Maharashtra Civil Services Rules | Penalty Of Reduction In Pay Scale Doesn't Extend Beyond Period Of Employment, Impact Post-Retirement Benefits: High Court

The Bombay High Court recently observed that the effect of reduction in pay scale of a state government servant, as a form of punishment, does not extend beyond the period of employment and impact post-retirement benefits.

A division bench of Justice AS Chandurkar and Justice Jitendra Jain allowed a petition filed by one Dr. Ramchandra Bapu Nirmale seeking calculation of his pension based on his salary before it was reduced till retirement as a penalty.

“on a true reading of Rule 5(1)(v) [of the the Maharashtra Civil Services (Discipline and Appeal) Rules, 1979] as a whole the Petitioner is justified in contending that calculation of post-retirement benefit of pension is not governed by Rule 5(1)(v). Provisions of Rule 5(1)(v) would be applicable during the period when an employee is in service and not to the benefits once he retires moreso because “increment of pay” used in the said Rule would be during the tenure of one's employment and not post retirement.”

The petitioner challenged an order dated October 10, 2022, by the Maharashtra Administrative Tribunal, which dismissed his Original Application.

Dr. Nirmale, a former Medical Officer with the State, served from December 20, 1978, to August 31, 2008. He was found guilty of taking Non-Practicing Allowance (NPA) while concurrently engaged in private service. On March 31, 2008, a punishment order was issued directing the recovery of Rs. 36,060 of NPA and a reduction in salary by three stages until retirement.

Upon Dr. Nirmale's retirement, the State calculated his pension based on the reduced pay scale. He protested this calculation, emphasizing that the punishment order did not explicitly state a perpetual reduction in salary, but the State did not agree. The Maharashtra Administrative Tribunal (MAT) on October 10, 2022 dismissed his Original Application which contested the calculation of his pension. Thus, he approached the high court.

The petitioner argued that the reduction should only apply during the specified period of punishment.

The State argued that accepting Dr. Nirmale's interpretation would nullify the effect of the punishment order, urging the court to dismiss the petition.

The punishment order, the court noted, lacked specific directions on whether the Petitioner would earn increments during the reduction period or the effect of this reduction on future increments post the specified punishment period. The court pointed out that Rule 5(1)(v) necessitates such clarity in the punishment order.

The court rejected the State's interpretation of the punishment order that withholding of increment would apply even post the expiry of the period for which the punishment is imposed. It asserted that this interpretation amounts to modifying the punishment order after its issuance, and is impermissible. The court emphasized the strict reading of the punishment order without any additions or subtractions.

Accepting the State's interpretation, according to the court, would transform the punishment into a permanent measure, contrary to the intention of the Rule-making authority. The court highlighted that the reduced pay scale should only impact the employee during the punishment period, specifically during the service tenure, and not extend to post-service benefits like pension.

Rule 5(1)(v) prescribes for a further direction by the concerned authority to specify the effect of future increments in the pay “during the period” for which the lower stage in time scale is specified. The court interpreted the phrase “during the period” to mean the period for which the penalty is imposed, which, in this case, was until the Petitioner's retirement. Therefore, the court concluded that Rule 5(1)(v) applies during the service period and not to post-retirement benefits.

“in the absence of any direction as mandated by Rule 5(1)(v) of the D & A Rules and punishment under the said Rule being applicable only during the term of employment, impugned action of giving effect to such punishment for calculation of pension is bad-in law.”

Consequently, the court set aside the Tribunal's order of October 10, 2022, and the communication of February 16, 2021.

The court directed the state, specifically for pension calculation, to consider the last drawn pay before the penalty order's implementation as the salary last drawn. The court instructed the Respondents to recalculate the pension amount and pay the difference within eight weeks.

Case no. – Writ Petition No. 15939 of 2022

Case Title – Dr. Ramchandra Bapu Nirmale v. State of Maharashtra and Ors.