Penalty Of Withholding 100% Pension Gratuity By Disciplinary Authority Is Not Understandable: Karnataka High Court

The Karnataka High Court has come to the aid of a 73-year-old, cancer patient and former employee of Commissioner of Central Excise, Customs and Service Tax, by setting aside an order of the authorities withholding 100 percent of gratuity and pension due to him.

Justice M Nagaprasanna allowed the petition filed by Hanumanth N Karkun and quashed the order passed by the authorities and directed the release of the entire pension that was withheld and the gratuity that was forfeited to its full, to be paid to the petitioner within 4 weeks.

It said, “The imposition of withholding of 100% of pension and 100% of gratuity, is un-understandable as to under which provision of law, the Disciplinary Authority could impose such penalty of withholding 100% of the pension that too, permanently, that goes with gratuity as well.”

It was alleged that when the petitioner was working as Superintendent, in-charge of Central Excise, Range 'A', Hubli Division, Hubli. A complaint came to be registered by one Rohith B. Deshpande, on 22.09.2011, on the score that the petitioner had demanded Rs.2,000 as bribe to issue a service tax registration certificate.

The Central Bureau of Investigation probed the matter and filed a chargesheet. After the registration of the crime, the petitioner retired on attaining the age of superannuation on 31.01.2012. Following which, the Disciplinary Authority issued a charge sheet against the petitioner based on the very same set of facts, which formed the basis in the criminal case. The impugned order of penalty was passed by the authority on 06.02.2023. In between, the trial court acquitted the accused of the charges levelled against him.

The petitioner argued that all the evidence and the documents in both the proceedings were the same. The penalty that is now imposed is clearly impermissible even under CCS (Pension) Rules, 1972 or even under CCS (Conduct) Rules, 1964.

The respondents contended that merely because the petitioner is acquitted of the crime, it would not mean that the department is precluded from imposing a penalty pursuant to the disciplinary enquiry. He would submit that the concerned Court acquitted the petitioner on benefit of doubt and would not enure to the benefit of the petitioner seeking quashment of the proceedings.

Findings:

The bench referring to the order of the trial court noted that a deeper delving into the findings recorded by the concerned Court what would emerge is that the prosecution has miserably failed to prove the guilt of the petitioner beyond all reasonable doubt. Therefore, it can safely be said that it is not an order of acquittal on benefit of doubt, but an acquittal due to lack of evidence, which is acquitted on merits.

It observed that “The documents that were marked as exhibits in the criminal trial and the witnesses examined in the criminal trial, as also the documents marked in the disciplinary enquiry and the witnesses examined thereof, are all verbatim similar.”

Then it held, “If both the proceedings are springing out of a solitary action, the acquittal in the criminal trial, would undoubtedly enure to the benefit of the petitioner and lead to obliteration of the penalty in the disciplinary enquiry.”

It further stated that under CCS (Pension) Rules, 1972, the imposition of penalty against an employee is 50% of the pension to the maximum, for a limited period or permanently, and there is no provision to impose 100% of the withholding of pension.

The court said, “The petitioner had superannuated and the proceedings are continued post retirement. Therefore, withholding of gratuity and pension both to the tune of 100% has no sanction in law.”

Rejecting the contention of the respondents that the petitioner has filed an appeal against the impugned order the court said, “ The petitioner is now 73 years old. He has not seen the light of his terminal benefits, despite his retirement 13 years ago. He is left bleeding by the impugned penalty, which is worse than dismissal. If what the learned counsel for the petitioner submitted is considered, the 'cup of sorrow' of the petitioner has come to the brim. Therefore, there is no question of sending the petitioner back to the doors of the Appellate Authority.”

Accordingly, it allowed the petition.

Appearance: Advocate Girish A Yadawad for Petitioner.

CGSC M.B Kanavi for R1.

Deputy Solicitor General Venkatesh M Kharvi for Advocate Girish Hulmani for R2, R3.

Citation No: 2025 LiveLaw (Kar) 78

Case Title: Hanumanth N Karkun AND Honourable Minister of Finance & Others

Case No: WRIT PETITION NO.101714 OF 2024

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