Whether Compulsory Retirement Warrants Reduction In Pension/ Gratuity To Be Decided At Time Of Imposing Punishment: Kerala HC

The Kerala High Court on Monday held that the decision as to whether a particular case where compulsory retirement is imposed warrants reduction in pension or gratuity or both is to be specifically considered by the authority imposing the punishment, at the time of such imposition itself.

Justice Anu Sivaraman, while holding so, observed that if the same was not done, 

"...the entire exercise of appreciation of the factors which lead to the imposition of the penalty will have to be redone at a later point in time which, according to me, would be impermissible since that would amount to a re-appreciation of the facts involved and therefore to double jeopardy".

The petitioner in the instant case, who had been working as Senior Superintendent in the Kerala State Electricity Board (KSEB) was suspended from 21st June 2006, over allegations of him assisting in theft of of electricity by a consumer. Subsequent to a memo of charges being served to the petitioner, which was found to have been unsatisfactorily answered, a disciplinary enquiry was ordered to be conducted against him, and the petitioner was reinstated in service pending its finalization. Subsequently, on 7th November 2014, the petitioner was ordered to be removed from service. When an appeal was preferred by the petitioner before the Chairman and Managing Director of KSEB (2nd respondent herein), the same was allowed, and his punishment was modified as compulsory retirement, taking into account the pathetic state of his family. A Non Liability Certificate was also issued to the petitioner, however, retirement benefits were not disbursed to him. 

The respondents had relied upon Rule 6(a) of Part III of the Kerala Service Rules (KSR) in order to fortify their claim that they had been empowered to reduce 50% of the eligible pension of the petitioner. When the same had been contested before the High Court of Kerala in W.P. (C).No.6725/2020, the Court had directed the Chairman and the Managing Director to take a fresh decision as regards the pension of the petitioner.

Subsequently, when the petitioner filed another representation before the 2nd respondent, the same was again rejected on finding that Rule 6(a) of Part III, KSR provides power to the authority who imposed the punishment of compulsory retirement to make orders on whether the pension or gratuity should be admitted in full or not. In the instant case, since the 2nd respondent had imposed the punishment of compulsory retirement by reducing the punishment of removal already inflicted on the petitioner, it was held that the 2nd respondent was fully competent to pass the order reducing pension. It is against the same that the instant writ has been filed. 

On behalf of the petitioner, it was contended by Advocate Jose J. Mathaikal, that under Rule 6(a), an employee who has been compulsorily retired from service would be entitled to pension unless the authority which imposes the punishment specifically directs the reduction of pension or Death-cum-Retirement Gratuity (DCRG) or both if the circumstances of any particular case warrant such reduction. The counsel averred that the question of reduction in pension ought to have been decided by the competent authority at the time of imposing the punishment of compulsory retirement itself.

On the other hand, the Standing Counsel, K.S. Anil, on behalf of the KSEB refuted the aforementioned contention, and argued that the Rule does not mandate that while issuing orders of compulsory retirement, the competent authority ought to stipulate the details of pension or death-cum-retirement gratuity sought to be reduced under Rule 6(a). It was further argued by him that the facts of the case clearly warranted the imposition of the said penalty.

The Court in this light, noted Rule 6(a) of the KSR Rules made it clear that the competent authority was to pass orders authorizing pension to an officer who is compulsorily retired from service provided no orders were passed reducing the pension by the authority which imposed the penalty of compulsory retirement. The court also took note of the settled position that "pension is a legal right available to an employee on the basis of long years of service rendered by him and the said right can be taken away only after following due procedure". In the instant case, the Court further noted that no such decision ordering reduction of pension had been made even when the punishment imposed had been modified to one of compulsory retirement.

It was in this regard that the Court set aside the order by the respondent denying pensionary benefits to the petitioner, and directed the respondents to pay the same within 3 months from the date of receipt of copy of the judgment. It was further directed that the request of the petitioner for regularizing the period of suspension as duty also ought to be considered.

Case Title: A.G. Dinesh v. KSEB Ltd. & Ors. 

Citation: 2022 LiveLaw (Ker) 501

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