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Monday, November 19, 2012

the applicant who was kept under deemed suspension w.e.f. 19.09.2003, was allowed to retire on attaining the age of superannuation (under suspension) vide order dated 28.04.2006 (Annexure A-15) w.e.f. 30.04.2006.= the applicant is not entitled to the benefits that he has claimed in the first three issues i.e. (i) he is not entitled to the revision of his provisional pension; (ii) the 1st and 2nd respondents have the authority and jurisdiction in rejecting the claim of the applicant for revision of his provisional pension; and (iii) the applicant is not entitled to get interest on the revised pension, leave encashment and other retiral dues. However, as far as the fourth issue relating to payment of CGEIGS amount with interest due to the applicant is concerned, the respondents are directed to make the said payment to the applicant and if the said amount has already been paid to the applicant, the respondents will provide him proper information in that behalf as expeditiously as possible, but positively within nine weeks from the date of receipt of a certified copy of this order. 24. In the result, with the above observations and directions, present Original Application stands disposed of with no order as to the costs.


Central Administrative Tribunal
Principal Bench

OA No.3647/2010

Reserved on : 12.09.2012
                          Pronounced on   : 25.09.2012

Honble Mr. Justice Syed Rafat Alam, Chairman
Honble Dr. Ramesh Chandra Panda, Member (A)

Shri R P S Panwar
S/o Shri Bihar Lal
R/o H.No. 86-A,
Radhey Shyam Park,
Gali No.2, Parwana Road,
Delhi  110 051. Applicant

(By Advocate: Shri R.P. Kapoor)

Versus

1. Union of India,
Through Director (Estt),
Department of Telecommunications,
11th Floor, Sanchar Bhawan,
20, Ashok Road,
New Delhi  110 001.

2. The Disciplinary Authority,
Through Under Secretary (Admn.),
Department of Telecommunications
Sanchar Bhawan,
20, Ashok Road,
New Delhi  110 001.

3. The Controller of Communication Accounts
Through its Joint Controller of Communication Accounts,
UP (West) Telecom District,
3rd Floor, Brahampuri Telephone Exchange Building,
Meerut (UP).

4. The Ministry of Personnel, Public Grievances & Pensions,
Department of Pension & Pensioners Welfare,
Through its Secretary,
Lok Nayak Bhawan,
New Delhi  110 003. Respondents.

(By Advocate: Shri Krishan Kumar)


O R D E R

Dr. Ramesh Chandra Panda, Member (A):


Through the instant Original Application, Shri R.P.S. Panwar - a retired ITS Officer, the applicant herein, is seeking the following main relief(s):-
8.03.That (Annexure A-1, A-2, A-3 and to the extent Annexure A-4 is applicable in respect of provisional pension and coming in the way of relief to applicant) be kindly declared as void abinitio and be aside; it be kindly also held that Respondents Nos. 1 and 2 acted without authority of law and without jurisdiction and in bad faith only by ignoring the staring law, rules and procedure as well as duty;

8.04.That applicant be kindly granted the revision as per 6th CPC and accordingly the leave encashment and other retiral dues, provisional pension, excepting Gratuity with interest @ 12% per annum from date of their respect accruals.  The prayer for release of deposits with interest in favour of Applicant under the CGEG Insurance Scheme is respectfully made at paragraph 9 below.


2. Brief facts of the case would reveal that the applicant who was kept under deemed suspension w.e.f. 19.09.2003, was allowed to retire on attaining the age of superannuation (under suspension) vide order dated 28.04.2006 (Annexure A-15) w.e.f. 30.04.2006. The said order also envisaged that as his vigilance clearance was withheld due to his suspension, he would be paid provisional pension as per Rule 69 of CCS (Pension) Rules, 1972.  It is the case of the applicant that as the 6th CPC recommendations on pay and pension came into force w.e.f. 01.01.2006, and the applicant retired on 30.04.2006, he was entitled to the revised provisional pension as per the 6th CPC recommendations.  It is stated that the applicant is facing six disciplinary proceedings and one criminal case which are pending for long time despite applicants cooperation.  Some of the disciplinary proceedings have already been stayed. It is further his case that though there is one criminal case, however, no previous approval, mandatory for conducting any enquiry and/or investigation under Section 6-A of the Delhi Special Police Establishment Act, 1946 and sanction under Section 19 of the Prevention of Corruption Act, 1988 has yet been accorded by the Government.  It is, therefore, averred that the inquiry and investigation undertaken being void ab initio and the criminal proceedings having been stayed by the Honble High Court of Delhi, and as there is no order of suspension under sub- rule (2) of Rule 10 of the CCS (CCA) Rule, 1965, the applicant should be considered to have unblemished and clean record of service. The 6th CPC recommendations giving effect to various revised pay scales Band with Grade Pay for serving employees and pension for the retired employees came into force w.e.f. 01.01.2006.  The applicants case is that he has retired on 30.04.2006 and as such his subsistence allowance and provisional pension get covered by the said recommendations of the 6th CPC. It was his case that he was kept under deemed suspension from 18.09.2003 to 03.02.2006 and on invalid suspension from 04.02.2006. But, the present OA does not raise the controversy in the relief clause on legal/illegal suspension w.e.f. 04.02.2006 upto 30.04.2006.  Further, the retirement OM dated 28.04.2006 has not eben assailed in the OA.  We, therefore, refrain to decide the issue and secured assumption would be to treat the applicants retirement under suspension.

3.  It has been stated that as per letter dated 27.01.2010, the respondents are required to pay the provisional pension as well as arrears to the applicant in terms of the revised pay scales.  In the meantime, on the applicants representation the Jt. Controller of Communication Accounts sought clarification vide Annexure A-3 dated 25.05.2010 from Department of Telecommunication. The applicants representations were considered by the concerned officers but the respondents have passed the impugned communication dated 28.06.2010 (Annexure A-1) whereby the revision of pension requested by the applicant was directed to wait till the regularization of his suspension period in view of Note-4 below Rule 7 (1) D of the CCS (Revised Pay) Rules, 2008 and the said impugned communication inter alia, refers to the Government O.M. dated 15.06.2010 wherein it has been decided by the Government that Government servant under suspension as on 01.01.2006 and retired without joining duty is not entitled to any revision of provisional pension but will get only provisional pension calculated on the basis of the emoluments which such Government servant has been drawing immediately before suspension.  It has been further indicated that the provisional pension will not be revised until the conclusion of departmental/judicial proceedings.  It is averred in the OA that the applicant requested for information under Right to Information Act, 2005 and was informed that large number of similarly situated persons as the applicant have already been granted benefit of 6th CPC recommendations relating to revision of pension.  Feeling aggrieved by the inaction by the respondents to revise applicants pension as per the pay scales recommended by the 6th CPC, he filed OA No. 3205/2010 before the Tribunal but withdrew the same seeking liberty to file fresh Original Application wherein he would challenge (a) the relevant rules, (b) OM dated 27.08.1958 and (c) Note-4 below Rule 7(1) D of the CCS (Revised Pay) Rules, 2008.  The Tribunal while dismissing the said OA granted liberty to the applicant to file a fresh Original Application for other relief(s) except the relief in respect of subsistence allowance as per the revised pay structure as recommended by the 6th CPC.  Accordingly, the applicant has moved the Tribunal and instituted the instant Original Application.

4. Shri R.P. Kapoor, learned counsel appearing on behalf of the applicant,  highlighted the background of the case and submitted that the respondents did not have a clear, cogent and consistent provisions between the FRs, CCS (CCA) Rules, CCS (Pension) Rules and the CCS (Revised Pay) Rules including the OM dated 01.09.2008 and 02.09.2008 and there was no specific judicial pronouncement to bar the applicant to get the relief(s) as prayed for.  It is contended that the pensioners getting full pension but facing disciplinary proceedings continue to get the full pension but charged officers prior to retirement getting the provisional pension on the date of retirement are treated differently.  The dichotomy in the statutory provisions provide contradictory guidelines/instructions/clarifications as a result, the applicant is suffering.  He has, therefore, challenged the appropriate provisions of the Rules and Guidelines.

5. Sh. Kapoor would further contend that the applicant had put in over 34 years of service and for the pendency of disciplinary and criminal cases, he could not be denied the revision of provisional pension as per the 6th CPC recommendations.  It is submitted that the final order purported to have been mentioned in the Government instructions/guidelines are not likely to be passed in the case of the applicant in near future as the disciplinary proceedings and criminal case have been stayed by the competent judicial authorities.  The regularization of period of suspension comes within the functional domain of the competent executive authority but non-regularization of the suspension period takes away the rights, which accrue to the applicant due to his retirement in April, 2006 and deprives him of the revision of provisional pension otherwise admissible to him as per the 6th CPC recommendations.  It is stated that Note-3 to Rule 33 of the CCS (Pension) Rules, 1972 provides equality amongst the pensioners and does not create any disparity among different types of pensioners, which has unauthorizedly been created by the respondents.  It is further contended that the applicant has retired in April, 2006 and as per the recommendations of the earlier Central Pay Commissions, he was entitled to get the provisional pension and after five years running of the 6th CPC on 15.06.2010, a clarification issued by the respondents created disparity and deprived the applicant of his right to get the revised provisional pension under the 6th CPC.  It is, therefore, alleged that this is an attempt of the respondents to justify the wrongful, irreparable loss and injury caused to the applicant by withholding Rs.14,859/- out of Rs.38,772/- and paying the applicant Rs.23,913/-as monthly provisional pension  and denying him to get the revised provisional pension under 6th CPC.  The applicant having put in required qualifying service of over 34 years cannot be denied the benefit of paragraph 5.2 of the OM dated 02.09.2008.

6. In view of the above contentions, Shri Kapoor would urge that the Original Application should be allowed and the respondents should be directed to revise the applicants provisional pension as per the 6th CPC Pay Bands and calculate the period of suspension for the purpose of arriving at the pension admissible to him with effect from April, 2006.  He also claims that the leave encashment and other retiral dues and arrears of provisional pension, if sanctioned, should also carry the appropriate interest rate in favour of the applicant.

7. On receipt of the notice from the Tribunal, the respondents have filed their counter reply on 17.05.2012 through Shri Krishan Kumar, senior counsel for the Central Government and have controverted all the grounds taken by the applicant in the OA. Shri Krishan Kumar would contend that a Government servant under suspension draws subsistence allowance based on the emoluments drawn in the scale of pay then existing at the time of suspension and the revision of the pay as per the new pay structure is extended only after the final order in pending disciplinary and judicial proceedings get completed.  He drew our attention to the DOP&PW OM No. 38/37/2008-P&PW(A) dated 15.06.2010 to state that a Government servant, who was under suspension as on 01.01.2006 and retired without joining duty, was entitled to only provisional pension based on the emoluments which he drew immediately before suspension, and the said provisional pension would not undergo any revision until the conclusion of the disciplinary and judicial proceedings.  In view of the clear stipulations by the Government in the statutory rules and guidelines, the applicant is not entitled to the benefit of the recommendations of the 6th CPC i.e. revision of his pay and allowance w.e.f. 01.01.2006 and also consequential revision of his provisional pension.  Therefore, he is also not entitled to the arrears of pay and allowances and provisional pension as claimed by him in the OA.
8. Shri Krishan Kumar also submitted that the first respondent, placing his reliance on OM dated 15.06.2010, issued a letter to the third respondent in respect of the applicant and on the clarification so received from DOP&PW, letter dated 28.6.2010 impugned by the applicant was issued.  His contention was that in view of the clear guidelines of the DOP&PW, applicants provisional pension would not be revised with effect from his date of superannuation as the applicant was continuing under suspension even on 01.01.2006 and superannuated from his service as such without joining duty.  In this context, Shri Krishan Kumar placed his reliance on Note-4 below Rule 7(1) of the CCS (Revised Pay) Rules, 2008.  His contention is that the CCS (Revised Pay) Rules, 2008 and the clarification issued by the DOP & PW are not contradictory to each other but are clarificatory in nature, which supplement each other.  Therefore, the plea taken by the learned counsel for the applicant that those being contradictory with each other should be quashed were not legally apt to be considered for challenging the vires of those rules.

9. He also submitted that the applicant had filed OA No.855/2009 before the Tribunal which was dismissed in limine as having no merits vide order dated 22.04.2009.  The applicant filed RA No. 86/2009 in the said OA which was too dismissed vide order dated 02.06.2009.  The applicant took the case before the Honble High Court of Delhi in WP(C) No.12906/2009 and WP(C) No. 3012/2008, which were dismissed by the Honble High Court vide a common judgment holding that where a Government servant was under suspension at the time of his retirement, the disciplinary proceedings would be deemed to be instituted from the date of his suspension or from the date of issuance of chargesheet issued to him, whichever was earlier, and where a Government servant was not under suspension at the time of his retirement, the disciplinary proceedings would be deemed to be instituted from the date of issuance of the chargesheet to him. Taking the above position into consideration, Honble High Court held that the Tribunal was not correct in holding that the second part of Rule 9(6)(a) does not apply in the case of pensioner.  Since the above judgment of the Honble High Court of Delhi was not challenged, the same attained finality in respect of the applicant and the issues having been already adjudicated, the applicant was barred to raise the same issues again in the present OA.

10. Shri Krishan Kumar also submitted that criminal proceedings against the applicant relate to the possession of disproportionate assets and, as such, the case being very serious in nature, the applicant would not be entitled to revision of his provisional pension. Further, refuting the allegations of the applicant, Shri Krishan Kumar would submit that the applicant had not given any instance where the provisional pension of a retiree was revised in violation of Note-4 below Rule 7(1) of the CCS (Revised Pay) Rules, 2008 and seeking parity with others, who were not similarly placed, would not get the applicant any benefit.  It is the case of the respondents that Rule 33 of CCS (Pension) Rules, 1972 with the emoluments defined in the said Rules is very clear and would cover the applicants case as he was under suspension and the provisional pension was fixed on the basis of the emoluments the applicant was getting just before he was placed under suspension.  In view of the above contentions, Shri Krishan Kumar would urge that the OA deserves to be dismissed.

11. In the background of the above contentions advanced by the parties, we perused the pleadings of the case.  Four following issues come up for our consideration  (i) Whether letter dated 28.06.2010 (Annexure A-1); OM dated 15.06.2010 (Annexure A-2); letter dated 25.05.2010 (Annexure A-3) and O.M. dated 27.08.1958 (Annexure A-4), in so far as the provisional pension is concerned, are void ab initio? (ii) Whether 1st and 2nd respondents lack authority and jurisdiction in rejecting the claims of the applicant for revision of provisional pension? (iii) Whether the applicant is entitled to get revised pension, leave encashment and other retiral dues with interest except gratuity as per 6th CPC recommendations? (iv) Whether the applicant is to be released the deposits with interest in respect of CGEGIS?

12. Before we dwell on the above four issues we would consider now the issue of discrimination raised in the OA. Referring to Annexure A-16 to Annexure A-19, Shri Kapoor would contend that the revision of provisional pension was granted to the similarly situated persons as the applicant had received this information under Right to Information Act, 2005.  In most of those cases the pension was granted under the 6th CPC explaining that such payments would be subject to the outcome of the appeal pending in respect of disciplinary cases. It is his contention that after retirement the provisional pension is bound to be revised as per the 6th CPC recommendations. Only in case of suspension the revision of subsistence allowance is not permissible.  It is further contended that the period of suspension should be counted for the purpose of arriving at the provisional pension.  Learned counsel would claim parity for the applicant which should have been granted as similarly situated persons were granted revised pension/provisional pension on the basis of 6th CPC recommendations. The respondents have not been in a position to indicate how the applicants rights to claim parity could be taken away by mere clarification.  The above discrimination contention was disputed by the respondents.  Shri Krishna Kumar would contend that the applicant had not given even one instance where the provisional pension of a retiree was revised in violation of Note-4 below Rule 7(1) of the CCS (Revised Pay) Rules, 2008 and submit that information received by the applicant under RTI Act and placed at Annexures A16-19 did not reflect similarity with the applicants case.  We have very carefully examined the issue of discrimination and the Annexures A16-19 which were referred to in support of the applicants claim.  The Annexure A-16 provides name of 5 persons whose provisional pension has been revised as per 6th CPC but this does not indicate whether 5 such persons have retired while under suspension.  Annexure A-17 is in response to applicants questions under RTI Act and indicates that the provisional pension of Shri Mohinder Pratap Ex SAO and Shri Arun Kumar Ex DDG has not been revised.  The letter dated 02.08.2010 is at Annexure A-18 which is reply to the applicants querries dated 05.07.2010 and 06.07.2010 and inter alia encloses a list of 13 officers whose provisional pension has been revised w.e.f. 01.01.2006 as per 6th CPC, but does not manifest how those 13 officers are similarly circumstanced as the applicant.  Annexure A-19 is letter dated 03.08.2010 which does not support the claim of discrimination.  In view of the above, we are not convinced of the grounds of discrimination taken in support of the relief(s) claimed by the applicant.

13. With regard to the first set of issues, which are directly attacking the vires of the provisions of Rules/O.Ms/letters, the contention of the learned counsel for the applicant is that all these provisions are contradictory with each other and, therefore, should be quashed and set aside by declaring them as void ab initio. We may refer to these impugned Rules/OMs/letters to find out how far the contention of the learned applicants counsel is valid.  Shri Krishan Kumar, learned counsel representing the respondents has vehemently opposed the said contention of the applicant to say that those rules and guidelines are well tested over the years and are not contradictory with each other.

14. The impugned letter dated 28.06.2010 relates to the reply given to the applicant with regard to his request for payment of leave encashment, CGEIGS, DCRG and outstanding dues of pension after revision of pay with effect from 01.01.2006 as per 6th CPC.  The letter dated 28.06.2010 reads as follows:-
With reference to your letter No.CCA/UP/(W)/Pro.PEN/ MUZ/20120-11/385 dated 25.5.2010, it is stated that the revision of pension of Shri R.P.S. Panwar may wait till the regularization of his suspension period and also in view of Note 4 below Rule 7(1) D of the CCS( RP) Rules, 2008. Moreover, it has recently been clarified by the department of Pension & Pensioners Welfare vide its O.M. No.38/37/08-P&PW(A) dated 15th June, 2010 (copy enclosed) that the Government Servant, who was under suspension as on 1.1.2006 and retired without joining duty, is entitled to only provisional pension.  The emoluments, which he drew immediately before suspension, shall be the emoluments for the purpose of the provisional pension.  This provisional pension will not be revised until the conclusion of the departmental/judicial proceedings and issue of final orders thereon.  In view of the clear instructions of DoP&PW on the issue, provisional pension of Shri R.P.S. Panwar cannot be revised w.e.f. 1.1.2006 consequent to 6th CPC.

The above letter is based on the clarification received by DoT from the DoP&PW O.M. No.38/37/08-P&PW(A) dated 15th June, 2010 which has been assailed by the applicant in the OA. The reply was given to the request letter dated 25.5.2010 received by the 1st respondent from the 2nd respondent on the admissibility or otherwise for payment of pension to the applicant after revision of his pay w.e.f. 01.01.2006 as per the 6th CPC.  The OM dated 15.06.2010 is a clarificatory letter on the doubts raised in the manner in which the pension and other retirement benefits applicable to the Government servants who are on extraordinary leave/unauthorized absence/suspension as on 01.01.2006 and retired/died thereafter without joining duty, would be regulated.  The OM inter alia refers to Rule 33 of the CCS( Pension) Rules, 1972 and Rule 9(21)(a)(i) of the Fundamental Rules in clarifying three specific doubts, one of which is relevant to the instant OA is extracted below:-


Government servant, who was under suspension as on 1.1.2006 and retired thereafter without joining duty. Such a Government Servant, on retirement, is entitled to only provisional pension.  The emoluments which he drew immediately before suspension shall be the emoluments for the purpose of provisional pension.  This provisional pension will not be revised until the conclusion of the departmental/ judicial proceedings and issue of final orders thereon.


In view of the controversy  whether the applicant was entitled to revision of his provisional pension  both sides referred to the OM dated 27.08.1958 dealing with revision of pay scale of Government Servants while under suspension.  We may reproduce below the pertinent portion relevant on the issue raised in the OA:-
2. Cases in which the revised scale of pay takes effect from a date falling with the period of suspension.

(a): Under suspension a Government Servant retains a lien on his substantive post.  As the expression holder of a post occurring in FR 23 includes also a person who holds a lien or a suspended lien on the post even though he may not be actually holding the post, such a Government Servant should be allowed to exercise the option under FR 23 even while under suspension.  The benefit of option will, however, practically accrue to him in respect of the period of suspension, only after his reinstatement depending on the fact that whether the period of suspension is treated as duty or not.


15. With regard to the relief claimed by the applicant to declare the above referred letters and OMs as void ab initio in respect of provisional pension, we note that those are legally sustainable and are not contradictory with each other.  The OM dated 27.08.1958 has been to a great extent incorporated in the CCS (Pension) Rules, 1972 and Fundamental Rules.  The letters/OM dated 25.05.2010, 15.06.2010 and 28.06.2010 are in conformity with the Statutory Rules.  We may examine these in subsequent paragraphs.

16. The provisional pension and revision thereof is calculated on the basis of emoluments drawn by the Government servant. Rule 3(e) defines emoluments which means emoluments as defined in Rule 33 of the CCS (Pension) Rules, 1972.  Rule 33 envisages that the expression emoluments means basic pay as defined in Rule 9 (21) (a) (i) of the Fundamental Rules which Government servant was receiving immediately before his retirement or on the date of his death.  In case of suspended Government servant retired from service while under suspension, Note 3 to Rule 33 will be applicable. The Note-3 to Rule 33 of the CCS (Pension) Rules envisages as follows:-

NOTE 3.  If a Government servant immediately before his retirement or death while in service had been absent from duty on extraordinary leave or had been under suspension, the period whereof does not count as service, the emoluments which he drew immediately before proceeding on such leave or being placed under suspension shall be the emoluments for the purpose of this rule. [Emphasis supplied]


17. In case of the 6th CPC recommendations, the Government of India have issued the CCS (Revised Pay) Rules, 2008.  According to Rule 6(1)(ii), where a Government servant is under suspension on the 1st day of January, 2006, the option may be exercised within three months from the date of his return to his duty if that date is later than the date prescribed in this sub-rule.  As per the above statutory rules, we noted the facts of the present case and could find that the applicant was under suspension as on 01.01.2006. Though the applicant retired on 30.04.2006 on superannuation while under suspension, he did not return to his duty and did not join his duty before retirement.  As such he could not have exercised his option as per the above rule less to speak of getting either revised pay/subsistence allowance or the revised provisional pension under the 6th CPC.  Even if he exercised his option, the applicant case would come up for decision by the Competent Authority on passing of the final orders on the pending disciplinary and judicial proceedings.  At this stage, it is pertinent for us to refer to the Note-4 below Rule 7 of the CCS (Revised Pay) Rules, 2008 reads as follows:-
NOTE 4.  A Government servant under suspension, shall continue to draw subsistence allowance based on existing scale of pay and his pay in the revised pay structure will be subject to the final order on the pending disciplinary proceedings.


18. From the collective reading of the CCS (Pension) Rules, 1972; CCS (Revised Pay) Rules, 2008 and CCS (CCA) Rules, 1965 and the OMs/letters referred to above, it emerges that the subsistence allowance is fixed on the basis of the emoluments drawn just prior to the official was put under suspension.  Since the pension/provisional pension is fixed on the basis of the emoluments drawn by the concerned Government official prior to the date of suspension, revision of emoluments under 6th CPC fixed after the event of suspension would not arise and hence the revision of the pension/provisional pension as per the revised pay scales would not materialize until all proceedings were finalized. In the instant case, the provisional pension has been fixed for the applicant on the basis of the emoluments that he was drawing just prior to his suspension.  That is the right position.  He is not entitled to revision of provisional pension as disciplinary and judicial proceedings have not yet been finalized.

19. These rules and Guidelines, in our considered opinion, are not contradictory to each other but are supplementary to each other and do not in any manner provide different reading. These OMs and letters are logical and rational. No specific ground has been advanced by the applicant to declare those OMs and letters as void ab initio. We do find rationality behind such provisions and clarifications issued in the impugned OM and letters. We are not convinced by the arguments of the learned counsel for the applicant to declare those as void ab initio in order to extend him the benefit of the 6th CPC pay revision and revision of his provisional pension.

20. We may now refer to the second issue raised by the learned counsel for the applicant whether the 1st and 2nd respondents have the jurisdiction in rejecting the claims of the applicant for revision of provisional his pension.  The 1st respondent is the Department of Telecommunications in the Ministry of Telecommunications & IT and the 2nd respondent is also the Department of Telecommunications and the Minister-in-charge of the Department is the Disciplinary Authority in the case of the applicant.  In both the cases, it is the Government of India represented through the concerned officers of the Department of Telecommunications, who convey the decision of the Government i.e. the Competent Authority through the letters and orders.  The Director (Establishment) and the Under Secretary (Administration) have conveyed the established principles which are backed by the statutory rules. They are only communicating the decision(s) taken by the Competent Authorities.  Therefore, the second set of allegations do not convince us calling for our interference in the matter.
21. The third claim raised by the learned counsel for the applicant is that the applicant is entitled to get revision of his pension, leave Encashment and other retiral dues with interest except gratuity as per the 6th CPC recommendations.  In this regard, as we have extensively dwelt on the issue whether provisional pension can be revised as per the fresh recommendations of CPC in the first issue within, we are of the considered view that the applicant is not entitled to get his provisional pension revised as per the 6th CPC until the departmental and judicial proceedings pending against him are finally decided.  Therefore, the interest claimed by the applicant on the said revised provisional pension would not arise at present.  With regard to the leave encashment and other retiral dues, he would be able to get the arrears of those retiral dues only when the departmental and criminal proceedings are finally decided.  Therefore, we do not find any support in favour of the applicant in case of the third set of contentions raised by the learned counsel for the applicant.

22. In respect of the fourth issue raised by the learned counsel for the applicant i.e. whether the applicant is to be released the deposits with interest in respect of CGEIGS, we have carefully considered the issue and note that the CGEIGS is an Insurance Scheme applicable to the Government employees, and the deposits in the said Scheme are deducted directly from their monthly pay. The Scheme has a specific tenure and on completion of such tenure, the deposits with interest accrued to the account of the concerned Government employees are to be paid back to them after retirement. The CGEIGS has no linkage to the pendency of departmental and judicial proceedings pending against the Government servant at the time of his/her suspension. In the instant case, though the applicant has raised the issue that he has not received his CGEIGS amount including interest thereon, it is seen from the impugned letter dated 28.06.2010, that the respondents have not addressed this claim and combined the CGEIGS claim with revision of pension.  As there is no specific prohibition for payment of CGEIGS deposit with interest, the applicant will be entitled to receive the same as per the Scheme.  Hence, it would be appropriate for us to direct the respondents to examine the matter and ensure that the deposits with interest as per CGEIGS are paid to the applicant as expeditiously as possible.  In case the said CGEIGS amount had already been paid to the applicant, he would be entitled to get proper information on the same from the respondents. 

23. Considering the totality of facts and circumstances of the case, we are of the considered view that the applicant is not entitled to the benefits that he has claimed in the first three issues i.e. (i) he is not entitled to the revision of his provisional pension; (ii) the 1st and 2nd respondents have the authority and jurisdiction in rejecting the claim of the applicant for revision of his provisional pension; and (iii) the applicant is not entitled to get interest on the revised pension, leave encashment and other retiral dues. However, as far as the fourth issue relating to payment of CGEIGS amount with interest due to the applicant is concerned, the respondents are directed to make the said payment to the applicant and if the said amount has already been paid to the applicant, the respondents will provide him proper information in that behalf as expeditiously as possible, but positively within nine weeks from the date of receipt of a certified copy of this order. 

24. In the result, with the above observations and directions, present Original Application stands disposed of with no order as to the costs. 


(Dr. Ramesh Chandra Panda)        (Syed Rafat Alam)
         Member (A)                Chairman

/naresh/



Constitution of India ; Article 14-UCO Bank (Employees') Pension Regulations, 1995 ; Regulation 22-Pension for employees who resigned from service-Entitlement of-Held, not entitled as they are specifically excluded under the Regulations-Such exclusion is not violative of Article 14 of the Constitution of India. Respondents resigned from service and accepted the provident fund dues without protest. Thereafter, pursuant to a settlement between the Banks and the Employees' Association, Pension Regulations were framed by the Banks under section 19(2)(f) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 after consultation with the Reserve Bank of India. The Regulations introduced pension scheme in the Banks in lieu of employers' contribution to provident fund. The respondents exercised their option for the pension scheme under the Regulations. The appellant-Banks declined the benefit of the Regulations to the respondents since they resigned and not retired from service. The respondents filed a suit for declaration of entitlement of pension under the Regulations before trial court. The trial court decreed the suit. The first appeal and second appeal of the appellants were dismissed. In appeal to the Court, the appellant-Banks contended that under the Regulations, the pension scheme, which confers a second retiral benefit, is not applicable to those employees who have resigned from service. The respondents contended that the exclusion of the category of employees who resigned from service from the benefit of the pension scheme under the Regulations is an arbitrary and unreasonable classification repugnant to Article 14 of the Constitution of India; and that the regulation is contrary to the objects of the pension scheme embodied in other clauses of the Regulations. Allowing the appeals, the Court HELD: 1.1. An employee can resign at any point of time but in the case of retirement, he retires only after attaining the age of superannuation or in the case of voluntary retirement on completion of qualifying service. On resignation and retirement, there is severance of employment but in service jurisprudence both the expressions are understood differently. The Pension Scheme in question was a second Retiral Benefit Scheme which covered only the retirees, as the credit balance to their provident fund account is larger as compared to employees who resigned from service. Resignation brings about complete cessation of master and servant relationship whereas voluntary retirement maintains the relationship for the purpose of grant of retiral benefits in view of the past service. [1133-C-E] 1.2. Acceptance of the resignation is dependent upon discretion of the employer whereas retirement is completion of service in terms of regulations/rules framed by the Bank. Resignation can be tendered irrespective of the length of service whereas in the case of voluntary retirement, the employee has to complete qualifying service for retiral benefits. Further, there are different yardsticks and criteria for submitting resignation vis-a-vis voluntary retirement and acceptance thereof. Since the pension regulations disqualify an employee, who has resigned, from claiming pension, the respondent cannot claim membership of the fund. Regulation 22 provides for disqualification of employees who have resigned from service and for those who have been dismissed or removed from service. Regulation 22 does not make an arbitrary and unreasonable classification repugnant to Article 14 of the Constitution of India by keeping out such class of employees. Regulation 22 is not in the nature of penalty. It only disentitles an employee who has resigned from service from becoming a member of the Fund. The pension scheme only provides for a second retiral benefit. The pension scheme only provides for an avenue for investment to retirees. They are provided avenue to put in their savings and as a term or condition which is more in the nature of an eligibility criteria the scheme disentitles such category of employees out of it. [1133-F-H; 1134-A-C] Reserve Bank of India and Anr. v. Cecil Dennis Solomon and Anr., [2003] 10 Scale 449, relied on. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3192 of 1999. From the Judgment and Order dated 8.7.98 of the Punjab and Haryana High Court in S.A. No. 1398 of 1997. WITH C.A. Nos. 607 and 1506 of 2003. A.K. Raina, R.D. Upadhyay for the appellants in C.A. No. 3192/99. Jagat Arora, Rajat Arora, Ms. Ritu Arora and Ms. Suruchi Agarwal for the appellants in C.A. Nos. 607 and 1503/2003. Raj Kumar Mahajan and Bhaskar Y. Kulkarni for the Respondent in C.A. No. 3192/99. Bhargava V. Desai, Abhinav Vashisht, Ms. Rachi Vashisht, Ms. Priya, Sanjeev Kr. Singh and Pradeep Kr. Malik for the Respondent in C.A. No. 607/2003. Ramesh P. Bhatt and M.N. Shroff for the Respondent in C.A. No. 1506/2003. L. Nageswara Rao, Additional Solicitor General, Ms. V. Mohana, Ms. Sushma Suri for Union of India in C.A. Nos. 607 & 1506/2003. 2004 AIR 2135, 2004(2 )SCR1125, 2004(4 )SCC412 , 2004(4 )SCALE280 , 2004(2 )Suppl.JT487


CASE NO.:
Appeal (civil)  3192 of 1999

PETITIONER:
UCO BANK AND ORS.

RESPONDENT:
SANWAR MAL

DATE OF JUDGMENT: 11/03/2004

BENCH:
V.N. KHARE CJ & S.H. KAPADIA

JUDGMENT:
JUDGMENT

2004(2) SCR 1125

The Judgment of the Court was delivered by

V.N. KHARE, CJ. Since common question of law is involved in these appeals,
one at the instance of UCO Bank; second, Oriental Bank of Commerce; and the
third, Bank of India, we propose to decide them by a common Judgment.

For the sake of convenience, we are noticing the facts asserted in Civil
Appeal No.3192 of 1999. The respondent - Sanwar Mal was appointed as a
Class-IV employee in UCO Bank on 29.12.1959 and was promoted to class-Ill
post in 1980. On 25.2.1988, he resigned after giving one month's notice. He
accepted his provident fund without protest. On 29.10.1993, a settlement
was arrived at under section 2(P) and section 18(1) of the Industrial
Disputes Act, 1947 read with Rule 58 of the Industrial Disputes (Central)
Rules, 1957 between Indian banks' Association (hereinafter referred to as
"IBA") representing the managements of banks on one hand and All India Bank
Employees' Association representing the workmen. Pursuant to the said
settlement, the IBA agreed to introduce pension scheme in banks in lieu of
employees' contribution to the provident fund. As a consequence of the said
settlement, UCO Bank (Employees') Pension Regulations, 1995 (hereinafter
referred to as "the said regulations" ) were framed by the bank under
section 19(2)(f) of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970 after consultation with the Reserve Bank of India.
The said regulations were published with the prior sanction of the Central
Government. The respondent herein opted for the pension scheme. However,
since he had resigned in 1988, the appellant-bank declined to accept his
option for admitting him as a member/beneficiary of the fund. Under such
circumstances, he filed a suit in civil court for a declaration that he was
entitled to pension as provided for under the regulations. He also prayed
for mandatory injunction directing the appellant to make payment of arrears
along with interest. The suit was decreed and the first appeal filed
against the trial court judgment as also the second appeal filed by the
appellant were dismissed. It is in this way that the appellant is in appeal
before us by way of special leave.

Before coming to the arguments advanced before us, we would like to examine
briefly the memorandum of settlement dated 29.10.1993 as well as the
regulations. The recital to the said settlement shows that during
negotiations of service conditions of workmen, the 1BA agreed to introduce
the pension scheme in banks for the workmen in lieu of employers'
contribution to the provident fund. This was pursuant to the demand made by
All India Bank Employees' Association representing the workmen, to
introduce pension as a second retrial benefit in lieu of employers'
contribution to contributory provident fund. As per the terms of the said
settlement, the banks agreed to introduce pension as second retrial benefit
in lieu of contributory provident fund w.e.f. 1.11.1993. Under the
settlement, the pension schema was inter alia made applicable to all
retired employees who were in service of the bank on or after 31.12.1985
and who retired in or after 1.1.1986 but before 1.11.1993. Provided that
such employees opt for the pension scheme and refund within six months from
1.11.1993 the banks contribution to the provident fund. As a consequence of
the said settlement, the appellant -Bank framed UCO Bank (Employees)
Pension Regulations, 1995 (hereinafter referred to as "the said
Regulations") in exercise of power conferred by section 19(2)(f) of the
Banking Companies (Acquisition and transfer of Undertakings) Act, 1970. The
said regulations were framed after consultation with the Reserve Bank of
India and were published with the previous sanction of the Central
Government.

Now coming to the said regulations, it may be stated that regulations 2(j)
defines "contribution" to mean any sum credited by the bank on behalf of
the employee to the Pension Fund. Under clause (k) of regulation (2), the
"date of retirement" has been defined to mean the last date of the month in
which an employee attains the age of superannuation or the date on which he
stood retired by the bank or the date on which the employee voluntarily
retires or the date on which the officer is deemed to have retired.
Regulation 2(q) defines the word "fund" to mean UCO Bank (Employees)
Pension Fund constituted under regulation 5. Regulation 2 (s) defines "pay"
to include the basic pay and all allowances counted for the purposes of
contribution to the provident fund and for payment of dearness allowance,
in relation to an employee who has either retired or died on or after
1.1.1986 but before 1.11.1993. Regulation 3 (1) inter alia states that the
said regulations shall apply to employees who were in service of the bank
on or after 1.1.1986 but who retired prior to 1.11.1993 and who exercised
option to join the pension scheme within 120 days from the notified date
i.e. 29.9.1995. Suffice it to state that the entire regulation 3 refers to
retirees only and not to those who have resigned or dismissed/removed form
the bank. Regulation 5 deals with the constitution of a pension fund. It
states that the bank shall constitute a Fund under an irrevocable trust
within the specified period to provide for payment of pension/family
pension in accordance with regulations. It further provides that the bank
shall be a contributor to the said fund to ensure that the trustees make
due payments to the beneficiaries under these regulations. A bare reading
of regulation 5 indicates that the fund will be managed by the trustees and
the beneficiaries are the employees covered by the regulations. Regulation
6 inter alia states that on constitution of the said fund, the Provident
Fund Trust shall transfer to the pension fund the accumulated balance of
the contribution of the bank to the Provident Fund along with the interest
accrued thereon up to the date of transfer. Regulation 7 deals with
composition of the pension fund. It states that pension shall consist of
the contribution by the bank at the rate of 10% per month of the pay of the
employee; the accumulated contributions of the bank to the Provident Fund
along with interest accrued up to the date of transfer; the amount
consisting of contributions of the bank along with interest refunded by the
employees who retried before the notified date but who opt for pension in
accordance with the regulations; the investment in annuities/securities
purchased out of the moneys of the Fund; annual contribution by the bank
and income from investments. Regulation 7, therefore, indicates that the
scheme is self-financing scheme to be run on the basis of contributions
from the employees and the bank. It further shows that it is a funded
scheme, which is not dependent upon budgetary support. Regulation 14 inter
alia states inter alia that an employee who has rendered a minimum of 10-
years of service in the bank on the date of his retirement shall qualify
for pension. Regulation 22 deals with forfeiture of service and it reads as
follows:-

"Forfeiture of service.- (1) Resignation or dismissal or removal or
termination of an employee from the service of the Bank shall entail
forfeiture of his entire past service and consequently shall not qualify
for pensionary benefits:

(2)  An interruption in the service of a Bank employee entails forfeiture
of his past service, except in the following cases, namely:-

(a)    authorized leave of absence;

(b)    suspension, where it is immediately followed by reinstatement,
whether in the same or a   different post, or where the bank employee dies
or is permitted to retire or is retired on attaining the age of compulsory
retirement while under suspension;

(c)    transfer to non-qualifying service in an establishment under the
control of the Government or Bank if such transfer has been ordered by  a
competent authority in the public interest;

(d)   joining time while on transfer from one post to another.

(3)    Notwithstanding anything contained in subordination   (2), the
appointing authority may, by order, commute retrospectively the periods of
absence without leave as extraordinary leave.

(4)  (a) In the absence of a specific indication to the contrary in the
service record, an interruption, between two spells of service rendered by
a bank employee shall be treated as automatically condoned and the pre-
interruption service treated as qualifying service;

(b) Nothing in clause (a) shall apply to interruption caused by
resignation, dismissal or removal from service or for participation in a
strike;

Provided that before making an entry in the service record of the Bank
employee regarding forfeiture of the past service because of his
participation in strike, an opportunity of representation may be given to
such bank employees."

Chapter V refers to Classes of pension and it covers superannuation
pension; pension on voluntary retirement; invalid pension compassionate
allowance, pre-mature retirement pension and compulsory retirement pension.
Regulation 34 which also falls within chapter V deals with payment of
pension/ family pension in respect of employees who retired or died between
1.1.1986 to 31.10.1993. It states that such retirees shall be eligible for
pension from 1.11.1993. Further, different formulas are laid down for
computation of pension having co-relationship with the classes of pension.
Accordingly, computation of pension on voluntary retirement is -different
from computation of pension in the case of invalid pension or pre-mature
retirement pension or compulsory retirement pension.

To sum up, the pension scheme embodied in the regulation is a self-
supporting scheme. It is a code by itself. The bank is a contributor to the
pension fund. The bank ensures availability of funds with the trustees to
make due payments to the beneficiaries under the regulations. The
beneficiaries are employees covered by the regulation 3. It is in this
light that one has to construe regulation 22 quoted above. Regulation 22
deals with forfeiture of service. Regulation 22(1) states that resignation,
dismissal, removal or termination of an employee from the service of the
bank shall entail forfeiture of his entire past service and consequently
shall not qualify for pensionary benefits. In other wards, the pension
scheme disqualifies such dismissed employees and employees who have
resigned from membership of the fund. The reason is not far to seek. In a
self financing scheme, a separate fund is earmarked as the scheme is not
based on budgetary support. It is essentially based on adequate
contributions from the members of the fund. It is for this reason that
under regulation 11, every bank is required to cause an investigation to be
made by an actuary into the financial condition of the fund from time to
time and depending on the deficits, the bank is required to make annual
contributions to the fund. Regulation 12 deals with investment of the fund
where as regulation 13 deals with payment out of the fund. In the case of
retirement, voluntary or on superannuation, there is a nexus between
retirement and retiral benefits under the provident fund rules. Retirement
is allowed only on completion of qualifying service which not there in case
of resignation. When such a retiree of opt for self-financing pension
scheme, he brings in accumulated contribution earned by him after
completing qualifying number of years of service under provident fund rules
where as a person who resigns may not have adequate credit balance to his
provident fund account (i.e. banks contribution) and, therefore, the
regulation 3 does not cover employees who have resigned. Similarly, in the
case of a dismissed employee, there may be forfeiture of his retrial
benefits and consequently the framers of the scheme have kept out the
retirees as well as dismissed employees vide regulation 22. Further, the
pension payable to the beneficiaries under the scheme would depend on
income accruing on investments and unless there is adequate corpus, the
scheme may not be workable and, therefore, clause 22 prescribes a
disqualification to dismissed employees and employees who have resigned.
Lastly, as stated above, the scheme contemplated pension as the second
retiral benefit in lieu of employers' contribution to contributory
provident fund. Therefore, the said scheme was not a continuation of the
earlier scheme of provident fund. As a new scheme, it was entitled to keep
out dismissed employees and employees who have resigned.

In the light of our above analysis of the scheme, we now proceed to deal
with the arguments advanced by both the sides. It was inter alia urged on
behalf of the appellant bank that under regulation 22, category of
employees who have resigned from the service and who have been dismissed or
removed from the service are not entitled to pension, that the pension
scheme constituted a separate fund to be regulated on self-financing
principles, that prior to the introduction of the pension scheme, there was
in existence a provident fund scheme and the present scheme conferred a
second retiral benefit to certain classes of employees who were entitled to
become the members/beneficiaries of the fund, that the membership of the
fund was not dependent on the qualifying service under the pension scheme,
that looking to the financial implications, the scheme framed mainly
covered retirees because retirement presupposed larger number of years of
service, that in the case of resignation, an employee can resign on the
next day of his appointment whereas in the case of retirement, the employee
is required to put in certain number of years of service and consequently,
the scheme was a separate code by itself, that the High Court has committed
manifest error in decreeing the suit of the respondent inasmuch as it has
not considered the relevant factors contemplated by the said scheme and
that the pension scheme was introduced in terms of the settlement dated
29.10.1993 between the IBA and All India Bank Employees' Association, which
settlement also categorically rules out employees who have resigned or who
have been dismissed/removed from the service.

Shri R.P. Bhatt, learned senior counsel appearing on behalf of the
respondent in Civil Appeal No. 1506 of 2003 inter alia urged that
regulation 22 to the extent it provides for forfeiture of service and
disqualifying those who have resigned for pensionary benefits is an
arbitrary and unreasonable classification and repugnant to Article 14 of
the Constitution, that regulation 22 was contrary to the objects of the
pension scheme embodied in the regulations, that employees who have
resigned after completing qualifying service contemplated by regulation 14
were entitled to opt for pension as they were in a position to bring in
their contribution of retiral benefits to their credit for having worked
for a minimum service of 10-years in the bank and that the respondent had
worked for more than 10-years after which he resigned and, therefore, the
fulfilled the qualifying service contemplated by regulation 14 and
consequently, he was entitled to the bent It of the pension scheme.

We find merit in these appeals. The words "resignation" and "retirement"
carry different meanings in common parlance. An employee can resign at any
point of time, even on the second day of his appointment but in the case of
retirement he retires only after attaining the age of superannuation or in
the case of voluntary retirement on completion of qualifying service. The
effect of resignation and retirement to the extent that there is severance
of employment but in service jurisprudence both the expressions are
understood differently. Under the Regulations, the expressions
"resignation" and "retirement" have been employed for different purpose and
carry different meanings. The pension scheme herein is based on actuarial
calculation; it is a self-financing scheme, which does not depend upon
budgetary support and consequently it constitutes a complete code by
itself. The scheme essentially covers retirees as the credit balance to
their provident fund account is larger as compared to employees who
resigned from service. Moreover, resignation brings about complete
cessation of master and servant relationship whereas voluntary retirement
maintains the relationship for the purposes of grant of retiral benefits,
in view of the past service. Similarly, acceptance of resignation is
dependent upon discretion of the employer whereas retirement is completion
of service in terms of regulations/rules framed by the bank. Resignation
can be tendered irrespective of the length of service whereas in the case
of voluntary retirement, the employee has to complete qualifying service
for retiral benefits. Further, there are different yardsticks and criteria
for submitting resignation vis-a-vis voluntary retirement and acceptance
thereof. Since the pension regulations disqualify an employee, who has
resigned, from claiming pension the respondent cannot claim membership of
the fund. In our view, regulation 22 provides for disqualification of
employees who have resigned from service and for those who have been
dismissed or removed from service. Hence, we do not find any merit in the
arguments advanced on behalf of the respondent that regulation 22 makes an
arbitrary and unreasonable classification repugnant to Article 14 of the
Constitution by keeping out such class of employees. The view we have taken
is supported by the judgment of this Court in the case of Reserve Bank of
India and Anr. v. Cecil Dennis Solomon and Anr., reported in (2003) 10
Scale 449. Before concluding we may state that clause 22 is not in the
nature of penalty as alleged. It only disentitles an employee who has
resigned from service from becoming a member of the Fund. Such employees
have received their retiral benefits earlier. The pension scheme, as stated
above, only provides for a second retiral benefit. Hence there is no
question of penalty being imposed on such employees as alleged. The pension
scheme only provides for an avenue for investment to retirees. They are
provided avenue to put in their savings and as a term or condition which is
more in the nature of an eligibility criteria the scheme disentitles such
category of employees out of it.

For the aforestated reasons, these appeals are allowed and the impugned
judgments and orders are set aside. There shall be no order as to costs.

So far as Civil Appeal No.607 of 2003 is concerned, learned counsel
appearing on behalf of the appellant - bank states that whatever credit
balance to the provident fund account of the employee which was transferred
to the pension fund shall be refunded to the respondent employee with
accrued interest, if any, if not already refunded.


Service Law: State Bank of India (Supervisory Staff) Service Rules, 1975 : Rules 20-A and 20-5. Sanction to retire-Withholding of-In case of erstwhile Imperial Bank of India (IBI) employees-Permissibility of-Person who was initially recruited as Cashier in July 1939 in the erstwhile IBI became an employee of State Bank of India (SBI) upon its constitution in 1955-Employee promoted as Head Cashier in SBI in July 1956-His date of retirement was 28-5-1970 but was granted extension in service for seven years up to 30-6-1977-During extended period charge sheet was served on him on 24-11-1975-After 30-6-1977 decision was taken to withhold sanction to retire him and to forfeit the Bank's contribution to his provident fund-Held: Withholding of sanction for retirement permissible in view of Rr. 20-A and 20-B-Further, in order to avail of retirement benefits under the rules and regulations framed for erstwhile IBI employees, sanction to retire under R.20-A mandatory-Decision to withhold sanction to retire and to forfeit Bank's contribution to employee's provident fund held valid-State Bank of India (Sub-Accountants and Head Cashiers) Service Rules, 1959-State Bank of India Act, 1955, S.43-Imperial Bank of India Act, 1920. Imperial Bank of India Employees' Pension and Guarantee Fund (Rules and Regulations) : Rule 7, Pension-Forfeiture of-Held : Implies forfeiture of Bank's contribution to pension fund and interest accruing there-on. Imperial Bank of India Employees' Provident Fund Rules : Rules 18 and 20. Rule 18-Held : Applies when an employee is dismissed from service but does not apply when sanction to retire an employee is withheld-Forfeiture of Bank's contribution towards provident fund-Forfeited amount determined at after holding enquiry against the employee-The forfeited amount repre- sented the liability incurred by the employee to the Bank-forfeiture was in accordance with R.20--Hence upheld. State Bank of India (Supervisory Staff) Service Rules, 1975 : Validity of-Held : The Service Rules have been framed in exercise of statutory power under S.43 of the State Bank of India Act, 1955-Hence valid. The respondent was appointed as Cashier in the Imperial Bank of India in July 1939 and became an employee of State Bank of India (SBI) in 1955 upon its constitution. The respondent was promoted as Head Cashier by the SBI in July 1956. Under the State Bank of India (Sub-Ac-countant and Head Cashiers) Service Rules, 1959 the respondent was due to retire on 28-5-1970. However, the respondent was granted extension in service for seven years up to 30-6-1977. During the extended period the respondent was served with a Charge Sheet on 24-11-1975. Enquiry proceedings were initiated against the respondent After 30-6-1977 a decision under Rule 11 of the Imperial Bank of India Pension and Guarantee Fund (Rules and Regulations) was taken to withhold sanction to retire the respondent and to forfeit the Bank's contribution to the respondent's provident fund under Imperial Bank of India Employees' Provident Fund Rules. The High Court allowed the writ petition filed by the respondent challenging the aforesaid decision. Hence this appeal. Disposing of the appeal, the Court HELD : 1. In view of Rules 20-A and 20-B of the State Bank of India (Supervisory Staff) Service Rules, 1975 withholding of sanction to retire an employee of the erstwhile Imperial Bank of India (IBI) is permissible. Further, in order to avail of retirement benefits under the Imperial Bank of India Employees' Pension and Guarantee Fund (Rules and Regulations) and the Imperial Bank of India Employees' Provident Fund Rules framed for erstwhile IBI employees sanction to retire an employee is mandatory under Rule 20-A of the Service Rules. Moreover, the Service Rules had been framed by the State Bank of India in exercise of its statutory powers under Section 43 of the State Bank of India Act, 1955. Hence, the decision to withhold sanction to retire the respondent is valid and permissible. [426-F-H; 427-A-B; 429-C-D] State Bank of India v. A.N. Gupta, (1997) 6 SCALE 303, held inapplicable. T. Narsiah v. State Bank of India, (1978) 2 LLJ 173, referred to. 2. Under Rule 7 of the Imperial Bank of India Employees' Pension and Guarantee Fund (Rules and Regulations) an employee has right of property in the pension fund to the extent of his contribution made thereof with interest thereon. When the Rules talk of forfeiture of all claims upon the fund for pension that would only mean the Bank's contribution and the interest accruing thereon. [430-A-B] 3. Rule 18 of the Imperial Bank of India Employees' Provident Fund Rules applies when an employee is dismissed from service but does not apply where sanction to retire an employee has been withheld. The forfeited amount is the Bank's contribution to the respondent's provident fund ac-count. This, the Bank is entitled to forfeit under Rule 20 of the Provident Fund Rules. The forfeited amount has been arrived at after due enquiry and represents the liability incurred by the respondent to the Bank. [430-C-D] CIVIL APPELLATE JURISDICTION : Civil Appeal No. 10078 of 1983. 1998 AIR 1500, 1997( 6 )Suppl.SCR 416, 1998( 2 )SCC 544, 1997( 7 )SCALE585 ,


PETITIONER:
THE STATE BANK OF INDIA

Vs.

RESPONDENT:
SHRI C.B. DHALL

DATE OF JUDGMENT: 11/12/1997

BENCH:
SUJATA V. MANOHAR, D.P. WADHWA




ACT:



HEADNOTE:



JUDGMENT:
     J U D G M E N T
D.P. Wadhwa, J.
     This appeal  by the State Bank of India (for short, the
'Bank' or  'State Bank')  arises out  of the  judgment dated
August 22, 1983 of learned single Judge of the High Court of
Delhi. The  reasons for the judgment  were given  by  order
dated September 2, 1983. The impugned judgment was delivered
on a  writ petition  filed by  the respondent, C.B.  Dhall.
Dhall had  challenged the  Order of the Central Board of the
State Bank  dated June 4, 1980 by which it was resolved that
"the sanction  to retire  you be  withheld  and the  Bank's
contribution to your provident fund Account amounting to Rs.
24006-49 be  forfeited" which  decision was  communicated to
Dhall by  letter dated July 16,  1980 of  the Chief General
Manager of  the Bank. The  High  Court  allowed  the writ
petition and  quashed the Resolution of the Central Board as
well as the Communication by which it was conveyed to Dhall.
The High  Court further ordered that  the  Bank  shall pay
within six weeks to Dhall the following amounts:
     "1. The  entire arrears  of pension
     in regard  to  the   pension  and
     gratuity fund rules with interest @
     6% per annum.
     2. Pension will be  paid in future
     in accordance   with  the  rules.
     Pension will  be  computed on  the
     basis of full pay during the period
     of suspension.
     3. The   provident  Fund (Bank's
     contribution   which    has    been
     withheld) with  interest  according
     to the  Rules after  deducting  the
     admitted sum  of Rs.  10,000/- P.F.
     and  the interest  up-to-date  on
     payment according to the Rules will
     be calculated first. Thereafter the
     admitted  amount  of  Rs. 10,000/-
     will  be  deducted therefrom.  The
     balance  shall   be  paid to  the
     petitioner.
     4. The  petitioner shall also  be
     entitled to  such other  retirement
     benefits as  are admissible  to him
     according to  the service  rules,
     have already not been given to him.
     5. Petitioner will also be entitled
     to full  pay  for the  period  of
     suspension and  the bank  shall pay
     the sum after deducting such amount
     as has  been paid to him during the
     period  of suspension  by way  of
     subsistence allowance or otherwise.
     6. The petitioner shall be entitled
     to his costs.
     Counsel's fee for Rs. 50/-.
     Dhall was appointed as Cashier in the Imperial Bank of
India in  July 1939  and was  confirmed to  this post  after
completion of  his period  of probation of  one  year. The
Imperial Bank  of India was constituted  under the Imperial
Bank of India Act, 1920 which was repealed by the State Bank
of India  Act, 1955 by which the State Bank was constituted.
Services of  Dhall were taken over by the State Bank and the
existing Services  Rules, Pension  Fund Rules  and provident
Fund Rules of the Imperial Bank of India were adopted by the
State Bank  in respect of these  employees. This  was under
Section 7  of the State Bank of India Act which, in relevant
part, is as under:
     "7. Transfer of service of existing
     officers  and   employees of   the
     Imperial Bank  to the  State  Bank-
     (1)   "Every   officer   or   other
     employee  of   the Imperial   Bank
     (excepting the  managing director
     the deputy managing  director  and
     other directors)  in the employment
     of the  Imperial  bank  immediately
     before the appointed day shall on
     and from  the appointed day, become
     an officer or other  employee,  as
     the case may be, of the state Bank,
     and shall hold his  tenure, at the
     same remuneration and upon the same
     terms and conditions and with the
     same rights  and privileges  as  to
     pension, gratuity and other matters
     as he  would have held the same on
     the   appointed day    if    the
     undertaking of  the  Imperial  Bank
     had not  vested in the State Bank,
     and shall continue to do so unless
     and until his  employment in  the
     State Bank is terminated or until
     his    remuneration,    terms    or
     conditions are  duly altered by the
     State Bank.
     (2)................................
     .....
     (3)................................
     ..............
     (4)................................
     ...............
     (5)................................
     ................
     (6)................................
     ................"
     In July 1956, Dhall was promoted as Head Cashier by the
State Bank of India. The State Bank of India (Sub-Accountant
& Head Cashiers) Service Rules came into force on January 1,
1959. Under these Rules, the age of super annuation for head
Cashier was  55 years  but w.e.f.  April 1,  1967, this was
increased to  58 years. Dhall was  due to retire on May 28,
1970 after  completing 30  years  of  pensionable  service.
However, the competent authority granted extension to him of
his service  by seven years up to & including 30th June 1977
on which  date Dhall  was to  completed 58 years of his age.
While in  he extended period of service, Dhall was suspended
on account  of certain allegations against him of fraud and
defalcation of funds while posted at Agra.
     On November  24, 1975  Dhall was served with the Charge
Sheet. The  charges laid  under this  Charge sheet were many
and some  of these  were (1)  shortage of admitted by Dhall,
thus, admitting his negligence and responsibility therefor
collaterally; (2)  shortage in cash to the tune  of Rs. 1,
000/- on  September 25, 1972; (3) exchanging mutilated noted
for he denomination of Rs. 5, Rs. 20 and Rs. 100 without
approval of  the joint custodian. The Reserve Bank of India
had intimated the Bank that mutilated notes to the extent of
Rs. 55,000/-  were irregularly exchanged and  that this was
borne out by the inspection of the currency at the branch at
Agra held  on August  11, 1976 which pertained to the period
when Dhall  was the  head Cashier.  Enquiry proceedings were
initiated against Dhall. Dhall completed 58 years of his age
on June 30, 1977.  However, due to the pendency of enquiry,
he was given two years extension.
     Report of the enquiry officer was submitted on June 15,
1979 which  was placed before the disciplinary Authority who
found Dhall  guilty of most of the charges levelled against
him. Extended period of Service of Dhall expired on June 17,
1979 on his attaining the age of 60 years. On November 22,
1979, he was intimated and given show cause notice as to why
Bank's contribution  to the  provident fund  should  not  be
forfeited as  he was liable to the Bank to the extent of Rs.
37458/83 and  further why  sanction to his retirement be not
withheld under Rule 11 of the Imperial Bank of India Pension
and Guarantee Fund Rules and Regulations. Reply of Dhall was
considered and the  Central  Board  of the  Bank  directed
forfeiting of  Bank's contribution  amounting to Rs.24006/49
from the  provident fund.  Dhall was also told that sanction
to retire  him was  withheld under  Rule 11 of the Rules and
Regulations  of the  pension  and  Guarantee  Fund  by the
competent authority.  The result was that Dhall was deprived
of pension  and Bank's contribution to his provident fund.
The show  cause notice and the decision of  the  Bank are
reproduced hereunder as:
     "State Bank of India,
     Local Head Office,
     P.O. Box No. 398,
     11, Sansad Marg
     New Delhi.
     Disciplinary Action Cell
     No. DAC/79/RL/1336
     Dated 22nd Nov. 1979.
     Dear Sir,
     With     reference     to     the
     correspondence  resting  with  your
     letter dated  29th June  1976,  in
     reply  to the  statement of  the
     charges served  on you, in terms of
     out letter No.  R.  IV/8990  dated
     24th November  1975 and  subsequent
     departmental enquiry  held against
     you, we  have perused  the findings
     of the  enquiry authority vis-a-vis
     the proceedings  of the enquiry and
     "held you guilty of charges Nos. 1,
     2, 4,  5, 6,  7, 7a,  9, 10  and
     partially charge No.3.
     2. With  reference to  your  letter
     dated 1st August, 1979  as charges
     proved against  are grave and  you
     attained the age of 60 years on the
     30th June, 1979 and ceased to be in
     the service  of the  Bank from that
     date, you are hereby  required  to
     show  cause  -  why  recommendation
     should not be made  to Local Board
     to withhold  the sanction of  your
     withhold  the   sanction  of   your
     retirement and  pension in the term
     of Rule  11 of the Imperial Bank of
     India Pension  and Guarantee  Fund
     rules. Please also show cause as to
     why the bank's contribution towards
     the  provident   Fund  may not  be
     forfeited as  you are liable to the
     bank   to the   extend to   Rs.
     37,458/83.
     3. Your reply in this regard should
     reach the undersigned within 7 days
     of the  receipt of this letter  by
     you. Otherwise  it will be presumed
     that you  have nothing to submit in
     this regard  as  we  shall proceed
     accordingly.
      Yours faithfully."
   Sd/-
      "State Bank of India,
      Local Head Office,
      P.O. Box No. 398,
      11, Sansad Marg,
      New Delhi.
     No. DAC
     Disciplinary action Cell
     Agra Branch
 Shri C.B. DHALL OFFICER GDE II
 H/Cashier - Under suspension.
 With ref.   to  your written
     statement dated 11.2.80, be advised
     considered  by the    Executive
     committee of  the Central Board at
     its meeting  held on  4.6.80 and it
     is resolved  that the  sanction  to
     retire  you  be  withheld and  the
     bank's contribution  to your P.Fund
     a/c  amount  to  Rs.  24,006/49  be
     forfeited.
     2. Therefore our tentative decision
     conveyed to  you  vide  letter  No.
     DAC/79/R-V/1336 dated 23rd Nov. '79
     is confirmed.
 Sd/- Chief General Manager"
     When the  decision was  communicated to  Dhall,  he  as
noted  above, filed  the  writ  petition  challenging the
decision of  the Bank. The  High  Court  allowed  the writ
petition in  terms mentioned  above. Special  leave petition
filed  by   the Bank  against the  impugned  judgment was
admitted.  On October 28,  1983,  the  Court passed the
following order:
     "Special leave granted.    The
     appellant however undertakes  that
     even  in the  event   of success
     nothing will  be recovered from the
     respondent. The  judgment in appeal
     will not  be treated as a precedent
     for any  other  case.  Four  weeks'
     time is granted for payment.
     Will be  listed for  final hearing
     along  with   SLP No.  431/81  (CA
     9943/83)."
     It may  be noted  that  SLP  (C)  No.  431/81  (CA No.
2141/80) entitled  State Bank  of India vs. A.N. Gupta etc.
has since  been decided and judgment is reported in 1997 (6)
SCALE 303.
     In A.N.  Gupta's case,  this court considered the scope
of Rule 11 of the Rules and Regulations of the Imperial Bank
of India  Pension and  Guarantee Fund  and Rule 20  of the
Imperial Bank of India Employees provident Fund Rules. These
Rules and  Rule 18  of the  Imperial Bank of India Employees
Provident Fund Rules are as under:
     (1)  The  Imperial Bank  of  India
     Employees Pension  and  Guarantee
     Fund (Rules and Regulations)
     "The retirement  of all officers of
     the Bank  shall be subject to  the
     sanction of the Executive Committee
     of  the Central   Board.    The
     retirement of  all other  employees
     of the Bank shall be subject to the
     sanction of the Executive Committee
     or the  Local Board  concerned with
     their employment. Any  officer  or
     other employee  who shall leave the
     service   without  sanction,   as
     required by this rule shall forfeit
     all  claim  upon the   fund   for
     pension."
     (2)  The  Imperial Bank  of  India
     Employees Provident Fund Rules
     "18.  If any  member   shall   be
     dismissed from  the service  of the
     Bank for  any fault  or other cause
     justifying dismissal,  he shall not
     be entitled   to receive,  unless
     permitted to do so by the trustees,
     the sums contributed. Provided that
     when any member is so dismissed any
     amount  due   under   a   liability
     incurred by  the member to the Bank
     (not exceeding in any case the sums
     so contributed  by  the  Bank  and
     interest thereon) shall be paid by
     the trustees to the Bank out of the
     sum standing  to the  credit of the
     member's account.
     20.  When a  member   resigns  or
     retires from  the service of  the
     Bank he shall, if he has served the
     bank for  a period of five years or
     more  (including service in  the
     Presidency Banks), be entitled  to
     receive the  balance at  his credit
     in the fund. Provided that when any
     member resigning  or retiring  from
     the service  of the Bank is under a
     liability incurred by him to  the
     Bank,    the     trustees  shall,
     irrespective of the duration of his
     service, pay to the Bank out of the
     balance at his credit  in the fund
     any amount due by him to the Bank
     (not exceeding in any case the sums
     contributed  by  the  Bank to  his
     account  in   the fund   and   any
     interest credited to his account on
     the sums so contributed)."
     This Court held that Rule 11 had no application in the
case of the employees governed by the Imperial Bank of India
Pension and   Guarantee  Fund Rules  who  had retired  on
attaining the age of superannuation. The Court did not agree
with  the   submission of  the Bank  that  sanctioning  of
retirement must be understood as  sanctioning of  service
which in  term must be understood as approval of service. It
was observed  that proceedings in the garb of disciplinary
proceedings could  not be  permitted after  an employee had
ceased to  be in  the service  of the  Bank as Service Rules
then in force applicable  to such employees did not provide
for continuation  of disciplinary proceedings after the date
of superannuation and that sanction of the Bank was required
only if the retirement of an employee was  by  any  other
method except  superannuation. As  regards Rule 20  of the
Imperial bank  of India Employees Provident Fund Rules, this
Court took  this view that this Rule would become applicable
only if an employee  retiring from  the service of the Bank
was under  a liability incurred by  him to  the Bank and in
that case,  trustees administering  the provident Fund could
pay to the bank  from balance to the credit of the employee
in the Fund any  amount due  by him  to the bank. The Court
observed that  there was  nothing on  record to show if any
liability was  incurred by  any of the respondents and if so
what were the amounts and then said as under:
     " In  this view of the matter we do
     not think it is necessary for us to
     go into  the question as to whether
     the  term "liability  incurred  "
     means only such  liability  as  is
     either not disputed or established
     by due process. Can it be said that
     this term would also  include  any
     liability that  may be  alleged  by
     the bank? In  any case  the  bank
     should   at   least   prima   facie
     establish that  any  liability  has
     been incurred  by the  employee for
     which  it can  lay  claim to  the
     provident Fund  of the employee. We
     cannot accept  the proposition  on
     behalf  of  the  Bank   that   the
     trustees  should be  allowed   to
     withhold  the  provident  Fund  due
     till they have had  an opportunity
     to have  established and determined
     the amount,  if any,  due from  the
     respondents to  the Bank. We are of
     the view  that the respondents are
     entitled to  the Provident Fund due
     to them  in  accordance  with  the
     provident Fund  Rules as  it cannot
     be said  that  they  incurred  any
     liability."
     This Court did not  approve the  view expressed by the
Andhra Pradesh high Court  in T.  Narsiah vs. State Bank of
India & Ors. [1978 (2) LLJ 173]   wherein  the High  Court
was of the view  that enquiry could also be made against an
employee after his  retirement on  attaining the  age  of
superannuation. This  Court said  that by  giving  such  an
interpretation to Rule 11, the High Court had, in fact, lent
validity to disciplinary proceeding against an employee even
after his  superannuation for  which  no  provision  existed
either in  the relevant  Pension  Rules or  in the relevant
Service Rules  and when the High  Court had itself observed
that an enquiry even if initiated during the service period
of the employee could not be continued after his retirement
on superannuation.  In coming to the conclusion that Rule 11
would not  be applicable  when an  employee superannuates on
his attaining  the age of retirement, this Court considered
various relevant  pension Rules and Service  Rules  of the
Imperial Bank.
     Later on  it would appear Rule 228 was inserted in the
Imperial Bank  of India Pension and  Guarantee fund  Rules
which postulates  continuance  of  disciplinary proceedings
even after  an employee ceases to be in Bank's service. This
Rule 22B  (to be  read as  Rule 22A  as per  the  additional
affidavit filed by the bank) came  into force with effect
from June  25, 1987 and would, therefore, be not relevant in
the present case.
     The question  then arises what are the Rules of service
applicable in  the case of Dhall. Mr. Dogra, learned counsel
for the Bank, submitted  that Rules  20A and 20B which were
inserted in  the State Bank of India (Supervising  Staff)
Service Rules, 1975 (for  short "Service  Rules") would  be
answer to  that. Rules 20A and 20B  were  introduced with
effect from April 1,1977 and are as under:
     "20A. Notwithstanding  anything  to
     the contrary  in  these  rules,  no
     employee who  has ceased  to be  in
     the Bank's service by the operation
     of ,  or by  virtue of,  any  rule,
     shall be  deemed  to  have retired
     form the  Bank's service for  the
     purpose for  the Imperial Bank  of
     India   Employees'   Pension   and
     Guarantee Fund  Rules or  the State
     Bank of  India  Employees' Pension
     Fund Rules unless such cessation of
     service  has   been  sanctioned  as
     retirement for   the  purpose   of
     either of the  said  pension  fund
     rules as may be applicable to him.
     20B.    In    Case    disciplinary
     proceedings under these rules have
     been initiated  against an employee
     before  he ceases to  be in  the
     Bank's service by the operation of,
     or by  virtue  of,  any  of  these
     rules, the disciplinary proceedings
     may,  at the  discretion of  the
     Managing Director, be continued and
     concluded by the authority by which
     the proceedings  were initiated  in
     the  manner  provided  for the  in
     these  rules  as  if  the employee
     continues to  be in  service,  so
     however, that he shall be deemed to
     be in  service only for the purpose
     of the  continuance and  conclusion
     of such proceedings."
     We asked  Mr. Dogra  if the services of Dhall, the Head
Cashier, were  governed by  the State  Bank of India  (Sub-
Accountants and Head Cashiers) Service  Rules as  Rule  2
therein provided  that the  Rules shall apply to  all Sub-
Accountants and head Cashiers who are in the service of the
Bank as such on  January 1, 1959 and to all Sub-Accountants
and Head  Cashiers  appointed  thereafter.  Mr. Dogra with
reference to  the additional  affidavit filed  by  the Bank
submitted that State Bank of India (sub-Accountants and head
Cashiers) Service  Rules, 1959 were no longer in  force as
they were  repealed in terms of Rule 2(1) of the State Bank
of India  Supervising Staff  (Service Rules),  of the  State
Bank of India Supervising Staff (Service Rules), 1975. Said
Rule 2(1)  states that the Service  Rules which  came into
force with  effect from July  1,1975  shall  apply  to all
officers/staff officers and senior  staff officers  in the
Bank other  than persons who were in the service of the Bank
on June 30,1955 either as officers or as assistants. It was
submitted by  Mr. Dogra that Dhall was a Cashier on June 30,
1955 and was not an officer. he was also not an Assistant to
be  governed   by  the Rules governing  the services  of
Assistants in  the Bank.  Dhall was promoted as head Cashier
in July 1956 under  Rule 3(p) of the Service Rules. head
Cashier is  a person  appointed on  the terms and conditions
applicable to officers Grade ii and as per the definition of
officer under  Rule 3(j), officer means an officer Grade II.
Dhall would,  therefore, be  an officer under the  Service
Rules, State bank  of  India (Sub-Accountants  and Head
Cashiers) Service Rules, 1959 would, therefore, be no longer
in force  as these  would deem to have been repealed by Rule
2(1) of the Service  Rules which  states that these Service
Rules shall apply to all officers, staff officers and Senior
Staff Officers in the bank other  than persons who were in
the service  of the  Bank on  the 30th June, 1955 either as
officers or  as Assistants.  Consequently,  Dhall  would  be
governed by  Rules 20A and 20B of the Service Rules which
came into effect from April 1,1977.
     There is  no dispute  that the employees who are in the
service of  the Bank as on 30th June, 1955 would continue to
be governed  by the Imperial Bank of India Rules relating to
pension and  provident Fund and those joining the Bank after
this data  by the  Rules of  the State bank of India framed
under Section  50 of  the State bank of  India Act. In this
connection we may also refer to Rule 21 of the Service Rules
of 1975 which is as under:
     " 21.  Unless Otherwise directed by
     the  Appointing   Authority,  every
     employee shall as   from   the
     commencement of  his service  as an
     officer become a member of-
     (a)  the State  bank   of   India
     Employees Provident  Fund, if he is
     not already  a member  of that Fund
     or the   Imperial bank  of  India
     Employee's Provident Fund:
     (b)  the State  Bank   Of   India
     Employees' pension Fund, if  he is
     not already  a member  of that Fund
     or the   imperial bank  of  India
     Employees' Pension  and  Guarantee
     Fund  or the   bank   of  Bombay
     Officers' pensions  and  Guarantee
     Fund or  the bank of Madras pension
     and Gratuity Fund:
     and shall subscribed and agree to
     be bound  by  the rules  of  those
     Funds.
     Provided that  if his  age at   the
     time of commencement of his service
     as Officer is below  21  years  he
     shall become  a member of the State
     bank of  India  Employees' Pension
     Fund on  attaining the  age  of  21
     years  and on  becoming  a  member
     shall subscribe  and  agree  to  be
     bound by  the rules  of that Fund."
     Rules 20-A and 20-B  of the  Service Rules  have been
framed under Section 43 of the State Bank of India Act. This
section is as under:
     "43.   State   bank   may appoint
     officers any  other employees-  (1)
     The State bank  may  appoint  such
     number of officers,  advisers  and
     employees as it considers necessary
     or desirable   for  the  efficient
     performance of  its functions,  and
     determine the  terms and conditions
     of their appointment and service.
     (2)  The officers,  advisers  and
     employees of  the State  Bank shall
     exercise such  powers  and perform
     such duties lies may, by general or
     special  order   be  entrusted   or
     delegated to  them by  the Central
     Board."
     Section 43 empowered the State bank  to determine the
terms and  conditions of  the appointment and service of its
officers  and employees.  These   officers  and  employees
exercise such  powers and  perform such duties as  may  be
entrusted or  delegated to  them by the Central board of the
State Bank.  Section 50 of the State Bank  of  India Act
empowers the  Central Board  to make regulations but Section
43 is  independent of Section 50, we hold that Service Rules
had been  framed by  the  State bank  in  exercise  of its
statutory powers under Section 43 of the State Bank of India
Rules.
     Rules 20-A and 20-B have now made a material difference
to the applicability of  Rule 11  of the  pension  Rules.
However, the  case of  A.N. Gupta (Supra) is distinguishable
as these  Rules, 20-A  and 20-B,  came into  existence only
w.e.f. March  31, 1977. Under Rule 20-A retirement under the
Pension Fund Rules has now to be sanctioned by the competent
authority. Under this Rule, retirement would mean retirement
on superannuation or any other type of retirement.
     Under Rule 20-B disciplinary  proceedings if initiated
against an  employee before he retires from service could be
continued and  concluded even  after his  retirement and for
the purpose  of conclusion  of the disciplinary proceedings,
the employees is deemed to have continued in service but for
no other  purpose. After  the disciplinary  proceedings, the
employee is  deemed to have continued  in service but for no
other  purpose. After the  disciplinary  proceedings were
concluded, the State Bank  directed that  (1) sanction  of
Dhall to  retire be  withheld and (2) Bank's contribution to
his provident  fund accounts  be forfeited. Under Rule 10 of
the Pension Fund Rules, and employee dismissed from the Bank
Service for  willful neglect  or  fraud shall forfeit all
claims upon  the  fund for  pension.  Dhall  has  not been
dismissed from service through he was charged with willful
neglect and   fraud. The   question that arises for
consideration is  what is  the effect  of the  direction the
State bank  that sanction  to retire  of Dhall be withheld.
Here cessation of service  of Dhall  on retirement  has not
been sanctioned accordingly as per the last portion of Rule
11 of  the pension Fund he forfeits all claims upon the Fund
for pension.
     But then  applicability  of  his  Rule  11 has  to  be
contrasted with Rule 10. It is only if an employee has been
dismissed from service that he forfeits all claims upon the
fund for  pension and  so would appear to  be the effect of
Rule 11.  Under Rule 7, an employee has right of property in
the pension  fund to  the extent  of his  contribution made
thereof with  interest thereon. It would, therefore, appear
to us  that when  the Rules talk of forfeiture of all claims
upon the  fund for  pension that  would only mean the Bank's
contribution and  the interest accruing thereon. These Rules
cannot be   extended  to   forfeit  event   eh  employee's
contribution to the pension  fund and the interest accruing
thereon. However,  after the introduction of Rule 5-A in the
pension Fund  Rules w.e.f. April 1, 1968, there is not to be
any contribution by employee to the pension fund.
     Coming to the provident  Fund Rules,  Rule 18  applies
when an employee is dismissed from service which is not the
case here.  It is  under Rule  20  that an  amount  of Rs.
24,006,49  has been  forfeited   which   is the   Bank's
contribution to the provident fund account of Dhall. This,
the State  Bank is  entitled to forfeit under Rule 20. The
amount has  been arrived at after due enquiry and represents
the liability  incurred by Dhall to the Bank. Accordingly we
hold  that  Dhall  was rightly proceeded  against  in the
disciplinary proceedings  and the  State bank was within its
authority to  impose the  penalty as  conveyed to  Dhall  by
letter dated  July 16, 1980 of the Chief General Manager of
the State Bank.
     We, therefore, uphold the impugned judgment of the High
Court to  the extent  that Dhall  would be  entitled to his
contribution, if  any, to  the pension Found along with the
interest accrued thereon. The impugned judgment in all other
respects is  set aside. However, in  view  of the  interim
orders made  on October 28, 1983,  no further orders are
required in this appeal.