Civil Appeal No 1203 of 1968
From the order dated the 4 4 1967 of the Punjab and Haryana High Court in LPA No 104 of 1967
O P Sharma for the appellant
H K Puri and M C Dhingra for the respondent
The Judgment of the Court was delivered by JASWANT SINGH J
This appeal by certificate of fitness granted by the Punjab and Haryana High Court is directed against the judgment dated April 4 1967 of a Division Bench of that Court passed in Letters Patent Appeal No 104 of 1967 whereby the judgment and order dated December 19 1966 of Narula J as he then was in Civil Writ Petition No 298 of 1966 was affirmed
361 It appears that the respondent joined the Punjab Education A Department Class II Service by direct recruitment as senior lecturer in 1933
He was promoted to Punjab Education Service Class l on October 1 1949
He was given the selection grade with effect from February 15 1956 and in due course rose to the position of Director of Public Instruction cum Secretary to the Government of Punjab Education Department
He proceeded on leave preparatory to retirement on March 18 1958 on attaining the age of super annuation
In June 1961 he received a copy of letter No 5137 ED I 609269 dated May 2 1961 addressed by the Secretary to Government Punjab Education Department to the Director of Public Instruction Punjab Chandigarh conveying the sanction of the Governor of Punjab to the grant to him ie the respondent of superannuation pension and death cun1 retirement gratuity of Rs 41702 np
per mensem and Rs 1703025 np in lump sum respectively under rules 527 and 613 of the Punjab Civil Service Rules Vol
II read with para 91 a of the New Pension Rules 1951
It was stated in the aforesaid letter that personal file of the respondent had been examined with reference to rule 64 of the Punjab Civil Service Rules Vol
II and Government were satisfied that his service record was not satisfactory and a cut of 10 had accordingly been made in the amount of pension and death cum retirement gratuity admissible to his
On January 28 1962 the respondent submitted representations to the Chief Minister and Governor of Punjab against the aforesaid decision of the Government to apply 10 cut in his pension and death cum retirenment gratuity but the same proved abortive
After the establishment of the Board set up to examine and remove the grievances in the matters of promotion and fixation of pension etc
Of the Gazetted officers of the Government the respondent addressed a representation to the said Board on September 14 1964 against the
aforesaid decision of the Government to apply a cut of l0 in his pension and gratuity
On November l  1965 the respondent received a copy of letter No EDI 464 6522436 dated October 21 1965 addressed by the Education Commissioner and Secretary to Government Punjab Education Department to the Director of Public Instruction Punjab intimating that in supersession of the aforesaid letter dated May 2 1961 of the Punjab Government it had been decided to grant to the respondent a superannuation pension and death cum retirement gratuity of Rs 44018 np per mensem and Rs 1892750 np in lump sum respectively under rules 527 and 613 of the Punjab Civil Service Rules Vol
II read with para 9i a of the New Pension Rules 1951
In para 3 of the letter it was reiterated that a cut of 5 had been made in the pension admissible to the respondent as his service record which had been examined with reference to rule 64 of the Punjab Civil Service Rules Vol
II had not been satisfactory
Aggrieved by this communication the respondent filed in the Punjab and Haryana High Court at Chandigarh a petition under Articles 226 and 227 of the Constitution being Civil Writ Petition No 298 of 1966 challenging the aforesaid decision of the Punjab Government which was as already stated allowed by Narula J ras he then was by his judgment and order dated December 19 1966 following the Full Bench Judgment of his Court dated October 362 251966in Civil Writ Petition No 504 of 1954 entitled Shri K R Erry Retired
Superintending Engineer 45 Cecil Hotel Simla vs
The State of Punjabl
Dissatisfied with this judgment and order the appellants preferred a Letters Patent Appeal being L P A No 104 of 1967 which did not meet with success
Thereupon the appellants applied for a certificate under Article 133 of the Constitution which was granted to them
This is how the matter is before us
Although in the grounds of appeal it has been urged by the appeIlants that the Full Bench decision of the High Court of Punjab and Haryana in K R Erry sl case supra is not in accordance with law as superannuation pension is a bounty and is given only as an act of grace that ground is no longer available to the appellants in view of the decision of this Court in Deokinandan Prasad vs The state of Bihar  Ors
2 where it was held that pension is not a bounty payable on the sweet will and pleasure of the Government and the right of a Government servant to receive it is property under Article 311 of the Constitution and the State cannot withhold the same by a mere executive order
It was further held in that case that the claim to pension was also property under Article 191 f of the Constitution and was not saved by clause S thereof
The learned counsel appearing for the appellants has however made a feeble attempt to urge that no opportunity to show cause was required to be given to the respondent before passing the order imposing the cut in his superannuation pension and death cum retirement gratuity under clauses a and b of rule 64 of the Punjab Civil Service Rules Pension Rules as the order was an administrative order and the case did not fall within the purview of Article 311 2 of the Constitution
It has been further contended by learned counsel for the appellants that it was the judgment of this Court in M Narasimachar vs The State of Mysore8 and not the judgment in State of Punjab vs The K R Erry  Sobhag Rai Mehta4 which governed the present case
We regret we are unable to accede to these contentions
Though the impugned order imposing cut in pension and gratuity is not one of reduction in rank falling within the purview of Article 311 2 yet there can be no doubt that it adversely affected the respondent and such an order could not have been passed without giving him a reasonable opportunity of making his defence
Reference r in this connection may be made with advantage to the decision of this Court in K R Erry  Sobhag Rai Mehta s case supra where after an exhaustive review of the case law bearing on the point it was observed at page 413 as follows Where a body or authority is judicial or where it has to determine a matter involving rights judicially because of express or implied provision the principle of natural justice audi alteram partem applies
See Province of Bombay vs Kusaldas section Advani  Ors  725 and Board of High School  Intermediate Education UP 1 ILR 1917 Punjab  Haryana 278
2 1971 Supp
SCR 634
3 1960 I SCR 981 AIR 1960 SC 247
4  363 ALLahabad vs Ghanshyam Das Gupta  ors
1962 Suppl
A 3 SCR 36 With the profiteration of administrative decisions in the welfare state it is now further recognised by Courts both in England and in this country especially after the decision of House of Lords in Ridge vs Baldwin  that where a body or authority is characteristically administrative the principle of natural justice is also liable to be invoked if the decision of that body or authority affects individual rights or interests and having regard to the particular situation it would be unfair for the body or authority not to have allowed a reasonable opportunity to be heard
See State of orissa vs Dr Miss Binapani Dei  Ors
1967 2 SCR 625 and In re H K An lnfant In the former case it was observed as follows C An order by the State to the prejudice of a person in derogation of his vested rights may be made only in accordance with the basic rules of justice and fairplay
The deciding authority it is true is not in the position of a Judge called upon to decide an action between contesting parties and strict compliance with the forms of judicial procedure may not be insisted upon
He is however under a duty to give the person against whom an enquiry is held an opportunity to set uphis version or drefence and an opportunity to correct or to controvert any evidence in the possession of the authority which is sought to be relied upon to his prejudice
For that purpose the person against whom an enquiry is held must be informed of the case he is called upon to meet and the evidence in support thereof
The rule that a party to whose prejudice an order is intended to be passed is entitled to a hearing applied alike to judicial tribunals and bodies of persons invested with authority to adjudicate upon matters involving civil consequences
It is one of the fundamental rules of our constitutional set up that every citizen is protected against exercise of arbitrary authority by the State or its officers
Duty to act judicially would therefore arise from the very nature of the function intended to be performed
It need not be shown to be super added
If there is power to decide and determine to the prejudice of a person duty to act judicially is implicit in the exercise of such power
If the essentials of justice be ignored and an order to the prejudice of a person is made the order is a nullity
That is a basic concept of the rule of law and importance thereof transcends the significance of a decision in any particular case
 These observations were made with reference to an authority which could be described as characteristically administrative
At page 630 it was observed It is true that the order is administrative in character but even an administrative order which involves civil 364 consequences as already stated must be made consistently with the rules of natural justice after informing the first respondent of the case of the State the evidenve in support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence This case and the English case in re HK An Infant were spcifically referred to with approval in a decision of the constitutional bench of this Court in A K Kraipak  Ors etc
vs Union of India  Ors
1970 l SCR 457
The decision of this Court in M Narasimachar s case supra on which strong reliance has been placed on behalf of the appellants is of no assistance to them as the point as to whether an opportunity to show cause was to be afforded to a Government servant before applying a cut in his pension in view of the principle of natural justice embodied in the well known maxim audi alteram partem was never urged or gone into in that case
Furthemore as pointed out by Palekar J while speaking for the Court in K R Erry  Sobhag Rai Mehta s case supra the question whether pension is a bounty or property did not arise in the former case
The present case is in our  opinion fully covered by the judgment of this Court in K R Erry  Sobha Rai Mehta s case supra
For the foregoing reasons we are of the view that the impugned judgments do not suffer from any illegality and were rightly rendered
In the result the appeal fails and is hereby dismissed with costs
PBR Appeal dismissed


Summary:
Purporting to act under r 64 of the Punjab Civil Service Rules
the State imposed a cut of 5 per cent on the pension and death cum retirement gratuity of the respondent
who was a retired Government servant on the ground that his service record was not satisfactory
The High Court allowed the respondent s writ petition challenging the decision of the Government
Dismissing the appeal of the State
 HELD The ground that superannuation pension is a bounty and is given as an act of grace is not available to the appellant
In Deoki Nandan Prasad vs The State of Bihar 1971 Supp
SCR 634 it was held by this Court 1 that pension is not a bounty payable on the sweet will and pleasure of the Government and the right of a Government servant to receive it is property under article 31  1  of the Constitution
and so the State cannot withhold the same by a mere executive order and 2 the claim to pension is property under article 19 1 f of the Constitution and is not saved by cl
5 of article 19
362C D 2 Though the impugned order imposing the cut in pension and gratuity is not one of reduction in rank falling within the purview of article 3112 yet there can be no doubt that it adversely affected the respondent and such an order could not have been passed without giving him a reasonable opportunity of making his defence
362G State of Punjab vs K R Erry  Sobhag Rai Mehta 19731 2 SCR 405 applied
3 M Narasimachar vs The State of Mysore 1960 1 SCR 981 is inapplicable to this case because the point as to whether an opportunity to show cause was to be afforded to a retired Government servant before applying the cut in his pension in view of the principle of natural justice of audi alteram partem was never urged or gone into in that case nor was the question whether pension was a bounty or property arose in that case
364 D E