Case: CHIEF GENERAL MANAGER GUJARAT TELECOM CIRCLE, BHARAT SANCHAR NIGAM LTD Vs. MANILAL AMBALAL PATEL

2. The first respondent (hereinafter referred to as the applicant), who filed the application before the Tribunal was granted provisional pension by proceeding dated 04.08.2008. It reads as follows:-2. The BSNL C.O. ND has intimated that the vigilance clearance in respect of Shri M.A. Paatel, (SL. No. 5) DE, O/o PGMTD Surat has not received from Vigilance Cell of BSNL and therefore the officer shall be given only provisional pension and the DCRG and CVP shall be withheld till the conclusion of the vigilance/ disciplinary case as per CCS (Pension) rules 19723. It may please be ensured that there is no Vig/ Disc case pending or contemplated against any of the above officer mentioned above as on the date of retirement. If any such case comes to notice, only provisional pension shall be granted to the officer (s) and his DCRG and CVP shall be withheld till the Vigilance clearance is accorded4. Copy of the charge relinquishing report may be sent to this office in respect of all concernedThough, the Anti-Corruption Bureau (hereinafter referred to as the ACB) had registered a case against the applicant, the investigating officer, however, had found no evidence against him. Investigating officer had submitted A-summary before the Principal District Sessions, Judge, Banaskantha, Palanpur, who refused to accept the summary. The State of Gujarat thereupon challenged the order. On 30.03.2012 the criminal revision application, filed by the State, was allowed according sanction to the investigating officer to file A-summary report before the trial Court. The applicant applied for interest on pensionary benefits i.e. DCRG and CVP, which, was rejected, on the basis that the criminal revision petition, filed by the State, against the order of the trial Court refusing to accept the A-summary was disposed of and that after the order of the High Court and Vigilance clearance the amounts were paid. He approached the Tribunal and the Tribunal directed payment of interest. The High Court in the writ petition, filed by the appellants, has reasoned that on 01.08.2008 (the applicant was to retire on superannuation on 31.07.2008), there were no criminal proceedings against him. The High Court, inter alia, held as follows:We are unable to accept the said submission as narrated hereinabove. There were no criminal proceedings on 01.08.2008. All that the High Court in its order has done directing the authority below, which is produced at page no.219 at Para 14, which read as under;14. The report made to the Court below by the investigating officer was, therefore, made under Section 173 of the Code and the Court was required to pass an order under Section 173(4) of the Code, which the Special Court has failed to do. The order passed by the learned Principal District and Sessions Judge, Banaskantha at Palanpur, dated 03.05.2006 is, therefore, set aside. The prayer sought by the investigating officer for Summary A is allowed. Accordingly, present revision application is allowed. Rule is made absolute to the aforesaid extent. Muddamal currency note be confiscated to the StateIt will relate back to the date of filing of A-Summary, which is prior to the date when the respondent retired. More particularly, in the year 2007, when the Criminal Revision Application was filed before this High Court3. It was found that it related back to the A- summary, which is prior to the date, when the applicant retired, more particularly, in the year 2007, when the revision was filed in the High Court4. This we understand to mean that the High Court takes the view that the investigating officer submitted A-summary report, which is initially not accepted by the District Court which on revision by the State was directed to be accepted by the High Court. The report submitted by the agency, finding no material against the applicant, would date back to the date on which the report was submitted which would further mean that as on the date when the applicant retired, there was no criminal proceeding against the applicant. Thereafter, the High Court reasoned that there is a delay of huge period and the applicant was given clearance by the Vigilance that there was no case pending as the State has already filed A-summary in the ACB trap case. There was no disciplinary action taken by the State. It was against Article 14 of the Constitution of India and the interest also was found not unreasonable. The High Court, in the petition filed under Article 227, found no infirmity in the order of the Tribunal and dismissed the same.

Reasoning:
10. There is no dispute that CVP has been paid to the applicant after the conclusion of the vigilance proceedings, clearing the applicant, but the question to be considered by us as to whether the applicant was entitled to be paid interest for the period immediately after retirement till the date on which the CVP was actually paid to him. The scheme of the Pension Rules, inter alia, indicate that under Rule 59, the authorities are duty bound to set in motion, the proceedings for calculating and paying the pension by the due date. Rule 59 would indicate that the said procedure is divided into three stages; first stage - verification of service; second stage – making good omission in the service book; third stage - as soon as the second stage is completed, but not later than eight months prior to the date of retirement of the Government servant various steps are to be undertaken. Rule 61 contemplates that after complying with the requirement of Rules 59 and 60, pension papers are to be forwarded to the accounts officer. Rule 64 contemplates provisional pension being paid for reasons other than departmental or judicial proceedings15. The above discussion relate to the persons who are eligible to commute and the pension which qualify. As we have noted ordinarily by the time the person is to retire, papers are to be got ready so that he becomes entitled to the CVP. Thus, if application is made and if all goes well, a person eligible, on his applying, as provided in the Rules, would become entitled to the pension without delay after the retirement19. In this case, admittedly the applicant was sanctioned a provisional pension under Rule 69 on the basis that there was a judicial proceeding pending. We have set out the broad scheme of the Commutation Rules.20. A scanning of the Commutation Rules reveals that there is no provision which contemplates payment of interest. In fact, the appellants have produced Office Memorandum dated 05.10.1999 and the contention appears to be raised that it does not contemplate the grant of interest. We have gone through the said Office Memorandum. On the one hand the Office Memorandum does not contemplate grant of interest when CVP is paid belatedly. But on the other hand, we notice that the order does not declare that no interest shall be payable when CVP is paid belatedly21. The next exercise is to ascertain the true nature of CVP. As we have noticed from the Commutation Rules that CVP is inter-linked with pension. Pension is not a bounty. It is a legal as well as a fundamental right of a Government servant to receive his pension. It is not an act of grace by the employer but it is the right of the Government servant who has put in the required number of years of service. This is subject no doubt to Rule 9 of the Pension rules under which there is power to withhold and recover part or whole of the pension. In regard to pension, it is beyond dispute that for belated payment of pension, interest can be ordered to be paid.22. Commutation of pension is nothing but payment of a portion of the pension calculated on a formula provided in the Rules, the result of which is that the employer will be absolved from payment of the pension to the extent it is commuted and the employee will receive the value of commuted pension in a lump sum at one go. No doubt after a certain number of years (15 years) the full pension gets restored. Therefore, CVP flows out of his right to receive pension. In fact, it is a part of his pension which is paid in lump sum to the employee.23. It is undoubtedly true that it is entirely optional for the officer to commute a part of his pension. In that sense it can be said that without an application, he has no right to get commuted value.28. Rule 6 declares that the commutation in regard to a person covered by Rule 13(1) is to become absolute when Form 1 is received by the Head of Office. In the case of application under sub-rule (3) of Rule (13), it becomes absolute on the date following the date of his retirement. We are not to be detained by Chapter 4 which deals with cases where medical examination is necessary. It is important to notice Clause (c) to the proviso to Rule 6. It clearly contemplates that in the case of person who applied under Rule 13(3), the CVP becomes payable on the date following the date of his retirement. This interpretation is inevitable having regard to the express language of the said Rule. In fact, it contemplates that the reduction in the amount of pension on account of commutation shall be operative from its inception. This means that consequent upon commutation, the full pension which he would otherwise receive would suffer a diminution and it is to take effect from the very first day following his retirement. In fact, Clause (c) proviso to Rule 6 does contemplate a situation where the CVP is not made within the first month from the date of retirement as it provides that the difference of monthly pension for the period between the day following the date of retirement and the date preceding the date on which the CVP is deemed to have been paid in terms of the Central Government Account (Receipts and Payments) Rules, 198329. We have noticed the Rules. We have found out that the Rules declare the categories of pension which would qualify for commutation. In other words, those persons who fall in Rule 12 of the Commutation Rules, without undergoing any medical examination can apply for commutation, as provided in Rule 13, which includes a person who receives superannuation pension. If such a person applies under Rule 13, well within the time, he is indeed conferred a legal right under the Statutory Rules to receive commutated pension. It does not lie in the mouth of Government which is excepted to act as a model employer to sit over the papers and delay the sanctioning or the payment of the CVP30. Therefore in a case where Rule 13(3) applies and the Government servant who is due to retire on superannuation applies for getting CVP along with pension papers, prior to the date of his retirement as provided and he actually retires on superannuation and his application is within time, the CVP must be paid immediately after the retirement. It may be true that in the case of a person covered by Rule 18 which deals with the cases, which we have mentioned, like invalid pension, pension under Rule 40 of the Pension Rules on being compulsorily retired by way of penalty or compassionate allowance on being dismissed or removed he must undergo a medical examination. Therefore, applications by a person covered under Rules 12 and 18 stand on a different footing. As far as application by a person governed by Rule 12, provided he makes an application as contemplated under Rule and the application gives details of the amount of percentage of commutation which he requires subject to the maximum of forty percent, he is entitled to demand the payment of CVP. We have already noticed that the Rule does not provide the payment of interest. The Office Memorandum dated 05.10.1999 does not prohibit payment of interest.32. Coming to the facts of this case, we notice that the applicant was given provisional pension under Rule 69 of the Pension Rules. This immediately attracts Rule 4 of the Commutation Rules prohibiting commutation of the provisional pension. In fact, Rule 69 of the Pension Rules contemplates sanctioning of provisional pension which is to be equal to the maximum pension which would have been admissible on the basis of the qualifying service upto the date of retirement of the Government servant or if he was under suspension on the date of retirement upto the date immediately before being placed under suspension.34. The learned counsel for the appellants and the learned ASG are no doubt correct in contending that there is prohibition against commuting of pension but we must notice one aspect. What Rule 4 taboos is commutation of provisional pension which is granted under Rule 69 during the pendency of the proceedings35. As we have noticed, there are three situations. The first category is where the pension is finalized immediately upon retirement and on the basis of the application, the commutation as permissible subject to the limit of forty percent, is ordered. The second category is where there is provisional pension granted under Rule 64. In such a case also commutation is permissible but of the provisional pension again subject to the limit under Rule 5. In the third category where provisional pension is sanctioned on account of pendency of judicial or departmental proceeding Rule 4 applies and it forbids the commutation of the provisional pension granted under Rule 69. Since, in this case the applicant was admittedly sanctioned provisional pension, while the provisional pension was in place, the applicant could not have sought commutation of the provisional pension granted under Rule 69 in view of the embargo against such commutation contained in Rule 439. As far as the argument of the learned ASG that there was a departmental proceeding pending by virtue of the fact that an order of suspension was passed within the meaning of Rule 9(6), which we have already referred to, we are of the view that there is no merit in the said contention. While the applicant was placed under suspension, in the year 1997, it is equally indisputable that the said suspension was revoked in the year 1999 well before the date of superannuation of the applicant. It is not the law that to constitute a departmental proceeding that a Government servant has been placed under suspension at some point of time of his career. What is contemplated is that there must be a suspension when the applicant would have otherwise retired on superannuation. In this case the suspension stood revoked several years prior to his date of superannuation. Therefore, the suspension which was subsequently revoked cannot constitute suspension within the meaning of Rule 9(6)(b) of the Pension Rules and we have no hesitation in repelling the argument of learned ASG41. This order was passed prior to the date of superannuation of the applicant. It is, therefore, that Criminal Revision Application No.52 of 2007 came to be filed before the High Court of Gujarat. By order dated 30.03.2012, the revision came to be allowed. It is noticed that the applicant opposed the revision. The A-summary was to be given in a case where the case is found to be true but the accused is absconding. Further, if the evidence against the accused is not sufficient to prosecute the accused, also A-summary could be given.42. It is true that well before his retirement the agency which had no doubt conducted a trap against the applicant, had itself found that there was no material in view of subsequent developments. It could be said that this is a case where the applicant was exonerated by the agency well before the date of his retirement. No doubt this is not a case where the applicant has been acquitted honourably after trial. In fact, there was never a trial and the case was not sent up for trial in view of the submission of A-summary43. The other question also must be considered and that question is whether there was a judicial proceeding pending at the time of the retirement. A perusal of Rule 9 of the Pension Rules would show that Government had a right to withhold the pension or gratuity or both either in full or in part or withdraw a pension in full or in part either permanently or for the specified period. Government is also authorized to order recovery from pension or gratuity of the whole or in part of any pecuniary loss caused, if in any departmental or judicial proceeding, the pensioner is found guilty of grave misconduct or negligence during the period of his service which includes service after reemployment. Thereafter, sub-rule 9(6) deals with what constitutes when a departmental or a judicial proceeding will be deemed to commence. Judicial proceedings are divided into two categories. First category is a criminal proceeding. Second category is civil proceeding. As far as civil proceeding is concerned, it is deemed to be instituted when a plaint is presented. In other words, upon presentation of a plaint in a civil case judicial proceeding commences. In the case of a criminal proceeding by the deeming provision, it is deemed to have been instituted for the purpose of Rule 9 when the complaint or report of a police officer is made, but that is not sufficient. In a case where a complaint or a report of a police officer is made to a Court, it should culminate in cognizance being taken by the Magistrate, for the department to contend that the date of the complaint or report is to be the date of institution of the proceedings44. From the order of the Sessions Judge which alone is produced, it is not clear that cognizance was taken. The criminal revision is a criminal proceeding. But the case was about the A diary not being accepted. If the criminal revision was dismissed then the matter would have been proceeded with by the Sessions Judge. It is in the region of conjecture as to what would have followed suit. At the time of the retirement, the authorities could not have divined what would happen in the revision. No doubt, the purport of the revision petition was that the State wanted the A Summary to be accepted. The acceptance of A Summary which, in fact, was ordered by the High Court would have brought the litigation as against the applicant to an end. In so far as, we later propose to render our finding on the effect of no application being filed under Rule 13(3) and also keeping in mind that the applicant did not take steps to challenge the order dated 04.08.2008, we would think that much may not turn on our even accepting the view of the High Court, that there was no criminal proceeding as on the date of the retirement. It also must be noted that the present is not a case where the authorities acted without any material at all even. We proceed on the basis that the criminal revision petition is not criminal proceeding under Rule (9) of the Pension Rules. A view was taken by the authorities regarding the same at the point of time which could not be said to have been taken without any basis at all. This, we say as the basis for interest on CVP can only be state action which is arbitrary. It is relevant to note that both sides proceeded on the basis that there was a proceeding within the meaning of Rule 9 and 69 of the Pension Rules. Further, even at the time when the order dated 04.08.2008 was passed it was open to the applicant to complain that there was no judicial proceeding, having regard to the nature of the proceeding pending in the High Court. The applicant instead chose not to question the sanctioning of provisional pension under Rule 69 and continued to receive the provisional pension. We will notice the consequences of the said order on his right to apply under Rule 13(1)45. We have noticed that a claim for interest in regard to CVP may lie when an application has been made in time under rule 13(3) and the payment is delayed. But in a case where application is made under Rule 13(1) which can be made within a period of one year from the date of retirement, the same would have to be processed and undoubtedly at the earliest it must be brought to its logical culmination as per the rules. But certainly, in a case falling under Rule 13(1) there can be no question of paying interest from the date of retirement as the application itself is predicated after the date of retirement. No doubt the question as to payment of interest even in such cases would arise based on the date of application and the reasonableness of the time taken in processing it and the arbitrariness in a particular case in delaying the matter. This we say for the reason that as held in by this Court in S.K. Dua (supra) the premise on which interest can be granted in the case of CVP also is the breach of Articles 14 and 21 and it is a matter to be decided on the facts of each case46. It is significant to note that in this case the applicant has no case even that he made an application within the meaning of Rule 13(3) of the Commutation Rules as contemplated before three months of his retirement. Nothing stood in the way of the applicant applying under Rule 13(3) apparently. If on the other hand, there was any legal impediment which stood in the way, then also he cannot claim the CVP on retirement. Without having made such an application under the Commutation Rules, it is clear that there can be no question of even becoming entitled to commute pension w.e.f. first day following his retirement. The Tribunal and the High Court have completely overlooked the conspectus of the Rules. The Tribunal, in fact, has proceeded to consider the matter from the standpoint of interest payable on gratuity which also was claimed by the applicant and has not focused on the question relating to the point of time when CVP becomes payable, and that the nature of CVP being one dependent entirely on an application from the Government servant and therefore we have no hesitation in coming to the conclusion that the direction to pay interest on the CVP, as ordered by the Tribunal, from the date of retirement from 01.08.2008 is clearly erroneous. Now, as far as Rule 13(1) is concerned, it enables a person who is in receipt of a pension under Rule 12, to apply after retirement but within one year thereof for CVP. It is true that the applicant was not in receipt of any pension under Rule 12 and therefore, he could not have applied under Rule 13(1). This is for the reason that as per order dated 04.08.2008, he was to be given provisional pension which as we have noted was under Rule 69 of the Pension Rules. The applicant, however, proceeded to accept the provisional pension. It is true that the effect of the order dated 04.08.2008 of the sanctioning of the provisional pension under Rule 69, was that he was precluded from applying for commuting the provisional pension, in view of Rule 4 and on the other hand, as he was not in receipt of superannuation pension, he could not have filed an application under Rule 13(1). Thus, a question may arise. Having issued order dated 04.08.2008, the effect of which we have clarified, should interest be ordered on the basis that the applicant was prevented from applying for CVP under Rule 13(1). We have already found that the applicant was not precluded from making any application under Rule 13(3). Had he done so, his claim for interest from the date of retirement could have been considered under Articles 14 and 21. We also take note of the fact that the applicant did not challenge the order dated 04.08.2008 and he continued to accept the provisional pension sanctioned thereunder. There could be no question of granting interest from the date of retirement in view of the absence of any application under Rule 13(3). We make it clear that we are not pronouncing about the liability to interest on DCRG amount which is not subject matter of controversy before us and the direction to pay interest on gratuity is not being interfered with.