1. Government servant retired while under suspension for corruption charges; gratuity withheld per service rules and tribunal order pending judicial proceedings. (Para 2 , 3 , 4 )
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1999 Supreme(SC) 842
SUPREME COURT OF INDIA
A.P.Misra : Sujata V.Manohar
R.Veerabhadram
Versus
Government Of A.P.
Case No. : 4519 , 4520 , 4521 of 1999
Date of Decision : 8/11/99
Important Points
Interest is not payable on gratuity withheld under statutory rules during pending judicial proceedings. Additionally, acquittal in criminal cases does not entitle an employee to retrospective promotion to a selection post, as merit-based promotion cannot be presumed.
Subject
Service Law - Pension and Promotion
Act Referred
Headnote
(A) Service Law - Pension Rules - Rule 52(c) of the Revised Pension Rules - Withholding of gratuity during pending judicial proceedings - Interest on delayed payment - Where gratuity is withheld in accordance with statutory rules and a binding order of a Tribunal during the pendency of criminal proceedings, such withholding is not illegal - In the absence of unexplained or unjustified delay or neglect in the discharge of duties by the State, interest on the delayed payment of gratuity is not payable. (Paras 7, 8, 9)
(B) Service Law - Promotion - Selection post vs. Seniority post - Deemed promotion upon acquittal - Where promotion to a post is based on selection and merit rather than sheer seniority, an employee cannot claim deemed promotion from the date a junior was promoted simply upon acquittal in criminal proceedings - The court cannot speculate in retrospect whether the employee would have been selected on merit and cannot direct retroactive promotion and back pay based on such hypothesis. (Para 10)
Facts of the case:
A government servant retired on superannuation while under suspension due to pending criminal proceedings under the Prevention of Corruption Act. Pursuant to statutory pension rules and an order from the Administrative Tribunal, the employee was paid a provisional pension, but the death-cum-retirement gratuity was withheld until the conclusion of the judicial proceedings. Following acquittal, the full pension and gratuity were paid. The appellant subsequently sought interest on the withheld gratuity and monetary benefits based on a claim for deemed promotion to a selection post prior to retirement.
Findings of Court:
The withholding of gratuity was legitimate under the applicable pension rules and the specific order of the Tribunal; therefore, there was no unjustified delay to warrant the payment of interest. Regarding the claim for promotion, since the post was a selection post and not based on seniority, the appellant was not entitled to deemed promotion upon acquittal.
Issues: Whether interest is payable on gratuity withheld during the pendency of criminal proceedings pursuant to statutory rules and a judicial order, and whether an employee is entitled to deemed promotion to a selection post upon acquittal.
Ratio Decidendi: Interest on gratuity is not granted when the withholding is justified by statutory rules and judicial orders, as no illegal delay exists. Furthermore, for posts where promotion is based on merit and selection rather than seniority, retrospective promotion cannot be granted upon acquittal as the court cannot assume the employee would have been selected.
Result: Appeals dismissed.
(B) Service Law - Promotion - Selection post vs. Seniority post - Deemed promotion upon acquittal - Where promotion to a post is based on selection and merit rather than sheer seniority, an employee cannot claim deemed promotion from the date a junior was promoted simply upon acquittal in criminal proceedings - The court cannot speculate in retrospect whether the employee would have been selected on merit and cannot direct retroactive promotion and back pay based on such hypothesis. (Para 10)
Facts of the case:
A government servant retired on superannuation while under suspension due to pending criminal proceedings under the Prevention of Corruption Act. Pursuant to statutory pension rules and an order from the Administrative Tribunal, the employee was paid a provisional pension, but the death-cum-retirement gratuity was withheld until the conclusion of the judicial proceedings. Following acquittal, the full pension and gratuity were paid. The appellant subsequently sought interest on the withheld gratuity and monetary benefits based on a claim for deemed promotion to a selection post prior to retirement.
Findings of Court:
The withholding of gratuity was legitimate under the applicable pension rules and the specific order of the Tribunal; therefore, there was no unjustified delay to warrant the payment of interest. Regarding the claim for promotion, since the post was a selection post and not based on seniority, the appellant was not entitled to deemed promotion upon acquittal.
Issues: Whether interest is payable on gratuity withheld during the pendency of criminal proceedings pursuant to statutory rules and a judicial order, and whether an employee is entitled to deemed promotion to a selection post upon acquittal.
Ratio Decidendi: Interest on gratuity is not granted when the withholding is justified by statutory rules and judicial orders, as no illegal delay exists. Furthermore, for posts where promotion is based on merit and selection rather than seniority, retrospective promotion cannot be granted upon acquittal as the court cannot assume the employee would have been selected.
Result: Appeals dismissed.
Legal Category Hierarchy
Table of Contents
2. Appellant seeks interest on withheld gratuity and monetary benefits for deemed promotion to a selection post following acquittal in criminal proceedings. (Para 5 , 6 )
3. Withholding gratuity was lawful under express rules and tribunal orders; promotion to a selection post cannot be granted retroactively based on mere acquittal. (Para 7 , 8 , 9 , 10 )
4. Interest is not payable on gratuity withheld under statutory rules; retroactive promotion to selection posts cannot be granted on a hypothetical basis after acquittal. (Para 7 , 10 )
5. Appeals dismissed. (Para 11 )
6. Is interest payable on gratuity withheld during the pendency of judicial proceedings if service rules permit such withholding?
No. If gratuity is withheld based on express statutory rules or a binding court order during pending judicial proceedings, the withholding is not illegal or unjustified, and therefore no interest is payable. (Para 7 , 8 , 9 )
7. Does acquittal in a criminal case entitle a government servant to deemed retroactive promotion to a selection-based post?
No. For posts filled by selection rather than seniority, acquittal does not automatically entitle the employee to retroactive promotion, as the court cannot speculate whether the employee would have been selected on merit. (Para 10 )
(1) LEAVE granted.
(2) THE appellant, at the material time was holding the post of Deputy Secretary to the Government of Andhra Pradesh. On 20-3- 1986, the Anti-Corruption Bureau of the State of Andhra Pradesh registered a case against the appellant under the Prevention of Corruption Act, 1947. On 12-5-1986, the appellant was suspended from service. During the pendency of his suspension on 30-6- 1988, the appellant was allowed to retire on attaining the age of superannuation while still under suspension without prejudice to the pending proceedings against the appellant.
(3) THE appellant filed a Petition in the Andhra Pradesh Administrative Tribunal challenging his retirement during suspension. The Tribunal, by its order dated 2-12- 1988, held inter alia, that in accordance with Rule 52 of the ANDHRA PRADESH REVISED PENSION RULES , 1980, the appellant shall be paid provisional pension but no death-cum- retirement gratuity shall be paid to him till the judicial proceedings are concluded and the final order is passed thereon. This order has become final and binding. Accordingly, on 30-9-89, the Government of Andhra Pradesh issued an order for payment of provisional superannuation pension. The order further stated that orders regarding payment of gratuity would be issued separately.
(4) ACCORDING to the respondents, under Rule 52(c) of the A.P. Revised Pension Rules, 1980, it is provided that no gratuity shall be paid to the Government servant until the conclusion of the departmental or judicial proceedings and issue of final orders thereon. The relevant portion of Rule 52 which deals with payment of provisional pension and withholding of gratuity is as follows :
52. Provisional Pension where departmental or judicial proceeding maybe pending :- (1) (a) In respect of a Government servant referred to in sub-rule (9), the Audit Officer/Head of Office shall pay the provisional pension not exceeding the maximum pension which would have been admissible on the basis of qualifying service up to the date of retirement of the Government servant, or if he was under suspension on the date of retirement, up to the date immediately preceding the date on which he was placed under suspension. (c) No gratuity shall be paid to the Government servant until the conclusion of the departmental or judicial proceedings and issue of final orders thereon." .
(5) THE appellant, however, in July 1992, again requested the State Government to sanction full pension, gratuity and other benefits as also contended that he should be granted benefits on the basis of his being promoted to the post of Joint Secretary to the Government of Andhra Pradesh. He, thereafter, filed an application in the A. P. Administrative Tribunal praying for an order directing the respondent to grant all arrears of pension, death-cum-retirement gratuity, computation of pension from 1-7-1988 till date as also consequential benefits on promotion to the post of Joint Secretary to the Government from 13-7-1987 to 30-6-1988. The Tribunal dismissed this application. The appellant filed a review petition before the Tribunal which was also dismissed by the Tribunal in view of the pendency of the criminal case against him.
(6) THE orders of the Tribunal in the main matter and the review petition are challenged in these appeals. Long after these Special Leave Petitions were filed in this Court, the appellant was acquitted in the criminal proceedings by an order dated 20-3-1998. Thereafter, the appellant has been paid the full pension as well as gratuity and other consequential benefits. In the present case, the appellant now claims, for the first time, that he should be granted interest on the gratuity which was withheld during the pendency of the criminal proceedings. He claims interest for the period from 30-6-1988, that is to say, the date of his retirement till 27-10-1998 when gratuity was paid. The only other contention raised before us is that
