IMPORTANT POINTS
Withdrawing or withholding of pension, in full or in part, permanently or for a specified period, if a grave misconduct or negligence is proved and (ii) recovery of pecuniary loss, if quantification is carried out in a departmental or judicial proceeding continued under the proviso to Rule 3- The punishment of withdrawing or reduction and recovery of quantified loss caused, could only be from the pension and not at all from DCRG.

JUDGMENT :

K. Vinod Chandran, J.

The identical issue agitated in both the Original Petitions, arising from separate orders in two Original Applications, is the justification for denial of Death- Cum-Retirement Gratuity [DCRG] after retirement, for reason of a criminal proceeding initiated against the government servants/applicants while in service; having not been finalized. The petitioners before us are the State and one of the Applicants before the Tribunal.

2. The Tribunal, in its order from which O.P[KAT] No.78 of 2015 arises, declined the claim for disbursement of DCRG. The Tribunal's decision was based on the fact that the Applicant stood convicted by the Vigilance Court and he has to wait for the conclusion of the appeal filed by him. The Tribunal also held that if the Applicant is exonerated, then he would be entitled to DCRG; which otherwise would stand permanently withheld. O.P[KAT] No. 428 of 2019 is by the State against the order of the Tribunal directing disbursal of DCRG. The reasoning of the Tribunal therein was, that the appeal against the conviction and sentence filed by the Government servant, is not a judicial proceeding against him. The vigilance proceedings initiated against both ended in conviction and in the appeals, now pending before this Court, there is an order of suspension of sentence passed, as an interim measure. The Government continues to withhold DCRG on the ground that the appeal is a continuation of the original proceeding. They rely on Rule 3A of Kerala Service Rules, Part-III-Pension (hereinafter referred to as KSR), to withhold such DCRG, till the conclusion of judicial proceedings initiated against them.

3. The matter has been placed before the Full Bench on a reference made by a Division Bench. Sri.Antony Mukkath, learned Senior Government Pleader, first emphasises the trite position that an appeal is a continuation of the original proceeding. It is argued that normally after retirement there cannot be any proceeding continued against a government servant for reason of the employer-employee relationship not subsisting. Rule 3 as available in KSR deems continuation in service of a delinquent servant, even after his superannuation, if any departmental or judicial proceeding is initiated, for the limited purpose of its finalisation. Under Rule 3 a punishment could be imposed for a grave misconduct or negligence, which may also be the extreme one of dismissal. In the event of an order of dismissal being passed, even after retirement, as permitted, the government servant would have to forfeit his pension and DCRG. Hence Rule 3A has to be upheld insofar as the withholding of DCRG during a pending disciplinary or judicial proceeding. Reliance is placed on Mahanadi Coalfields Ltd. v. Rabindranath Choubey 2020 SCC online SC 470 to uphold the validity of the rule, its deeming nature and the proceedings initiated. It is asserted that there is no scope for reversal of the decisions already rendered by different Division Benches. If at all, KSEB v. K. Kesavan [2014 (3) KHC 167] has to be found to be wrongly decided and sub-silentio, for reason of Rule 3A having not been noticed. There, the Government was not a party and the employee was of the Kerala State Electricity Board, which entity had adopted the KSR for its employees.

4. Learned Counsel Smitha George appearing for the respondent in O.P[KAT]No. 428/19 argues that retirement benefits are not a bounty, graciously paid by the Government at its discretion, but is a valuable right of the government servant flowing from the service rules, attained by virtue of the long service. Gratuity has been placed at a higher pedestal than pension as is specifically discernible from the Payment of Gratuity Act, 1972 which makes such amounts payable by the employer not liable for any attachment. Gratuity is linked to period of service and last drawn pay, computed at half of such pay for the years of service rendered, subject to a maximum. The service rules as relied