M. Karpaga Vinayagam, CJ.––The short facts leading to the filing of the letters patent appeal are as follows:-

(i) The appellant was the District Animal Husbandry Officer. He retired from service on 30.6.2001.

(ii) He is one of the accused in a fodder scam case, investigated by the C.B.I., namely, R.C. 47(A)/96.

(iii) After investigation, charge-sheet has been filed against the appellant. The case is still pending.

(iv) After retirement, group insurance and G.P.F. amount has been paid. He has also been granted 90% of the pension.

(v) In regard to the other retiral benefits, like gratuity and leave encashment, the appellant filed a writ petition being W.P.(S) No. 635 of 2003.

(vi) The learned Single Judge disposed of the said writ petition on 28.32003 directing the Secretary, Animal Husbandry to look into the matter and release the admitted retiral dues.

(vii) In pursuance of the order, the Secretary, Department of Animal Husbandry passed an order on 6.6.2003 withholding the 10% pension, Full Gratuity and Full Leave Encashment amount till the disposal of the criminal case pending against him in RC 47(A)/96 under Rule 47(b) of the Pension Rules.

(viii) Aggrieved by the same, the appellant challenged the said order in W.P.(S) No. 1491 of 2004. Learned Single Judge dismissed the same on 27.8.2004. Therefore, the present appeal has been filed raising the point that the Government has no power to withhold full pension, gratuity and leave encashment pending criminal proceeding.

(ix) When this matter came up before the Division Bench, a judgment in L.P.A. No. 752 of 2004 rendered by a Division Bench, dated 2.2.2006, holding that the appellant was not entitled to any amount other than 90% of the provisional pension and 90% Gratuity, was brought to the notice by the learned Counsel for the respondents to justify the order withholding the payment.

(x) Since in the above judgment in L.P.A. No. 752 of 2004, it was indicated that the appellant was not entitled to any amount including the leave encashment other than 90% of the provisional pension and 90% of the Gratuity amount, the Division Bench thought it fit to refer to Larger Bench for a decision as it felt doubt about the correctness of the same in the light of the absence of the rule providing such power to the State. While referring the matter, the Division Bench framed the following question:-

Whether in absence of any rule/guideline, the State Government has jurisdiction to withhold leave encashment or part of it, permanently or temporarily, or can recover the leave encashment, on the ground of pendency of a departmental or criminal proceeding or on the ground that the retired employee has been convicted in a judicial proceeding or found guilty in a departmental proceeding?

(xi) Accordingly, the Chief Justice referred to Larger Bench. That is how this matter has come up before this Full Bench.

2. The submissions of the learned Counsel for the appellant in brief is as follows:-

(A) The Government has no power to withhold pension/gratuity and leave encashment on the ground of pendency of judicial/departmental proceeding.

(B) Rule 43 of Bihar Pension Rules provides the withholding of the pension amount only when the pensioner is found to be guilty of grave misconduct, in the Departmental or Judicial Proceedings. In this case no departmental proceeding concluded finding him guilty nor any judicial proceeding ended in conviction finding him guilty. Admittedly, leave encashment is not covered under Rule 43. Therefore, the order passed by the department withholding the 10% pension and entire gratuity and entire leave encashment under this Rule is wholly illegal.

3. The reply by the counsel for the respondents-department is as follows:-

(A) State Government has got power to withhold pension, which also includes gratuity under Rules 43(a) and 43(b) pending disposal of the departmental and judicial proceedings as an interim measure so that after conclusion of the proceedings, final order may be passed