New Delhi, Mar 15 (PTI) The Supreme Court on Tuesday held that mere pendency of appeal cannot disentitle the State from withholding the Death-Cum Retirement Gratuity (DCRG) of a delinquent employee.

A bench of Justices Sanjay Kishan Kaul and MM Sundresh set aside a full bench order of Kerala High Court which held that recovery under provisions of State Service rules could only be against the pension and not against the DCRG.

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The High Court had struck down Rule 3 A of Kerala Service Rules as it permitted withholding of DCRG.

It said, “We also believe that it is a very restrictive view to disburse DCRG on account of the proceedings against a pensioner coming to an end, even where a conviction has arisen. This is especially so where the convicted person has availed of the remedy of appeal. An appeal is a continuation of the proceedings in trial and would be, thus, a continuation of judicial proceedings”.

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The bench giving an example said if no appeal had been filed, can it be said that despite conviction in the criminal case, the State is without the authority of forfeiting the DCRG or pension for that matter?

“If it is not so, as we believe, then the pendency of the appeal cannot disentitle the State from withholding the DCRG, considering that it is a hiatus period within which certain arrangements have to be made which would be dependent on the outcome of the appeal”, the bench said.

It clarified that there is no question of any other departmental proceedings arising independently against the respondents (employees of the state government), as the conclusion of the criminal proceedings would entitle the State to pass appropriate orders based solely on the result of the proceedings.

“We are, thus, of the view that the impugned judgement of the Full Bench of the Kerala High Court cannot be sustained, and it cannot be opined that the DCRG would have to be released to the respondents pending consideration of the criminal appeal”, the bench said.

The bench said that the court must keep in mind the very objectives of holding back pension or the DCRG.

“One can recover the amounts found due from the delinquent employee of any nature whatsoever after appropriate notice and proceedings. The second eventuality is if an employee is dismissed from service. It can hardly be doubted that in the second eventuality of the dismissal from service the employee would lose all retirement benefits”, it said.

Dealing with the case in hand, the bench said that in the present case separate departmental proceedings have not been concluded within the given timeframe.

“The State in its wisdom has deemed it appropriate to await the outcome of the criminal proceedings. The result of this would mean that the State would still be empowered to dismiss an employee from service based on the conviction in the criminal case. The State cannot have an opportunity to have separate disciplinary proceedings even if the acquittal takes place”, it said.

The top court added that it is conscious of the fact that a mere acquittal in a criminal case would not imply that no action can be taken in departmental proceedings.

It said, however, the choice was with the State Government as to whether they would like to hold separate departmental proceedings or go by the final view of the criminal court; the latter is naturally based not on the preponderance of probabilities but proof beyond a reasonable doubt.

The bench said that it is the latter course which the State has followed.

“Thus, an employee's entitlement to all benefits and the right not to be now dismissed from service all inure if the criminal proceedings conclude in favour of the employee. However, were these proceedings to be concluded against the employee and the conviction upheld it cannot be said that the department would still be required to pay all the retirement benefits. The department can also pass an order of dismissal based solely on the criminal conviction”, it said.

Dealing with Rule 3A of the Kerala Service Rules, the bench said, “the High Court, in our view, has introduced a new legislation by undertaking the exercise of reading down. We do believe that there is absolutely no need to do so when the language of the rule is so clear, conveying its intended meaning without any ambiguity”.

It said that in the court's view Rule 3A cannot be read in isolation nor the latter part of it struck down as done by the High Court.

“Rule 3, Note 2, Ruling 3, and Rule 3A have to be read in conjunction as they provide for the treatment of the DCRG in case of disciplinary or judicial proceedings pending at the stage of retirement. Even in the absence of these proceedings in certain eventualities, the amounts can be recovered from the DCRG”, the bench said.

The bench passed the verdict while dealing with the question of whether on the conviction in a criminal case for violation of integrity norms during the performance of official duties and an appeal pending before the High Court, is the employee still entitled to the release of his DCRG.

The Kerala government had preferred an appeal against a full bench order of the High Court passed on two different appeals before it related to employees who were convicted by the trial court under the Prevention of Corruption Act and other offences. They had preferred an appeal before the High Court against the conviction and sentence by the trial court but at the time sought the release of DCRG.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)