State of Punjab & ANR Vs. Iqbal
Singh  INSC 24 (12 February 1976)
SINGH, JASWANT SINGH, JASWANT GUPTA, A.C.
CITATION: 1976 AIR 667 1976 SCR (3) 360 1976
SCC (2) 1
CITATOR INFO :
R 1983 SC 130 (20) R 1984 SC1064 (18) F 1985
SC1196 (7) R 1987 SC 943 (8)
Punjab Civil Service Rules-r. 6.4-Retired
Government servant-Pension and death-cum-retirement gratuity reduced by
Government on the ground that service record not satisfactory-Pension if a
bounty paid by Government- If property under Arts 31(1) and 19(1)(f) of the
Constitution- If reasonable opportunity of making defence should be given
before reducing the pension.
Constitution of India-Att.
Purporting to act under r. 6.4 of the Punjab
Civil Service Rules. the State imposed a cut of 5 per cent on the pension and
death-cum-retirement gratuity of the respondent.
who was a retired Government servant, on the
ground that his service record was not satisfactory. The High Court allowed the
respondent's writ petition challenging the decision of the Government.
Dismissing the appeal of the State.
HELD: The ground that superannuation pension
is a bounty and is given as an act of grace is not available to the appellant.
In Deoki Nandan Prasad v. The State of Bihar,  Supp. S.C.R. 634, it was
held by this Court (1) that pension is not a bounty payable on the sweet will
and pleasure of the Government and the right of a Government servant to receive
it is property under Art. 31 ( 1 ) of the Constitution. and so the State cannot
withhold the same by a mere executive order: and (2) the claim to pension is
property under Art. 19 (1) (f) of the Constitution and is not saved by cl. (5)
of Art. 19. [362C-D] (2) Though the impugned order imposing the cut in pension
and gratuity is not one of reduction in rank falling within the purview of Art.
311(2), yet there can be no doubt that it adversely affected the respondent and
such an order could not have been passed without giving him a reasonable
opportunity of making his defence. [362G] State of Punjab v. K. R.. Erry &
Sobhag Rai Mehta [19731 2 S.C.R. 405, applied.
(3) M. Narasimachar v. The State of Mysore
 1 S.C.R. 981, is inapplicable to this case because the point as to
whether an opportunity to show cause was to be afforded to a retired Government
servant before applying the cut in his pension in view of the principle of
natural justice of audi alteram partem was never urged or gone into in that
case, nor was the question whether pension was a bounty or property arose in
that case. [364 D-E]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1203 of 1968.
From the order dated the 4-4-1967 of the
Punjab and Haryana High Court in L.P.A. No. 104 of 1967.
O. P. Sharma, for the appellant.
H. K. Puri and M. C. Dhingra, for the
The Judgment of the Court was delivered by
JASWANT SINGH, J.-This appeal by certificate of fitness granted by the Punjab
and Haryana High Court is directed against the judgment dated April 4, 1967 of
a Division Bench of that Court passed in Letters Patent Appeal No. 104 of 1967
whereby the judgment and order dated December 19, 1966 of Narula, J. (as he
then was) in Civil Writ Petition No 298 of 1966 was affirmed.
361 It appears that the respondent joined the
Punjab Education A Department (Class II) Service by direct recruitment as
senior lecturer in 1933. He was promoted to Punjab Education Service (Class l)
on October 1, 1949. He was given the selection grade with effect from February
15, 1956 and in due course rose to the position of Director of Public
Instruction-cum-Secretary to the Government of Punjab, Education Department. He
proceeded on leave preparatory to retirement on March 18, 1958, on attaining
the age of super- annuation. In June; 1961, he received a copy of letter No.
5137-ED-I-60/9269 dated May 2, 1961 addressed
by the Secretary to Government, Punjab, Education Department to the Director of
Public Instruction, Punjab, Chandigarh, conveying the sanction of the Governor
of Punjab to the grant to him i.e. the respondent of superannuation pension and
death-cun1-retirement gratuity of Rs. 417.02 np. per mensem and Rs. 17,030.25
np in lump sum respectively under rules 5.27 and 6.13 of the Punjab Civil
Service Rules, Vol.
II read with para 9(1) (a) of the New Pension
It was stated in the aforesaid letter that
personal file of the respondent had been examined with reference to rule 6.4 of
the Punjab Civil Service Rules, Vol. II and Government were satisfied that his
service record was not satisfactory and a cut of 10% had accordingly been made
in the amount of pension and death-cum-retirement gratuity admissible to his.
On January, 28, 1962, the respondent
submitted representations to the Chief Minister and Governor of Punjab against
the aforesaid decision of the Government to apply 10% cut in his pension and
death-cum-retirenment gratuity but the same proved abortive. After the
establishment of the Board set up to examine and remove the grievances in the
matters of promotion and fixation of pension etc. Of the Gazetted officers of
the Government, the respondent addressed a representation to the said Board on
September 14, 1964, against the. aforesaid decision of the Government to apply
a cut of l0% in his pension and gratuity. On November l . 1965, the respondent
received a copy of letter No. EDI-4(64)-65/22436 dated October 21, 1965,
addressed by the Education Commissioner and Secretary to Government, Punjab,
Education Department, to the Director of Public Instruction, Punjab, intimating
that in supersession of the aforesaid letter dated May 2, 1961 of the Punjab
Government, it had been decided to grant to the respondent a superannuation
pension and death-cum-retirement gratuity of Rs. 440.18 np per mensem and Rs.
18,927.50 np in lump sum respectively under rules 5.27 and 6.13 of the Punjab
Civil Service Rules, Vol. II read with para 9(i) (a) of the New Pension Rules,
1951. In para 3 of the letter, it was reiterated that a cut of 5% had been made
in the pension admissible to the respondent as his service record which had
been examined with reference to rule 6.4 of the Punjab Civil Service Rules,
Vol. II had not been satisfactory. Aggrieved by this communication, the
respondent filed in the Punjab and Haryana High Court at Chandigarh a petition
under Articles 226 and 227 of the Constitution, being Civil Writ Petition No.
298 of 1966, challenging the aforesaid decision of the Punjab Government which
was, as already stated, allowed by Narula, J. r(as he then was) by his judgment
and order dated December 19, 1966, following the Full Bench Judgment of his
Court dated October 362 25,1966,in Civil Writ Petition No. 504 of 1954 entitled
Shri K. R. Erry, Retired. Superintending Engineer, 45, Cecil Hotel, Simla v. .
The State of Punjab(l). Dissatisfied with this judgment and order, the
appellants preferred a Letters Patent Appeal, being L. P. A. No. 104 of 1967
which did not meet with success. Thereupon the appellants applied for a
certificate under Article 133 of the Constitution which was granted to them.
This is how the matter is before us.
Although in the grounds of appeal, it has
been urged by the appeIlants that the Full Bench decision of the High Court of
Punjab and Haryana in K. R. Erry's(l) case (supra) is not in accordance with
law as superannuation pension is a bounty and is given only as an act of grace,
that ground is no longer available to the appellants in view of the decision of
this Court in Deokinandan Prasad v. The state of Bihar & Ors. (2) where it
was held that pension is not a bounty payable on the sweet will and pleasure of
the Government and the right of a Government servant to receive it is property
under Article 31(1) of the Constitution and the State cannot withhold the same
by a mere executive order. It was further held in that case that the claim to
pension was also property under Article 19(1) (f) of the Constitution and was
not saved by clause (S) thereof. The learned counsel appearing for the
appellants has, however, made a feeble attempt to urge that no opportunity to
show cause was required to be given to the respondent before passing the order
imposing the cut in his superannuation pension and death-cum-retirement
gratuity under clauses (a) and (b) of rule 6.4 of the Punjab Civil Service
Rules (Pension Rules), as the order was an administrative order and the case
did not fall within the purview of Article 311 (2) of the Constitution. It has
been further contended by learned counsel for the appellants that it was the
judgment of this Court in M. Narasimachar v. The State of Mysore(8), and not
the judgment in State of Punjab v. The K. R..Erry & Sobhag Rai Mehta(4)
which governed the present case. We regret we are unable to accede to these
Though the impugned order imposing cut in
pension and gratuity is not one of reduction in rank falling within the purview
of Article 311 (2) yet there can be no doubt that it adversely affected the
respondent and such an order could not have been passed without giving him a
reasonable opportunity of making his defence. Reference r in this connection
may be made with advantage to the decision of this Court in K. R. Erry &
Sobhag Rai Mehta's case (supra) where after an exhaustive review of the case
law bearing on the point, it was observed at page 413 as follows:- -
"Where a body or authority is judicial or where it has to determine a
matter involving rights judicially because of express or implied provision, the
principle of natural justice audi alteram partem applies. See: Province of
Bombay, v. Kusaldas S. Advani & Ors. [1950 S.C.R. 621 (725), and Board of
High School & Intermediate Education, U.P.
(1) I.L.R. (1917) Punjab & Haryana 278.
(2)  Supp. S.C.R. 634.
(3)  I S.C.R. 981: A.I.R. 1960 S.C.
247. (4)  2 S.C.R. 405.
363 ALLahabad v. Ghanshyam Das Gupta &
ors. (1962) Suppl. A (3) S.C.R. 36.] With the profiteration of administrative
decisions in the welfare state it is now further recognised by Courts both in
England and in this country, (especially after the decision of House of Lords
in Ridge v. Baldwin (1964) A.C. 40 that where a body or authority is
characteristically administrative the principle of natural justice is also
liable to be invoked if the decision of that body or authority affects,
individual rights or interests, and having regard to the particular situation
it would be unfair for the-body or authority not to have allowed a reasonable
opportunity to be heard.. See: State of orissa v.
Dr. (Miss) Binapani Dei & Ors. [1967) 2
S.C.R. 625 and In re H. K. (An lnfant)  2 Q.B.D. 617. In the former case
it was observed as follows:- C "An order by the State to the prejudice of
a person in derogation of his vested rights may be made only in accordance with
the basic rules of justice and fairplay. The deciding authority, it is true, is
not in the position of a Judge called upon to decide an action between
contesting parties, and strict compliance with the forms of judicial procedure
may not be insisted upon. He is however under a duty to give the person against
whom an enquiry is held an opportunity to set up his version or drefence and an
opportunity to correct or to controvert any evidence in the possession of the
authority which is sought to be relied upon to his prejudice. For that purpose
the person against whom an enquiry is held must be informed of the case he is
called upon to meet and the evidence in support thereof. The rule that a party
to whose prejudice an order is intended to be passed is entitled to a hearing
applied alike to judicial tribunals and bodies of persons invested with
authority to adjudicate upon matters involving civil consequences. It is one of
the fundamental rules of our constitutional set up that every citizen is
protected against exercise of arbitrary authority by the State or its officers.
Duty to act judicially would therefore arise from the very nature of the
function intended to be performed. It need not be shown to be super-added. If
there is power to decide and determine to the prejudice of a person, duty to
act judicially is implicit in the exercise of such power. If the essentials of
justice be ignored and an order to the prejudice of a person is made, the order
is a nullity. That is a basic concept of the rule of law and importance thereof
transcends the significance of a decision in any particular case." These
observations were made with reference to an authority which could be described
as characteristically administrative. At page 630 it was observed:
"It is true that the order is
administrative in character, but even an administrative order which involves
civil 364 consequences as already stated, must be made consistently with the
rules of natural justice after informing the first respondent of the case of
the State, the evidencve in support thereof and after giving an opportunity to
the first respondent of being heard and meeting or explaining the
evidence." "This case and the English case in re H.K. (An Infant)
were spcifically referred to with approval in a decision of the constitutional
bench of this Court in A. K. Kraipak & Ors. etc. v. Union of India &
Ors.  l S.C.R. 457".
The decision of this Court in M.
Narasimachar's case (supra) on which strong reliance has been placed on behalf
of the appellants is of no assistance to them as the point as to whether an
opportunity to show cause was to be afforded to a Government servant before applying
a cut in his pension in view of the principle of natural justice embodied in
the well known maxim audi alteram partem was never urged or gone into in that
case. Furthemore as pointed out by Palekar, J. while speaking for the Court in
Erry & Sobhag Rai Mehta's case (supra)
the question whether pension is a bounty or property did not arise in the
former case. The present case is, in our , opinion, fully covered by the
judgment of this Court in K. R. Erry & Sobha Rai Mehta's case (supra).
For the foregoing reasons we are of the view
that the impugned judgments do not suffer from any illegality and were rightly
rendered. In the result the appeal fails and is hereby dismissed with costs.
P.B.R. Appeal dismissed.