Prakash Narain, J.:— By this petition under Article 226 of the Constitution of India the petitioners who is a retired employee of the respondent, State Back of India, prays for the issue of a with to quash departmental proceedings alleged to have been instituted by the respondent against the petitioner by issue of a charge sheet dated January 4, 1973, a direction to the respondent that the petitioner be allowed to withdraw the entire amount to his credit is the provident fund of the petitioner to which he is entitled under the rales, and a direction to the respondent to pay 10 the petitions pension and other retirement benefits admissible under the service rules.
2. The petitioner was born on August 14, 19 U. He was appointed as a Clerk in the erstwhile Imperial Bank of India on April 3, 1939 and confirmed as such on June 1, 1941. From that date the petitioner started contributing 5 per cent of his salary to the pension fund and 5 per cent of his salary to the provident fund, both maintained under rules framed for the respective purposes under the relevant statute, namely, the Imperial Bank of India Act, 1920. The State Bank of India Act, 1955 was enacted in May, 1955 and came into force with effect from July 1, 1955. The State took over the undertaking of the Imperial Bank. By virtue of the provisions of Section 7 of the said Act the petitioner was continued as an employee of the State Bank of India. On March 6, 1972 the petitioner was informed by a communication or that date issued by the respondent that he had been granted extension in service upto August 13, 1972, i.e the date on which he was to attain the age of 58 years, subject to good conduct and satisfactory service. At that time the petitioner was posted with effect from August 1, 1970 as Agent of the respondent's South Patel Nagar Branch. This appointment he continued to hold till March, 1972 when he was transferred as Public Relations Officer in the respondent's Chandni Chowk Branch. Earlier between February, 1968 till July 31, 1970 the petitioner was posted as Superintendent, Stationery Department, in the local Head Office of the respondent. It seems there were certain allegations of lapses on the part of the petitioner during the time he was posted as Superintendent, Stationery Department. Accordingly, on July 19, 1972 the petitioner was placed under suspension pending further investigation into the functioning of the Stationery Department during the period when the petitioner was posted there. Before the investigation could ripen into any further proceedings, the petitioner reached the age of 58 years and retired from service of the respondent. Indeed a memorandum dated August 14, 1972 was issued to the petitioner that as he had attained the age of 58 years, it was no longer necessary for him to attend the office from August 14, 1972 This memorandum was received by the petitioner on August Is 1972. The petitioner stopped attending office and on September 1, 1972 while acknowledging the memorandum of August 14, 1972 wrote to the Agent of the respondent's Chandni Chowk Branch that a letter written by him to the Secretary and Treasurer, New Delhi local Head Office, which he was enclosing with the said letter may be forwarded for necessary action. In the letter to the Secretary and Treasurer of the respondent's local Head Office the petitioner wrote that as he had retired from service of the respondent with effect from August 14, ??? he may be paid his retirement benefits and pension after calculation at an early date. The petitioner had been occupying, while in service, a house leased the respondent for use by its staff the petitioner was asked to vacate this house by respondent's memorandum, dated September 7, 1972. The petitioner replied by a letter dated September 18, 1972 that on retirement he was entitled to go to his home town in Bihar and the bank was liable to pay his expenses apart from all retirement benefits. These may be paid to enable him to vacate the borne. Regarding payment of the retirement benefits the respondent wrote to the petitioner on September 27, 1972 that the matter was engaging the attention. In this letter it was reaffirmed that the petitioner had retired from bank's service on August 13, 1972 on attaining the age of 58 years. A letter of October 25, 1972 further confirmed this fact. The petitioner kept on requesting the respondent to make an early settlement of his dues but to no avail and several months elapsed. On January 11, 1973 one J.M Arora called on the petitioner and tried to serve on him a change sheet for disciplinary proceedings contemplated by the respondent against the petitioner. The petitioner did not accept the charge sheet but instead wrote to the Branch Manager of the respondents Chandni Chowk branch on January 13, 1973 about the incident. He sub-matted that no such charge-sheet could be served on him as he was no longer an employees of the respondent and that the attempt to serve the charge-sheet amounted to harassment. He called upon the respondent to pay to him his prov dent fund and other retirement benefits within 15 days failing which he would take such action as he may be advised. Thereafter the petitioner filed the person writ petition.
3. According to the petitioner, while in service, the relevant rules applicable governing the terms and conditions of service were, what are known as “Rules go vetoing the service of Assistants in the in penal Bank of India.” These rules were continued even when the State Bank of India came into existence. With regard to pension, it is claimed that the relevant rules were the rules and regulations of Employees' pension and Guarantee Fund formulated by the Imperial Bank of India which were continued by the State Bank of India as amended. Similarly, the Employees' Provident Fund Rules were relied upon which also originally were framed by the Imperial Bank of India but with necessary modifications became the rules of the State Bank of India the respondent admits that these were the relevant rules which were applicable to the petitioner.
4. The petitioner's contentions are that having retired from service of the respondent, no departmental action or disciplinary proceedings can be taken against him. Further, the respondent is not entitled to withhold either the provide it fund due to the petitioner or the pension payable to him. He claims that it is his statutory right to get the same.
5. The respondent has not disputed the facts of the case, as set out above. What is contended is that the petitioner did not retire on attaining the age of 58 years. He only reached the age of superannuation. Retirement was possible only if so sanctioned by the appropriate authority under Rule 11 of the aforesaid pension Rules. Accordingly, the petitioner was rightly proceeded against by instituting disciplinary proceedings against him after he was placed under suspension on July 19, 1972. The suspension is justified on the basis of preliminary investigation conducted and the power to suspend contained in Rule 24 of the imperial Bank Rules governing the service of Assistants in the State Bank of India, hereinafter referred to as the Service Rules. It is further submitted that do writ could be issued, as prayed, inasmuch as the respondent had the power to determine if any loss had been occasioned by the acts of commission and omission of the petitioner while he was in Service and deducting the amount that may be found as the loss having been accessioned on account of the acts of the petitioner. It is submitted that this can only be done after a proper enquiry is held at which the petitioner would have reasonable change of putting forth his Case but so long as this is not determined, no amount can be paid or directed to be paid to the petitioner. Though not so pleaded in the return, it has been urged that pension and provident fund is payable by the trustees of the two funds and not by the respondent. Inasmuch as the trustees of the Funds are not parties to the writ petition and the respondent is not liable to pay the said amount. No directions can be issued to the respondent to pay the amounts claimed. It is disputed that the petitioner has aby statutory right as claimed.
6. Before I proceed to deal with the contentions of the parties it will be appropriate to read certain relevant provisions of the statute and the rules relied upon.
7. As noticed earlier, the State Bank of India was constituted by the State Bank of India Act, 1955. By virtue of Section 3 of the said Act the State Bank of India was to take over the undertaking; of the Imperial Bank. Section 7 of the Act provides for the transfer of service of existing officers and employees of the Imperial Bark to the State Bank of India on the same terms and conditions as ware enjoyed by the officers/employees in the Imperial Bink until the remuneration, terms or conditions are duly altered by the State Bank. Sub-section (2) of Section 7 safeguarded the pension and other benefits of the employees so transferred.
8. It is common case of the parties that the throe sets of rules which continued to apply to the petitioner were the Service Rules noticed above, the Pension Rules and the provident Fund Rules, framed by the Imperial Bank but continued by the State Bank.
9. Rules 26 of the Service Rules laid down that all Assistants shall retire at fifty-five years of age or upon the completion of thirty years' service whichever occurs first. This rule was amended with effect from April 1, is 67 to the extent that the retirement age was fixed at 58 years of age or upon completion of 30 years' service whichever occurs first.
10. Rule 21 of the Service Roles authorizes the Bank to dismiss any Assistant for misconduct or neglect of duty without notice or salary in lieu of notice.
11. Rules 24 gives the power to suspend while in service.
12. Rule 27 and 28 provide for contribution to be made to the provident fund and the pension fund. These rules further provide that on subscribing to the respective funds the employee has to agree to be bound by the rules regarding those funds.
13. Pension became payable to an employee of the respondent who subscribed to the respondent's Employees' Pension and Guarantee Fund in accordance with aforesaid Pension rules. We are not concerned with the Guarantee Fund vis-a-vis the petitioner. Rule 5 A of these Rules provides for the contribution to be made from salary to the Pension Fund. Rule 6 provides for the Bank's contribution to the Pension Fund. This fund was to be vested in five trustees according to Rule 4 No employee was to have any right of property in the fund beyond the amount of his contributions to the pension section of the fund with interest accrued thereon. Under Rule 10 an employee dismissed from the Bank's service for wilful neglect or fraud shall forfeit all claims upon the fund for pension. Rule 11 reads as under:—
“The retirement of all officers of the Back shall be subject to the sanction of the Executive Committee of the Central Board. The retirement of all other employees of the Back shall be subject of the sanction of the Executive Committee or the Local Board concerned with their employment. Any officer or other employee who shall leave the service without sanction as required by this rule shall forfeit all claim upon the fund for pension.”
14. According to Rule 13 pension was to begin to accrue on the first day succeeding that of retirement and was payable to the beneficiary personally or to his order. Rule 19 lays down the circumstances in which an employee retiring from Banks's service was entitled to pension. Rule 28 provides that any loss which the Bank may sustain by the dishonesty of a guaranteed employees could be made good in the manner set out therein. We are, however not concerned with this rule or Rule 29 or Rule 31 as the petitioner was not a “guaranteed employee.”
15. Just as the Pension Fund was created, so as the Employees' Provident Fund which also was to vest in the trustees. The contribution to be made to this fund by an employee was provided in Rule 13 and he had to subscribe to the fund and declare that he was bound by the rules thereof as provided to Rule 14. Rule 18 laid down that if any member of the fend was dismissed from the service of the Bank for any fault or other cause justifying dismissal, he shall not be entitled to receive, unless permitted to do to by the trustees, the sums contributed by the Bank to his provident fund account or any interest credited to that account on the sums so contributed. Rule 20 reads as under:—
“When a member resigns or retires from the service of the Bank he shall if, he has served the Bank for a period of five years or more (including service in the Presidency Banks), be entitled to receive the balance at his credit in the fund. Provided that when any member resigning or retiring from the service of the Bank is under a liability incurred by him to the Bank, the trustees shall, irrespective of the duration of his service, pay to the Bank out of the balance at his credit in the fund any amount due by him to the Bank not exceeding in any case the sums contributed by the Bank to his account in the fund and any interest credited to his account on the sums so contributed.”
16. The first point which rises for consideration is whether a writ as prayed can issue against the State Bank of India. It has been contended on behalf of the petitioner that by virtue of Section 7(1) of the State Bank of India Act a statutory right was created in the petitioner inasmuch as Section 7(1) preserved or recognised the contractual right that existed previously between the petitioner and the Imperial Bank of India. Therefore, the withholding of retirement benefits or taking of disciplinary proceedings after the petitioner his retired amounts to breach of statutory right. In my view the contention is not correct. Section 7(1) does not create any rights but only keeps alive or preserves the contactual rights which the petitioner had despite change of employers on the State Bank of India taking over the undertaking, officers and employees of the erstwhile Imperial Bank. The right which the petitioner seeks to enforce arises from a contract and not from the Statute. In my opinion, the alleged contravention of contractual rights dose not contravene Section 7(1) of the aforesaid Act but only the contract of service. Therefore, it will not be possible to agree with the contention of the petitioner that a writ can issue to the State Bank under Article 226 of the Constitution for violation of any statutory rights. I am fortified in coming to this conclusion by a decision of this Court in P. L. Bhardwaj…Petitioner v. State Bank Of India & Others…S, I.L.R 1971 (2) Delhi 236.
17. It is next contended that although the right may flow out of contract in as much as the State Bank is public authority invested with statutory powers a with can still be issued on the ratio of the decision of the Supreme Court in The D.F.O South Kheri v. Ram Sanehi Singh, (1971) 3 SCC 864 : A.I.R 1973 Supreme Court 205. It is further contended that even for arrears of salary writ of mandamus can issue, as was observed by the Supreme Court in State of Madhya Pradesh v. Bhailal Bhai, 1964 (6) S.C.R 261. In my view here again the rule laid down by the Supreme Court is not being correctly read by the petitioner. In the case of The D.F.O South Kheri a right flowing from a contract was held to be justiciable in writ proceedings in view of the fact that the impugned order was passed by public authority. The State Bank cannot be regarded as public authority in that sense. Similarly. In the case of Bhailal Bhat, the writ was issued against the State of Madhya Pradesh to refund tax which was realised by the State without the authority of law. However, it is not necessary to further dilate on this question inasmuch as Mr. I.N Shroff, learned counsel for the respondent, concedes only for argument sake and only for the ??? of present petition that it may be assumed that this court would have jurisdiction to issue a writ against the State Bank. In my view, it is tightly so conceded became admittedly the State Bark of India is a statutory body and has to work within the frame work of statute which created it. Article 226 of the Constitution empowers the High Court, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority including in appropriate cases any Government, orders, directions or writs for the enforcement of any of the rights conferred by Part III of the Constitution of for any other purpose. The Bank may be regarded as an authority within the meaning of Article 12 of the Constitution and as such amendable to its jurisdiction.
18. The next aspect which requires adjudication is the contention of the petitioner that he has retired from the service of the respondent and so, is entitled to retirement benefits as contemplated by various rules, and the contrary contention on behalf of the respondent that for the purpose of being granted pension and payment of provident fund the petitioner cannot be regarded as having retired. That the petitioner has retired from the service of the respondent cannot be disputed. Indeed, it does not lie in the mouth of the respondent to contend otherwise. The communication dated March 6, 1971 had in clear terms extended the petitioner's service up to August 13, 1973, i.e, the date on which he was to attain the age of 58 years. The communication of the respondent dated August 14, 1972 clearly advised the petitioner not to attend office any more with effect from that date as he had attained the age of 58 years on August 26, 1972. In the respondent's reply dated September 36, 1972 to the petitioner's letter of September 1, 1972 it is categorically stated that the petitioner's contract of service had expired on August 13, 1972 on his attaining the age of 58 years. The Service Rules referred to earlier are also to the same effect. Rule 26 which has been read clearly lays down that all Assistants shall retire at 58 years of age or upon completion of ??? years service, whichever occurs first. The petitioner who had entered service of the erstwhile Imperial Bank on April 3, 1939 had completed 30 years' service and would have retired earlier but for the communication dated March 6, 1971 by which he was given extension upto August 13, 1972. In fact, therefore, the petitioner did retire from the service of respondent. The argument of the respondent is bawd on Rule 11 of the Pension Rules which lays down that retirement of all officers of the Bank shall be subject to the sanction of the Executive Committee of the Central Board, the retirement of all other employees of the Bank shall be subject to the sanction of the Executive Committee or the Local Board concerned with their employment. There is an injuction in rule 11 that any officer or other employee who shall leave the service without sanction as required by this rule shall forfeit all claim upon the fund for pension. It is contended that no sanction as postulated by Rule 11 has been given and so, the petitioner has not retired. At first sight there thus seems to be a conflict between Rule 26 of the Service Rules and Rule 11 of the Pension Rules. On a proper constructions of the two rules only one view is possible and that is that the retirement which Rule 11 of the Pension Rules speaks of is other than the retirement postulated by Rule 26 of the Service Rules for example, Rule 25 of the Service Rules lays down that an Assistant may at the discretion of the Executive Committee be called upon to retire from the Bank's service upon completion of 25 years' service. Rule 15 of the Pension Rubs lays down that no employee on the staff in India shall be entitled to pension until he shall have completed twenty-five years' service in India. Rule 19 postulates pension being payable to an employee retiring from Bank's service after completing 20 years service if he has attained the age of 50 years'. It is only when a person takes a premature retirement that the sanction to retire is necessary otherwise Rule 26 of the Service Rules would become nugatory. Indeed, Rule 13 of the Pension Rules is specific in laying down that pension shall begin, to accrue on the first day succeeding that of retirement. Inasmuch as Rule 26 is mandatory and no other interpretation is possible on a proper reconciliation of the various rules. I, accordingly, hold that the petitioner has retired from the service of the respondent and no sanction as mentioned in Rule 11 to retire is postulated in his case. To hold otherwise would be irrational as the requirement of Rule 26 is of compelling nature.
19. Having come to the conclusion that the petitioner has, in fact, retired from the service of the respondent the next question to be considered is whether disciplinary proceedings can now be taken against him. As noticed earlier, the petitioner was placed under suspension on July 19, 1972. He retired on the expiry of August 13, 1972. A charge-sheet was sought to be served on him on January 11, 1973 being dated January 4, 1973. In my view this could not have been done.
20. In Harabilas Biswas v. Commissioner of Income-Tax, West Bengal, A.I.R 1963 Calcutta 359 a learned Single Judge of that Court held that the right to proceed against an employee departmentally subsists so long as there remains the relationship of mister and servant between the employer and the employee. As soon as that relationship comes to amend the employer or the appointing authority can no longer punish an employee departmental.
21. In State of Assam v. Padma Ram Borah, A.I.R 1965 Supreme Court 473, the government servant concerned was to retire on January 1, 1961. He was placed under suspension a few days earlier on December 22, 1960 and this had the effect of not only placing the Government servant under suspension but retaining him in service till the departmental enquiry against him was finalised. On January 6, 1961 the Government fixed the period of three months from January 1, 1961 to finalise the departmental proceedings. Under this order the service of the employee was to come to an and on March 31, 1961. The departmental proceedings not having been concluded the Government passed an order on May 9, 1961 extending the service of the employee for a further period of three months with effect from April 1, 1961. If was held that the State Government had no jurisdiction to piss an order on May 9, 1961 as it could not unilaterally create a fresh contract of service. In those circumstances the departmental proceedings, it was held could not proceed against an employee who was no longer in service.
22. In Sushil Kumar Choudhary v. State of Bihar, A.I.R 1966 Patna 227, a bench of that Court held that retention in service of Civil servant beyond date of superannuation for the purpose of holding a departmental enquiry was only possible under rules of service if the civil servant is suspended before his date of compulsory retirement and service extended. No departmental proceedings could be held after the date of superannuation if the service had not been extended.
23. In V.P Gindoroniya v. State of Madhya Pradesh, (1970) 1 SCC 362 : A.I.R 1970 Supermen Court 1494, it was held that where the Government servant under rules of service gave notice of leaving Government service and the notice complied with the rules, then the employee was not in service of the Government from the date on which the Government received notice and it was not open tot he Government to take disciplinary proceedings against him after receipt of notice.
24. In the present case although the petitioner was placed under suspension before the date of retirement or before the date on which the contract of service was to come to an end, no extension of service was given to him. By off lux of time the service cams to an end and the relationship of employer and employee or master and servant ceased to exist between the petitioner and the respondent from August 14, 1972. It was not competent on the part of the respondent to initiate any disciplinary proceedings against the petitioner thereafter. Accordingly, no chargesheet as contemplated could be served on the petitioner.
25. Mr. Shroff contends that the charge-sheet sought to be served on the petitioner may not be considered as one contemplating disciplinary action, for obvious none could be taken once the petitioner had retired from service. The charge-sheet may be considered as a notice of an enquiry to the petitioner which was being held to find out whether any loss has been occasioned to the respondent by acts of omission and commission while he was in service of the respondent. This enquiry or investigation is necessary before orders can be passed for payment of pension and provident fund because the respondent has the right to be reimbursed for any loss that it may have suffered by the acts of omission and commission by the petitioner. It is also contended that such an enquiry or investigation is permissible for the limited purpose aforesaid and in consonance wish the principles of natural justice the petitioner had to be called upon to appear and say whatever he wanted to, lest later on it may be averred that he was not given any reasonable chance to take part in such an investigation. Reliance is placed on Rule 20 of the provident Fund Rules, which has been read earlier which authorises reimbursement to the Back from the provident fund account of an employee of any amounts due from the employee. The specific rule is “provided that when any member resigning or retiring from the service of the bank is under a liability incurred by him to the bunk, the trustees shall, irrespective of the duration of his service, pay to the bank out of the balance at his credit in the fund any amount due by him to the Bank (not exceeding in any case the sums contributed by the Bank to his account in the fund and any interest credited to his account on the sums so contributed). “Reading of the above provision makes it clear that the liability contemplated is a liability ascertained and determined while the employee was still in service. It obviously cannot refer to any claim that the Bank may have on Investigation conducted subsequent to the retirement of an employee. Indeed, there is a difference between a claim that may arise on investigation such as is contemplated in the present case and the liability postulated by the rule. As the word ‘Liability’ itself indicates the amount due must have been ascertained and must not be disputed. It obviously cannot have reference to alleged liabilities or, as noticed earlier, claims raised later on. Looking at the pension Rules the right to pension is absolute but is forfeited only in certain given circumstances. No rule in the pension Rules has been brought to my notice similar to Rule 20 of the provident Fund Rules under which any amount of pension can be withheld. In my view, therefore, the enquiry contemplated by the respondent even for the limited purpose now advocated at the bar cannot be for the purposes of withholding or deducting any amount due to the petitioner either by way of pension or provident fund. If the respondent has any claim it may have to take remorse to other ways of realisation and not by withholding pension or provident fund.
26. The respondent has relied on A.A.R Deshpande v. Union of India, 1971 (2) S.L.R 776 and The State of U.P v. Sri Aditya Narain Misra, 1973 (1) S.L.R 679, to contend that it could hold an investigation to find out the loss occasioned to it by the petitioner while in service and then deduct the loss so determined from the pension and/or provident fund payable to the petitioner. In my view the contention has no force. As far as Government service is concerned there are specific rules which authorise deductions to be made. There are no such rules brought to my notice in this case vis-a-vis service under the respondent, except Rule 20 of the provident Fund Rules on which I have already given my opinion.
27. It has been contended that the right to claim pension or provident fund is not enforceable as yet in as much as orders have to be passed under the relevant rules sanctioning pension and payment of provident fund. Unless that is done or there is a refusal to do so, the petitioner gats no right which he can enforce through court. Here again the contention cannot be accepted as sound.
28. The grant of pension does not depend upon an order being passed by any body. It may be that for the purpose of qualifying the amount having regard to the period of service and other allied matter it may be necessary for the authorities to pass an order to that effect, but the right to receive pension flows to the petitioner not because of any such order that may be parsed but by virtue of the rules. Reference in this behalf may be made to Rule 13 of the Pension Rules. The same would be the position regarding provident fund as is apparent from a reading of Rule 20 of the provident Fund Rules. I am fortified in coming to this conclusion by the decision of the Supreme Court in Deokinandan Prasad v. The State of Bihar, (1971) 2 SCC 330 : A.I.R 1971 Supreme Court 1409.
29. The result is that a declaration has to be given in favour of the petitioner that the respondent cannot take any disciplinary proceedings against him, he having retired from service and that he is entitled to his pension and provident fund in accordance with the rules.
30. Pension and Provident Fund, according to the rules, are payable by the trustees of the respective funds. The same are not payable by the respondent. It is urged that in as much as the trsutees of the funds are not before this court no writ can issue directing payment of pension and the provident fund. Technically, the plea may have some force, all the same this court cannot shut its eyes to the fact that it is at the instance of the respondent that the petitioner has not yet been paid the pension and provident fund due to him. Indeed, the stand of the respondent has been that these have yet to be determined after the investigation contemplated is concluded. In as much as I have held that such an investigation can have no relevance as far as the petitioner is concerned and any investigation that the respondent makes would be for its own benefit and subsequent action as it may be advised, I am inclined to mould the relief and direct the respondent to see that the pension and provident fund accounts of the petitioner are finalised at the earliest. I further direct that the investigation that the respondent may contemplate with regard to alleged losses incurred by it on account of alleged acts omission and commission of the petitioner will not stand in the way of the finalising of the pension and provident fund accounts of the petitioner. A writ is issued in terms of the decision above. The petitioner will be entitled to his costs. Counsel's fee Rs. 300/-.
31. Petition allowed.