Railway Employee Who Has Compulsorily Retired As Penalty Has No Vested Right To Claim Entire Pension Or Gratuity: Kerala HC

The Kerala High Court has observed that a railway servant who has been compulsorily retired from service as a penalty does not have any vested right to stake claim for the entire pension or gratuity.

While observing Rule 40, 41 and 64 of the Railway Services (Pension) Rules 1993, the Bench of Justice A.K. Jayasankaran Nambiar and Justice Mohammed Nias C.P noted thus "A reading of the above rules would clearly indicate that, a railway servant compulsorily retired from service as a penalty may be granted pension or gratuity or both at the rate not less that 2/3rd and not more than full compensation pension or gratuity, which clearly shows that the quantum is completely at the discretion of the competent authority to grant either 2/3rd or full pension and within the band of 2/3rd to full which is an absolute discretion of the employer and the applicant does not have any vested right to stake claim for the entire pension or gratuity in cases where he is imposed a penalty of compulsory retirement."

In this case, a Senior Clerk in Southern Railway was given a penalty of compulsory retirement from service pursuant to a disciplinary proceeding that alleged that he had obtained employment in the Railways under the Sports Quota by producing a fraudulent sports certificate.

He challenged the punishment before the Central Administrative Tribunal (CAT) Ernakulam, which came to be dismissed. The review attempt was also dismissed by the Tribunal.

After the culmination of the proceedings, the retirement benefits were settled and 2/3rd pension and 2/3rd gratuity as Compensation Pension under the Railway Services (Pension) Rules 1993 were passed.

Those orders restricting the pension and gratuity were challenged before the CAT.

The Tribunal held that the grant of compulsory retirement pension ought to have been simultaneously made along with the order of compulsory retirement and that not having been done, it must be treated that the applicant is entitled to full pension as the disciplinary authority in the original instance did not choose to pass any orders reducing the pension.

Feeling aggrieved by the Order of the Tribunal, the General Manager, Southern Railway, Chennai, and its officials approached High Court.

Deputy Solicitor General of India Manu S. appeared for the petitioners whereas Advocate Martin G. Thottam appeared for the Respondent.

The Court held that the quantum is completely at the discretion of the competent authority to grant either 2/3rd or full pension and within the band of 2/3rd to full which is an absolute discretion of the employer.

The Court further noted that "We are also not impressed with the argument of the learned counsel for the respondents that not imposing a reduction in pension or gratuity at the time of inflicting the punishment should mean that he is entitled to full pension. As held earlier the question of grant of pension or its quantum is determined only after the punishment is imposed after the culmination of the disciplinary proceedings."

Accordingly, the Court set aside the impugned Judgment of the Tribunal.

Cause Title- The General Manager Southern Railway v. R. Harindrakumar

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