w w w . L a w y e r S e r v i c e s . i n



Principal (Retd.), Dr. Ambedkar Institute of Hotel Management v/s Union of India through Secretary to Government of India, Ministry of Tourism, New Delhi & Others


Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- Z H TOURISM PRIVATE LIMITED [Strike Off] CIN = U63030MH2004PTC145328

Company & Directors' Information:- H S MANAGEMENT INSTITUTE PRIVATE LIMITED [Active] CIN = U74140DL2005PTC141500

Company & Directors' Information:- A S INSTITUTE OF MANAGEMENT PRIVATE LIMITED [Strike Off] CIN = U80302DL2005PTC140941

Company & Directors' Information:- R L TOURISM PRIVATE LIMITED [Strike Off] CIN = U63020KA2013PTC070668

Company & Directors' Information:- M R TOURISM INDIA PRIVATE LIMITED [Active] CIN = U63000GJ2014PTC081635

Company & Directors' Information:- INSTITUTE OF HOTEL MANAGEMENT AND TOURISM PRIVATE LIMITED [Strike Off] CIN = U80903WB1998PTC087196

    OA No. 060/00207 of 2016

    Decided On, 11 May 2017

    At, Central Administrative Tribunal Chandigarh Bench

    By, THE HONOURABLE MR. JUSTICE M.S. SULLAR
    By, JUDICIAL MEMBER

    For the Applicant: R.K. Sharma, Advocate. For the Respondents: Arvind Moudgil, Advocate.



Judgment Text

Oral Order:

M.S. Sullar, Member, J.

1. Applicant, Navin Kumar Nanchahal, son of Late Sh. Ved Prakash Nanchahal, has assailed the impugned orders dated 24/28.07.2015 (Annexure A-1) and dated 28.08.2015 (Annexure A-2), whereby recovery of an amount of Rs.2,66,580/- + Dearness relief, from his pension, was ordered to be effected, on account of his taking commercial employment, after retirement, without obtaining sanction and for violation of Rule 10 of CCS (Pension) Rules, 1972 (for brevity ‘Pension Rules, 1972’).

2. The pith and substance of the facts and material, which needs a necessary mention, for the limited purpose of deciding the core controversy, involved in the instant Original Application (OA), and exposited from the record is, that after completion of his tenure, the applicant retired from service on 31.10.2011, from the post of Principal of Dr. Ambedkar Institute of Hotel Management, Chandigarh (For short DAIHM, Chandigarh), on attaining the age of superannuation. After his retirement, he got employment, by virtue of a Service Agreement dated 08.08.2011 (Annexure A-3) with the Federation of Hotel & Restaurant Associations of India (FHRAI), Institute of Hospitality Management, a Company incorporated under the Companies Act, 1956, which is stated to be non-commercial organization, as per Life Certificate 25.11.2013 (Annexure A-4) submitted by the applicant.

3. The case set up by the applicant, in brief, in so far as, relevant is, that the respondents issued a Notice (SCN) dated 14.03.2014 (Annexure A-5), to show cause as to why the impugned amount be not deducted from his pension, to which the applicant filed the reply dated 20.03.2014 (Annexure A-6). It was alleged that the respondents without considering the pleas raised by the applicant, and without verifying the facts, issued another notice dated 23.06.2014 (Annexure A-7) for recovery of pointed amount from his pension w.e.f. 01.11.2011 to July, 2012 along with interest. He again submitted his detailed reply dated 05.07.2014 (Annexure A-8), but the respondents issued the impugned orders dated 24/28.07.2015 (Annexure A-1) and dated 28.08.2015 (Annexure A-2), without considering the replies, and started recovery from the amount of his pension, in a very casual manner.

4. Aggrieved thereby, the applicant has preferred the instant OA, challenging the impugned orders (Annexures A-1 and A-2), on the following grounds:-

'i)That admittedly recovery from pension is a major punishment and such a punishment cannot be awarded without holding proper departmental inquiry and full-fledged inquiry was required under Rule 14 of CCS (CCA) Rules, 1965 and Rule 9 of the CCS (Pension) Rules, 1972. Hence, the action of the respondents in passing the impugned orders A-1 and A-2 is not sustainable and liable to be quashed.

ii) That the very base of the allegation of the respondents is without any foundation in as much as applicant had not concealed anything from the respondents, rather he himself disclosed the factum of taken employment by him after retirement, which was not a commercial organization, in terms of Section 25 of the Companies Act, 1956 and without verifying that fact, respondents have started recovery. This shows non-application of the mind and arbitrariness on the part of the respondents.

iii) That in the administrative action the doctrine of equality Article 14 is required to be followed as held by the Honble Supreme Court in Civil Appeal No.3186 of 2008 titled Man Singh Versus State of Haryana and others.

iv) That the action of the respondent department is harsh, arbitrary, discriminatory, and violative of principles of natural justice and as such is not sustainable in the eyes of law.'

5. Levelling a variety of allegations and narrating the sequence of events in detail, in all, the applicants claim that although he got the employment in non-commercial organization after his retirement, but the respondents have illegally started recovery of the impugned amount from his pension, in the garb of violation of Rule 10 of Pension Rules, 1972. On the strength of aforesaid grounds, the applicant seeks to quash the impugned orders and action of respondents, in the manner, indicated hereinabove.

6. On the contrary, the respondents have refuted the claim of the applicant and filed the written statement, inter-alia, pleading certain preliminary objections of misrepresenting the facts and maintainability of the OA. It was further pleaded that the applicant, after retirement from his service, joined the Federation of Hotel & Restaurant Association of India (FHRAI) Institute of Hospitality Management, without obtaining prior sanction, as required under rule 10 of the Pension Rules, 1972. Accordingly, Member Secretary of the Government Body, vide memorandum dated 14.3.2014 (Annexure A-5) directed the applicant to explain the contravention of rule 10 of Pension Rules, 1972, to which he filed the reply. After considering the reply, the respondents issued notice for recovery of amount from his pension. The applicant filed a reply dated 5.7.2014 (Annexure A-8) and after considering the entire matter, the impugned recovery was ordered to be effected from his pension, vide impugned orders, Annexures A-1 and A-2.

7. According to the respondents, since the applicant has violated the provisions of Rule 10 of Pension Rules, 1972, so the Competent Authority has rightly ordered the recovery of the impugned amount, from his pension after issuing him SCN and considering his reply. Instead of reproducing the entire contents of the reply, and in order to avoid the repetition of facts, suffice it to say, that virtually acknowledging the factual matrix, and reiterating the validity of the impugned orders, the respondents have stoutly denied all other allegations and grounds, contained in the OA and prayed for its dismissal.

8. Controverting the allegations and pleadings of the respondents and reiterating the grounds contained in the OA, the applicant has filed the replication, in which it was additionally pleaded that he had not accepted any commercial employment as per letters dated 20.03.2014 (Annexure A-6), 05.07.2014 (Annexure A-8), 26.09.2015 (Annexure A-10), 13.01.2016 (Annexure A-11) and 15.02.2016 (Annexure A-12). As the FHRAI is not a commercial organization, as per provisions of Section 25 of the Companies Act, 1956 (Annexure A-13), and job description (Annexure A-14), so no recovery can be effected. That is how, I am seized of the matter.

9. Having heard the learned counsel for the parties, having gone through the record with their valuable assistance and after considering the entire matter, I am of the firm view that the instant OA deserves to be partly accepted, in the manner and for the reasons, mentioned herein below.

10. As is evident from the record that having completed his tenure of Principal of DAIHM, Chandigarh, the applicant retired from service on 31.10.2011, on attaining the age of superannuation. As per Service Agreement (Annexure A-3), he joined FHRAI Institute, with job descriptions (Annexures A-14). The applicant claimed that, FHRAI is a Company registered under Section 25 of the Companies Act, 1956, and is not a commercial organization, even as per its own Aims and Objects. On the other hand, according to the respondents, the applicant has violated the provisions of Rule 10 of Pension Rules, 1972, and the impugned amount is liable to be recovered, from his pension.

11.Thus, it would be seen that the facts of this case are neither intricate, nor much disputed, and fall within a very narrow compass, for deciding the real controversy between the parties. Such being the position on record, the short and significant question that arises for my consideration in this case, is as to whether the competent authority can affect the recovery in the garb of the impugned orders, Annexures A-1 and A-2, from the pension of the applicant or not?

12. Having regard to the rival contentions of the learned counsel for the parties, to my mind, the answer must obviously be in negative.

13.The relevant provisions Rule 10 of Pension Rules, 1972, read as under:-

'10. Commercial employment after retirement

(1) If a pensioner who immediately before his retirement was a member of Central Service Group `A' wishes to accept any commercial employment before the expiry of two years from the date of his retirement, he shall obtain the previous sanction of the Government to such acceptance by submitting an application in Form 25 :

Provided that a Government servant who was permitted by the Government to take up a particular form of commercial employment during his leave preparatory to retirement or during refused leave shall not be required to obtain subsequent permission for his continuance in such employment after retirement.

(2) Subject to the provisions of sub-rule (3), the Government may, by order in writing, on an application made under sub-rule (1) by a pensioner grant, subject to such conditions, if any, as it may deem, necessary permission, or refuse for reasons to be recorded in the order, permission, to such pensioner to take up the commercial employment specified in the application.

(3) xx xxxx xx

(4) xx xx xx xx

(5) xx xx xx xx

(6) If any pensioner takes up any commercial employment at any time before the expiry of two years from the date of his retirement without the prior permission of the Government or commits a breach of any condition subject to which permission to take up any commercial employment has been granted to him under this rule, it shall be competent for the Government to declare by order in writing and for reasons to be recorded therein that he shall not be entitled to the whole or such part of the pension and for such periods as may be specified in the order :

Provided that no such order shall be made without giving the pensioner concerned an opportunity of showing cause against such declaration:

Provided further that in making any order under this sub-rule, the Government shall have regard to the following factors, namely:-

(i) the financial circumstances of the pensioner concerned;

(ii) the nature of, and the emoluments from the commercial employment taken up by the pensioner concerned; and

(iii) any other relevant factor.

(7) Every order passed by the Government under this rule shall be communicated to the pensioner concerned.

(8) In this rule, -

(a) the expression "commercial employment" means :-

(i) an employment in any capacity including that of an agent, under a company, co-operative society, firm or individual engaged in trading, commercial, industrial, financial or professional business and includes also a directorship of such company and partnership of such firm, but does not include employment under a body corporate, wholly or substantially owned or controlled by the Central Government or a State Government;

(ii) setting up practice, either independently or as a partner of a firm, as adviser or consultant in matters in respect of which the pensioner -

(A) has no professional qualifications and the matters in respect of which the practice is to be set up or is carried on are relatable to his official knowledge or experience, or

(B) has professional qualifications but the matters in respect of which such practice is to be set up are such as are likely to give his clients an unfair advantage by reason of his previous official position, or

(C) has to undertake work involving liaison or contact with the offices or officers of the Government.

(iii) Deleted.

EXPLANATION. - For the purpose of this clause, the expression "employment under a co-operative society" includes the holding of any office, whether elective or otherwise, such as that of President, Chairman, Manager, Secretary, Treasurer and the like, by whatever name called in such society;

(b) the expression "date of retirement", in relation to a Government servant re-employed after retirement, without any break, either in the same or in another Group `A' post under the Government or in any other equivalent post under a State Government, means the date on which such Government servant finally ceases to be so re-employed in Government service.'

14. Likewise, Section 25 of the Companies Act, 1956 empowers the Central Government to register an Association as a Company with limited liability, without the addition to its name the word ‘Limited’ or ‘Private Limited’. It is not a matter of dispute that FHRAI Institute is registered Company under Section 25 of the Companies Act, 1956, as per its Aims and Objects (Annexure A-9).

15.Sequelly, the expression ‘commercial employment’ has been defined in sub-rule 8 of rule 10 of Pension Rules, 1972, to mean the employment, in any capacity, including that of an agent, under a company, co-operative society, firm or individual engaged in trading, commercial, industrial, financial or professional business and includes also a directorship of such company and partnership of such firm, but does not include employment under a body corporate, wholly or substantially owned or controlled by the Central Government or a State Government.

16. A conjoint and meaningful reading of these provisions would reveal that if a pensioner takes up any commercial employment, at any time, before the expiry of one year from the date of his retirement, without the prior permission of the Government, or commits a breach of any condition subject to which permission to take up any commercial employment has been granted to him under this rule, it shall be competent for the Government, to declare, by an order in writing, and for the reasons to be recorded therein, that he shall not be entitled to the whole, or such part of the pension, and for such period, as may be specified in the order,

Provided that no such order shall be made, without giving the pensioner concerned, an opportunity of showing cause against such declaration and in making any such order, the Government shall have regard to the financial circumstances of the pensioner concerned, the nature of and emoluments from the commercial employment taken up by the pensioner concerned and any other relevant factor.

17.Therefore, the rules make it clear that in order to debar a person from pension, in the garb of rule 10 of the Pension Rules, 1972, it was mandatory duty of the Competent Authority to come to a definite conclusion that, despite the fact that FHRAI Institute was a non-commercial organisation, registered under section 25 of the Companies Act, 1956, still it falls within the ambit of ‘commercial employment’ as defined under sub rule 8 of rule 10 of the Pension Rules, 1972, that too based on cogent evidence, which is totally lacking in the instant case.

18.Not only that, the applicant, in his replies dated 20.3.2014 (Annexure A-6) to SCN and dated 5.7.2014 (Annexure A-8) to notice, has specifically pleaded that his engagement in FHRAI Institute is not in a commercial employment, as contemplated under sub rule 8 of rule 10 of the Pension Rules, 1972, as it is a non-profitable organization, but strangely enough, the Competent Authority has not addressed even a single issue, ignored all the points with impunity and passed the impugned orders of recovery of the impugned amount dated 24/28.7.2015 (Annexure A-1) and 28.8.2015 (Annexure A-2), in a very casual manner, which lacks reasoning. The Competent Authority was required to pass a speaking and reasoned order before passing adverse orders against the applicant, in view of the instructions issued by the Central Vigilance Commission vide office order No. 51/09/03 dated 15.09.2003.

18.Exhibiting the necessity of passing of speaking orders, the Honble Apex Court in the case of Chairman, Disciplinary Authority, Rani Lakshmi Bai Kshetriya Gramin Bank Vs. Jagdish Sharan Varshney and Others (2009) 4 SCC 240 has in para 8 held as under:-

'8. The purpose of disclosure of reasons, as held by a Constitution Bench of this Court in the case of S.N.Mukherjee vs. Union of India reported in (1990) 4 SCC 594, is that people must have confidence in the judicial or quasi-judicial authorities. Unless reasons are disclosed, how can a person know whether the authority has applied its mind or not? Also, giving of reasons minimizes chances of arbitrariness. Hence, it is an essential requirement of the rule of law that some reasons, at least in brief, must be disclosed in a judicial or quasi-judicial order, even if it is an order of affirmation'.

19.An identical question came to be decided by Hon’ble Apex Court in a celebrated judgment in the case of M/s Mahavir Prasad Santosh Kumar Vs. State of U.P. & Others 1970 SCC (1) 764 which was subsequently followed in a line of judgments. Having considered the legal requirement of passing speaking order by the authority, it was ruled that 'recording of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. A party to the disp

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ute is ordinarily entitled to know the grounds on which the authority has rejected his claim. It was also held that ‘while it must appear that the authority entrusted with the quasi-judicial authority has reached a conclusion of the problem before him: it must appear that he has reached a conclusion which is according to law and just, and for ensuring that he must record the ultimate mental process leading from the dispute to its solution’. Such authorities are required to pass reasoned and speaking order.' The same view was again reiterated by Honble Apex Court in the case of Divisional Forest Officer Vs. Madhuusudan Rao JT 2008 (2) SC 253. 20.Therefore, in case the Competent Authority, intended to make recovery from the pensionary benefits of the applicant after his retirement, then it was its mandatory duty, to provide an adequate opportunity of hearing and record reasons, before passing any adverse order at his back. Indeed this is clear violation of principle of natural justice and Doctrine that a person cannot be condemned unheard at his back. Moreover, the administrative actions of the Competent Authority should be just on the test of fair play and reasonableness, which is totally lacking in the present case. Thus seen from any angle the impugned orders cannot legally be sustained in the obtaining circumstances of the case. 21.In the light of the aforesaid reasons, instant O.A. is partly accepted. Impugned order dated 24/28.7.2015 (Annexure A-1) and 28.8.2015 (Annexure A-2), are hereby set aside. The matter is remitted back to the competent authority for a fresh decision, after providing adequate opportunity of hearing to the applicant, by passing reasoned and speaking order, in the light of the indicated observations and in accordance with law, within a period of two months from the date of receipt of a certified copy of this order. However, the parties are left to bear their own costs.
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