judgement:
ivil Appeal No. 471 of 1975.
From the Judgment and Order dated 25.9.72 of the Karna taka High Court in Regular Second Appeal No. 311 of 1969.
B.R.L. Iyengar and T.R. Ramasesh for the Appellants.
M.S. Ganesh, R.B. Datar, Mrs. B. Tamta, N. Nettar, S.S. Jabali and B .P.
Singh for the Respondents.
The Judgment of the Court was delivered by NATARAJAN, J.
C.A. No. 471 of 1975 by certificate and C.A. No. 3602 of 1984 and C.A. No. 461 of 1987 (arising out of S.L.P. (Civil) No. 13120 of 1985) by Special Leave raise common questions of law and hence they were heard together and are disposed of by this common judgment.
The judgments of the High Court in all the three cases have been rendered in accordance with the opinion rendered by a Full Bench of the High Court in a reference made in Regular Second Appeal No. 311 of 1969.
The opinion of the Full Bench was sought for in the following circumstances.
The respondent in C.A. No. 471 of 1975 entered into an agreement with the State of Mysore to purchase paddy on its behalf under the Paddy Procurement Scheme, 1959 and to hull the paddy and supply rice.
Clause 12 of the agreement re lates to breach of conditions of the agreement and the consequences that would ensue on such breach.
The said clause, referring to the respondent and the State as first party 401 and second party respectively is worded as under: "In token of the first party 's willingness to abide by the above conditions, the first party has hereby deposited as security a sum of Five Hundred Rupees only with the second party and for any breach of conditions set forth herein before, the first party shall be liable to pay damages to the second party as may be assessed by the second party, in addition to the for feiture in part or whole of the amount depos ited by him.
Any amount that may become due or payable by the first party to the second party under any part of the agreement, shall be deemed to be and may be recovered from the first party as if they were arrears of land revenue.
" The State alleged that the respondent had committed a breach of the contract by making short delivery of rice and demanded payment of damages assessed at Rs.7,344.16ps.
by the Deputy Commissioner.
As the respondent failed to pay the damages the State initiated proceedings under the Revenue Recovery Act to recover the amount as if it were arrears of land revenue.
The respondent filed a suit to challenge the recovery proceeding as being illegal and for a permanent injunction to restrain the State from pursuing the recovery proceedings.
The trial court dismissed the suit but the Appellate Court decreed the suit.
The State preferred a Second Appeal to the High Court.
In the Second Appeal a reference was made to the Full Bench for its opinion since there were two conflicting decisions of Division Benches of the High Court on the questions of law raised in the appeal.
The Full Bench answered the reference in the following manner: "Where an agreement between the State and a private person provides that for any breach of any of the conditions of such agreement by such person he shall be liable to pay such damages as may be assessed by the State and that any amount that may become due or payable by such person to the State under any part of that agreement, shall be deemed to be and may be recovered from such person as if they were arrears of land revenue (i) the State is not competent to adjudicate upon the question whether such a person committed breach of contract and that the State is not competent to assess 402 damages for any breach of the contract which is not admitted by the other side: (ii) damages so assessed cannot be recovered from such person as if they were arrears of land revenue".
In accordance with the opinion of the Full Bench the Second Appeal preferred by the State was dismissed.
The High Court, however, granted a certificate of leave to the State and that is how this appeal by certificate has come to be filed.
The other two appeals relate to two contractors who had entered into agreements with the State of Mysore for con structing certain buildings.
As the contractors failed to complete the works their contracts were terminated and in terms of the agreements entered into by them the damages payable by them for breach of contract were assessed and the damages were sought to be recovered as arrears of land revenue.
Both the contractors filed writ petitions under Article 226 of the Constitution and challenged the validity of the assessment of the damages and the recovery proceed ings.
Following the ruling of the Full Bench referred to above the High Court allowed both the writ petitions and quashed the proceedings for recovery of damages.
Against the judgments of the High Court the State has preferred the other two appeals.
Mr. B.R.L. Iyenger, learned counsel for the appellant contended that the terms of clause 12 of the agreement are wide and comprehensive enough to hold that the Deputy Com missioner representing the State has competence and sanction to decide whether any breach of the conditions of the con tract had been committed and also to determine the quantum of damages payable for the breach.
In other words, the argument was that the Deputy Commissioner, even though a party to the agreement is empowered under Clause 12 to not only assess the damages occasioned by the breach of the conditions but also to adjudicate upon any issue concerning the commission of the breach itself.
The learned counsel, therefore, submitted that the opinion rendered by the Full Bench and the judgments rendered in pursuance thereof are unsustainable and hence the appeals by the State should be allowed.
On a consideration of the matter we find ourselves unable to accept the contentions of Mr. Iyenger.
The terms of Clause 12 do not afford scope for a liberal construction being made regarding the power 403 of the Deputy Commissioner to adjudicate upon a disputed question of breach as well as to assess the damages arising from the breach.
The crucial words in clause 12 are "and for any breach of conditions set forth hereinbefore, the first party shall be liable to pay damages to the second party as may be assessed by the second party".
On a plain reading of the words it is clear that the right of the second party to assess damages would arise only if the breach of conditions is admitted or if no issue is made of it.
If it was the intention of the parties that the officer acting on behalf of the State was also entitled to adjudicate upon a dispute regarding the breach of conditions the wording of Clause 12 would have been entirely different.
It cannot also be argued that a right to adjudicate upon an issue relating to a breach of conditions of the contract would flow from or is inhered in the right conferred to assess the damages arising from a breach of conditions.
The power to assess damages, as pointed out by the Full Bench, is a subsidiary and conse quential power and not the primary power.
Even assuming for argument 's sake that the terms of Clause 12 afford scope for being construed as empowering the officer of the State to decide upon the question of breach as well as assess the quantum of damages, we do not think that adjudication by the Officer regarding the breach of the contract can be sus tained under law because a party to the agreement cannot be an arbiter in his own cause.
Interests or justice and equity require that where a party to a contract disputes the com mitting of any breach of conditions the adjudication should be by an independent person or body and not by the other party to the contract.
The position will, however, be dif ferent where there is no dispute or there is consensus between the contracting parties regarding the breach of conditions.
In such a case the Officer of the State, even though a party to the contract will be well within his rights in assessing the damages occasioned by the breach in view of the specific terms of Clause 12.
We are, therefore, in agreement with the view of the Full Bench that the powers of the State under an agreement entered into by it with a private person providing for assessment of damages for breach of conditions and recovery of the damages will stand confined only to those cases where the breach of conditions is admitted or it is disputed.
The further question requiring consideration is regard ing the power of the State to recover damages as arrears of land revenue under the Revenue Recovery Act.
The Full Bench has taken the view that the State is not entitled to recover damages as arrears of land revenue because damages for breach of conditions will not amount to 404 "money due under the contract".
The Full Bench has relied upon a decision of this Court in Divisional Forest Officer vs Mool Chand, ; in support of its view.
This decision cannot be an authority for the view taken by the Full Bench because it has been rendered with reference to facts which are entirely different.
What fell for consid eration in that case was whether a tender amount could be recovered from a defaulting forest contractor as arrears of land revenue when Section 75 of the Forest Regulation and Rule 10 of the Rules made thereunder did not provide for such realisation.
We are, however, concerned with cases where the agreement entered into between the Government and the private persons specifically provides for recovery of damages as arrears of land revenue.
What the Full Bench has failed to notice is that even though the damages become payable on account of breach of conditions of the contract, the liability to pay damages does not fall outside the terms of the contract but within the terms of the contract.
The words "any amount that may become due or payable by the first party to the second party under any part of this agreement" have to be read in conjunction with the earlier portion of the clause stipulating liability on the party contracting with the State to pay damages for breach of conditions.
Therefore, it follows that though damages become payable on account of breach of conditions of the agreement they nevertheless constitute amounts payable under the contract i.e. under one of the terms of the contract impos ing liability to pay damages for breach of conditions.
To illustrate the position if the agreement provides for a liquidated sum being paid as damages for breach of condi tions instead of a sum to be assessed by the Deputy Commis sioner, it cannot be said that the specified damages will not be money due under the contract and hence the damages cannot be recovered under the Revenue Recovery Act.
What applies to specified damages will likewise apply to damages which are quantified after assessment.
We, therefore, hold that the opinion of the Full Bench in so far as the recovery of damages and arrears of land revenue is concerned is not in accordance with law.
As it is not disputed that in all the three cases the Officers acting on behalf of the State have not only as sessed the damages but have also acted as arbiters in the dispute regarding the alleged breach of contract, the High Court was justified in dismissing the Second Appeal pre ferred by the State in R.S.A. No. 311 of 1969 and in allow ing the writ petitions filed by the two contractors.
All the appeals, therefore, have to fail and will accordingly stand dismissed.
The parties will pay and bear their respective costs.
A.P.J. Appeals dismissed.

summary:
Clause 12 of the agreements separately entered into between the respondents and the appellant State provided that "for any breach of conditions the first party (the respondent) shall be liable to pay damages to the second party (the State) as may be assessed by the second party in addition to the forfeiture in part or full of the security amount deposited by the first party and that any amount that may become due or payable by the first party to the second party under any part of the agreement, shall be deemed to be and may be recovered from the first party as if they were arrears of land revenue.
According to the State the respondents committed a breach of their respective contract and, therefore, demanded payment of damages as assessed by the authorities represent ing the State.
As the respondents failed to pay the damages, the State initiated recovery proceedings under the Revenue Recovery Act.
The respondents challenged the recovery pro ceedings by filing suit/writ petition.
The Full Bench of the High Court dismissed the Second Appeal (out of which C .A. No. 471 of 1975 arises) preferred by the State holding that the State is not competent to adjudicate upon the question whether the respondent commit ted breach of contract, that the State is not competent to assess the damages for any breach of contract not admitted by the respondent and that the damages so assessed cannot be recovered as if they were arrears of land revenue.
Following this decision, the High Court allowed the writ petitions filed by the other respondents and quashed the recovery proceedings.
399 In the appeal to this Court on behalf of the State it was contended that the authorities representing the State, even though a party to the agreement are empowered under Clause 12 to not only assess the damages occasioned by the breach of the conditions but also to adjudication any issue concerning the commission of the breach itself.
Dismissing the Appeals, HELD: 1.
On a plain reading of the words in Clause 12: "and for any breach of conditions set forth herein before, the first party shall be liable to pay damages to the second party as may be assessed by the second party", it is clear that the right of the second party to assess damages would arise only if the breach of conditions is admitted or if no issue is made of it.
If it was the intention of the parties that the officer acting on behalf of the State was also entitled to adjudicate upon a dispute regarding the breach of conditions the wording of Clause 12 would have been entirely different.
A right to adjudicate upon an issue relating to a breach of conditions of the contract would not flow or is not inhered in the right conferred to assess the damages arising from a breach of conditions.
The power to assess damages is a subsidiary and consequential power and not the primary power.
[403A C] 2.
Adjudication by the Officer regarding the breach of the contract cannot be sustained under law because a party to the agreement cannot be an arbiter in his own cause.
Interests of justice and equity require that where a party to the contract disputes the committing of any breach of conditions the adjudication should be by an independent person or body and not by the other party to the contract.
The position will, however, be different where there is no dispute or there is consensus between the contracting par ties regarding the breach of conditions.
In such a case the Officer of the State even though a party to the contract will be well within his rights in assessing the damages occasioned by the breach in view of the specific terms of Clause 12.
[403D F] 3.
The Full Banch while taking the view that the State is not entitled to recover damages as arrears of land reve nue because damages for breach of conditions will not amount to "money due under the contract" has wrongly relied upon the decision of this Court in Divisional Forest Officer vs Mool Chand ; Here the Court is concerned with cases where the agreement entered into between the Govern ment and the private persons specifically provides for recovery of damages as arrears of land revenue.
The Full Bench has failed to notice that even though the damages become payable on ac 400 count of breach of conditions of contract, the liability to pay damages does not fail outside the terms of the contract but within the terms of the contract.
The words "any amount that may become due or payable by the first party to the second party under any part of this agreement" have to be read in conjunction with the earlier portion of the Clause stipulating liability on the party contracting with the State to pay damages for breach of conditions.
Therefore, it follows that though damages become payable on account of breach of conditions of the agreement they nevertheless constitute amount payable under the contract, that is, under one of the terms of the contract imposing liabilities to pay damages for breach of conditions.
Therefore, the opinion of the Full Bench in so far as the recovery of damages as arrears of land revenue is concerned is not in accordance with law.
[403H; 404A F]


judgement:
ivil Appeal No. 481 of 1987.
From the Judgment and Order dated 11.7.
1986 of the Allahabad High Court in W.P. No. 8249 of 1980.
Anil Dev Singh and Mrs. section Dikshit for the Appellant.
Ashok Grover and Pramod Dayal for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
Leave granted.
This appeal is directed against the order of the High Court of Allahabad quashing the State Government 's Notice dated 29.1.86 issued under article 470(b) of the Civil Service Regulations calling upon the respondent to show cause as to why his pension and gratuity be not forfeited.
Relevant facts giving rise to this appeal are necessary to be recaptulated.
Brahm Datt Sharma was employed as an Executive Engineer in the Irrigation Department of the State of Uttar Pradesh.
A number of charges were framed against him and after departmental inquiry charges were found proved consequently.
He was dismissed from service by the State Govt.
's Order dated November 10, 1972.
He unsuccessfully challenged the validity of the Order before the U.P. Public Service Tribunal.
Therefore he filed a writ petition under article 226 of the Constitution before the High Court challeng ing the order of dismissal.
A single Judge of the High Court Allahabad by his Order dated 10.8.84 set aside the order of the Tribunal and quashed the State Government 's Order dis missing the respondent from service on the ground that he had not been afforded reasonable opportunity of 448 defence in as much as the recommendation made by the inquiry officer relating to the quantum of punishment against the petitioner had not been communicated to him.
While allowing the writ petition the learned single Judge made the follow ing observations: "I am informed by the learned counsel for the petitioner that the petitioner has now reached the age of superannuation during the pendency of the petition in the High Court, consequently no reinstatement can be ordered today.
The petitioner will, however, be enti tled to receive all the benefits which he would be entitled treating him as having been in service from the date of dismissal till the date of superannuation.
The petitioner will also be entitled to receive the pensionary benefits which will be admissible to him as if he continued in service till the date of superannuation.
It will be open to the re spondents to draw fresh proceedings if it is permissible to do so.
" The respondent had already retired from service during the pendency of the petition before the High Court.
On attaining the age of superannuation disciplinary proceedings could not be taken against him.
The State Govt.
however issued a notice dated 29.1.86 to him calling upon him to show cause as to why orders for forfeiture of his pension and gratuity be not issued in accordance with article 470(b) Civil Service Regulation as his services have not been wholly satisfactory.
The notice contained allegations of misconduct against the respondent regarding financial irreg ularities committed by him.
The respondent submitted a reply to the notice but before the same could be examined or a decision could be taken by the Govt.
he filed an application before the High Court in Writ Petition No. 82449 of 1980 which had already been finally disposed of on 10.8.84.
By his Order dated July 11, 1986 the learned single Judge of the High Court held that since the departmental proceedings taken against the respondent had already been quashed, it was not open to the State Govt.
to issue show cause notice under article 470(b) of Civil Service Regulations, on those very allegations which formed charges in the disciplinary proceedings.
The Learned single Judge quashed the show cause notice and directed the State Govt.
to pay arrears of sal ary, pension and other allowances to the respondent.
The question which fails for consideration is whether notice dated 29.1.86 was invalid and liable to be quashed.
The learned single Judge of the High Court quashed the notice on the sole ground that the 449 allegations specified in the show cause notice were the same which had been the subject matter of departmental inquiry resulting in the respondent 's dismissal from service, and since dismissal order had been quashed in the writ petition, it was not open to the State Govt.
to take proceedings for imposing any cut in the respondent 's pension on the same set of charges.
We do not agree with the view taken by the High Court.
While quashing the order of dismissal the learned Judge did not quash the proceedings or the charges instead; he had quashed dismissal order merely on the ground that the respondent was not afforded opportunity to show cause against the proposed punishment as the recommendation with regard to the quantum of punishment made by the Inquiry Officer had not been communicated to him.
In fact while allowing the writ petition the learned single Judge himself observed in his order dated 10.8.84 that it would be open to the State govt to draw fresh proceedings if it was permissi ble to do so.
The High Court did not enter into the validity of the charges or the findings recorded against the respond ent during the inquiry held against him.
After the decision of the writ petition, it was open to the State Govt.
to have taken up proceedings against the respondent from the stage at which it was found to be vitiated.
Had the respondent not retired from service on attaining the age of superannuation it was open to the State Govt.
to pass order awarding pun ishment to him after issuing a fresh show cause notice and supplying to him a copy of the recommendation made by the Inquiry Officer.
There was no legal bar against the State Govt.
in following such a course of action.
There were serious allegations of misconduct against the respondent which had been proceeded against him during inquiry, those charges remained alive even after quashing of the dismissal order and it was therefore open to the State Govt.
to take action against the respondent in accordance with the rules.
No disciplinary proceedings could be taken as the respondent had retired from service, the Govt.
therefore considered it appropriate to take action against him under article 470 of Civil Service Regulations.
The Regulation vests power in the appointing authority to take action for imposing reduction in the pension, as the State Govt.
is the appointing author ity it was competent to issue show cause notice to the respondent.
The notice specified various acts of omissions and commissions with a view to afford respondent opportunity to show that he had rendered throughout satisfactory service and that the allegations made against him did not justify any reduction in the amount of pension.
If disciplinary proceedings against an employee of the Govt. are initiated in respect of misconduct committed by him and if he retires from service on attaining the age of superannuation, before the completion of the proceedings it is open to the State Govt.
to direct deduc 450 tion in his pension on the proof of the allegations made against him.
If the charges are not established during the disciplinary proceedings or if the disciplinary proceedings are quashed it is not permissible to the State Govt.
to direct reduction in the pension on the same allegations, but if the disciplinary proceedings could not be completed and if the charges of serious allegations are established, which may have bearing on the question of rendering efficient and satisfactory service, it would be open to the Govt.
to take proceedings against the Govt.
servant in accordanace with rules for the deduction of pension and gratuity.
In this view the High Court committed error in holding that the show cause notice was vitiated.
Grant of pension to employees of the State Government is regulated by the Civil Service Regulations which have statu tory character.
Article 348 A provides that pension shall be granted subject to the conditions contained in the Regula tions.
Article 351 A empowers the Governor to withhold or withdraw pension or any part of it, whether permanently or for a specified period and also to order recovery from pension of the whole or part of the pension for any pecuni ary loss caused to the Government if the pensioner is found guilty in departmental or in judicial proceedings for any misconduct or negligence during his service.
Article 353 lays down that no pension shall be granted to an officer dismissed or removed from service for misconduct, insolvency or inefficiency, but compassionate allowance may be granted on special consideration.
The claim of pens,on is determined by length of service, as provided by Article 474 to 485.
Full pension is admissible under the rules not as a matter of course but only if the service rendered by the Government employee is approved.
The Regulations empower the authority sanctioning the pension to make such reduction in the amount of pension as it may think proper.
These provisions indicate that a Government servant is entitled to pension but the claim of pension is determined in accordance with the statu troy rules.
No doubt pension is no more a bounty; instead it is a right earned by the Government servant on the basis of length of service, nonetheless grant of full pension depends on the approval of service rendered by the employee.
In other words if the service rendered by the Government serv ant has not been satisfactory he would not be entitled to full pension and it would always to open to the Govt.
to withhold or reduce the amount of pension in accordance with the statutory rules.
If the Government incurs pecuniary loss on account of misconduct or negligence of a Govt.
servant and if he retires from service before any departmental proceedings are taken against him, it is open to the State Govt.
to initiate departmental proceedings, and if 451 in those proceedings he is found guilty of misconduct, negligence or any other such act or omission as a result of which Govt.
is put to pecuniary loss, the State Govt.
is entitled to withhold, reduce or recover the loss suffered by it by forfeiture or reduction of pension.
These provisions ordain the Govt.
servant to perform his duties faithfully and honestly.
Honest and devoted service rendered by a Govt.
servant ensures efficiency in public administration.
The statutory rules therefore contain provisions for the forfei ture and deduction in the pension of Govt.
servant who have not rendered satisfactory service or who have been found guilty of misconduct or negligence resulting in pencuniary loss to the Govt.
Merely because a Govt.
servant retires from service on attaining the age of superannuation he cannot escape the liability of misconduct and negligence or financial irregularities.
article 470 of the Civil Service Regulation reads as under: "470(a) The full pension admissible under the Rules is not to be given as a matter of course, or unless the service rendered has been really approved (See Appendix 9) (b) If the service has not been thor oughly satisfactory the authority sanctioning the pension should make such reduction in the amount as it thinks proper.
Provided that in cases where the authority sanctioning pension is other than the appoint ing authority, no order regarding reduction in the amount of pension shall be made without the approval of the appointing authority.
Note: For the purpose of this Article 'ap pointing authority ' shall mean the authority which is competent to make substantive ap pointment to the post or service from which the officer concerned retires.
" A plain reading of the regulation indicates that full pension is not awarded as a matter of course to a Govt.
servant on his retirement instead, it is awarded to him if his satisfactory service is approved.
If the service of a Govt.
servant has not been thoroughly satisfactory the authority competent to sanction the pension is empowered to make such reduction in the amount of pension as it may think proper.
Proviso to the regulation lays down that no order regarding reduction in 452 the amount of pension shall be made without the approval of the appointing authority.
Though the Regulations do not expressly provide for affording opportunity to the Govt.
Servant before order for the reduction in the pension is issued, but the principles of natural justice ordain that opportunity of hearing must be afforded to the Govt.
servant before any order is passed.
article 311(2) is not attracted, nonetheless the Govt.
servant is entitled to opportunity of hearing as the order of reduction in pension affects his right to receive full pension.
It is no more in dispute that pension is not bounty; instead it is a right to property earned by the Govt.
servant on his rendering satisfactory service to the State.
In State of Punjab vs K.R. Erry and Sobhag Rai Mehta, ; this Court held that the State Govt.
could not direct cut in the pension of officers without giving a reasonable opportunity of bearing to them.
In Deokinandan Prasad vs State of Bihar & Ors., it was held that pension is not bounty pay able at the sweet will and pleasure of the Govt.; instead the right to pension is valuable right vested in a Govt.
servant.
Again in D.S. Nakara and Ors.
vs Union of India, ; this Court held that payment of pension does not depend upon the discretion of the Govt.
but it is governed by the rules and Govt.
servant coming under those rules is entitled to claim pension.
A Govt.
employee earns his pension by rendering long and efficient service, the claim of pension is regulated by rules, which provide for reduction in the amount of pension if the Govt.
servant has failed to render efficient service.
In M. Narasimhachar vs State of Mysore, [1960] 1 SCR 981 this Court upheld the order of the State Govt.
in reducing pension of a Govt.
employee as the rules regulating the grant of pension made provision for reduction of pension on account of his having rendered unsatisfactory service.
Rule 6.4 of Punjab Civil Pension Rules provides for the reduction in the amount of pension if the service of the Govt.
employee has not been thoroughly satisfactory.
The State Govt.
's order directing reduction of pension of the employee of State of Punjab were set aside by this Court in State of Punjab vs K.R. Erry and Sebhag Rai Mehta (Supra) and in State of Punjab & Anr.
vs Iqbal Singh; , on the ground that the orders imposing deduction in the pension had been passed in viola tion of principles of natural justice as the affected em ployees had not been afforded opportunity of hearing.
These decisions leave no scope for any doubt that the State Govt.
is competent to direct reduction in pension after affording opportunity of hearing to the Govt.
servant.
The High Court was not justified in quashing the show cause notice.
When a show cause notice is issued to a Govt.
servant under a 453 statutory provision calling upon him to show cause, ordi narily the Govt.
servant must place his case before the authority concerned by showing cause and the courts should be reluctant to interfere with the notice at that stage unless the notice is shown to have been issued palpably without any authority of law.
The purpose of issuing show cause notice is to afford opportunity of hearing to the Govt.
servant and once cause is shown it is open to the Govt.
to consider the matter in the light of the facts and submissions placed by the Govt.
servant and only thereafter a final decision in the matter could be taken.
Interference by the Court before that stage would be premature.
The High Court in our opinion ought not have interfered with the show cause notice.
The High Court 's order is not.
sustainable for yet another reason.
Respondents ' writ petition challenging the order of dismissal had been finally disposed of on 10.8.1984, thereafter nothing remained pending before the High Court.
No miscellaneous application could be filed in the writ petition to revive proceedings in respect of subse quent events after two years.
If the respondent was ag grieved by the notice dated 29.1.86 he could have filed a separate petition under article 226 of the Constitution chal lenging the validity of the notice as it provided a separate cause of action to him.
The respondent was not entitled to assail validity of the notice before the High Court by means of a miscellaneous application in the writ petition which had already been decided.
The High Court had no jurisdiction to entertain the application as no proceedings were pending before it.
The High Court committed error in entertaining the respondent 's application which was founded on a separate cause of action.
When proceedings stand terminated by final disposal of writ petition it is not open to the Court to reopen the proceedings by means of a miscellaneous applica tion in respect of a matter which provided a fresh cause of action.
If this principle is not followed there would be confusion and chaos and the finality of proceedings would cease to have any meaning.
We accordingly allow the appeal, set aside the order of the High Court dated 10.8.84.
It would be open to the State Government to consider the respondents reply to the show cause notice and proceed with the matter in accordance with law.
In the circumstances of the case parties shall bear their own costs.
P.S.S Appeal allowed.

dataset_name: IN-Abs

summary:
Article 470(b) of the U.P. Civil Service Regulations provides for reduction in pension amount by the sanctioning authority in cases where the service of a Government servant has not been thoroughly satisfactory.
A number of charges framed against the first respondent were found proved in a departmental inquiry.
He was dis missed from service by order dated November 10, 1972.
The U.P. Public Service Tribunal upheld the dismissal.
In a writ petition filed by him the High Court quashed the said order on August 10, 1984 on the ground that he had not been af forded reasonable opportunity of defence inasmuch as the recommendation of the inquiry officer relating to the quan tum of punishment had not been communicated to him.
Since the respondent had already retired from service during the pendency of the petition only consequential reliefs were granted.
The State Government issued a notice to him on January 29, 1986 calling upon him to show cause as to why orders for forfeiture of his pension and gratuity be not issued in accordance with Article 470(b) of the Civil Service Regula tions as his services have not been wholly satis 445 factory.
It contained allegations of misconduct.
The re spondent thereupon filed on application in the writ petition which had already been disposed of on August 10, 1984.
The High Court held that since departmental proceedings taken against the respondent had already been quashed, it was not open to the State Government to issue show cause notice for imposing reduction in the respondent 's pension on the same set of charges.
Allowing the appeal by special leave, the Court, HELD:1.
When a show cause notice is issued to a Govern ment servant under a statutory provision he must place his case before the authority concerned by showing cause.
The courts should be reluctant to interfere with the notice at that stage unless it is shown to have been issued palpably without any authority of law.
The purpose of issuing show cause notice is to afford opportunity of hearing to the Government servant and once cause is shown it is open to the Government to consider the matter in the light of the facts and submissions placed by the Government servant and only thereafter a final decision in the matter could be taken.
Interference by the Court before that stage would be prema ture.
The High Court, therefore, ought not to have inter fered with the show cause notice in the instant case.
[452H; 453A C] 2.1 When proceedings stand terminated by final disposal of a writ petition it is not open to the Court to reopen them by means of miscellaneous application in respect of a matter which provided a fresh cause of action.
[453F] 2.2 In the instant case Respondent 's writ petition challenging the order of dismissal having been finally disposed of on August 10, 1984 no miscellaneous application could be filed in the writ petition to revive those proceed ings.
If the respondent was aggrieved by the notice dated January 29, 1986 he could have filed a separate petition under Article 226 of the Constitution, as it provided a separate cause of action.
The High Court, therefore, commit ted an error in entertaining his application.
[453D E] 3.
After the decision of the writ petition it was open to the State Government to have taken up proceedings against the respondent from the stage at which it was found to be vitiated.
Had the respondent not retired from service the State Government could have passed orders awarding punish ment to him after issuing a fresh show cause notice.
[449D] 446 4.
Merely because a Government servant retires from service an attaining the age of superannuation he cannot escape the liability of misconduct and negligence or finan cial irregularities.
There were serious allegations of misconduct against the respondent which had been proceeded against him during inquiry.
Those charges remained alive even after quashing of the dismissal order.
Since no disci plinary proceedings could be taken as he had retired from service, the Government proceeded to take action against him under the Civil Service Regulations.
[451C; 449F] 5.1 Pension is not bounty, instead it is a right to property earned by the Government servant on his rendering satisfactory service to the State.
Article 470(b) of the Civil Service Regulations vests power in the appointing authority to take action for imposing reduction in pension.
As the State Government is the appointment authority in the instant case it was competent to issue show cause notice to the respondent.
[450F; 452G] 5.2 If disciplinary proceedings against an employee of the Government are initiated in respect of misconduct com mitted by him and if he retires from service before the completion of the proceedings, it is open to the State Government to direct reduction in his pension on the proof of the allegations made against him.
If the charges are not established during the disciplinary proceedings or if the disciplinary proceedings are quashed it is not permissible to the State Government to direct reduction in the pension on the same allegations, but if the disciplinary proceedings could not be completed and if the charges of serious allega tions are established, which may have bearing on the ques tion of rendering efficient and satisfactory service, it would be open to the Government to take proceedings against the Government servant and to withhold or reduce the amount of pension in accordance with the statutory rules.
If the Government incurs pecuniary loss on account of misconduct or negligence of a Government servant and if he retires from service before any departmental proceedings are taken against him, it is open to the State Government to initiate departmental proceedings, and if in those proceedings he is found guilty of misconduct, negligence or any other such act or commission as a result of which Government is put to pecuniary loss, the State Government is entitled to with hold, reduce or recover the loss suffered by it by forfei ture or reduction of pension.
[449H; 450 A B; D F] 5.3 article 311(2) of the Constitution is not attracted, nonetheless the Government servant is entitled to opportuni ty of hearing before order for reduction in pension is issued, as it would affect his right to receive full pen sion.
[452B] 447 5.4 It would be open to the State Government to consider the respondent 's reply to the show cause notice and proceed with the matter in accordance with law.
[453G] State of Punjab vs K.R. Erry and Sobhag Rai, Mehta, ; ; Deokinandan Prasad vs State of Bihar & Ors.
, ; D.S. Nakara and Ors., vs Union of India, ; ; M. Narasimhachar vs State of Mysore, [1960] 1 SCR 981 and State of Punjab & Anr.
vs Iqbal Singh, ; , referred to.