Railway Service Rules | Employee Compulsorily Retired From Service As Penalty Has No Vested Right To Claim Entire Pension Or Gratuity: Kerala HC

The Kerala High Court recently observed that as per the provisions of the Railway Services Rules, 1993, a railway servant compulsorily retired from the service as a penalty has no vested right to stake a claim for the entire pension or gratuity, as the quantum of pension and gratuity to be granted is at the absolute discretion of the employer. The orders restricting the pension and gratuity were challenged before the CAT by the respondent and relying on a Kerala High Court decision, in which the Court had held that the grant of compulsory retirement pension ought to have been simultaneously made along with the order of compulsory retirement, and since that not having been done, it must be treated that the applicant is entitled to full pension as the disciplinary authority did not choose to pass any orders reducing the pension. The Counsel further contended that there is no provision for forfeiting past service in cases of compulsory retirement, and in the absence of the disciplinary authority reducing the pension while imposing punishment, a second exercise of power under Rule 64 tantamounts to a second punishment and, therefore the said action of reducing the pension is illegal as Rule 64 can only be interpreted as an enabling provision which confers the power on the disciplinary authority to give more rigour to the punishment by reducing the pension and gratuity up to 2/3rd to which one is normally entitled as per the qualifying service. The Court, after hearing the contentions raised by both the counsels and going by wordings of Rule 40, 41 and 64 of Railway Services Rules, 1993, observed that a railway servant compulsorily retired from service as a penalty may be granted pension or gratuity or both at the rate not less than 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 a claim for the entire pension or gratuity in cases where he is imposed a penalty of compulsory retirement.