The Madurai Bench of the Madras High Court has dismissed an appeal filed by the Treasury and Accounts Department, affirming that a conviction under Section 138 of the Negotiable Instruments Act, 1881, does not constitute “grave misconduct” or a “serious crime” that would justify the stoppage or withholding of a retiree’s pension under the Tamil Nadu Pension Rules, 1978.
A Division Bench comprising Justice N. Sathish Kumar and Justice M. Jothiraman upheld the order of a Single Judge which had quashed the department’s decision to stop the pension of a respondent, Srinivasan, following his conviction in a cheque bounce case.
Background
The case arose when the Treasury and Accounts Department (Appellants) passed an order to stop the pension of the respondent. The decision was based on the fact that the respondent had been convicted for an offence under the Negotiable Instruments (NI) Act, 1881. This department action was initially challenged before a Single Judge, who quashed the stoppage of pension. The present Writ Appeal was filed by the Director of Treasury and Accounts and other officials challenging that quashing order.
Arguments of the Parties
The Appellants, represented by the Additional Government Pleader, argued that the authorities were empowered to act under Rule 8(b) of the Tamil Nadu Pension Rules, 1978. They contended that if a pensioner is convicted of a “serious grave of misconduct,” the sanctioning authority possesses the power to withhold or withdraw the pension, either in part or in full. It was their stance that the conviction under the NI Act fell within this category, justifying the order.
The respondent, represented by counsel Mr. R. Karunanithi, maintained that the nature of an offence under Section 138 of the NI Act is fundamentally different from typical criminal offences involving moral turpitude.
Court’s Analysis and Observations
The Court examined the scope of Rule 8(b) of the Pension Rules and the nature of offences under the NI Act. Referencing the Supreme Court’s decision in Koushalya Devi Massand vs. Roopkishore Khore (2011), the Bench noted:
“The gravity of a complaint under the Negotiable Instruments Act, 1881, cannot be equated with an offence under the provisions of the Indian Penal Code or other criminal offences. An offence under Section 138 of the Negotiable Instruments Act, 1881, is almost in the nature of a civil wrong, which has been given criminal overtones.”
The Court also cited a previous Division Bench ruling in Manjula vs. State of Tamil Nadu (2016), which clarified that Section 138 is a “deeming provision” and an offence committed in commercial practice “cannot be taken as one involving moral turpitude.”
The Court specifically addressed the applicability of the Tamil Nadu Pension Rules:
“Rule 8(b) of the Tamil Nadu Pension Rules, 1978, deals with only when the punishment involves in a serious crime and the conviction for the serious crime, which would amount to grave misconduct. Therefore, the said Rule cannot be applicable for the conviction for the offence regarding the commercial transaction.”
Decision
The Bench concluded that the authorities cannot withhold or stop pension based on Rule 8(b) for convictions arising out of commercial transactions under the NI Act. Finding no merit in the appeal, the Court dismissed the Writ Appeal and closed the connected miscellaneous petition.
Case Details
- Case Title: The Director, Treasury and Accounts Department & Ors. vs. Srinivasan
- Case No: W.A(MD)No. 250 of 2026 and C.M.P.(MD) No.2721 of 2026
- Date: March 5, 2026
- Bench: Justice N. Sathish Kumar and Justice M. Jothiraman
- Counsels: Mr. A. Kannan, Additional Government Pleader (for Appellants); Mr. R. Karunanithi (for Respondent)
