While affirming the view that the conviction for the offence under Section 138 of the Negotiable Instruments Act, cannot be termed as an offence under criminal laws, the Madras High Court has held that the Authorities cannot withhold or stop the pension of a retired employee convicted under such provision on the strength of Rule 8(b) of the Tamil Nadu Pension Rules, 1978.

The High Court was considering an appeal challenging the impugned order of the Single Judge quashing the order of stoppage of pension of the respondent, who was convicted under the Negotiable Instruments Act, 1881.

The Single Bench of Justice N.Sathish Kumar and Justice M. Jothiraman held, “Further, Rules 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. In such view of the matter, the Authorities cannot withhold or stop the pension on the strength of Rules 8(b) of the Pension Rules.”

Additional Government Pleader A.Kannan represented the Appellant while Advocate Mr.R.Karunanithi represented the Respondent.

Arguments

It was the case of the appellant that as per Rule 8(b) of the Tamil Nadu Pension Rules, 1978, if the employee was convicted for a serious grave of misconduct, the sanctioning authority has power to withhold or withdraw the pension in part or full. According to the appellant, the respondent was convicted under the Negotiable Instruments Act, 1881 and the order was passed as per the rules.

Reasoning

The Bench referred to the judgment of the Apex Court in Koushalya Devi Massand vs. Roopkishore Khore (2011) wherein it was held that 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.

“As held that the conviction for the offence under Section 138 of the Negotiable Instruments Act, 1881, cannot be termed as an offence involved under criminal laws”, the order read.

Considering that Rule 8(b) of the Tamil Nadu Pension Rules, 1978, deals only with cases where the punishment involves a serious crime and the said Rule cannot be made applicable for the conviction for the offence regarding a commercial transaction, the Bench held that authorities cannot stop the pension on the strength of Rule 8(b).

Thus, finding no merit in the appeal, the Bench dismissed the same.

Cause Title: The Director v. Srinivasan (Case No.: W.A(MD)No. 250 of 2026)

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Madras High CourtJustice N Sathish KumarJustice M. Jothiraman

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.