The ministry had taken punitive action against Mittal by attaching his pension, among other things, as he had joined the MP Birla-controlled Birla Corporation after his retirement, allegedly in violation of government rules and regulations. According to the sources, Mittal, has moved the Calcutta high court finding fault with the way the ministry has stopped some of his post-retirement benefits.

Mittal's prime contention against the MoF is that it had not communicated to him the decision disallowing him from joining the Birlas within the stipulated period of two months from the submission of his request for the same-a fact disputed by the ministry. The ministry also sent the letter communicating its refusal to a wrong address in Mumbai, Mittal said in his plea before the high court.

Mittalcould not be contacted for his comments on the matter. In exercise of powers conferred by the General Insurance Executives (Acceptance of Commercial Employment after Retirement) Rules 1994, the government has decided to impose a penalty against Mittal with immediate effect, a recent letter of the finance ministry sent to all GIC subsidiaries said.

The penalties include: withdrawal/withholding of monthly pension; denial of all special facilities which the corporation extends to its employees, including discount on personal insurance and group Mediclaim policy and non-consideration for any assignment by the company, including guest faculty and like.

The ministry letter states that the government had denied permission to Mittal for accepting commercial employment from the Birlas in view of his association with the group during the period of GIC service.

By joining the Birlas, Mittal had violated the provisions of the General Insurance Executive Rules 1994, and sub-section 6 of section 49 of the GeneralInsurance (Employees) Pension Scheme, 1995, said the letter. The ministry said Mittal had applied for permission on May 18, 1998, before he retired on May 31 and was informed of the government decision on July 7, 1998, which is well before the expiry of 60 days from the date of submission of his application. Moreover, Mittal was well aware of the fact that due to his long association with the Birla group during service, he was not being given permission for employment, which is evident from his representation dated June 11, 1998, to the finance minister through a member of parliament (MP) asking clearance for employment with the Birla group. The government's hardline stand regarding Mittal has significant implications as the insurance industry is on the threshold of being opened up for the private sector, creating employment opportunities for existing public sector employees. GIC rules make it mandatory for officers above the rank of assistant general manager (AGM) to seek prior permission of the governmentof India for accepting any employment in any other companies before or after retirement. The government's permission is particularly necessary if the employee is joining another company within the two years of his retirement.