Allahabad High Court Upholds Withholding of Gratuity Pending Disciplinary Proceedings: “Entitlement to Full Pension and Gratuity Is Subject to Proceedings’ Outcome”

Court’s Decision:

The Allahabad High Court dismissed the appeal challenging the withholding of gratuity and upheld the decision of the Single Judge. It ruled that gratuity cannot be claimed during the pendency of disciplinary proceedings, as “entitlement to full pension and gratuity is conditional and subject to the final outcome of the proceedings.”

Facts:

1. The appellant retired on June 30, 2022, after a long tenure as a government employee.
2. A charge-sheet alleging misconduct was issued to him on April 26, 2024, nearly two years after his retirement.
3. The appellant’s gratuity was partially withheld—₹4,46,880—out of his total entitlement of ₹14,17,251.
4. He argued that no disciplinary proceedings had been initiated against him during his service, and therefore the withholding of his gratuity post-retirement was illegal.
5. During the writ petition, it was disclosed that the Governor’s sanction under Article 351-A of the Civil Service Regulations (CSR), a prerequisite for initiating post-retirement disciplinary proceedings, had been granted on November 23, 2023.

Issues:

1. Legality of withholding gratuity during disciplinary proceedings: Is it permissible to withhold gratuity from a retired employee until the conclusion of such proceedings?
2. Validity of disciplinary proceedings initiated post-retirement: Does obtaining the Governor’s sanction under Article 351-A justify the initiation of such proceedings?

Petitioner’s Arguments:

1. Article 351-A Scope: The appellant contended that Article 351-A applies only to pensions and does not empower the authorities to withhold gratuity.
2. Illegality of Gratuity Withholding: The withholding of ₹4,46,880 from his gratuity was argued to be contrary to the law and regulations.
3. Timing of Proceedings: He maintained that the lack of disciplinary action during his service meant that post-retirement proceedings were unwarranted.

Respondent’s Arguments:

1. CSR Provisions: The State submitted that under Articles 351-A and 919-A of CSR, gratuity and full pension cannot be paid until the completion of disciplinary proceedings.
2. Governor’s Sanction: The respondents emphasized that the sanction granted by the Governor validated the post-retirement proceedings.
3. Provisional Pension Entitlement: They argued that the appellant was entitled to provisional pension but not to gratuity until the conclusion of the proceedings.

Analysis of the Law:

1. Article 351-A of CSR:

• Empowers the Governor to withhold or withdraw pension, including gratuity, during the pendency of disciplinary or judicial proceedings.
• The provision applies to both retired and serving government employees.
• Requires Governor’s sanction to initiate proceedings post-retirement.

2. Article 919-A of CSR:

• Specifically prohibits payment of gratuity during the pendency of proceedings.
• Provisional pension equivalent to the maximum admissible pension is allowed during such proceedings.
• Gratuity can only be disbursed after the proceedings are concluded and final orders are issued.

3. Relevant Precedents:

• Jarnail Singh v. Ministry of Home Affairs: Interpreted the term “pension” to include “gratuity,” unless explicitly distinguished.
• Shivagopal v. State of UP: A Full Bench of the Allahabad High Court affirmed:
  • Provisional pension is mandatory during pending proceedings.
  • Gratuity cannot be paid until the conclusion of proceedings.
  • Articles 351-A and 919-A must be read conjointly to ensure good conduct and accountability of retired employees.

4. Implied Good Conduct Condition:

• Pension and gratuity are contingent upon the good conduct of the retiree. Misconduct or pecuniary loss to the government may result in withholding benefits.

Precedent Analysis:

The Full Bench in Shivagopal had clarified:

1. Gratuity and full pension are not automatic rights but are contingent on satisfactory service.
2. Provisional pension safeguards retirees against undue financial hardship during proceedings.
3. The government can act against retirees to recover losses or penalize grave misconduct through disciplinary or judicial proceedings.

Court’s Reasoning:

1. Governor’s Sanction Validates Proceedings:
   • The sanction granted on November 23, 2023, empowered the authorities to initiate disciplinary proceedings post-retirement.
2. Gratuity Forms Part of Pension:
   • Following Jarnail Singh and Shivagopal, the court reiterated that gratuity is included within the definition of pension under CSR.
3. Embargo on Gratuity Payment:
   • Article 919-A explicitly prohibits gratuity payments until proceedings conclude. This restriction is intended to ensure accountability and deter misconduct.
4. Provisional Pension Suffices During Proceedings:
   • The appellant was already receiving provisional pension, meeting his immediate financial needs. Full pension and gratuity would be determined after the proceedings’ outcome.

Conclusion:

• The court dismissed the appeal, affirming the legality of withholding gratuity under CSR during disciplinary proceedings.
• It upheld the Single Judge’s ruling that the appellant was entitled only to provisional pension during the pendency of the proceedings.

Implications:

1. Accountability for Retired Employees: The judgment reinforces the government’s authority to enforce accountability even after retirement.
2. Clarity on Gratuity and Pension Rules: It reiterates that gratuity, as part of pension, is not an automatic entitlement and is contingent upon service conduct and the resolution of pending proceedings.
3. Governor’s Role: Highlights the critical role of the Governor’s sanction in enabling post-retirement disciplinary actions.

This decision serves as a precedent for handling disputes concerning pension and gratuity, emphasizing the importance of compliance with CSR provisions and the need for accountability among public servants.

Also Read – Delhi High Court Overturns Family Court’s Closure of Appellant’s Testimony Rights: ”Balancing Professional Commitments and Judicial Sensitivity in Matrimonial Disputes”