KANAIYALAL NATHALAL PATEL vs STATE OF GUJARAT

C/SCA/13382/2025 CAV JUDGMENT DATED: 16/10/2026
(GJHC240645862025)
Reserved On : 07/08/2026
Pronounced On : 16/10/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13382 of 2025

FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE NIRAL R. MEHTA

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Approved for Reporting Yes No
✔
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KANAIYALAL NATHALAL PATEL
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR NIRAD D BUCH(4000) for the Petitioner(s) No. 1
MRS. BHAVINI N. BUCH(5403) for the Petitioner(s) No. 1
MS NIDHI VYAS AGP for the Respondent(s) No. 1
MR. R.D.KINARIWALA(6146) for the Respondent(s) No. 2
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CORAM: HONOURABLE MR. JUSTICE NIRAL R. MEHTA


CAV JUDGMENT
[1] By way of this petition under Article 226 and 300A of
the Constitution of India, the petitioner has approached this Court
with the following reliefs:
“8(A) Your Lordships may be pleased to admit and allow
this application;
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(B) Your Lordships may be pleased to issue an appropriate
writ, order or direction, quashing and setting aside the
impugned decision dated 09/06/2025 (Ann : S) taken by the
respondent authorities, whereby the respondent authority has
granted adhoc pension to the petitioner instead of full pension
and withheld the amount of gratuity as well as the impugned
decision dated 20/02/2023 (Ann : K) whereby the petitioner
has been denied third higher pay scale and thereby direct the
respondent authorities to grant third higher pay scale from the
deemed date as also grant all retirement benefits including full
pension, gratuity etc. with all consequence benefits including
arrears of salary;
(C) Pending admission, hearing and final disposal of this
petition, Your Lordships may be pleased to direct the authority
concerned to grant all retirement benefits including full pension,
release the amount of gratuity as also grant third higher pay
scale from the deemed date with immediate effect;
(D) Your Lordships to pass such other and further
orders necessary in the interest of justice.”
[2] At the outset, learned advocate Mr. Nirad Buch,
appearing for the petitioner, has restricted the challenge in the
present petition to the withholding of the petitioner’s gratuity on
account of the pendency of criminal proceedings.
[3] In view of the aforesaid limited controversy, the issue
involved in the present petition lies within a narrow compass.
Accordingly, with the consent of learned advocates appearing for
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the respective parties, the petition is taken up for final hearing at
the admission stage.
[4] Rule. Learned A.G.P. Ms. Nidhi Vyas waives service of
notice of Rule on behalf of respondent No.1, and learned advocate
Mr. R. D. Kinariwala waives service of notice of Rule on behalf of
respondent No.2.
[5] The brief facts leading to the filing of the present
petition are set out hereinbelow:
[5.1] The petitioner was appointed as a Peon in the office of
th
the Taluka Development Officer, Bayad, vide order dated 26
March 1991. Subsequently, the petitioner was promoted to the post
th
of Junior Clerk by the respondent authorities on 10 June 2005. On
st
1 July 2026, the petitioner became a member of the Bayad Taluka
Employees Cooperative Society, a cooperative society duly
registered under the provisions of the Gujarat Cooperative Societies
Act, 1961.
th
[5.2] On 11 April 2017, an F.I.R. bearing C.R. No.128 of
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2017 came to be registered at Bayad Police Station, District Arvalli,
for the alleged offences punishable under Sections 409, 406, 420,
477(a), 468, 407 and 114 of the Indian Penal Code, in connection
with alleged financial irregularities committed by the office-bearers
of the aforesaid Cooperative Society. Though the petitioner was not
specifically named in the F.I.R. as an accused in his capacity as an
office-bearer, he was subsequently implicated as an accused in the
case. Upon completion of the investigation, a charge-sheet came to
be filed before the competent court.
th
[5.3] On 25 April 2017, the District Registrar issued a notice
to the petitioner and other office-bearers of the Cooperative Society
in connection with the aforesaid alleged financial irregularities.
[5.4] It is the case of the petitioner that he was promoted to
th
the post of Senior Clerk on 6 October 2017. Thereafter, on 3rd
th
and 4 March 2021, the petitioner, being eligible for promotion to
the higher post of Deputy Chitnis, appeared in the departmental
promotion examination and was declared successful, securing
th
Serial No.17 in the merit list. On 12 September 2021, the
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Departmental Promotion Committee convened to consider the cases
of eligible candidates for promotion. However, on account of the
pendency of the criminal proceedings, the petitioner’s case was
kept in a sealed cover.
th
[5.5] On 11 November 2021, the Board approved the
promotion of seven Senior Clerks to the cadre of Deputy Chitnis,
while the petitioner’s case was kept aside in view of the pendency
of the criminal proceedings.
[5.6] Thereafter, the petitioner made repeated
representations to the competent authority seeking ad hoc
th
promotion in accordance with the resolution dated 14 June 2016
issued by the General Administration Department. The petitioner’s
case for ad hoc promotion was considered and recommended for
consideration by the Departmental Promotion Committee on two
occasions. However, on both occasions, his case was kept in a
sealed cover on account of the pendency of the criminal
proceedings. The petitioner further contends that he was also
denied the benefit of the third higher pay scale for the same reason.
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[5.7] As the petitioner’s case for promotion remained
unconsidered for a considerable period, he was constrained to
approach this Court by filing Special Civil Application No.10158 of
2024 seeking appropriate relief in that regard. During the pendency
of the said petition, the Gujarat Panchayat Service Selection Board,
Gandhinagar, considered the petitioner’s case for ad hoc promotion
th
on 24 April 2025. In view thereof, the petitioner withdrew the
said petition.
st
[5.8] Upon attaining the age of superannuation on 31 May
2025, the petitioner retired from service while holding the post of
Deputy Chitnis. An order to that effect came to be passed by the
respondent authority, and the charge held by the petitioner was
handed over to Smt. Roshaniben Trivedi.
th
[5.9] Subsequently, vide order dated 9 June 2025, the
respondent authority, citing the pendency of the criminal
proceedings, sanctioned provisional pension to the petitioner and
ordered the withholding of his gratuity.
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[6] Being aggrieved by the decision of the respondent
authority to withhold his gratuity on account of the pendency of
the criminal proceedings, the petitioner has approached this Court
by way of the present petition.
[7] Heard learned advocate Mr. Nirad Buch for the
petitioner, learned A.G.P. Ms. Nidhi Vyas for the respondent No.1
and learned advocate Mr. R. D. Kinariwala for the respondent No.2.
[8] Learned advocate Mr. Nirad Buch, appearing for the
petitioner, while assailing the impugned order dated 9th June
2025, has advanced the following submissions:
[8.1] It is submitted that the action of the respondent
authorities in withholding the amount of gratuity payable to the
petitioner is contrary to the provisions of law and, therefore, the
impugned order deserves to be quashed and set aside.
[8.2] It is further submitted that the impugned action of the
respondent authorities in withholding the petitioner’s gratuity is
contrary to the provisions of the Gujarat Civil Services (Pension)
Rules, 2002, more particularly, Rules 142 and 145 thereof.
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[8.3] Learned advocate for the petitioner submits that no
departmental proceedings were initiated against the petitioner in
connection with the allegations forming the subject matter of the
aforesaid F.I.R. till the date of his retirement on attaining the age of
superannuation. In such circumstances, it is contended that the
withholding of gratuity merely on account of the pendency of
criminal proceedings is legally unsustainable.
[8.4] It is further, and emphatically, submitted that the
registration of the F.I.R. and the pendency of the criminal
proceedings have no nexus with the petitioner’s employment. It is
contended that, where the alleged acts or omissions giving rise to
the F.I.R. and the criminal proceedings were committed outside the
scope of the petitioner’s employment, the respondent authorities
cannot withhold the petitioner’s retiral benefits, particularly the
amount of gratuity, solely on that ground.
[9] By making above submissions, learned advocate for the
petitioner has prayed this Court to allow the present petition by
quashing and setting the impugned order in the interest of justice.
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[10] Per contra, learned advocate Mr. R. D. Kinariwala,
appearing for respondent No.2, while supporting the impugned
th
order dated 9 June 2025, has advanced the following submissions:
[10.1] It is submitted that the decision of the respondent
authorities to withhold the petitioner’s gratuity on account of the
pendency of criminal proceedings is legally justified. Accordingly, it
is contended that the present petition does not warrant any
interference by this Court and deserves to be dismissed.
[10.2] Learned advocate for respondent No.2 further submits
that, in view of Rules 142 and 145 of the Gujarat Civil Services
(Pension) Rules, 2002 (hereinafter referred to as “the Rules,
2002”), the employer is legally entitled to withhold gratuity during
the pendency of judicial proceedings. Placing particular reliance
upon Rule 145 of the Rules, 2002, it is submitted that the petitioner
st
attained the age of superannuation on 31 May 2025 and that, if
the trial is not concluded within two years from the date of his
superannuation, the question of payment of gratuity can be
considered in accordance with the said Rule. It is, therefore,
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contended that the present petition, having been instituted before
the expiry of the aforesaid period of two years, is premature and
deserves to be dismissed on that ground.
[11] By making above submissions, learned advocate Mr.
Kinariwala for the respondent No.2 has requested this Court to
dismiss the present petition.
[12] Learned A.G.P. Ms. Nidhi Vyas for the respondent No.1
– State of Gujarat has adopted all the submissions canvassed by
learned advocate appearing for the respondent No.2 and requested
this Court to dismiss the present petition.
[13] Heard learned advocates appearing for the respective
parties and have gone through the material produced on record. No
other and further submissions have been canvassed by learned
advocates appearing for the respective parties except what are
stated hereinabove.
[14] Having heard the learned advocates appearing for the
respective parties and having gone through the material produced
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on record, a short question that falls for consideration of this Court
is whether mere pendency of criminal proceedings, having no
nexus with the discharge of official duties by the government
employee, would, by itself, justify withholding of pensionary
benefits by invoking Rule 145 of the Gujarat Civil Services
(Pension) Rules, 2002?
[15] So as to decide the aforesaid question, Rules 142 and
145 of the Rules, 2002 deserve consideration, which are quoted
hereinbelow:
"142. Provisional payment of pension and gratuity :
(1) The Pension Sanctioning Authority shall adhere to the
procedure laid down in rules 128 to 138. In cases where, in
spite of following the procedure laid down in rule 128 to 138, it
may not be possible for the Pension Sanctioning Authority to
forward the pension papers referred to in rule 138 to the
Director of Pension and Provident Fund within the period
prescribed or where the pension papers have been forwarded to
the Director of Pension and Provident Fund within the
prescribed period but the Director of Pension and Provident
Fund may have returned the pension papers to the Pension
Sanctioning Authority for elucidating further information
before issue of pension payment order and order for the
payment of gratuity where in case departmental or judicial
proceedings are not pending against the retiring/retired
Government employee and if the pension sanctioning authority
is of the opinion that a Government employee is likely to retire
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before his pension and gratuity or both, can be finally assessed
and settled in accordance with the provisions of these rules, he
shall without any delay, take steps to determine the qualifying
years of service and the pensionable pay after summary
investigations.
Explanation : For this purpose, he shall –
(i) rely upon such information as may be available in the
official records, and in pension papers,
(ii) if necessary, call for from the retiring Government employee
a written statement stating the total length of qualifying service
including details of pay drawn during the last ten months of
service but excluding the breaks and other non-qualifying period
of service.
(2) The written statements as referred to Explanation (ii) above
shall be signed by the Government employee along with
declaration as to the truth of the statement.
(3) The Pension Sanctioning Authority shall thereafter
determine the qualifying years of service and the pensionable
pay in accordance with the information available in the official
records and the information obtained from the retiring
Government employee under sub-rule (1). He shall, then,
determine the amount of pension and the amount of death-cum-
retirement gratuity."
" 145. Provisional payment of pension and gratuity where
charge sheet is issued or judicial proceedings are instituted
in respect of the Government employee against whom the
departmental inquiry is pending :
(1) In case of a Government employee against whom the
Departmental Inquiry is initiated or prosecution is granted (i.e.
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charge- sheet is issued or FIR is filed, as the case may be) prior
to retirement, but the departmental inquiry or prosecution, is
not concluded (i.e. the order of the competent authority on the
report of the inquiry officer is not issued or the judgement of
trial court is not delivered, as the case maybe), the Pension
Sanctioning Authority shall sanction provisional payment of full
amount of pension as determined under sub-rule (3) of rule
142. No provisional payment of death-cum-retirement gratuity
shall be sanctioned.
(2) In case of a Government employee against whom the
Departmental Inquiry is initiated or prosecution is granted (i.e.
charge sheet is issued or FIR is filed, as the case may be)prior to
retirement, but the departmental inquiry or prosecution, is not
concluded (i.e. the order of the competent authority on the
report of the inquiry officer’s not issued or the judgement of trial
court is not delivered, as the case may be), and two years have
lapsed since the date of retirement, the Pension Sanctioning
Authority shall sanction the provisional payment of pension and
death-cum-retirement gratuity as under :-
(i) 100 per cent of pension as determined under sub-rule (3) of
rule 142 if the same is not sanctioned under sub-rule (1).
(ii) 100 per cent of gratuity as determined under sub-rule (3) of
rule 142 subject to withholding of after 10 per cent or fifteen
thousand rupees whichever is less."
[16] A plain reading of Rule 142 of the Rules, 2002,
indicates that the said provision deals with the determination and
payment of provisional pension and gratuity. It contemplates a
situation where, despite compliance with the procedure prescribed
under Rules 128 to 138, the pension papers cannot be processed
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within the stipulated time, or the Director of Pension and Provident
Fund returns the pension papers for furnishing further information,
and the employee is likely to retire before the pension and gratuity
can be finally assessed and settled. In such circumstances, Rule
142(1) mandates the pension sanctioning authority to determine,
on the basis of a summary inquiry, the qualifying service rendered
by the employee and the pensionable pay admissible to him. Rule
142(3), in turn, provides for the determination of the amount of
pension and death-cum-retirement gratuity payable to the
employee.
[17] So far as Rule 145 of the Rules, 2002, is concerned, the
said provision deals with cases where a departmental inquiry has
been instituted or a prosecution has been launched against a
Government employee before his retirement, but the same remains
pending on the date of his superannuation. The underlying object
of the provision is to safeguard the Government’s interest in
recovering or adjusting amounts lawfully due to it, while ensuring
that a retired employee is not deprived of his pensionary benefits
indefinitely merely on account of the pendency of such
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proceedings. The provision, therefore, seeks to strike a balance
between the legitimate interests of the employer and the rights of
the retired employee.
[18] Rule 145(1) of the Rules, 2002, contemplates a
situation where a departmental inquiry has been instituted or
prosecution has been launched against a Government employee
before his retirement, but the same has not been concluded by the
date of his superannuation. In such circumstances, provisional
pension may be sanctioned in accordance with sub-rule (3) of Rule
142; however, provisional payment of gratuity is not permissible
during the pendency of such proceedings. Rule 145(2), on the
other hand, provides that where the departmental inquiry or
prosecution is not concluded within a period of two years from the
date of superannuation, the gratuity may be sanctioned in
accordance with Rule 142(3), subject to withholding an amount
equivalent to 10% of the gratuity or Rs.15,000/-, whichever is less.
[19] Having considered the aforesaid statutory provisions in
the backdrop of the facts of the present case, it emerges that no
departmental inquiry was initiated against the petitioner in
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connection with the allegations forming the subject matter of the
criminal proceedings. It is, however, an admitted position that
criminal proceedings are pending against the petitioner for the
alleged offences punishable under Sections 406, 409, 420, 477A,
465, 467, 468, 471 and 114 of the Indian Penal Code.
[19.1] A closer examination of the nature of the
allegations reveals that the criminal proceedings arise out of the
petitioner’s alleged involvement in the affairs of the Bayad Taluka
Panchayat Employees Credit Cooperative Society, a cooperative
society registered under the provisions of the Gujarat Cooperative
Societies Act, 1961. The said Society is an independent entity
formed by the employees of the Taluka Panchayat, and its
constitution and functioning are distinct from the affairs of the
office of the Taluka Development Officer or any other Panchayat
office.
[19.2] In the aforesaid circumstances, the affairs of the
Cooperative Society cannot be equated with the official functions
discharged by the petitioner in his capacity as a Government
employee. Any alleged act of misconduct, omission or irregularity
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committed by the petitioner in connection with the affairs of the
Society cannot, merely by reason of his membership thereof, be
regarded as an act committed in the discharge of, or in furtherance
of, his official duties. Further, the allegations in question do not
indicate any loss to the Government or the public exchequer on
account of the alleged financial irregularities or misappropriation of
funds. Nor is the Government, in the facts of the present case,
under any obligation to compensate the members of the Society for
any loss allegedly occasioned by the acts attributed to the
petitioner.
[19.3] Thus, the criminal proceedings arise out of
allegations relating to the affairs of an independent cooperative
society and have no demonstrated nexus with the petitioner’s
official duties or any financial loss caused to the Government.
Significantly, no departmental proceedings were initiated against
the petitioner in relation to the allegations forming the subject
matter of the said criminal case.
[20] On a conjoint reading of Rules 142 and 145 of the
Rules, 2002, it is evident that the statutory scheme contemplates
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the grant of provisional pension and regulates the payment of
gratuity in cases where departmental inquiries or prosecutions
instituted before retirement remain pending. Rule 145(2), in
particular, provides for consideration of the payment of gratuity
where the departmental inquiry or prosecution remains
inconclusive for a period of two years from the date of
superannuation, subject to the conditions stipulated therein.
[20.1] Even assuming, for the sake of argument, that the
criminal proceedings pending against the petitioner were directly
connected with a loss caused to the Government and / or it is
arisen in the course of employment, the statutory scheme under
Rule 145(2), read with Rule 142(3), would nevertheless require
consideration of the payment of gratuity upon expiry of the
prescribed period of two years, subject to the permissible
withholding contemplated under the Rules. As discussed
hereinabove, the amount liable to be withheld under the aforesaid
provision is limited to 10% of the gratuity or Rs.15,000/-,
whichever is less.
[20.2] The position in the present case stands on an
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entirely different footing. The criminal proceedings pending against
the petitioner arise out of allegations concerning the affairs of an
independent cooperative society and, on the facts placed before this
Court, have no demonstrated connection with the petitioner’s
official employment or any loss to the public exchequer. In such
circumstances, permitting the respondent authorities to withhold
the petitioner’s gratuity merely on account of the pendency of the
said criminal proceedings would result in an unjustified deprivation
of his retiral benefits.
[20.3] It is required to be borne in mind that gratuity is
a valuable statutory retiral benefit accruing to an employee in
recognition of the service rendered during his employment. Its
withholding must, therefore, be supported by the authority of law
and justified within the framework of the applicable statutory
provisions. The pendency of criminal proceedings, by itself, cannot
be treated as an independent and unrestricted ground for
withholding gratuity, irrespective of the nature of the allegations
and their nexus with the employee’s official duties or the interests
of the Government.
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[20.4] Accordingly, having regard to the nature of the
criminal proceedings, the absence of any departmental inquiry
against the petitioner in relation to the allegations in question, and
the absence of any demonstrated loss to the Government or the
public exchequer, this Court is of the considered opinion that the
respondent authorities were not justified in withholding the
petitioner’s gratuity by relying upon Rule 145 of the Rules, 2002.
The impugned action, to that extent, cannot be sustained in law
and deserves to be set aside.
[21] For the foregoing reasons, the present petition succeeds
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and is accordingly allowed. The impugned order dated 9 June
2025, insofar as it directs withholding of the petitioner’s gratuity, is
hereby quashed and set aside.
[21.1] The respondent authorities are directed to release
and pay the amount of gratuity payable to the petitioner, in
accordance with law, within a period of eight weeks from the date
of receipt of a copy of this judgment. In the event the payment is
not made within the aforesaid period, the amount payable towards
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gratuity shall carry interest at the rate of 7% per annum, subject to
the applicable law.
[22] Rule is made absolute to the aforesaid extent. The
present petition stands disposed of accordingly.
(NIRAL R. MEHTA,J)
CHANDRESH
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