Gratuity must be withheld when judicial proceedings are pending against a railway servant at retirement.

The applicants, railway employees who superannuated in 2024 and 2025, were prosecution witnesses in a departmental proceeding initiated against Smt. Seema Babele.

She subsequently filed a private criminal complaint alleging offences under Sections 354, 323, 504 and 506 IPC against the applicants and others.

The Chief Judicial Magistrate, Jhansi, took cognizance and summoned the applicants by order dated 8 June 2022.

By orders dated 20 September 2024 and 19 April 2025, the respondents withheld the applicants’ gratuity under Rule 10(1)(c) of the Railway Services (Pension) Rules, 1993, until conclusion of the pending criminal proceedings.

The applicants sought quashing of those orders and payment of gratuity amounting to ₹13,29,900 and ₹19,50,300, with 10% interest.

Whether gratuity could be withheld under Rule 10(1)(c) of the Railway Services (Pension) Rules, 1993, while a private criminal complaint in which the applicants had been summoned remained pending?

Whether mere pendency of the criminal proceeding, in the absence of conviction or departmental proceedings against the applicants, invalidated the orders withholding their gratuity?

Whether the applicants were entitled to immediate release of gratuity with interest at 10% per annum?

The Tribunal primarily applied Rule 10(1)(c) of the Railway Services (Pension) Rules, 1993, which provides that no gratuity shall be paid to a railway servant until the conclusion of departmental or judicial proceedings and issuance of final orders, subject to a limited proviso concerning specified minor-penalty departmental proceedings.

The Tribunal treated the word “shall” as creating a mandatory bar, leaving no general discretion to release gratuity while judicial proceedings remained pending.

It also considered Rules 9 and 10 of the 1993 Rules, relied upon by the respondents as authorising withholding of gratuity during pending proceedings.

The applicants’ reliance on Ashok Kumar v. State of Haryana & Ors., CWP No. 6683/2024, was distinguished on the ground that it concerned withholding based merely on registration of an FIR, whereas the present case involved a private complaint in which cognizance had been taken and summons issued before retirement.

The Tribunal held that Rule 10(1)(c) contained a substantive prohibition against payment of gratuity until the conclusion of pending departmental or judicial proceedings.

Since no departmental proceeding had been initiated against the applicants, the proviso concerning payment during specified minor-penalty proceedings was inapplicable.

The criminal complaint had progressed beyond mere registration: the CJM had taken cognizance and summoned the applicants under Sections 354, 323, 504 and 506 IPC on 8 June 2022, before their respective retirements.

Accordingly, judicial proceedings were considered validly instituted and pending at the time of retirement.

The Tribunal further held that the alleged offences involved moral turpitude and could not be treated as trivial or purely technical.

The withholding was characterised as interim and provisional rather than permanent forfeiture, operating only until the criminal case culminated in acquittal, discharge or conviction.

Therefore, the respondents’ orders were held to be consistent with Rule 10(1)(c) and neither arbitrary nor without authority of law.

It held that the pendency of the criminal complaint, after cognizance had been taken and summons issued, authorised withholding of gratuity under Rule 10(1)(c) of the Railway Services (Pension) Rules, 1993, notwithstanding the absence of conviction or departmental proceedings against the applicants.

The orders dated 20 September 2024 and 19 April 2025 were upheld, and the claim for immediate payment of gratuity with 10% interest was rejected.

The Original Application was dismissed; pending miscellaneous applications were disposed of, with no order as to costs.