Gratuity remains withheld under Rule 69(1)(c) so long as either departmental or judicial proceedings are pending.

The appellant, a Senior Assistant with the respondent-Corporation, retired on February 28, 2009

In 2006, he was implicated in FIR No. 140/2006 regarding the CPMT paper leak scam and concurrently faced departmental proceedings

An inquiry report dated February 26, 2009, concluded that while no material established the appellant’s involvement, the matter remained sub judice in the criminal court

Upon retirement, the respondent released a provisional pension but withheld the appellant’s gratuity and other terminal benefits citing the pendency of the criminal trial

The appellant unsuccessfully challenged this withholding before the Himachal Pradesh High Court, where both the Single Judge and the Division Bench held that Rule 69(1)(c) of the CCS (Pension) Rules acts as a statutory bar during pending judicial proceedings

Whether the expression “departmental or judicial proceedings” in Rule 69(1)(c) of the CCS (Pension) Rules, 1972, should be interpreted to mean that gratuity becomes payable once either one of the two sets of proceedings is concluded

Rule 69(1)(c) of the Central Civil Services (Pension) Rules, 1972, which stipulates that no gratuity shall be paid to a government servant until the conclusion of departmental or judicial proceedings and the issuance of final orders

Rule 9(1) of the same Rules, which reserves the right of the President to withhold or withdraw pension/gratuity if a pensioner is found guilty of grave misconduct

Principle from Babu Manmohan Das Shah & Ors. v. Bishun Das, which mandates that the word "or" be construed in its ordinary disjunctive meaning unless doing so leads to absurdity

The Court determined that Rule 69(1)(c) operates as a statutory "embargo" rather than an enabling provision

The use of the disjunctive "or" expands the scope of this bar, meaning gratuity remains withheld so long as either departmental or judicial proceedings are pending

The Court rejected the appellant's interpretation, stating it would yield an anomalous result and defeat the provision's purpose of safeguarding the State’s financial interests

It further noted that departmental and criminal proceedings are fundamentally different in nature and standard of proof; thus, an exoneration in one does not automatically dictate the outcome of the other

Regarding Rule 9(1), the Court held it is a "downstream" provision that only applies after a finding of guilt and cannot be used to justify the release of gratuity during the interregnum of a trial on the assumption that funds could be recovered later

The Court affirmed the High Court's judgment but directed the Trial Court to expedite the proceedings related to FIR No. 140/2006 in light of the appellant’s advanced age