Karnataka HC Upholds Order Requiring KPTCL To Pay Retiree’s Terminal Benefits Despite 16-Year Criminal Case After Same-Facts Departmental Exoneration

The respondent, an Accounts Officer, faced a criminal case arising from a 2010 crime; a charge sheet was filed in 2012, and the case remained pending when he retired on 31 May 2024.

A departmental inquiry initiated in 2019 on the same set of facts concluded with his exoneration, which became final.

On retirement, KPTCL paid him 50% provisional pension but withheld gratuity and other terminal benefits under Regulations 171 and 172 of the Karnataka Electricity Board Employees Service Regulations, 1996.

The Single Judge set aside the withholding endorsement and directed payment; KPTCL appealed.

Regulations 171 and 172 of the Karnataka Electricity Board Employees Service Regulations, 1996 govern withholding pension and gratuity where qualifying departmental or judicial proceedings are pending; Regulation 172 provides for provisional pension and withholding gratuity pending conclusion of proceedings instituted under Regulation 171.

Following Karnataka Power Transmission Corporation Limited v. Mallikarjun Savanur, W.A. No. 100422 of 2023, decided 16 November 2023, the Court treated the Regulations as requiring strict compliance before pension or terminal benefits may be withheld; the precedent also relied on the principle that pension is a protected property interest and may be abridged only in accordance with the governing regulations.

The Court left open the employer’s rights under the Regulations following the conclusion of judicial proceedings.

The Court applied the coordinate Bench’s interpretation of Regulations 171 and 172 and considered that the criminal case had remained pending for approximately 16 years.

It also emphasised that the departmental inquiry concerned the same factual basis as the criminal case and had resulted in the respondent’s final exoneration; the other persons charged in the matter had also been exonerated.

In those circumstances, the Court concluded that the pending trial and its delay did not justify continuing to withhold the respondent’s accrued terminal benefits.

Pending applications were also disposed of.