Mere FIR pendency cannot justify withholding leave encashment absent statutory proceedings and a recovery finding.

The applicant, a retired Senior Assistant in the Health and Medical Education Department, superannuated on 30 September 2017. Although his pensionary benefits were sanctioned, his claim for leave salary/cash equivalent of earned leave remained unpaid.

He had earlier filed O.A. No. 1172/2022, pursuant to which the Tribunal directed the respondents to consider his claim and pass a reasoned order.

By Office Order No. 150 of 2023 dated 11 August 2023, the respondents rejected the claim on the ground that the applicant was allegedly involved in offences concerning forged government creation and transfer orders and that FIR No. 07/2013 was under investigation by the Crime Branch.

The respondents subsequently stated that a challan had been filed in the criminal case, while the applicant produced a document indicating presentation/return of Session Challan No. 37/2026 dated 11 March 2026; however, the document did not establish when the challan was first presented or whether charges had been framed.

No departmental proceedings had been initiated against the applicant.

Whether mere registration of an FIR and pendency of investigation at the time of the applicant’s retirement legally justified withholding his leave salary/cash equivalent of earned leave under Articles 168-A and 168-D of the J&K Civil Service Regulations and Rule 37(2)(v) of the J&K Civil Services (Leave) Rules, 1979?

Whether the subsequent presentation of a challan in 2026 could retrospectively validate the withholding of leave salary or constitute judicial proceedings as existing on the applicant’s date of retirement in 2017?

Whether the impugned order was invalid for failing to record the statutory satisfaction that there was a possibility of recovery of government money from the applicant?

The Tribunal applied Articles 168-A and 168-D of the J&K Civil Service Regulations, under which recovery from pension and withholding of gratuity or other retiral benefits require properly instituted departmental or judicial proceedings satisfying the statutory conditions; mere allegations or investigation are insufficient.

Rule 37(2)(v) of the J&K Civil Services (Leave) Rules, 1979 permits withholding of the cash equivalent of earned leave only where disciplinary or criminal proceedings are pending at retirement and the competent authority records a possibility that money may become recoverable from the employee.

Relying on Ghulam Mohi-ud-Din Lone v. State of J&K & Ors., LPA No. 220/2019, decided on 11 December 2020, the Tribunal held that registration of an FIR or investigation does not amount to institution of judicial proceedings; such proceedings commence before a competent court, including upon presentation of a complaint or police report/charge-sheet.

It also relied on State of Jharkhand v. Jitendra Kumar Srivastava, (2013) 12 SCC 210, for the principle that pension, gratuity and leave encashment are property protected under Article 300-A and cannot be withheld without statutory authority.

It also relied on Dev Prakash Tewari v. U.P. Cooperative Institutional Service Board, (2014) 7 SCC 260, regarding the necessity of statutory authority for curtailing retiral benefits after superannuation.

The applicant retired in 2017 when the criminal case was admittedly still under investigation and there was no material showing that a challan or charge-sheet had been presented before a competent criminal court.

In accordance with Ghulam Mohi-ud-Din Lone, an FIR and investigation did not constitute pending judicial proceedings for purposes of Articles 168-A and 168-D or Rule 37(2)(v).

The respondents also failed to establish compliance with the statutory conditions governing post-retirement proceedings under Article 168-A, particularly because the alleged events related to a 2013 FIR and the challan was stated to have been presented only in 2026.

Further, the impugned order merely referred to the FIR and alleged misconduct but did not record the mandatory satisfaction that recovery of government money was possible, as required by Rule 37(2)(v).

The later presentation of the challan could not retrospectively cure the illegality of the 2023 order or convert the earlier investigation into judicial proceedings existing on the date of retirement.

Office Order No. 150 of 2023 dated 11 August 2023 was accordingly quashed and set aside.

The respondents were directed to process and release the admissible leave salary/cash equivalent of earned leave, including arrears, within six weeks of receiving the certified order.

Failure to comply would attract interest at 6% per annum from expiry of the six-week period until payment.

The release was made without prejudice to any action independently permissible under Article 168-A if the criminal proceedings culminated in a finding of guilt and the statutory requirements for determining and recovering any proven government loss were satisfied.

The Original Application was allowed, with no order as to costs.