No Interest Payable on Gratuity Lawfully Withheld During Pending Disciplinary Proceedings Concluding in Penalty

The applicant, a retired Additional Legal Advisor, superannuated while disciplinary proceedings under Rule 14 of the CCS (CCA) Rules, 1965, were pending.

Consequently, his gratuity was withheld under Rule 69 of the CCS (Pension) Rules, 1972.

These proceedings concluded on 24.10.2018 with a penalty order reducing his pension by 10% for one year.

The applicant submitted revised pension papers on 28.02.2019, and the gratuity was subsequently released on 13.03.2019.

The applicant approached the Tribunal seeking interest at 18% for the delay in payment from the date of retirement (01.02.2013) until realization, alleging the withholding was illegal and violated Article 300-A.

1. Whether the withholding of gratuity during the pendency of disciplinary proceedings was legally valid under Rule 69 of the CCS (Pension) Rules.

2. Whether the applicant is entitled to interest on the delayed payment of gratuity where he was not fully exonerated in the departmental proceedings.

Rule 69 of the CCS (Pension) Rules, 1972, which prohibits the payment of gratuity until the conclusion of pending departmental or judicial proceedings.

Rule 68 regarding interest on delayed payments, noting it applies only to administrative lapses.

Government of India O.M. dated 10.01.1983 and 22.01.1991, which establish that if an employee is not fully exonerated, gratuity is deemed to fall due only on the date the final order is issued.

Precedent of Bikram Chand Rana v. HRTC (2026 INSC 326) on the statutory bar of Rule 69.

Precedent of D.V. Kapoor v. UOI regarding the necessity of statutory authority to withhold benefits.

The Tribunal reasoned that Rule 69 serves as a "statutory bar" rather than an enabling provision, designed to protect the financial interests of the State while proceedings are sub judice.

The court applied the "deemed due date" principle: since the applicant was not fully exonerated (receiving a 10% pension cut), the gratuity officially fell due only on 24.10.2018—the date of the final penalty order—and not the date of retirement.

The Tribunal found that once the applicant submitted revised papers in February 2019, the respondents acted promptly by releasing funds in March 2019.

The Tribunal found that no "administrative lapse" existed under Rule 68 to justify an award of interest, as the delay was a legal consequence of the pending disciplinary action.

The Original Application was dismissed as being without merit, and all pending miscellaneous applications were disposed of with no order as to costs.