Private criminal proceedings unrelated to service cannot justify withholding pension, gratuity, or leave encashment.

The petitioner, a Senior Accountant with the Central Board of Indirect Taxes and Customs, retired on 31 August 2023 while three criminal cases were pending against him.

The employer stated that the cases were unrelated to his service; a departmental enquiry arising from one matter had been closed and all charges dropped.

The employer withheld gratuity, leave encashment, part of the pension and salary for the suspension period, while paying provisional pension.

A court had separately directed that Rs. 1,50,000 be retained from the gratuity.

The Central Administrative Tribunal dismissed the petitioner’s application, finding that the record did not establish the nature of the criminal cases or whether they had caused loss to a Government entity.

The petitioner challenged that dismissal before the High Court.

Rule 8 of the Central Civil Services (Pension) Rules, 2021 governs withholding or withdrawal of pension and gratuity, including provisional pension and the non-payment of gratuity while qualifying departmental or judicial proceedings remain pending; under Rule 8(1), action against pension or gratuity is linked to a finding of grave misconduct or negligence, and Rule 8(4)(c) addresses gratuity during proceedings.

Relying on State of Jharkhand v. Jitendra Kumar Srivastava, (2013) 12 SCC 210, and the principles in Deokinandan Prasad v. State of Bihar and D.S. Nakara v. Union of India, the Court reiterated that pension and gratuity are rights, not bounties, and cannot be withheld without authority of law; Article 300A protects property from deprivation except by authority of law.

The Court also relied on Gagan Bihari Prusty v. Paradip Port Trust, SLP (C) No. 4468/2022, dated 3 March 2025, in directing interest on the gratuity payable.

The Court held that the employer’s reliance on the pending cases did not justify withholding the benefits where the cases were unconnected with the petitioner’s service and the departmental enquiry had been closed with all charges dropped.

It also found that the Tribunal had dismissed the application because the record lacked details, although the employer—having withheld the benefits on that basis—ought to have supplied those details; their absence should not prejudice the petitioner.

Applying the governing pension principles, the Court concluded that the employer was not entitled to withhold the pension, leave encashment and the balance gratuity, subject to the separate court order requiring retention of Rs. 1,50,000.

It directed the employer to initiate conversion of provisional pension into regular pension within 30 days and to release any unpaid pension within that period;

retain Rs. 1,50,000 from the gratuity as directed by the competent court and pay the balance with 10% statutory interest within 45 days;

and treat the suspension period as duty, paying the remaining salary, after deducting suspension allowance already paid, within 45 days.

The Rule was made partly absolute.