Retiral benefits may be withheld pending judicial proceedings or following the imposition of a major penalty.

The applicant retired from NBCC (I) Ltd. on June 30, 2025, upon reaching superannuation

Following his retirement, he sought the release of his retiral benefits, including Performance Related Pay (PRP), gratuity, and leave encashment

The respondents, via an impugned order dated September 2, 2025, withheld these benefits citing Clause 8(20)(ii) and (b) of the NBCC (Discipline and Appeal) Rules, 1993, due to pending disciplinary and judicial proceedings

The applicant approached the Tribunal claiming no such proceedings were pending at the time of his retirement

However, the respondents revealed that a major penalty (reduction in pay) had been imposed on the applicant on April 29, 2024, following disciplinary proceedings

Furthermore, the CBI had registered an FIR on August 29, 2024, regarding financial losses worth several crores caused to the organization, and had sought sanction for the applicant's prosecution

1. Whether the applicant has a vested right to receive retiral benefits (PRP, leave encashment, and gratuity) despite the imposition of a major penalty and an ongoing CBI investigation into pecuniary losses

2. Whether the withholding of benefits is legally sustainable when a criminal investigation is underway but a formal charge-sheet in court has not yet been filed

The court primarily applied the NBCC (Discipline and Appeal) Rules, 1993, specifically those governing the withholding of gratuity and PRP during the pendency of proceedings

It referred to Rule 39 of the CCS (Leave) Rules, 1972, which permits withholding leave encashment if there is a possibility of recovering money upon the conclusion of proceedings

The court also considered the Payment of Gratuity Act, 1972, particularly Section 4(6) regarding the forfeiture of gratuity for misconduct causing financial loss

While the applicant relied on Union of India v. K.V. Jankiraman (1991) and Swaraj Basu v. IGNOU (2025) to argue that proceedings only "pend" once a charge-sheet is filed or cognizance is taken, the Tribunal focused on the organization’s regulatory power to safeguard financial interests

The Tribunal found that the applicant had materially suppressed facts by failing to disclose the major penalty imposed on April 29, 2024

It reasoned that the respondents’ rules are designed to balance the financial interests of the organization against the employee's rights, specifically allowing for the withholding of funds when significant pecuniary losses are alleged

Although the applicant argued that judicial proceedings had not "commenced" in the technical sense of the Jankiraman precedent, the Tribunal noted that a CBI FIR existed, statements had been recorded, and prosecution sanction had been requested

The Tribunal emphasized that the PRP for the year 2024-25 was squarely covered by the "currency" of the major penalty

Consequently, the Tribunal determined that the serious nature of the multi-crore loss and the existence of a prior disciplinary penalty justified withholding the benefits until the applicant is successfully exonerated in both disciplinary and judicial forums

It held that the applicant is not entitled to the immediate release of retiral benefits including gratuity, leave encashment, and PRP, as the withholding was consistent with internal rules aimed at recovering potential pecuniary losses identified in ongoing investigations and prior disciplinary actions

No order as to costs was made