High Court: Can’t withhold gratuity when challan not presented in pending FIR

Saurabh Malik

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Chandigarh, March 18

The Punjab and Haryana High Court has ruled that the authorities have no right to withhold gratuity due to employees solely on the ground of an FIR’s pendency, when challan has not been presented on the date they retired.

The ruling by Justice Vikas Bahl came on a bunch of six petitions, seeking directions to the State of Punjab and other respondents to pay 10 per cent per annum interest from the date gratuity was payable till its payment.

The Bench was told that the petitioners retired from Punjab Public Works Department between 2005 and 2008. But gratuity was sanctioned and paid in 2016-17, after much delay. The sole reason for non-release of gratuity was the pendency of an FIR registered in June 2004 for cheating and other offences under the provisions of the IPC and the Prevention of Corruption Act. Admittedly, departmental proceedings were not initiated. An untraced report, submitted by the Vigilance Bureau in the criminal case, was also accepted by the Judge concerned.

Justice Bahl observed that the petitioners’ case was that the respondents could not have withheld the gratuity, much less for 10 years, since judicial proceedings were not pending at the time of their retirement. The respondents were dutybound to pay interest since they had illegally withheld the gratuity.

Referring to judicial precedents, Justice Bahl asserted a provision in the Punjab Civil Services Rules provided that gratuity would not be paid to a government employee until the conclusion of departmental or judicial proceedings and the final order thereon. The “proceeding” would be considered to be initiated/pending only in case the challan had been filed in the criminal court.

But the challan had not been presented when the petitioners before the court retired in the case in hand. As such, it could not be said judicial proceedings were pending so as to entitle the respondent-authorities to withhold the petitioners’ gratuity.

Justice Bahl asserted: “It is held that the respondent-authorities had no right to withhold the gratuity due to the petitioners solely on account of the pendency of the FIR dated June 29, 2004, when admittedly no challan had been presented on the date the petitioners retired”.

Partly allowing the petitions, Justice Bahl added the petitioners were entitled to interest for delayed payment once the court held that the respondent-authorities had no right to withhold the gratuity payable to them. As such, the petitioners were held entitled to 6 per cent per annum interest on delayed payment of gratuity. The interest would accrue three months after the petitioners’ retirement date till the actual payment was made. For the purpose, the Bench set a three-month deadline.

Entitled to 6% interest

The petitioners were entitled to interest for delayed payment once the court held that the respondent-authorities had no right to withhold the gratuity payable to them. As such, the petitioners were entitled to 6 per cent per annum interest on delayed payment of gratuity. Justice Vikas Bahl