Bar On Payment Of Gratuity As Per Rule 69(1)(c) Of Central Civil Services (Pension) Rules Operates As Long As Either Departmental Or Judicial Proceedings Are Pending: Supreme Court
The Supreme Court was considering an appeal of a former employee of the Himachal Pradesh Road Transport Corporation who was allegedly involved in a CPMT paper leak.
Justice Prashant Kumar Mishra, Justice Vipul M. Pancholi, Supreme Court
While dismissing the appeal of a former employee of the Himachal Pradesh Road Transport Corporation who was allegedly involved in a CPMT paper leak, the Supreme Court has held that the bar on payment of gratuity as per Rule 69(1)(c) operates as long as either departmental or judicial proceedings are pending.
The Apex Court was considering an appeal against the judgment of the Himachal Pradesh High Court, whereby an intra-court appeal preferred by the appellant against the judgment of the Single Judge was disposed of.
Referring to Rule 69(1)(c) of the Central Civil Services (Pension) Rules, 1972, which makes provision for provisional pension where departmental or judicial proceedings may be pending, the Division Bench of Justice Prashant Kumar Mishra and Justice Vipul M. Pancholi held, “As the learned Single Judge had rightly noted at the first instance, Rule 69(1)(c) operates as an ‘embargo’ or a statutory bar, not as an enabling provision. The use of the ordinary disjunctive “or” expands the scope of this bar, indicating that gratuity shall not be paid so long as either departmental or judicial proceedings are pending.”
AOR Karan Bharihoke represented the Appellant, while AOR Himanshu Tyagi represented the Respondent.
Factual Background
The appellant has been working with the respondent, Himachal Pradesh Road Transport Corporation, as a Clerk since 1979. In 2000, he was promoted to the post of Senior Assistant. He continued in service until he retired upon attaining the age of superannuation on February 28, 2009. The allegation against the appellant was that between May and July 2006, he was involved in the leak of the question paper of the Combined Pre-Medical Test, 2006. An FIR was registered against the appellant and other accused persons under Sections 406, 418, 420 and 120B of the Indian Penal Code, 1860, for their involvement in the CPMT paper leak. In connection with the said FIR, the appellant was arrested and released on bail. Parallely, the respondent-Corporation initiated departmental proceedings against the appellant. In 2007, a charge sheet was issued to the appellant under Rule 14 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965.
In 2009, the appellant superannuated; however, he was not paid his full retirement benefits. While a provisional pension was released to him, his gratuity and other terminal benefits were withheld on account of the pendency of the criminal proceedings. The appellant approached the respondent Corporation by way of a representation, reiterating his grievance regarding the withholding of his gratuity and pensionary benefits. In 2015, the charges against the appellant were found not to be proved. The appellant approached the Himachal Pradesh State Administrative Tribunal seeking directions for the release of his gratuity and regular pension with consequential benefits. As the Tribunal was subsequently abolished, the Original Application was transferred to the Himachal Pradesh High Court, where it was renumbered and dismissed. Aggrieved, the appellant approached the Division Bench of the High Court by way of Letters Patent Appeal. The Division Bench concurred with the findings of the Single Judge. It was in such circumstances that the appellant approached the Apex Court.
Reasoning
Referring to Rule 69(1)(c), the Bench affirmed that the same operates as an ‘embargo’ or a statutory bar, not as an enabling provision. “The use of the ordinary disjunctive “or” expands the scope of this bar, indicating that gratuity shall not be paid so long as either departmental or judicial proceedings are pending”, it added.
The Bench stated that Rule 69(1)(c) of the 1972 Rules has a wide import and operates in respect of any proceeding that may be pending against an employee at the time of retirement. As per the Bench, the breadth of the provision reflects its protective character. “If the appellant’s interpretation were accepted, an employee could contend that once any one set of proceedings against him/her stands concluded, the embargo stands lifted and gratuity must be released. This would altogether defeat the purpose of the provision, which is to safeguard the financial interests of the State”, it added.
The Bench also noticed that in the instant case, where both the proceedings stem from identical allegations, their nature, scope, and standard of proof remain fundamentally different.
Thus, finding no reason to interfere with the impugned judgment, the Court dismissed the Appeal.
Cause Title: Bikram Chand Rana v. Himachal Pradesh Road Transport Corporation (Neutral Citation: 2026 INSC 326)
Appearance
Appellant: AOR Karan Bharihoke, Advocate Mehak Jaggi,
Respondent: AOR Himanshu Tyagi