Grant Of Residence Can’t Obstruct Or Defeat Pension & Retiral Benefits: Supreme Court

In this appeal, before the Apex Court, the Panchayat & Rural Development Department, Government of Madhya Pradesh challenged the judgment passed in a Writ Appeal questioning the order whereby the respondent’s writ petition seeking to quash a recovery of residence Rs 1,56,187 (penal house rent) and Rs 1,46,466 (excess payment of salary), was allowed.

The Division Bench of Justice Sanjay Karol and Justice Prashant Kumar Mishra held, “Pension and other retiral dues are benefits that have been earned by an employee due to the service rendered to the institution paying the pension/other retirement benefits. The grant of a residence corresponds to the position held at the time by such employee. The width of these two aspects is separate and distinct. Pension and retirement benefits accrue from a much wider base as the culmination of all efforts, across employment whereas the latter is only for a limited time, till such a person is holding that position. The latter cannot obstruct or defeat the former. The Appellant cannot be allowed to withhold a duly accrued right on this count.”

Additional Advocate General Amit Sharma represented the Appellant, while Senior Advocate Saurabh Mishra represented the Respondent.

Factual Background

The respondent was recruited into the state's services in 1980. In 2009, the State brought in the M.P. Revision of Pay Rules, 2009, according to which his pay was revised and he superannuated from service in 2013. However, neither was his pension sanctioned nor was the payment of retirement dues made. The appellant passed an amendment order through which the pay revision was undertaken and, his salary was relegated to the lower scale. Such action was challenged by way of a Writ Petition, and the refixation of salary by the latter order was withdrawn. Consequently, the said writ petition was withdrawn. When the amounts were not paid even after the order of refixation of salary was withdrawn, the respondent did not vacate the official residence. He eventually vacated such residence in 2015.

The payment of gratuity and pension amount was carried out in 2016; however, the two amounts of penal house rent and excess payment of salary were deducted. Having withdrawn his earlier Writ Petition in view of intervening developments, the writ petition culminating in the present proceedings came to be filed. The Single Judge allowed the writ petition, and the recovery of the amount was held illegal. The Division Bench affirmed the view of the Single Bench and dismissed the appeal. Aggrieved thereby, the appellant approached the Apex Court.

Reasoning

Referring to the judgments in PEPSU RTC v. Mangal Singh (2011) and U.P. Roadways Retired Officials & Officers Assn. v. State of U.P. (2024), the Bench reiterated that the payment of retiral dues/gratuity/pension is not a matter of bounty but in fact a matter of right of every employee, should there be some rule or statute from where the right may originate.

Coming to the facts of the case, the Bench stated, “This makes it clear that the Courts below were correct in holding that there was no justification for the appellants having not paid the dues rightly belonging to the respondent to him even after the passage of almost three years after the retirement. We may also observe that there was no occasion whatsoever for the Appellant to have conducted re-fixation of pay after retirement of the Respondent and then proceed to recover the excess amount from the retiral dues payable to the latter. This is a well-settled position in law.”

The Bench noted that the delay was entirely on the part of the Appellant, and no explanation was given except for the attempt to hold back pensionary benefits as a sword on the Respondent’s head for not having vacated his government-allocated accommodation. Finding no error in the order of the Single Bench awarding interest to the Respondent, the Bench dismissed the appeal.

Cause Title: Panchayat and Rural Development Department & Ors. v. Santosh Kumar Shrivastava (Neutral Citation: 2025 INSC 1142)

Appearance

Appellant: Additional Advocate General Amit Sharma, AOR Mrinal Gopal Elker, Advocates Aarushi Singh, Chinmoy Chaitanya, Chhavi Khandelwal

Respondent: Senior Advocate Saurabh Mishra, AOR Abhinav Shrivastava, Advocates Ambar Pare, Shivang Rawat, Muskaan

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