The Chhattisgarh High Court has held that withholding the gratuity of an employee after his retirement merely on allegations of misappropriation without conducting an inquiry is impermissible under law.

The Court dismissed a Writ Appeal filed by the State of Chhattisgarh challenging the Order of the Single Bench. The Division Bench upheld the said decision directing the release of full gratuity to retired officials from the date of retirement.

A Division Bench of Chief Justice Ramesh Sinha and Justice Ravindra Kumar Agrawal held, “this alone ground itself the order of withholding of the gratuity of the respondent No. 1/writ petitioner after his retirement is impermissible under law.

Additional Advocate General Yashwant Singh Thakur represented the Appellants, while Advocate Hamida Siddiqui appeared for the Respondents.

Brief Facts

The Respondent (employee) retired as a Revenue Sub Inspector. During an audit, allegations of misappropriation amounting were raised the employee and two others. Despite these allegations, no departmental inquiry or show-cause notice was initiated against the employee before his retirement.

In response to the employee’s application for retiral dues, the State withheld a certain amount from his gratuity. The employee filed a Petition seeking quashing of the impugned Order withholding gratuity and the release of the full amount.

Single Judge’s Decision

The Single Judge relied on the Supreme Court’s judgment in Punjab v. Rafiq Masih (White Washer) (2015), which prohibits recovery from retired employees or those belonging to Class III and IV services. Observing that no inquiry or judicial proceedings under the Pension Rules, 1976, had been initiated before the employee’s retirement, the Single Bench ordered the release of the withheld gratuity with interest.

State’s Appeal

The State argued that a departmental inquiry against the employee was pending regarding the audit report and contended that the withheld gratuity was public money subject to recovery in cases of misappropriation. It claimed that withholding gratuity was justified to avoid financial loss to the exchequer.

Court’s Reasoning

The Division Bench referred to the decision in Rafiq Masih (supra) and held, “It clearly reflects that the matter of the respondent No. 1/writ petitioner is attracted and covered by the above-mentioned judgment of the Hon’ble Supreme Court. Therefore, on this alone ground itself the order of withholding of the gratuity of the respondent No. 1/writ petitioner after his retirement is impermissible under law.

Consequently, the Court ordered, “Considering the pleadings made in writ appeal, submissions advanced by the learned counsel appearing for the parties and also considering the findings recorded by the learned Single Judge while allowing the writ petition filed by the respondent No. 1/writ petitioner, we are of the considered opinion that the learned Single Judge has not committed any illegality, irregularity or jurisdictional error warranting interference by this Court.

Accordingly, the High Court dismissed the Appeal.

Cause Title: State of Chhattisgarh & Ors. v. B.P. Tiwari & Ors. (Neutral Citation: 2025:CGHC:2151-DB)

Appearance:

Appellants: Additional Advocate General Yashwant Singh Thakur

Respondents: Advocates Hamida Siddiqui and H.S. Ahluwalia

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