Supreme Court: CCS Pension Rules | Gratuity Can Be Withheld During Pendency Of Criminal Or Disciplinary Proceedings Against Employee

The Appellant contends that the expression "departmental or judicial proceedings" in Rule 69(1)(c) must be construed to mean that gratuity becomes payable upon the conclusion of either set of proceedings.

12. Such a submission totally misapprehends the nature of the Rule. 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. 

13. 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; indeed, 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.

14. Even in the instant case, where both the proceedings stem from identical allegations, their nature, scope, and standard of proof remain fundamentally different. By way of illustration, let us consider if the converse were true i.e., the criminal case against the Appellant had concluded in an acquittal due to failure to establish guilt beyond reasonable doubt. It would nevertheless be possible that the Appellant was eventually found liable in the pending departmental proceedings on a preponderance of probabilities. An acquittal in that case could not be determinative. If such an approach is impermissible in one direction, it cannot be countenanced in the other either. Moreover, this distinction assumes increased significance in the instant case, as the Inquiry Officer had expressly noted that the matter was sub judice and any definitive conclusion would rest on the outcome of the criminal trial.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 14669 of 2025

Decided On: 07.04.2026

Bikram Chand Rana Vs. Himachal Pradesh Road Transport Corporation

Hon'ble Judges/Coram:

Prashant Kumar Mishra and V.M. Pancholi, JJ.

Author: Prashant Kumar Mishra, J.

Citation: 2026 INSC 326,MANU/SC/0322/2026

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Is a Child Adopted By Widow After the Death Of a Government Employee Entitled To Family Pension?

It is necessary that the scope of the benefit of family pension be restricted only to sons or daughters legally adopted by the government servant, during his/her lifetime. The definition of 'family' is narrowly worded under the CCS (Pension) Rules, in the specific context of the entitlement to 'family pension' and in relation to the government servant. Therefore, the word "adoption" in Rule 54(14)(b)(ii) of the CCS (Pension) Rules, in the context of grant of family pension, must be restricted to an adoption made by a government servant during his/her lifetime and must not be extended to a case of adoption made by a surviving spouse of the government servant after his/her death. This is because the object of the provision is to lend succour to a son till he attains the age of twenty-five years and unmarried or widowed or divorced daughter; similarly to the adopted son or unmarried adopted daughter when such an adoption had been made by the government servant during his/her lifetime.

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 386 of 2023 

Ram Shridhar Chimurkar Vs.  Union of India (UOI) and Ors.

Hon'ble Judges/Coram:

K.M. Joseph and B.V. Nagarathna, JJ.

Author: B.V. Nagarathna, J.

Decided On: 17.01.2023.

Citation: MANU/SC/0041/2023

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Whether the employer can refuse to pay the amount of provident fund and leave encashment to the employee if he had issued the charge sheet of departmental enquiry to him after retirement?

  With respect the Provident Fund reliance is placed on the

judgement of the Supreme Court in Gorakhpur University & Ors. vs. Dr. Shitla Prasad Nagendra & Ors., (2006) 6 SCC 591, wherein the Court held that terminal benefits including Provident Fund cannot be withheld and the same are immune from attachment, deduction or adjustment even against any of the dues from the employee. To the same effect is the

decision of the Division Bench of the Bombay High Court in Ramdas Govind Bakhle vs. Maharashtra State Financial Corporation (2000)SCC OnLine Bom 9, wherein the Court relying on Bhagirathijena vs. Board of Directors, Orissa State Financial Corporation & Ors., (1993) 3 SCC 666, held that no amount from the Provident Fund of an employee can be deducted in the absence of service Regulations providing so and

the Court directed the Respondent therein to release the Provident Fund of the Petitioner.{Para 7}

13. A perusal of the provisions of Rule 7.7 makes it evident that before the Competent Authority can withhold the Leave Encashment of an employee, wholly or partly, a conscious decision must be taken to withhold the Leave Encashment due to the employee on account of there being a possibility of some money becoming recoverable from him, once the Disciplinary Proceedings conclude.

14. While interpreting the said Rule, the Division Bench held as

follows:-

“10. The aforesaid Rule would show that the competent

authority may wholly or partly, withhold leave encashment in

respect of a Government servant who retires on attaining the

age of superannuation, while under suspension or while

undergoing disciplinary or criminal proceedings, provided the

competent authority is of the view that there is a possibility of

some money becoming recoverable from him on the conclusion

of proceedings against him. In the present case, the respondents

have not produced any order to show that a conscious decision

has been taken by the Government to withhold the leave

encashment due to the petitioner upon his retirement, on

account of there being a possibility of some money becoming

recoverable from him on the conclusion of proceedings against

him. The nature of the charge levied against the petitioner also

does not support the withholding of the leave encashment. We

cannot agree with the submissions of learned counsel for the

respondents that if the charge against the petitioner is proved,

it could also have the effect of nullifying the examination

process in which the petitioner is alleged to have manipulated

the marks of some of the candidates. Pertinently, the said

examination took place in the year 2010. It is not the

respondent’s case that any of the successful candidates have

been put to notice in this regard. It is not claimed that the said

examination process has been assailed by any unsuccessful

candidate on account of the alleged misconduct of the

petitioner, or that the same has been set aside, or the challenge

is still pending. We are, therefore, of the view that withholding

of leave encashment of the petitioner is not justified.

 IN THE HIGH COURT OF DELHI AT NEW DELHI

W.P.(C) 3114/2020 & CM 10817/2020

SH. S.B. SINGH Vs NATIONAL TEXTILE CORPORATION 

CORAM: HON'BLE MS. JUSTICE JYOTI SINGH

Pronounced on: 17.11.2020

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Whether nomination for retiral benefits made by husband in favour of second wife is valid?

The Supreme Court in Bakulabai and another v. Gangaram and another, 1988 (25) ACC 119, held that the marriage of a Hindu woman with a Hindu male with a living spouse performed after the coming into force of the Hindu Marriage Act, 1955 is null and void and the woman is not entitled to maintenance under Section 125 of the Cr.P.C.

The Apex Court in Smt. Sarbati Devi and another Versus Smt. Usha Devi, AIR 1984 SC 346, held that a mere nomination made in an insurance policy does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. The nomination only indicates the hand which is authorised to receive the amount on the payment of which the insurer gets a valid discharge of its liability under the policy. The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them.

This Court in Shakuntala Devi (Smt.) Versus Executive Engineer, Electricity Transmission Ist U.P. Electricity Board, Allahabad and another, [(2001) 1 U.P.L.B.E.C. 8691], while dealing with two wifes wherein the nomination was in favour of the second wife it was held that it cannot defeat the claim of the legally wedded wife, only legally wedded wife is entitled to retiral benefits and provident fund and appointment under Dying-in-Harness Rules.

Similarly, view was expressed in Poonam Devi (Smt.) Versus Chief Engineer, Electricity Board and others, [(2004) 3 U.P.L.B.E.C 2292].
In G.L. Bhatia v. Union of India and another, 2000(1) ESC 135 (SC), the Supreme Court held that if a nomination is made contrary to statutory provision, it would be inoperative. In the facts of that case, the husband of the deceased employee claimed family pension while nomination was not in his favour. The authorities rejected the claim of the husband for the reason that he was staying separately from the wife and thus was not entitled to family pension. The Apex Court held that the husband was entitled to family pension, where the rights of the authorities are governed by statutory provisions, the individual nomination contrary to the statute will not operate.

Allahabad High Court

Manno Singh vs State Of U.P. & Others on 11 September, 2014

Bench: Suneet Kumar

Case :- WRIT - A No. - 23388 of 2012

Citation:I(2015)DMC 654 ALL

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Whether Retiral benefits like gratuity and pension can be withheld by employer?

Retrials benefits like gratuity and pension cannot be withheld by the employer and if done so, interest is payable. Such payments are no longer bounty.
Pension and gratuity are no longer any bounty to be distributed by the employer/Government as already held by the Supreme Court of India in the case of State of Kerala & Ors. vs. M. Padmanabhan Nair, (1985) 1 SCC 429 that pension and gratuity have become valuable right of the employee and any culpable delay in the settlement of the pension and gratuity must be dealt with the penalty of interest at the current market rate from the due date of payment till the date of payment to the employee.

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7113

OF 2014

(Arising out of SLP (C) No. 25015 of 2011)

D.D. TEWARI(D) THR. LRS.

......APPELLANTS

VERSUS

UTTAR HARYANA BIJLI VITRAN NIGAM LTD. & ORS. 

Citation;2014 ALLSCR3023

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Whether employer is liable to pay interest when there is culpable delay in settlement and disbursement of retiral benefits?

The High Court has adverted to the judgments of this Court particularly, in the case of State of Kerala & Ors. Vs. M. Padmanabhan Nair[1], wherein this Court reiterated its earlier view holding that the pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement, but, have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be dealt with the penalty of payment of interest at the current market rate till actual payment to the employees. The said legal principle laid down by this Court still holds good in so far as awarding the interest on the delayed payments to the appellant is concerned.

D.D. Tewari (D) through LRS. Vs. Uttar Haryana Bijli Vitran Nigam Ltd. & Ors.

[Civil Appeal No. 7113 of 2014 arising out of SLP (C) No. 25015 of 2011]

V.GOPALA GOWDA, J.

Citation;AIR 2014 SC 2861,2014ALLSCR3023

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