Maharashtra Civil Services (Pension) Rules | Gratuity Of Employee Can Be Withheld Until Conclusion Of Criminal Appeal: Bombay High Court

The division bench of Justice A.S. Chandurkar and Justice Jitendra Jain were considering the petition of the Maharashtra State Government against the order of the Maharashtra Administrative Tribunal.

The respondent-employee during his employment was tried for offences under the Prevention of Corruption Act, 1988 (POCA) in 2002. The Trial Court acquitted him in 2008 and the State filed an appeal against his acquittal in 2009. This appeal against the employee is still pending.

The State withheld the pension and gratuity benefits of the employee since the appeal against his acquittal was still pending. Due to this, the respondent approached the Maharashtra Administrative Tribunal.

The Tribunal ruled that the expression 'judicial proceedings' was limited to a criminal trial. As the employee was acquitted by the trial court, it held that there was no 'judicial proceedings' pending against him. It held that the employee was entitled to receive a pension and gratuity.

The High Court referred to Rule 130, which provides that a provisional pension should be provided to the employee during the pendency of departmental or judicial proceedings. However, under the said rule gratuity cannot be paid 'until the conclusion of the departmental or judicial proceedings and issue of final orders thereon'. The Court stated that this expression indicates that the passing of the final order has a material bearing on the employee's entitlement to receive gratuity.

“... entitlement to gratuity is dependent on the conclusion of departmental or judicial proceedings. The requirement of final orders being passed in such proceedings has material bearing and its impact on the entitlement to receive gratuity cannot be ignored” it observed.

The Court referred to the case of Ramesh Manikrao Sasane vs. The Maharashtra and anr (WP No.5137 of 2016), where the Bombay High Court had held that the employee was not entitled to receive gratuity until the conclusion of criminal appeal against his acquittal under POCA.

The respondent-employee contended that this judgment is per incuriam as the court did not consider the expression 'judicial proceedings' under Rule 27(6) while rendering its decision. Rule 27(6) provides that 'judicial proceedings' is deemed to be instituted in a criminal proceeding on the date on which the complaint or report of a police officer of which the Magistrate takes cognizance is made. However, the Court rejected this contention and said that reference to Rule 27(6) is misplaced. It noted that as Rule 27(6) starts with the expression 'for the purpose of this Rule', it only applies within Rule 27 itself, concerning when judicial proceedings are deemed to be instituted.

It remarked “In the present context, we are not concerned with the institution of judicial proceedings but conclusion and passing of final orders in judicial proceedings. In our view, the provisions of Rule 27 of the Rules of 1982 would not come into play in a situation where the entitlement to receive gratuity under Rule 130(1)(c) of the Rules of 1982 is in question.”

The Court further cited the Delhi High Court's judgment in Lakhminder Singh Brar vs. UOI & ors. (2010 (127) FLR 1077), which held that the pendency of an appeal against acquittal constitutes a continuation of judicial proceedings under Rule 69(1)(c) of the Central Civil Services (Pension) Rules, which is similarly worded as Rule 130(1) (c) of the Rules of 1982.

The Court held that the Tribunal incorrectly directed the release of gratuity to the respondent-employee by “...misconstruing the provisions of Rule 130(1)(c) of the Rules of 1982.”

It thus partly modified the order of the Tribunal. It held the respondent-employee is is entitled to receive a provisional pension as per Rule 130(1). However, he would be entitled to a pension only after the conclusion of the criminal appeal against him.

Case title: The State of Maharashtra & ors. vs. Mr. Baban Yeshwant Ghuge (WP No. 14289 of 2017)