Pensionary Benefits And Gratuity Can't Be Withheld During Pendency Of Criminal Proceedings Against Employees: Jharkhand High Court

Background Facts

Shanti Devi (Petitioner) was appointed as a Lecturer in BNJ College, Sisai, Gumla, on November 1, 1984. She was subsequently transferred to Ram Lakhan Singh Yadav College, Kokar, Ranchi, on February 16, 2002. On November 7, 2003, she was appointed as a member of the Jharkhand Public Service Commission (JPSC), where she took charge. After her term with the JPSC, she resumed her duties at Ram Lakhan Singh Yadav College on November 7, 2009.

Six criminal cases were lodged against the employee by the Vigilance Department. She was acquitted in three cases, while the other three remain pending. She was released on bail in one of the pending cases. The employee was arrested and remained in judicial custody. She was suspended from her services on June 3, 2011. Upon her release from custody, her suspension was revoked on March 14, 2014, effective from January 30, 2014. No departmental proceedings were initiated against her. Despite performing her duties from January 30, 2014, to March 3, 2015, she was again suspended on March 4, 2015, and was asked to report to the Ranchi University headquarters. Her suspension was again revoked on January 17, 2019.

The employee was compulsorily retired by the Ranchi University on January 25, 2019, under Section 67 of the Jharkhand State Universities Act, 2000. Despite her retirement, employee did not received her pension, gratuity, leave encashment, and group insurance. She made several representations, but her claims were denied by the State (Employer) due to the pending criminal cases. Aggrieved by the same, employee filed the writ petition.

The employee contended that no departmental proceedings were ever initiated against her during her service. She highlighted that the three criminal cases were still pending, but there had been no conviction. The employee further argued that her suspension during her judicial custody was revoked, and she continued to perform her duties until she was again suspended. She received suspension allowances during this period, which indicated that her service was recognized despite the legal challenges.

On the other hand, it was contended by the employer that Employee was not entitled to the pensionary benefits due to the serious criminal charges pending against her. These charges involved moral turpitude, and their pendency was a legitimate ground for withholding her benefits. The employer further contended that employee was arrested by the Vigilance Department and sent to jail on June 2, 2011. The employer argued that despite her release on bail and revocation of her suspension in 2014, the severity of the charges justified subsequent suspensions and withholding of benefits.

Findings of the Court

The court reviewed the service history of Shanti Devi, including her appointments, transfers, periods of extraordinary leave, and suspensions. It was noted that no departmental proceedings had ever been initiated against her despite the criminal charges.

The court observed that out of the six criminal cases lodged against Shanti Devi, she had been acquitted in three cases, while the other three cases were still pending. Importantly, she had not been convicted in any of these cases. The court reiterated that pension and gratuity are not bounties but rights earned by an employee through long and faithful service. The court relied on the case of U.P. Raghavendra Acharya vs. State of Karnataka wherein the Supreme Court held that pension is treated to be a deferred salary. It is akin to right of property. It is correlated and has a nexus with the salary payable to the employees as on the date of retirement

The court emphasized that under Article 300A of the Constitution of India, no person can be deprived of their property (which includes pensionary benefits) without the authority of law. Attempts to withhold pension or gratuity without statutory backing are impermissible.

The court relied on the case of Dr. Dudh Nath Pandey vs. State of Jharkhand and Others wherein the Supreme Court held that there is no power under the Bihar Pension Rules to withhold gratuity and pension during the pendency of departmental or criminal proceedings.

The court held that the employer could not withhold employee's pensionary benefits based on the pending criminal cases. The court relied on the case of State of Jharkhand and Others vs. Jitendra Kumar Srivastava and Another wherein the Supreme Court clarified that the mere pendency of criminal cases cannot be a ground for withholding pensionary benefits.

The court directed the employer to fix Shanti Devi's pension, considering the 6th and 7th pay revisions, and to calculate and disburse the amounts due for gratuity, leave encashment, and other benefits within 12 weeks. With these observations, the Writ Petition was allowed.

Case No. : W.P.(S) No. 3987 of 2021

Case Name : Shanti Devi vs. State of Jharkhand and Others

Counsel for the Petitioner : Ritu Kumar, Samavesh Bhanj Deo, Shatakshi, Advocates

Counsel for the Respondents : Rahul Saboo, GP-II; Rishab Kaushal, AC to GP-II; Aprajita Bharadwaj, Advocate