Can Pension Be Withheld If Inquiry Remains Pending? Andhra Pradesh High Court Clarifies The Law

Pension is a fundamental right and not a bounty. The Andhra Pradesh High Court reiterated it in a recent case hearing, where an employer had withheld an employee’s retirement benefits due to a pending inquiry. The judgment delivered by Justice Harinath N. ordered the release of the terminal benefits to the employee. It marked the end of the 20-year-old battle for the petitioner (the retiree), at the age of 79 years.

The petitioner lost his wife and son during this long legal ordeal and has been living without any source of income. Now the judgment that cleared the way for his pension and other retirement benefits is not just a legal victory but a lifeline for survival in his twilight years.

The petitioner joined Sri Swamy Hathiramjee Mutt as a clerk in 1968 and served the organisation for around 36 years. However, towards the end of his career, he, along with several other people, was charged in a criminal case for an alleged fraud and forgery. Subsequently, he was suspended in 2004. It was just two years before his retirement on August 31, 2006.

Even after retirement, the employer (respondents) didn’t release their retirement benefits. They withheld all his terminal benefits and full person, due to the pending trial in the criminal case. In 2010, a departmental enquiry was initiated against him, despite his having retired from service four years earlier.

Arguments

The petitioner’s counsel argued that withholding a pension without finding guilt is illegal and arbitrary. The counsel highlighted the petitioner’s personal circumstances, noting that he is 79 years old, has no source of income, and has outlived his immediate family, urging that withholding pension after 20 years of retirement is illegal.    

The Counsel of the respondent contended that under the Pension Rules 1966, if an employee is involved in serious misconduct and a criminal case is pending, such an employee is not entitled to the terminal benefits. The pension can be released only when the case is finalised and reaches a conclusion.  

Court Observation And Judgment

The court observed that a criminal case has been dragging on since 2008, and five of the co-accused in the case have already passed away. The court also noted that the petitioner has served the organisation for over three decades without any allegations prior to the 2004 case.

The high court referred to the previous orders by the Supreme Court and Rule 9 of the Revised Pension Rules. It noted, “Rule 9 of the Revised Pension Rules entitles the Government to withhold or withdraw pension or gratuity, or both, either in full or in part, whether permanently or for a specified period, and also to order recovery from pension or gratuity of the whole or part of any pecuniary loss caused to the Government or to a local authority, if in any departmental or judicial proceedings the pensioner is found guilty of grave misconduct or negligence during the period of his service.”

However, the court clarified that Rule 9 allows withholding only if the pensioner is found guilty of grave misconduct. Since the petitioner was neither convicted in the criminal case nor found guilty in the departmental enquiry either, there is no legal justification for withholding the petitioner’s retirement benefits, ruled the court.

The high court allowed the writ petition. Calling the respondents’ action to withhold pension a violation of Articles 14 and 21 of the Constitution, it ordered the immediate release of full pension, all terminal benefits, and arrears to the petitioner within eight weeks.