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The bench said, “Pension and other retiral dues are benefits that have been earned by an employee due to the service rendered to the institution.”
The bench rejected a contention for withholding of the retiral dues for occupying the official residence.
The Supreme Court has emphasised that the payment of retiral dues, gratuity or pension is not a matter of bounty but in fact a matter of right of every employee, should there be some rule or statute from where the right may originate.
A bench of Justices Sanjay Karol and Prashant Kumar Mishra rejected a contention for withholding of the retiral dues for occupying the official residence.
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“We cannot accept this position. Pension and other retiral dues are benefits that have been earned by an employee due to the service rendered to the institution paying the pension/other retirement benefits. The grant of a residence corresponds to the position held at the time by such employee. The width of these two aspects is separate and distinct,” the bench said.
The court upheld the Madhya Pradesh High Court’s orders which allowed a writ petition filed by Santosh Kumar Shrivastava seeking to quash a recovery of Rs 1,56,187 (penal house rent) and Rs 1,46,466 (excess payment of salary).
“Pension and retirement benefits accrue from a much wider base as the culmination of all efforts, across employment whereas the latter is only for a limited time, till such a person is holding that position. The latter cannot obstruct or defeat the former. The appellant cannot be allowed to withhold a duly accrued right on this count,” the bench said.
The court saw no error in the order of the single judge awarding interest to the respondent.
It found the delay was entirely on part of the appellant, and no reasonable explanation acceptable to law is forthcoming except for the attempt to hold back pensionary benefits as a sword on the respondent’s head for not having vacated his government allotted accommodation.
The High Court has observed that the entire amount of pension and gratuity could not have been withheld on account of there being an order for recovery. It also held that since the amounts were not paid to him forthwith on his retirement, the appellants, Panchayat and Rural Development Department could not have charged him for illegal occupation of his government residential premises.
It has held the recovery of the amount as illegal, and directed the appellants to pay 6% interest on the total amount to be refunded to the respondent as also 6% interest on the amount of pension and gratuity paid to him from the date of superannuation till payment.
The High Court’s division bench also found no error in the judgment.
The question for consideration in the appeal was whether on account of failure to vacate government residence upon superannuation was a valid justification for withholding the payment of retiral dues/pension.
As per facts of the matter, the respondent was recruited into the services of the State in the year 1980. During his service, he was posted at various positions. He superannuated from service on June 30, 2013. However, neither was his pension sanctioned nor was the payment of retiral dues made.
In view of the M.P. Revision of Pay Rules, 2009, his pay stood revised by an order of December 14, 2011. The appellant passed an amendment order on January 23, 2014 which quashed the order dated of December14, 2011 through which the pay revision was undertaken and, his salary was relegated to the lower scale. Subsequently, this order was withdrawn.
Even after the order of refixation of salary was withdrawn, the amounts were not paid. This time on account of the respondent having not vacated the official residence. He eventually vacated such residence on August 31, 2015. At this point in time, no payments had been made to him. On February 10, 2016, finally the payment of gratuity and pension amount was carried out however the two amounts were deducted therefrom.
Having heard the counsel for the parties, the bench opined the courts below were correct in holding that there was no justification for the appellants having not paid the dues rightly belonging to the respondent to him even after the passage of almost three years after the retirement.
“We may also observe that there was no occasion whatsoever for the appellant to have conducted re-fixation of pay after retirement of the Respondent and then proceed to recover the excess from the retiral dues payable to the latter,” the bench said, finding no exceptional scenario for it.
With regard to the appellants’ position that failure to vacate is the reason that retiral dues were not being granted to him, the court said, it failed to see the nexus between these two aspects.
About the Author
Sanya Talwar, Editor at Lawbeat, has been heading the organisation since its inception. After practising in courts for over four years, she discovered her affinity for legal journalism. She has worked previousl…Read More
Sanya Talwar, Editor at Lawbeat, has been heading the organisation since its inception. After practising in courts for over four years, she discovered her affinity for legal journalism. She has worked previousl… Read More
October 07, 2025, 15:25 IST
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