The Chhattisgarh High Court has ruled that the state government cannot withhold gratuity from Class III employees without initiating a departmental inquiry before their retirement, even in cases of alleged financial misappropriation.
The ruling came in a case involving B.P. Tiwari, a former revenue sub-inspector, whose gratuity of Rs 4.68 lakh was partially withheld by authorities over allegations of fund misappropriation during his tenure as Incharge chief municipal officer at Nagar Panchayat Chhuriya.
The division bench, comprising Justices Ramesh Sinha and Ravindra Kumar Agrawal, upheld a single judge’s order directing the state to release the full gratuity amount with 8 per cent simple interest. The court cited the precedent set in State of Punjab v. Rafiq Masih case, which prohibits recovery from retired Class III employees unless proceedings begin before superannuation.
Despite audit objections from 2008-09 suggesting Tiwari’s involvement in a Rs 10.14 lakh misappropriation case, the state failed to initiate any departmental inquiry or issue a show-cause notice before his retirement on March 31, 2019.
The state’s argument that withholding was justified due to pending departmental inquiry and potential losses to the public exchequer was rejected. The court emphasised that under Pension Rules, 1976, judicial or departmental proceedings must be instituted before retirement to justify gratuity withholding.
This verdict sets a significant precedent for protecting retirement benefits of Class III employees in similar situations across the state.
