Pension, gratuity or earned leaves are hard-earned properties of employees, can't be taken away: HC

In a key ruling, the Chhattisgarh High Court has held that the state government cannot deduct any part of a retired employee’s pension, gratuity or leave encashment unless there is a statutory provision allowing it. The court said this cannot be done even under administrative instructions. The order came in a case involving the late Rajkumar Gonekar, a retired government officer, whose family was facing recovery of over Rs 9.2 lakh from his pension, a TOI report stated.

Employee benefits are property under the Constitution

A single-judge bench of Justice Bibhu Datta Guru stated that benefits like pension and gratuity are not given as a favour but are earned by employees for their long and honest service. “It is an accepted position that gratuity and pension are not bounties. An employee earns these benefits by dint of his long, continuous, faithful and unblemished service. It is thus a hard-earned benefit which accrues to an employee and is in the nature of ‘property’,” the court said.

The judge also said that under Article 300-A of the Constitution, such property cannot be taken away without following legal procedures.

Court says state cannot act without statutory provision

The court observed that the Chhattisgarh government tried to recover money without any statutory backing. “It follows that the attempt of the appellant state govt to take away a part of pension or gratuity or even leave encashment without any statutory provision and under the umbrage of administrative instruction cannot be countenanced,” the order said.

As a result, the high court quashed the recovery order against Gonekar and directed that the deducted amount be returned to his family within 45 days.

Case background and service history

Gonekar was appointed as an assistant director on March 29, 1990, and promoted to deputy director in 2000. Due to changes in the gradation list, he was later demoted, but a court order restored him to the post of deputy director. He retired on January 31, 2018.

During his service, Gonekar was accused of misappropriation. He denied the allegations both before and after retirement. He responded to a showcause notice in January 2019, rejecting the charges again. Despite this, the government ordered recovery of Rs 9.23 lakh from his pension.

State said due process was followed

The state government argued that Gonekar’s response was considered and recovery was ordered only after taking proper permission. However, the court noted that there was no finding of guilt in any judicial or departmental inquiry.

Court cites pension rules and earlier judgments

The court referred to Rule 9 of the Chhattisgarh Civil Services (Pension) Rules, 1976, which says pension can be withheld if a retired employee is found guilty of grave misconduct or negligence in a proper proceeding. It also pointed to earlier Supreme Court rulings that emphasised the need to give the accused a fair hearing before such action.

Since Gonekar was not found guilty in any such proceeding, the court concluded that the order of recovery was invalid and directed a refund of the deducted amount to his legal heirs.