High Court of Jammu and Kashmir and Ladakh: A single judge bench of Justice Rajesh Sekhri held that retirement benefits could not be withheld merely on the grounds of pending clearance from crime branch, especially when the FIR has been closed as 'not proved'. The court ruled that even when if the FIR investigations were pending, it does not amount to 'judicial proceedings', and thus,...
High Court of Jammu and Kashmir and Ladakh: A single judge bench of Justice Rajesh Sekhri held that retirement benefits could not be withheld merely on the grounds of pending clearance from crime branch, especially when the FIR has been closed as 'not proved'. The court ruled that even when if the FIR investigations were pending, it does not amount to 'judicial proceedings', and thus, cannot be used to deny retirement benefits. Thus, the court directed the employer to provide all retirement benefits, along with interest.
Background
In 2011, Prem Kumar retired from his post as a storekeeper in the Jammu and Kashmir Cooperative Supply and Marketing Federation Ltd. (JAKFED).
In 1995, he was implicated in an FIR for alleged misappropriation of food grains. However, that case was closed as 'not proved' by the Vigilance Organisation, after an approval from the Commissioner of Vigilance. A closure report was accepted by the anti-corruption court too.
Later in 2019, J&K administration decided to wind up JAKFED. A liquidator was appointed to assess assets and liabilities, and to also settle any pending dues with former JAKFED employees. However, instead of releasing Prem Kumar's retiral benefits, the liquidators published a public notice stating that about Rs. 4 lakhs were outstanding against him. In a response, Kumar attached his 'no dues' certificate and detailed his pending claims: about Rs. 8.4 Lakhs.
When there was no satisfactory response, Prem Kumar filed a writ petition to claim his retiral benefits and dispute the outstanding dues.
Arguments
Prem Kumar argued that despite his full cooperation (including getting all clearances), the authorities failed to release his retiral benefits. He argued that there as no legal justification to withhold payments, especially since the criminal case against him was also closed. Relying on Sanjeev Bhagat v. UT of J&K & Ors., WP(C) No. 2823/2023, he argued that ongoing investigations or minor procedural delays cannot be used to hinder the release of retiral benefits.
On the other hand, the union territory argued that the outstanding amount of Rs. 4 Lakhs was on account of Prem Kumar's earlier misappropriation. They argued that as per SRO 233 of 1988, which regulates the service conditions of employees in cooperative institutions, a clearance from the crime branch was necessary. They also argued that Prem Kumar also failed to comply with the general public notice that was issued in all newspapers on 23 Sept 2023.
Court's Reasoning
Firstly, the court noted that Prem Kumar's service had ended in 2011; however, the departmental order that granted increments and authorised dues was issued in 2014. Further, the court noted that the FIR from 1995 also had been officially closed and accepted by the Anti-Corruption Court. Thus, the court held that there was no pending criminal case against Prem Kumar that could lawfully prevent the release of his retirement benefits.
Secondly, referring to Ghulam Mohi-ud-Din Lone v. State of J&K, LPA No.220/2019, the court held that the mere pendency of FIR investigations does not amount to 'judicial proceedings', and thus, cannot be used to deny retirement benefits. The court ruled that judicial proceedings require active adjudication before a court that is capable of passing a judgement on the matter.
Thirdly, the court ruled that employees cannot be denied retiral benefits solely due to ongoing investigations. The court held this to be especially relevant, as the Union Territory had already taken a policy decision in July 2023 to clear all pending claims of JAKFED employees.
Lastly, the court held that clearance from crime branch is not a necessary condition for the receiving of retirement benefits. The court held that such a requirement has no basis, especially since the FIR is also closed. The court ruled that withholding these benefits any further in these circumstances would violate Articles 14, 16 and 21 of the Constitution.
Thus, the court allowed the writ petition. Consequently, the court ordered the release of all pending retirement benefits along with interest.
Case Title: Prem Kumar Vs UT Of J&K
Citation: 2025 LiveLaw (JKL) 236
Decided on: 26.05.2025
Case no.: WP(C) No. 2279/2024
Counsel for the Petitioner: Ms. Shivani Jalali
Counsel for the Respondents: Mr. P.D. Singh, Dy. AG; Ms. Sagira Jaffar, Advocate vice Mrs. Monika Kohli, Sr. AAG