PCS Rules| Criminal Proceedings Unrelated With Service Can't Be Basis Of Withholding Gratuity: P&H High Court

In a significant interpretation of the Punjab Civil Services Rules, the Punjab and Haryana High Court has held that criminal proceedings unrelated to an employee's official duties cannot be used as a ground to withhold gratuity.

The deceased employee's family was denied gratuity because appeal against acquittal in a criminal case was pending before the Supreme Court. The Court directed authorities to release gratuity and regularise the family pension of a deceased employee within three months, along with 7.5 per cent annual interest, from the date of petition filing.

Justice Jagmohan Bansal said, “it can be safely concluded that criminal proceedings must be relating to official duty. An offence which is totally unrelated to official duty is not contemplated by Rule 2.2(b).”

The plea was filed seeking release of death-cum-retirement gratuity and other pensionary benefits. The Bench was told that the petitioner, who retired in 2004, was accused under the Transplantation of Human Organs and Tissues Act after his kidney was transplanted and was convicted in the case.

He was sentenced to five years of imprisonment in 2013, however his conviction was overturned in appeal in 2018. Despite his acquittal, the government withheld his service benefits, citing its intention to approach the Supreme Court. The employee passed away while the matter was still pending.

Subsequently, the court was informed that the State of Haryana had in fact filed an appeal before the Supreme Court against all the accused, including the petitioner.

After hearing the submissions, the Court relied on “Darshan Singh Vs. State of Punjab and Ors.” 2011(3) PLR 584 wherein while adverting to the question of withholding retiral benefits has held that respondents cannot invoke provisions of Rule 2.2(b) as criminal proceedings filed against the petitioner are totally unrelated to his service.

The Court noted that, the respondent during the course of hearing as well as in the reply has not pleaded that departmental proceedings are pending against the deceased.

"The only ground of withholding gratuity is that criminal appeal is pending against the deceased before Hon'ble Supreme Court. Concededly the deceased was convicted by trial Court, however acquitted by this Court. It is trite that criminal proceedings cannot continue against a dead person," the judge added.

Noting that the employee's wife is is 73 years old, who is stated to be suffering from cancer, the Court said, " She cannot be deprived from right of gratuity on the ground that criminal appeal is pending before Hon'ble Supreme Court especially when employee was acquitted by this Court and he is no more. The petitioner was made to retire without departmental proceedings."

Referring to The Secretary, Local Self Government Department & Ors. Etc. Vs. K. Chandran Etc. 2022, the Court said, "He cannot be dismissed even if Hon'ble Supreme Court allows appeal of the State."

The Court noted that Rule 2.2(b) is applicable if employee is held guilty of grave mis-conduct or negligence during the period of his service. It means the alleged act must be conducted during the period of his service.

At the first blush, it appears that grave mis-conduct may not be connected with official duty e.g. if offence of murder or rape is committed at home and employee is held guilty, he would be covered by expression grave misconduct, it added.

Referring to Proviso 3 of Rule 2.2(b), the Court said that it provides that judicial proceedings if not initiated while in service, cannot be instituted against a retired person after 4 years from the date of cause of action or date of event. In case, an offence is committed outside the official duty, criminal proceedings are not instituted by department and there cannot be limitation period.

"If offence of murder/rape is committed, criminal law can be put into motion even after 10 years. There is no limitation period. By envisaging limitation of four years, the Legislature has made it clear that proceedings should be concerned with department," it added.

The Court illustrated that there are many offences which are relating to official duty e.g. embezzlement of funds, theft of official property, mis-use of official duty, leakage of secret information etc.

In the light of the above, the Court allowed the plea.

 Mr. Dhiraj Chawla, Advocate for the petitioner

Mr. Suneel Ranga, DAG Haryana

Title: Suresh Kumar Sharma (deceased) through LRs v. State of Haryana and Ors.

Citation: 2025 LiveLaw (PH) 308

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