UP Government Cannot Withhold Pension Without Inquiry: Supreme Court

The case of State of Uttar Pradesh and Others vs. Dhirendra Pal Singh raises critical concerns about pension rights and the obligations of the state in dealing with retired government employees. The Supreme Court delivered its judgment on November 15, 2016, modifying a High Court order regarding the withholding of pension and gratuity of a retired employee of the Irrigation Department.

Background of the Case

Dhirendra Pal Singh retired on June 30, 2009, from the position of Assistant Store Superintendent in the Irrigation Department of Uttar Pradesh. At the time of his retirement, 70% of his pension and gratuity were cleared, but the remaining 30% was withheld due to alleged discrepancies in departmental stock. Without conducting any departmental inquiry, the State authorities decided to recover Rs. 7,26,589 from his retiral dues. Aggrieved by this, Singh filed a writ petition before the High Court of Allahabad.

High Court Ruling

The Allahabad High Court found that the State had failed to conduct any departmental inquiry as required under Article 351-A of the UP Civil Service Regulations before withholding the pension and gratuity. The single-judge bench ruled that withholding the pension was legally unsustainable and ordered its release with 10% interest per annum. The State’s intra-court appeal against this order was dismissed.

Key Arguments Before the Supreme Court

Petitioner (State of Uttar Pradesh) Arguments:

• The respondent’s retiral dues were withheld due to financial discrepancies discovered in his department.
• The decision to recover the amount was justified as per government regulations.
• The High Court erred in awarding 10% interest on the withheld amount.

Respondent (Dhirendra Pal Singh) Arguments:

• No departmental inquiry was initiated against him before the withholding of gratuity and pension.
• The alleged discrepancies were found in stock records five months after his retirement, making it legally untenable to hold him accountable.
• Withholding pension and gratuity without inquiry violated fundamental rights.

Supreme Court’s Observations

The Supreme Court upheld the High Court’s view that the State had not followed due process. The Court observed:

“Admittedly, no departmental enquiry was initiated in the present case against the respondent for the misconduct, if any, nor any proceedings drawn as provided in Article 351-A of UP Civil Service Regulations.”

The Court further relied on previous judgments, including State of Kerala vs. M. Padmanabhan Nair, emphasizing that pension and gratuity are valuable rights and not a government bounty. The Court stated:

“Pension and gratuity are no longer any bounty to be distributed by the Government to its employees on the retirement but are valuable rights in their hands, and any culpable delay in disbursement thereof must be visited with the penalty of payment of interest.”

Final Judgment

The Supreme Court modified the High Court’s order by reducing the interest rate:

• Interest on withheld pension was set at 6% per annum.
• Interest on withheld gratuity was set at 8% per annum.

The appeal was disposed of with no order as to costs.

Conclusion

This judgment reinforces the principle that pension and gratuity cannot be withheld arbitrarily. The ruling highlights the necessity of following due process before penalizing a retired employee and protects pensioners from unjust actions by the government.

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Download Judgment: State of Uttar Prade vs Dhirendra Pal Singh Supreme Court of India Judgment Dated 15-11-2016.pdf