In the case of UOI Vs. J.P.Sharma WP(C) 6465/2003 Honble Delhi High Court viewed that the gratuity of retired Govt. servant could not withheld for any length of time to await the instituton of departmental or judicial proceedings even after his retirement. The Relevant extract of said judgment of Honble High Court read as under.
22. This leads us to the question, as to what is the inter play of the rights of the Government and the retired Government servant with regard to the fixation of provisional pension and the withholding of the gratuity of the retired Government servant by the Government. Is it, that in every case where neither departmental proceedings nor judicial proceedings are instituted, as contemplated by Rule 9(6) as on the date of retirement of the Government servant, he immediately becomes entitled to receive full pension and gratuity? In such a situation, if departmental or judicial proceedings are instituted after the lapse of sometime from the date of the retirement of Government servant, but within the time permissible under Rule 9(2)(b)(ii) or otherwise within the period of limitation, would the Government not be entitled to fix the provisional pension and, in case by then the gratuity has not been paid to the retired Government servant would the Government not be entitled to withhold the gratuity in terms of Rule 9 (4) and Rule 69(1)(c) of the Pension Rules?
23. We may note that unlike for the initiation of
departmental proceedings, for the initiation of judicial
proceedings, there is no time limit prescribed under the Pension Rules within which the same can be initiated after the retirement of the government servant. However, judicial proceedings, be they civil or criminal, would be subject to the laws of limitation. A perusal of Rule 9(4) would show that the said Rule is applicable, inter alia, to every case where a departmental or judicial proceedings is instituted against the retired government servant. The said sub-rule(4) does not say that the departmental or judicial proceedings have necessarily to be in existence on the date of superannuation of the government servant. This means that even when the departmental or judicial proceedings are validly instituted subsequent to the date of superannuation, a provisional pension as provided in Rule 69 would be sanctioned in favour of the government servant.
24. The pension of a government servant, who is due to retirement, is required to be fixed well in advance, so that there is no delay in payment of pension to him immediately upon his retirement. Reference may be made to the provisions contained in Chapter VIII and in Rules 83 & 85 of the Pension Rules. Consequently, it follows that in respect of a government servant to whom Rule 9(4) of the Pension Rule does not apply, the Government is obliged to fix and pay the full pension and continue to pay the same, until a situation arises (with the institution of valid proceedings) as contemplated in Rule 9(4). Once a situation covered by Rule 9(4) arises, the government would become entitled to henceforth fix the provisional pension and continue to pay the same until the conclusion of the proceedings, and subject to the final outcome of the proceedings. While the right to receive monthly pension accrues immediately upon retirement, and the same is to be paid vide Rule 85(2) monthly on or after the last working day of the month to which the pension relates...................., so far as gratuity is concerned, there is no specific Rule with regard to disbursement thereof. Rule 85(1) states Except as otherwise provided in these Rules, a gratuity shall be paid in lump sum. While in respect of pension a statutory right exists, to receive pension immediately upon retirement month by month. There is no time bound prescription with regard to release of gratuity to the retired government servant. This also appears to be the scheme as evident from Rule 9(1) of the Pension Rules. The question of withholding pension or gratuity or both either in full or in part by the President can arise only in a situation where the same has in fact not been paid to the retired government servant. From the aforesaid analysis of the Pension Rules, we draw the following conclusions:-
(i) In a case where neither departmental proceedings nor judicial proceedings are instituted as contemplated by Rule 9(6) of the Pension Rules as on the date of retirement of the Government servant, he immediately becomes entitled to receive the full pension.
(ii) If departmental or judicial proceedings are instituted validly after the retirement of the Government servant, but within the time permissible under Rule 9(2)(b)(ii) or otherwise within the period of limitation, the government would become entitled to fix provisional pension to be paid henceforth till the conclusion of the proceedings and would abide by the final decision arrived at in the proceedings in relation to the payment of the pension.
(iii) While a Government servant does become entitled to receive gratuity upon retirement (when proceedings as contemplated by Rule 9(6) are not in existence on the ate of his retirement),there is no rule that the same is payable immediately upon retirement. If proceedings are validly instituted after the date of retirement of the Government servant, but prior to the disbursement of the gratuity to him, the Government servant cannot claim release of gratuity till so long as the proceedings are not concluded, and the final decision with regard to disbursement of gratuity would abide by the outcome of the proceedings.
25. Does it mean that the gratuity of a retired government servant can be withheld for any length of time to await the institution of the departmental or judicial proceedings even after his retirement? In our view the answer to this question has to be in the negative. In case departmental proceedings are not instituted within the time granted by Rule 9(2)(b) against a retired government servant i.e. within four years of the commission of the misconduct, the same cannot be instituted at all. Similarly, judicial proceedings, would have to be initiated within the period of limitation. If no judicial proceedings are initiated against the retired Government servant within the period of limitation, it would be impermissible for the Government to institute them later, or even to withhold the full pension or gratuity of the retired government servant. The power to withhold the grant of gratuity in contemplation of disciplinary or judicial proceedings cannot be permitted to be misused or abused by the Government. The same cannot become an instrument of harassment of the retired government servant in the hands of the Government. At the same time, the Government cannot lightly be divested of its right to withhold the gratuity in respect of a retired government servant in a deserving case. Therefore, in every case where the Government withholds gratuity in respect of a retiring/retired Government servant, the Government shall be obliged to pass an order disclosing the grounds with reference to the particular cases in respect of which Rule 9(4) and Rule 69 of the Pension Rules are sought to be invoked against the Government servant.
