The Allahabad High Court expressed shock over illegal deductions from retiral dues of a U.P. State Employees Welfare Corporation employee, ordering full payment with arrears within a month and warning contempt action against the Executive Director for non-compliance.
PRAYAGRAJ: The Allahabad High Court recently expressed its “shock” upon discovering that deductions were made from the retiral dues of an employee of the U.P. State Employees Welfare Corporation under the categories of “Prostsahan Agrim,” “Tyohar Agrim,” and GST, noting that there is no provision allowing such deductions.
The court ordered that the full retiral dues be disbursed within one month without any deductions, alongside arrears of salary. If the order is not complied with, the Executive Director of the corporation will be required to appear for the framing of charges in a contempt case.
The bench, led by Justice Rohit Ranjan Agarwal, was reviewing a contempt application filed by Satish Kumar Verma against Shri Kamta Prasad, the Executive Director of the corporation.
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The application alleged non-compliance with previous court orders regarding the payment of retiral benefits and salary arrears. Referring to a compliance affidavit dated July 6, 2025, the court noted that the total retiral dues due to the applicant were stated to be Rs 15,71,604. However, deductions totaling Rs 4,55,100.38 had been made, including Rs 2,90,185 for “Prostsahan Agrim,” Rs 28,900 for “Tyohar Agrim,” Rs 56,253.38 for GST recovery, and Rs 79,762 for audit recovery. After these deductions, Rs 11,16,504 was ultimately paid to the applicant.
The court observed that there was no legal basis for deducting “Prostsahan Agrim,” “Tyohar Agrim,” or GST from the retiral dues of an employee. Additionally, it noted that funds received from the state government through a soft loan for the payment of retiral dues had not been properly disbursed to employees.
On January 21, 2026, the court had acknowledged the dismissal of a special appeal filed by the corporation on November 7, 2025. At that time, the corporation’s counsel had claimed that while part of the retiral dues had been paid, salary arrears could not be cleared due to financial constraints.
The court then instructed the Executive Director to submit a personal affidavit detailing the outstanding amounts owed for salary and retiral dues, as well as the timeline for payment, warning that failure to comply would necessitate his personal appearance.
When the matter was reviewed, a personal affidavit was submitted. However, the court found that this affidavit did not accurately reflect the outstanding salary arrears payable to the applicant and failed to clearly specify the total amount paid, aside from referencing the prior compliance affidavit.
The court held that the Executive Director was “buying time” and misleading the court by not ensuring employees received their rightful retiral dues and salary. It granted a final opportunity, ordering that the complete retiral dues be settled within one month without any deductions, along with payment of the salary arrears.
Should there be non-compliance, the Executive Director is to appear in court on March 19, 2026, for the framing of charges.
Additionally, the court instructed the Principal Secretary of Food and Civil Supplies for the U.P. Government to investigate why the corporation’s employees had not been paid their retiral dues and salary as mandated by the writ court, and to submit a personal affidavit detailing actions taken against the negligent officers.
Case Title: Satish Kumar Verma vs. Shri Kamta Prasad, Executive Director, U.P. State Employees Welfare Corporation.
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