Supreme Court affirms employee rights, ruling that pension and gratuity cannot be withheld for not vacating government housing. Landmark judgment ensures timely retiral benefits for all employees.
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NEW DELHI: The Supreme Court of India has delivered a landmark judgment reinforcing the rights of employees to receive their pension, gratuity, and other retirement dues irrespective of whether they vacate their government-allotted residence immediately after retirement.
The bench, comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra, dismissed an appeal filed by the Panchayat & Rural Development Department, Government of Madhya Pradesh, upholding the Madhya Pradesh High Court’s decision that had directed the department to release the withheld dues along with interest for the delay.
Case Background
The case involved Santosh Kumar Shrivastava, a government employee who joined the Madhya Pradesh state services in 1980 and retired on June 30, 2013. Following his superannuation, his pension and other retirement benefits were not sanctioned.
The dispute arose when the department, through an order dated January 23, 2014, revised a previous pay revision order from December 14, 2011, reducing Shrivastava’s salary. Shrivastava challenged this through Writ Petition No. 5201 of 2014, leading to the eventual withdrawal of the order by the department in July 2014. Despite this, the department still withheld his retirement dues, citing his delay in vacating the government residence, which he eventually vacated on August 31, 2015.
When the department finally released his gratuity and pension on February 10, 2016, it deducted ₹1,56,187 for penal house rent and ₹1,46,466 for alleged excess salary payment. Shrivastava challenged this through Writ Petition No. 16351 of 2017, seeking a refund of the deductions and interest for the delay.
High Court Decision
The Madhya Pradesh High Court ruled in Shrivastava’s favor. It held that:
- The deductions made by the department were illegal.
- The withheld amounts must be refunded with 6% interest.
- Interest must also be paid on the delayed pension and gratuity.
The Department’s appeal to the Supreme Court followed.
Arguments Presented
The department argued that Shrivastava was responsible for the delay in receiving his pension due to his continued occupation of the government residence. In its affidavit, it stated:
“The petitioner is maintaining possession unauthorizedly… hence the petitioner himself is responsible for not getting the pension.”
Supreme Court Observations
The Supreme Court, in a judgment authored by Justice Sanjay Karol, clarified:
Pension and retirement dues are rights, not bounties. The Court emphasized that these benefits accrue to employees based on their service and cannot be withheld arbitrarily.
“The grant of a residence corresponds to the position held at the time by such employee. The width of these two aspects is separate and distinct… The latter cannot obstruct or defeat the former.”
Regarding recovery of alleged excess salary, the Court cited Syed Abdul Qadir v. State of Bihar, noting that recovery is only justified in cases of misrepresentation or fraud by the employee, which was absent in this case.
There was no nexus between the failure to vacate the government residence and the non-payment of pension and gratuity. The Court criticized the department for attempting to use pensionary benefits as leverage.
Court Decision:
The Supreme Court dismissed the appeal filed by the Panchayat & Rural Development Department, affirming the High Court’s order:
- Refund the deducted amounts.
- Pay interest on the refunded amounts.
- Pay interest on the delayed pension and gratuity.
The Court described the department’s action as an attempt to hold back pensionary benefits as a sword on the employee’s head, emphasizing that retirement benefits are earned rights that cannot be obstructed by unrelated issues.
Case Title:
PANCHAYAT & RURAL DEVELOPMENT DEPARTMENT & ORS. VERSUS SANTOSH KUMAR SHRIVASTAVA
SLP(C)No. 21625/2025
Read Judgment:
