Court rules Rule 69(1)(c) of Central Civil Services (Pension) Rules, 1972 bars gratuity release until conclusion of judicial proceedings, overturning CAT order.
In a significant ruling delivered on August 31, 2026, the Delhi High Court (Division Bench comprising Justices C. Hari Shankar and Vinod Kumar) set aside the Central Administrative Tribunal’s (CAT) judgment that had allowed release of gratuity to a retired government servant facing criminal proceedings. The case, Union of India and Others vs. Sh. Jamuna Dass, centered on the interpretation and application of Rule 69(1)(c) of the Central Civil Services (Pension) Rules, 1972.
The respondent, Jamuna Dass, was employed as a Tax Assistant with the Office of the Commissioner of Income Tax. Criminal proceedings had been initiated against him while in service, culminating in a conviction and sentence by the Special Judge (CBI) on January 23, 2012. Notably, Dass had retired on December 31, 2011, prior to the conviction. He challenged the conviction through Criminal Appeal No. 344/2012, which remains pending before the Delhi High Court. The appeal had temporarily suspended the sentence but did not quash the conviction.
Dass contended that the government’s withholding of his gratuity and leave encashment was illegal. While the leave encashment was eventually released, the gratuity remained withheld by the government. The CAT had ruled in favor of Dass, holding that since no disciplinary proceedings were instituted against him, and over four years had elapsed since his retirement (barring initiation of disciplinary action as per Rule 9(2)(b)), gratuity could not be withheld.
However, the Delhi High Court found the CAT’s reasoning flawed. The Court emphasized that Rule 69(1)(c) explicitly prohibits release of gratuity not only during pending departmental proceedings but also during pending judicial proceedings, including criminal appeals. The Court observed that although the trial court proceedings had ended, the ongoing criminal appeal meant judicial proceedings were still active. The Court relied on the Supreme Court’s recent ruling in Bikram Chand Rana v. Himachal Pradesh Road Transport Corporation (2026), which clarified that the phrase “judicial proceedings” in Rule 69(1)(c) includes any pending judicial process and that the embargo on gratuity release continues until all such proceedings conclude.
The Court noted that releasing gratuity before the final outcome of judicial proceedings would defeat the protective intent of the rule, which safeguards the State’s financial interests. It rejected the argument that the conclusion of trial court proceedings alone was sufficient to lift the embargo. Since the criminal appeal remains pending, the Court upheld the government’s decision to withhold gratuity.
The Court quashed the CAT’s order and allowed the writ petition filed by the Union of India. It clarified that once the criminal appeal is finally disposed of, Dass’s claim for gratuity would revive, subject to the outcome.
This judgment reinforces the strict statutory embargo on gratuity payments under Rule 69(1)(c) of the Central Civil Services (Pension) Rules, 1972, ensuring that gratuity is not prematurely released when judicial proceedings remain unresolved, even if disciplinary proceedings are absent.
Bottom Line:
Gratuity cannot be released to a retired government servant under Rule 69(1)(c) of the Central Civil Services (Pension) Rules, 1972, until judicial proceedings initiated against the employee have concluded.
Statutory provision(s):
Central Civil Services (Pension) Rules, 1972 - Rule 69(1)(c), Rule 9(2)(b); Central Civil Services (Classification, Control and Appeal) Rules, 1965 - Rule 16, Rule 11
Union of India v. Sh. Jamuna Dass, (Delhi)(DB) : Law Finder Doc Id # 2975766
