Govt Can’t Withhold Retiral Dues for Not Vacating Official Residence: Supreme Court

The question for consideration in the appeal was whether the failure to vacate the government residence upon superannuation provided a valid justification for withholding the payment of retiral dues/pension. The original case arose after the respondent, Santosh Kumar Shrivastava, filed a writ petition seeking to quash a recovery of Rs 1,56,187, which was levied as penal house rent, and Rs 1,46,466, claimed as an excess payment of salary.

The respondent was recruited into State services in the year 1980 and superannuated from service on June 30, 2013. Following his retirement, neither his pension was sanctioned nor were the retiral dues paid.

Initially, his pay was revised under the M.P. Revision of Pay Rules, 2009, by an order dated December 14, 2011. Subsequently, the appellant passed an amendment order on January 23, 2014, which quashed the December 14, 2011, pay revision order and relegated his salary to a lower scale. Although this order of refixation of salary was later withdrawn, the payments were still not released, this time on account of the respondent not having vacated the official residence. He eventually vacated the residence on August 31, 2015. At this juncture, no payments had been made. Finally, on February 10, 2016, the payment of gratuity and pension amount was carried out, but the two recovery amounts, Rs 1,56,187 and Rs 1,46,466, were deducted.

Having heard the counsel for the parties, the Supreme Court opined that the courts below were correct in holding that there was no justification for the appellants having not paid the dues rightly belonging to the respondent even after the passage of almost three years after his retirement.

"We may also observe that there was no occasion whatsoever for the appellant to have conducted re-fixation of pay after retirement of the Respondent and then proceed to recover the excess from the retiral dues payable to the latter," the bench said, noting that no exceptional scenario for such an action was found.

Court stated that it "failed to see the nexus" between the appellants' position that failure to vacate was the reason that retiral dues were not being granted, and the actual right to such dues.

The Supreme Court found no error in the high court’s order of the single judge bench awarding interest to the respondent. It noted that the delay was "entirely on part of the appellant, and no reasonable explanation acceptable to law is forthcoming except for the attempt to hold back pensionary benefits as a sword on the respondent’s head for not having vacated his government allotted accommodation".

The high court had observed that the entire amount of pension and gratuity could not have been withheld on account of a recovery order. It had also held that since the amounts were not paid to him forthwith on his retirement, the appellants could not have charged him for illegal occupation of his government residential premises. The high court had declared the recovery of the amount as illegal, and directed the appellants to pay 6% interest on the total amount to be refunded to the respondent, as well as 6% interest on the amount of pension and gratuity paid to him from the date of superannuation till payment. The high court's division bench also found no error in the judgment of the single judge bench.