Pension, Gratuity Not Bounties, Can't Be Taken Away By State: High Court

The state government cannot deduct any portion of an employee's pension, gratuity, or leave encashment without a clear statutory provision - even if done under administrative instructions - the Chhattisgarh High Court has ruled.

The court was hearing a case involving Rajkumar Gonekar, a retired government officer from Chhindwara, Madhya Pradesh, who is now dead. 

In a recent order, Justice Bibhu Datta Guru said, "It is an accepted position that gratuity and pension are not bounties. An employee earns these benefits by dint of his long, continuous, faithful and unblemished service. It is thus a hard-earned benefit which accrues to an employee and is in the nature of 'property'."

He added the right to property was protected under Article 300-A of the Constitution, and cannot be taken away without due process.

Mr Gonekar retired as deputy director in January 2018. After his retirement, the government issued a show-cause notice over alleged misappropriation and later ordered a recovery of Rs 9.23 lakh from his pension.

A show cause notice is a formal document issued by an authority (like the government or an employer) asking a person to explain or justify their actions - usually when they are suspected of wrongdoing or misconduct.

Mr Gonekar denied all allegations, both while in service and in his reply to the show cause notice issued on December 13, 2018. The state, however, moved ahead with the recovery.

The High Court noted that the recovery was ordered without any formal departmental or judicial finding of guilt - violating Rule 9 of the Chhattisgarh Civil Services (Pension) Rules, 1976. The rule allows recovery from pension only if the employee is found guilty of grave misconduct or negligence in legally conducted proceedings.

Quoting previous Supreme Court judgments, the court stressed the importance of giving a reasonable opportunity to be heard before imposing any financial penalty on pensioners.

Calling the recovery "unsustainable," the court set aside the government's order and directed the refund of the deducted amount to Mr Gonekar's family within 45 days.

Mr Gonekar died on June 20, 2024. His legal heirs were later added to the case.