The Supreme Court has held that gratuity of a retired employee can be lawfully withheld as long as either departmental or judicial proceedings remain pending.
The bench of Justice Prashant Kumar Mishra and Justice Vipul M. Pancholi held that Rule 69(1)(c) imposes a statutory bar on the payment of gratuity during the pendency of either departmental or judicial proceedings.
The appellant, Bikram Chand Rana, served with the Himachal Pradesh Road Transport Corporation (HRTC) from 1979 and retired as a Senior Assistant on February 28, 2009. During his service, he was accused of involvement in the 2006 Combined Pre-Medical Test (CPMT) paper leak scandal. An FIR was registered under multiple provisions of the Indian Penal Code, and he was briefly arrested before being released on bail.
Parallel to the criminal case, departmental proceedings were initiated against him in 2007 under the Central Civil Services (Classification, Control and Appeal) Rules, 1965. However, the inquiry officer concluded in 2009 that there was no substantive evidence linking him to the alleged misconduct.
Despite this exoneration in departmental proceedings, his gratuity and certain retiral benefits were withheld due to the pendency of the criminal trial. Aggrieved, Rana approached the Himachal Pradesh High Court, which dismissed his plea. The matter eventually reached the Supreme Court.
The central question before the Court was the interpretation of Rule 69(1)(c) of the Central Civil Services (Pension) Rules, 1972. The appellant argued that gratuity should be released once either departmental or judicial proceedings conclude.
However, the Court rejected this interpretation.
The Court emphasized that the word “or” in the rule must be interpreted in its ordinary disjunctive sense. Gratuity cannot be released until both proceedings are concluded. Accepting the appellant’s interpretation would defeat the purpose of the rule, which is to safeguard government financial interests.
Case Details
Case Title: Bikram Chand Rana Versus Himachal Pradesh Road Transport Corporation
Citation: JURISHOUR-651-HC-2026(Ker)
Case No.: CIVIL APPEAL NO. 14669 OF 2025
Date: 07/04/2026
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