Delay tactics won’t work: warns against arbitrary action
Justice Sandeep Moudgil holds successive or repetitive proceedings cannot be used to indefinitely withhold retirement dues, calls such practice legally impermissible
09 April, 2026 – Chandigarh : Admonishing the State for adopting a pattern of initiating “successive or repetitive proceedings” to withhold retirement dues of its employees, the Punjab and Haryana High Court has ruled that such a course renders the right to pension “illusory” and exposes it to arbitrary administrative discretion.
Justice Sandeep Moudgil also delivered a broader caution to administrative authorities by asserting that they must exercise greater responsibility in matters concerning retirement benefits.
“The practice of delaying such dues on tenuous or shifting grounds erodes public confidence and runs contrary to the welfare character of the State,” the Bench asserted.
The ruling came in case of an employee, who joined the State government as works manager in 1986 and retired in 2019 after rendering more than three decades of service. He was during service promoted as senior mechanical engineer in 2016 and had earlier also discharged duties as joint transport commissioner.
The State’s stand in the matter was that he petitioner was not entitled to release of gratuity and commuted value of pension at the current stage as a show cause notice pertaining to financial loss to the State exchequer was pending against the petitioner at the time of superannuation. In such circumstances, only provisional pension was rightly sanctioned in accordance with the applicable rules, the Bench was told.
After hearing rival contentions in the matter, Justice Moudgil found that the initial show cause notice, forming the basis for withholding benefits at the time of superannuation, stood withdrawn on January 14, 2022.
“This effectively obliterated the substratum of the respondents’ initial justification,” the court held. It was added that the embargo on release of retirement dues ceased to operate.
Justice Moudgil observed the authorities issued a fresh show cause notice shortly thereafter instead of releasing the benefits. The court found this sequence significant, observing that it disclosed a pattern whereby “upon conclusion of one proceeding, another is initiated, thereby perpetually postponing the petitioner’s retirement benefits.”
Declaring such a course “legally impermissible”, Justice Moudgil asserted in his detailed order that the State could not be permitted to initiate successive or repetitive proceedings “so as to defeat accrued and vested rights.”
Making it clear that pension and gratuity were not acts of grace but enforceable rights, Justice Moudgil held that statutory provisions permitting provisional pension during pending proceedings could not be invoked to justify indefinite deprivation.
“The rule is not a carte blanche (blank document) for arbitrary or prolonged deprivation of retirement dues,” the court asserted, while anchoring its reasoning in constitutional guarantees under Articles 14 and 300A.
The controversy, the court noted, lay in a narrow compass but raised a doctrinally significant issue — “whether the State can indefinitely withhold gratuity and commuted value of pension merely on the pendency of departmental proceedings, particularly where such proceedings either stand concluded or are re-initiated in a staggered and belated manner.”
Answering in the negative, Justice Moudgil asserted that such powers must be exercised reasonably, proportionately and within a defined time frame.
Rejecting the State’s stand that the relevant pension rules operated as a complete bar, the court held that these provisions were enabling in nature and could not authorise indefinite withholding.
“The interpretation advanced by the respondents would run afoul of Article 14 and Article 300A, as it would deprive a person of property without due authority of law,” the court observed.
Allowing the petition, Justice Moudgil directed the authorities to release the withheld gratuity and commuted value of pension within eight weeks, along with interest at the rate of 9 per cent per annum from the date of accrual till actual disbursement.
The Tribune