GAHC010001602025 2026:GAU-AS:10011 IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH) WRIT PETITION (CIVIL) NO. 61 OF 2025 1. Shri Kamaljit Singh, Son of late Chandra Kumar Singh Retired Deputy General Manager North Eastern Electric Power Corporation Ltd (A Government of India Enterprise), Presently residing at Flat No. B-01/001, Games Village, Borsojai, Post Office- Basistha, Pin- 781029 2. Shri Munin Hazarika, Son of Late Kshitish Chandra Hazarika Retired Manager North Eastern Electric Power Corporation Ltd (A Government of India Enterprise), Presently residing at Jyotiban Road, Hazarpar, Tezpur, Assam Post Office- Tezpur, Pin- 784001. 3. Shri Kamalendu Deb Son of Late Karunamay Deb North Eastern Electric Power Corporation Ltd. (A Government of India Enterprise), Presently residing at House No. 284, Ambicapatty, Post Office- G.C. College, Silchar, Dist- Cachar, Assam, Pin-788004. …….Petitioners -Versus- 1. The Union of India represented by the Secretary to the Government of India, Ministry of Power, Shram Shakti Bhawan, New Delhi, Pin- 110001 2. The North Eastern Electric Power Corporation Limited (A Government of India Enterprise) represented by the Chairman and Managing Director, Camp- NEEPCO Bhawan, R.G. Baruah Road, Guwahati- 781005. 3. The Director (Personnel), North Eastern Electric Power Corporation Ltd. (A Government of India Enterprise), Camp- NEEPCO Bhawan, R.G. Baruah Road, Guwahati, Pin- 781005 ……. Respondents – B E F O R E – HON’BLE MR. JUSTICE KAUSHIK GOSWAMI For the Petitioner(s) : Mr. A. Ahmed, Advocate. For the Respondent(s) : Mr. A. Atreya, learned counsel for the respondent Nos. 2 and 3. Date on which judgment is reserved : N/A Date of pronouncement of judgment : 20.07.2026 Whether the pronouncement is of the operative part of the judgment ? : No. Whether the full judgment has been pronounced : Yes. JUDGMENT & ORDER (ORAL) Heard Mr. A. Ahmed, learned counsel appearing for the petitioners. Also heard Mr. A. Atreya, learned counsel appearing for the respondent Nos. 2 and 3. None appears for the respondent No. 1 (Union of India). 2. By way of this writ petition under Article 226 of the Constitution of India, the petitioners seek a direction upon the respondent authorities for release of their retiral benefits, namely gratuity and leave encashment. 3. The brief facts leading to the filing of the present writ petition are that all the petitioners were employees of the North Eastern Electric Power Corporation Limited (hereinafter referred to as “NEEPCO”). The petitioner No. 1, petitioner No. 2 and petitioner No. 3 superannuated from service on 31.12.2016, 31.03.2017 and 31.12.2023 respectively upon attaining the age of superannuation. Despite their retirement, their gratuity and leave encashment have not been released, compelling them to invoke the writ jurisdiction of this Court. 4. Mr. A. Ahmed, learned counsel appearing for the petitioners, submits that the respondent authorities have withheld the retiral dues solely on the ground that a criminal case instituted by the Central Bureau of Investigation is pending against the petitioners, in which charge-sheet was submitted on 15.05.2008. According to the learned counsel, there exists no statutory provision empowering the respondents to withhold gratuity and leave encashment merely because of pendency of a criminal proceeding, particularly when no departmental proceeding was ever initiated against the petitioners during their service tenure. It is further submitted that petitioner Nos. 1 and 2 have already remained deprived of their retiral dues for almost a decade. Owing to acute financial hardship, the son of petitioner No. 2 also expired during the interregnum. It is therefore contended that continued withholding of the retiral benefits on the basis of a pending criminal case is wholly arbitrary and violative of the constitutional rights of the petitioners. 5. Per contra, Mr. A. Atreya, learned counsel appearing for respondent Nos. 2 and 3, submits that under the Circular dated 26.03.2013 issued by NEEPCO, vigilance clearance is mandatory before release of final dues, including retiral benefits payable upon superannuation, resignation, voluntary retirement, compulsory retirement or premature retirement. Since the Chief Vigilance Officer has declined vigilance clearance in view of the pendency of the CBI case against the petitioners, the respondent authorities contend that they are not in a position to release the gratuity and leave encashment. Page 5 of 25 6. I have heard the learned counsel appearing for the parties and have carefully perused the materials available on record. 7. It is not in dispute that the petitioners have already superannuated from service. It is equally undisputed that their gratuity and leave encashment continue to remain unpaid solely because of the pendency of the criminal case arising out of FIR dated 14.12.2005 registered by the CBI, Anti-Corruption Branch, Silchar. Pursuant thereto, charge- sheet was laid before the learned Special Judge, Dimapur, Nagaland on 15.05.2008 and the case has been registered as R.C. No. 7(A)/2005. Admittedly, the said criminal proceeding is still pending before the Trial Court. 8. Learned counsel for the petitioners submits that although the criminal case has remained pending for nearly two decades, out of ninety-eight prosecution witnesses only about thirty-seven witnesses have been examined till date, thereby indicating that the trial is nowhere near its conclusion. 9. The sole justification advanced by the respondents for withholding the retiral dues is the absence of vigilance clearance. In support thereof, reliance has been placed upon the Circular dated 26.03.2013 issued by the Chief Vigilance Officer, NEEPCO. 10. The Circular dated 26.03.2013 reads as under: “NORTH EASTERN ELECTRIC POWER CORPORATION LTD. Page 6 of 25 (A GOVT. OF INDIA ENTERPRISE) OFFICE OF THE CHIEF VIGILANCE OFFICER BROOK LAND COMPOUND: LOWER NEW COLONY: SHILLONG-793 003 CIRCULAR No.-57 Dt-26/03/2013 Sub: Vigilance Clearance. There is hardly any need to emphasize the importance of ensuring the integrity of public servants for a clean administration. CVC bas Issued Instructions from time to time to improve the vigilance administration in the organizations and to ensure that the posts in the organizations are occupied by persons with exemplary service and clean vigilance track records. Accordingly a system had been evolved for according vigilance clearance for certain management decisions to encourage and promote the culture of honesty in the public sector enterprises. Against the said backdrop and keeping in mind the importance of this mandatory function to be performed by the vigilance organization and various instructions on the subject, the following guidelines as complementary and supplementary to extant rules and regulations are hereby issued to streamline the process of granting vigilance clearance in this Corporation. ation. 1. Requirement of Vigilance clearance: Vigilance clearance is required to be obtained for the following purposes:- (a) Posting of officials in the Vigilance Department, (b)Posting on Foreign deputations/Projects/assignments. (c) Foreign trainings/seminars/visits. (d) Issue of NOCs for private visits abroad/passport. (e) Posting in positions carrying special pay/allowance. (f)Promotions/looking after arrangements/Re- musterations. (g) Appointment on absorption in NEEPCO. Page 7 of 25 (h) Confirmation after probation. (i)Forwarding of applications for deputations/appointments to other organizations. (j) Repatriation of deputationists to their parent cadre. (k)Conferment/grant of award for outstanding contribution to NEEPCO business etc. (l) Releasing of final dues/withheld payments of the employees including retired employees. (m)Superannuation/resignation/voluntary retirement/compulsory retirement/premature retirement through review. (n)Extension/Re-employment/Commercial employment after retirement. (0) Giving Additional/concurrent Charge. (p) Engagement of retired persons. (q) Empanelment/appointment of serving/retired NEEPCO officers as Arbitrators/Inquiry Officers 2. Sallent points to be considered while giving vigilance clearance by the Vigilance Deptt., Corporate Office, Shillong:- (a) Contemplation/pendancy of vigilance cases on the date of vigilance clearance requirement. (b) Consideration from the vigilance point of view against posting to sensitive posts. (c) Inclusion in the Agreed list/ODI list. (d) Cases pending in CDA rules/Certified Standing Orders proceedings. (e) Any other case where enquiry has resulted in major/minor penalty. (f) Promotions: While considering cases of promotions, extant rules and Instructions issued from time to time may be followed by the Competent Authority. It is however, clarified that promotions should not be withheld merely because a case has been registered by CBI against the employee or the complaints against him/her are being looked by the Corporation's Agencies. As per the rulings of the Hon'ble Supreme Court, an employee who is otherwise eligible and who is not undergoing any penalty under the rules governing disciplinary proceedings, should not be denied consideration for promotion by the Departmental Promotional Committee. Promotions can be withheld only in the following circumstances: (i) Where Public servant is under suspension; (ii) Where Public servant in respect of whom a charge sheet has been issued and disciplinary proceedings are pending. (iii) Public servant in respect of whom prosecution for a criminal charge is pending (iv) Public servants who are undergoing a penalty imposed by the disciplinary authority or sentence ordered by a court of law. It, therefore, follows that vigilance clearance for promotion cases shall be withheld by the vigilance Deptt. under the above situations only duly informing the competent authority about the circumstances that are applicable to the employee concerned. However, the following facts should be placed for the information of the Corporate HR Department considering the suitability of the employee for promotion: 1. From the preliminary/regular enquiry/Investigation by Vigilance Deptt., prima facie, the culpability of the concerned officer has been established. 2. Whether the name of the employee is in Agreed List or in the List of Doubtful Integrity. Further, It must be ensured that there is no delay in issuing the charge-sheet after a decision has been taken to initiate penalty proceedings. It may be brought to the notice of all concerned that any delay in Issuing the charge-sheet resulting in promotion of the erring public servant shall be construed as a deliberate attempt to derive undue and unintended advantage of the rulings. Such abnormal delays in implementation of the vigilance advices after a decision has been taken to initiate penalty proceedings would, therefore, reinforce a conclusion as to the presence of vigilance angle. Page 9 of 25 The procedure being followed for promotion should also be followed for confirmation duly keeping in view the instructions issued from time to time in this respect. (g) No objection certificate for issue of passport: Before issue of NOC to an employee for obtaining passport, the following points are to be verified and in case the employee does not attract any of these conditions, NOC may be issued: 1. Whether any disciplinary proceedings are pending or contemplated against him. 2. Whether any vigilance case is pending or contemplated against the employee. 3. Whether there are grounds to believe that the applicant could figure adversely on the security records of the Government. Normally, all vigilance investigations which are likely to result in sanction for prosecution, dismissal/removal would normally debar issue of 'No Objection Certificate'. If a major penalty action is in progress or if the Competent Authority considers that there is a prima-facie case established for major penalty, "NOC" should generally be withheld except in special deserving cases. In other cases, "NOC" should be freely given. Vigilance clearance accordingly is to be decided. (h) For the purpose of forwarding application for outside post, foreign visits, proceeding on lien/deputation and foreign visit. Vigilance Clearance for the purpose of 'Forwarding Application for Outside Post', 'Proceeding on Lien/Deputation' and 'Foreign Visits' will be withheld, if: 1. The Officer is under suspension in vigilance cases 2. Charge sheet has been issued against the officer and the disciplinary proceedings are pending due to investigation by Vigilance Department. Decision has been taken to issue charge-sheet against the officer in a vigilance case. Page 10 of 25 3. Prosecution for a criminal charge is pending against the officer (by CBI or any other investigating agencies). 4. A vigilance complaint has been registered and from preliminary investigation, the culpability of the concerned official has been established. However, inere registration of the case against the official should not ordinary bar him from getting vigilance clearance unless preliminary report indicates his culpability. 5, The name of the officer is in the List of officers of Doubtful Integrity. (i) For Deputationists: In case of deputationists, vigilance status will be obtained from parent/lending departments, updated with the current vigilance information which may be available in the NEEPCO vigilance on the date of requirement and furnished to the official seeking the vigilance clearance by the NEEPCO Vigilance Department. Cases of all the deputationists are required to be forwarded to the CVO. 3. Other points of action: (i) All regulations of the NEEPCO's Conduct Discipline & Appeal Rules/Certified Standing Orders as the case may be or otherwise regarding imposition of penalty, sealed cover procedure, appeal & review of the disciplinary proceedings should be observed. (ii) All vigilance clearances should be routed through Corporate HR Department only. In order to give adequate processing time, proposals need to be sent sufficiently in advance of the requirement date to the Vigilance Deptt. (iii) There may be some situations where the controlling officers of the employees in respect of whom the vigilance clearance is being sought might have directly received some complaints having vigilance angle in the field areas and may, therefore, be under the process of being referred to the Corporate Vigilance Deptt. In order to ensure that such contingency is also taken care of while furnishing vigilance status of employees by the Vigilance Deptt. and in such situation, an endorsement need to be made by the concerned controlling officer of the employee to the Corporate Vigilance Deptt. Page 11 of 25 (iv) Vigilance clearance for any of the purposes listed above at 1(a) to (q) is required to be obtained prior to putting up the case for approval so that due consideration may be given to the vigilance status of the Individual by the competent administrative authority before issue of orders. 4. Validity of Vigilance Clearance: The validity of vigilance clearance furalshed by the Vigilance Department for any purpose in respect of all employees shall remain valld for 2 (two) months. The Hit Department need not seek fresh vięllance clearance with respect to same employee for the same purpose before expiry of 2 (two) months, During this period, If anything adverse comes to the notice of the Vigilance Department having bearing on the guidelines stipulated, the same shall be communicated to the HR Department suo motto. All concerned are requested to ensure compliance to the above Instructions in the disposal of cases received by the Vigilance Department for seeking vigilance status in NEEPCO.” 11. A perusal of the aforesaid Circular indicates that vigilance clearance is required before release of final dues of an employee. 12. In the present case, vigilance clearance was admittedly sought in respect of the petitioners. However, the same was declined solely on the ground that the petitioners are facing prosecution in connection with the CBI case relating to procurement of sand from Dimapur for construction of the approach channel and spillway of the DHEP Project, Nagaland. 13. Significantly, despite registration of the FIR in the year 2005 and submission of charge-sheet in the year 2008, the respondent authorities never initiated any departmental proceeding against any of the petitioners during their service tenure. The petitioners ultimately retired from service in the normal course on attaining the age of superannuation. 14. The question, therefore, which arises for consideration is whether gratuity and leave encashment can be indefinitely withheld merely because a criminal prosecution is pending. 15. At this stage, it is also fairly submitted by the learned counsel appearing for the respondent Nos. 2 and 3, upon obtaining instructions, that the employees of NEEPCO are governed by the provisions of the Payment of Gratuity Act, 1972 (hereinafter referred to as the “Act of 1972”) and that all employees retiring on superannuation are entitled to gratuity in accordance with the said Act. 16. Once it is admitted that the entitlement of the petitioners to gratuity is governed by the Act of 1972, the rights and liabilities of the parties are necessarily regulated by the provisions of the said enactment. Section 4 of the Act of 1972 provides for payment of gratuity to an employee upon superannuation, retirement, resignation, death or disablement. The said provision further carves out only a limited exception under sub-section 6 of Section 4 of the Act of 1972, which permits forfeiture of gratuity in the circumstances specifically enumerated therein. 17. Section 4(6) of the Act of 1972 is reproduced hereunder for ready reference: “4. Payment of gratuity. (6) Notwithstanding anything contained in sub-section (1), - (a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused. (b) the gratuity payable to an employee [may be wholly or partially forfeited] – (i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or (ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.” 18. A plain reading of Section 4(6) of the Act of 1972 makes it abundantly clear that gratuity can be forfeited only in the contingencies expressly contemplated therein. The sine qua non for invocation of Section 4(6) of the Act of 1972 is termination of the services of the employee for the misconduct specified therein. The statute does not contemplate withholding or forfeiture of gratuity merely because a criminal case is pending against a retired employee who has superannuated in the normal course. 19. The Apex Court in Union Bank of India and Ors. vs. C.G. Ajay Babu and Anr., reported in (2018) 9 SCC 529, while interpreting Section 4(6) of the Act of 1972, has categorically held that forfeiture of gratuity is not automatic and is permissible only in the circumstances expressly contemplated by Section 4(6) of the Act of 1972. The Court emphasized that the conditions stipulated under the provision are mandatory and the power of forfeiture cannot be exercised dehors the statute. The relevant paragraphs of the aforesaid judgment read as under: “15. Under sub-section (6)(a), also the gratuity can be forfeited only to the extent of damage or loss caused to the Bank. In case, the termination of the employee is for any act or wilful omission or negligence causing any damage or loss to the employer or destruction of property belonging to the employer, the loss can be recovered from the gratuity by way of forfeiture. Whereas under clause (b) of sub-section (6), the forfeiture of gratuity, either wholly or partially. is permissible under two situations: (i) in case the termination of an employee is on account of riotous or disorderly conduct or any other act of violence on his part, (ii) if the termination is for any act which constitutes an offence involving moral turpitude and the offence is committed by the employee in the course of his employment. Thus, clause (a) and clause (b) of sub-section (6) of Section 4 of the Act operate in different fields and in different circumstances. Under clause (a), the forfeiture is to the extent of damage or loss caused on account of the misconduct of the employee whereas under clause (b), forfeiture is permissible either wholly or partially in totally different circumstances. Clause (b) operates either when the termination is on account of: (i) riotous, or (ii) disorderly, or (iii) any other act of violence on the part of the employee, and under clause (ii) of sub-section (6)(b) when the termination is on account of any act which constitutes an offence involving moral turpitude committed during the course of employment. 16. "Offence" is defined, under the General Clauses Act, 1897, to mean "any act or omission made punishable by any law for the time being in force" [Section 3(38)]. 17. Though the learned counsel for the appellant Bank has contended that the conduct of the respondent employee, which leads to the framing of charges in the departmental proceedings involves moral turpitude, we are afraid the contention cannot be appreciated. It is not the conduct of a person involving moral turpitude that is required for forfeiture of gratuity but the conduct or the act should constitute an offence involving moral turpitude. To be an offence, the act should be made punishable under law. That is absolutely in the realm of criminal law. It is not for the Bank to decide whether an offence has been committed. It is for the court. Apart from the disciplinary proceedings initiated by the appellant Bank, the Bank has not set the criminal law in motion either by registering an FIR or by filing a criminal complaint so as to establish that the misconduct leading to dismissal is an offence involving moral turpitude. Under sub-section (6)(b)(ii) of the Act, forfeiture of gratuity is permissible only if the termination of an employee is for any misconduct which constitutes an offence involving moral turpitude, and convicted accordingly by a court of competent jurisdiction. 18. In Jaswant Singh Gill v. Bharat Coking Coal Ltd.5, it has been held by this Court that forfeiture of gratuity either wholly or partially is permissible under sub-section (6)(b)(ii) only in the event that the termination is on account of notous or disorderly conduct or any other act of violence or on account of an act constituting an offence involving moral turpitude when he is convicted. To quote para 13. (SCC p. 670) "13. The Act provides for a close-knit scheme providing for payment of gratuity. It is a complete code containing detailed provisions covering the essential provisions of a scheme for a gratuity. It not only creates a right to payment of gratuity but also lays down the principles for quantification thereof as also the conditions on which he may be denied therefrom. As noticed hereinbefore, sub-section (6) of Section 4 of the Act contains a non obstante clause vis-à-vis sub-section (1) thereof. As by reason thereof, an accrued or vested right is sought to be taken away, the conditions laid down thereunder must be fulfilled. The provisions contained therein nmust, therefore, be scrupulously observed. Clause (a) of sub-section (6) of Section 4 of the Act speaks of termination of service of an employee for any act, wilful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of damage or loss caused. The disciplinary authority has not quantified the loss or damage. It was not found that the damage or loss caused to Respondent I was more than the amount of gratuity payable to the appellant. Clause (b) of sub-section (6) of Section 4 of the Act also provides for forfeiture of the whole amount of gratuity or part in the event his services had been terminated for his riotous or disorderly conduct or any other act of violence on his part or if he has been convicted for an offence involving moral turpitude. Conditions laid down therein are also not satisfied." 19. In the present case, there is no conviction of the respondent for the misconduct which according to the Bank is an offence involving moral turpitude. Hence, there is no justification for the forfeiture of gratuity on the ground stated in the order dated 20-4-2004 that the "misconduct proved against you amounts to acts involving moral turpitude". At the risk of redundancy, we may state that the requirement of the statute is not the proof of misconduct of acts involving moral turpitude but the acts should constitute an offence involving moral turpitude and such offence should be duly established in a court of law. 20. That the Act must prevail over the Rules on Payment of Gratuity framed by the employer is also a settled position as per Jaswant Singh Gills. Therefore, the appellant cannot take recourse to its own Rules, ignoring the Act, for denying gratuity. 21. To sum up, forfeiture of gratuity is not automatic on dismissal from service; it is subject to sub-sections (5) and (6) of Section 4 of the Payment of Gratuity Act, 1972.” 20. In the present case, admittedly, the petitioners were never dismissed, removed or otherwise terminated from service. They retired upon attaining the age of superannuation. No departmental proceeding was ever initiated against them. Consequently, the essential jurisdictional fact required for attracting Section 4(6) of the Act of 1972, namely termination of service on the grounds specified therein, is completely absent. Therefore, the respondents cannot withhold the gratuity of the petitioners by placing reliance upon an administrative circular requiring vigilance clearance. 21. Once the field is occupied by the Act of 1972, an executive instruction or vigilance circular cannot travel beyond the statute so as to create an additional ground for withholding gratuity. Such an administrative instruction cannot override either the statutory mandate of the Act or the constitutional protection guaranteed under Article 300A of the Constitution of India. 22. The Apex Court in Dr. Hira Lal v. State of Bihar, reported in (2020) 4 SCC 346, has categorically held that pension and gratuity are not matters of grace or bounty but constitute valuable property rights protected under Article 300A of the Constitution. It has further been held that executive instructions or administrative circulars which do not have statutory force cannot deprive a retired employee of such constitutional entitlement. The relevant paragraphs of the aforesaid judgment read as under: 22. It is well settled that the right to pension cannot be taken away by a mere executive fiat or administrative instruction. Pension and gratuity are not mere bounties, or given out of generosity by the employer. An employee earns these benefits by virtue of his long, continuous, faithful and unblemished service. The right to receive pension of a public servant has been held to be covered under the "right to property under Article 31(1) of the Constitution by a Constitution Bench of this Court in Deokinandan Prasad v. State of Bihar, which ruled that: (Deokinandan Prasad case, SCC pp. 343-44, paras 30-31 & 33) 30. The question whether the pension granted to a public servant is property attracting Article 31(1) came up for consideration before the Punjab High Court in Bhagwant Singh v. Union of India. It was held that such a right constitutes "property" and any interference will be a breach of Article 31(1) of the Constitution. It was further held that the State cannot by an executive order curtail or abolish altogether the right of the public servant to receive pension. This decision was given by a learned Single Judge. This decision was taken up in letters patent appeal by the Union of India. Letters Patent Bench in its decision in Union of India v. Bhagwant Singh approved the decision of the learned Single Judge. The Letters Patent Bench held that the pension granted to a public servant on his retirement is "property" within the meaning of Article 31(1) of the Constitution and he could be deprived of the same only by an authority of law and that pension does not cease to be property on the mere denial or cancellation of it. It was further held that the character of pension as "property" cannot possibly undergo such mutation at the whim of a particular person or authority. 31. The matter again came up before a Full Bench of the Punjab and Haryana High Court in K.R. Erry v. State of Punjab. The High Court had to consider the nature of the right of an officer to get pension. The majority quoted with approval the principles laid down in the two earlier decisions of the same High Court, referred to above, and held that the pension is not to be treated as a bounty payable on the sweet will and pleasure of the Government and that the right to superannuation pension including its amount is a valuable right vesting in a government servant. It was further held by the majority that even though an opportunity had already been afforded to the officer on an earlier occasion for showing cause against the imposition of penalty for lapse or misconduct on his part and he has been found guilty, nevertheless, when a cut is sought to be imposed in the quantum of pension payable to an officer on the basis of misconduct already proved against him, a further opportunity to show cause in that regard must be given to the officer. This view regarding the giving of further opportunity was expressed by the learned Judges on the basis of the relevant Punjab Civil Service Rules. But the learned Chief Justice in his dissenting judgment was not prepared to agree with the majority that under such circumstances a further opportunity should be given to an officer when a reduction in the amount of pension payable is made by the State. It is not necessary for us in the case on hand to consider the question whether before taking action by way of reducing or denying the pension on the basis of disciplinary action already taken, a further notice to show cause should be given to an officer. That question does not arise for consideration before us. Nor are we concerned with the further question regarding the procedure, if any, to be adopted by the authorities before reducing or withholding the pension for the first time after the retirement of an officer. Hence, we express no opinion regarding the views expressed by the majority and the minority Judges in the above Punjab High Court decision on this aspect. But we agree with the view of the majority when it has approved its earlier decision that pension is not a bounty payable on the sweet will and pleasure of the Government and that, on the other hand, the right to pension is a valuable right vesting in a government servant. 33. Having due regard to the above decisions, we are of the opinion that the right of the petitioner to receive pension is property under Article 31(1) and by a mere executive order the State had no power to withhold the same. Similarly, the said claim is also property under Article 19(1)(f) and it is not saved by clause (5) of Article 19. Therefore, it follows that the order, dated 12-6-1968, denying the petitioner right to receive pension affects the fundamental right of the petitioner under Articles 19(1)(f) and 31(1) of the Constitution, and as such the writ petition under Article 32 is maintainable. 23. The aforesaid judgment was followed in D.S. Nakara v. Union of India by another Constitution Bench of this Court, which held that: (SCC pp. 320 & 323-24, paras 20, 29 & 31) "20. The antiquated notion of pension being a bounty, a gratuitous payment depending upon the sweet will or grace of the employer not claimable as a right and, therefore, no right to pension can be enforced through Court has been swept under the carpet by the decision of the Constitution Bench in Deokinandan Prasad v State of Bihar wherein this Court authoritatively ruled that pension is a right and the payment of it does not depend upon the discretion of the Government but is governed by the rules and a government servant coming within those rules is entitled to claim pension. It was further held that the grant of pension does not depend upon anyone's discretion. It is only for the purpose of quantifying the amount having regard to service and other allied matters that it may be necessary for the authority to pass an order to that effect but the right to receive pension flows to the officer not because of any such order but by virtue of the rules. This view was reaffirmed in State of Punjab v. Iqbal Singh, 29. Summing up it can be said with confidence that pension is not only compensation for loyal service rendered in the past, but pension also has a broader significance, in that it is a measure of socio-economic justice which inheres economic security in the fall of life when physical and mental prowess is ebbing corresponding to aging process and, therefore, one is required to fall back on savings. One such saving in kind is when you give your best in the heyday of life to your employer, in days of invalidity, economic security by way of periodical payment is assured. The term has been judicially defined as a stated allowance or stipend made in consideration of past service or a surrender of rights or emoluments to one retired from service. Thus, the pension payable to a government employee is earned by rendering long and efficient service and therefore can be said to be a deferred portion of the compensation or for service rendered. In one sentence one can say that the most practical raison d'étre for pension is the inability to provide for oneself due to old age. One may live and avoid unemployment but not senility and penury if there is nothing to fall back upon. Page 21 of 25 31. From the discussion three things emerge: (i) that pension is neither a bounty nor a matter of grace depending upon the sweet will of the employer and that it creates a vested right subject to 1972 Rules which are statutory in character because they are enacted in exercise of powers conferred by the proviso to Article 309 and clause (5) of Article 148 of the Constitution; (ii) that the pension is not an ex gratia payment but it is a payment for the past service rendered; and (iii) it is a social welfare of their life ceaselessly toiled for the employer on an Assurance that in their old age they would not be left in lurch. 24. The right to receive pension has been held to be a right to property protected under Article 300-A of the Constitution even after the repeal of Article 31(1) by the Constitution (Forty-Fourth Amendment) Act, 1978 w.e.f. 20-6-1979, as held in State of W.B. v. Haresh C. Banerjee 12. 23. Likewise, in State of Jharkhand and Others v. Jitendra Kumar Srivastava and Another, reported in (2013) 12 SCC 210, the Apex Court reiterated that in the absence of any statutory provision permitting withholding of pension or gratuity, the State cannot withhold the same merely on the strength of executive instructions. The relevant paragraph of the aforesaid judgment reads as under: “17. It hardly needs to be emphasised that the executive instructions are not having statutory character and, therefore, cannot be termed as "law" within the meaning of the aforesaid Article 300-A. On the basis of such a circular, which is not having force of law, the appellant cannot withhold even a part of pension or gratuity. As we noticed above, so far as statutory Rules are concerned, there is no provision for withholding pension or gratuity in the given situation. Had there been any such provision in these Rules, the position would have been different.” 24. The legal principles emerging from the aforesaid decisions leave no manner of doubt that gratuity, pension and leave encashment are not discretionary benefits dependent upon the pleasure of the employer. They are earned rights flowing from long and continuous service rendered by an employee and are recognized as property protected under Article 300A of the Constitution. Any deprivation thereof must have the sanction of law. 25. In the present case, no statutory provision has been brought to the notice of this Court authorizing the respondents to withhold gratuity or leave encashment merely because of pendency of a criminal prosecution. On the contrary, Section 4(6) of the Act of 1972 clearly demonstrates that forfeiture of gratuity is permissible only in the limited circumstances specified therein, none of which exist in the facts of the present case. 26. The Court also cannot lose sight of the fact that the criminal case has remained pending since the year 2005. Nearly two decades have elapsed and, as submitted, even half of the prosecution witnesses have not yet been examined. To permit withholding of retiral benefits for an indefinite period on account of such prolonged pendency would virtually amount to depriving the petitioners of their constitutional right to property without authority of law. 27. It is also apposite to refer to the decision of the Karnataka High Court in Sri H. Channaiah v. The Chief Executive Officer & Others, in W.P. No.5016/2024 (S-R), wherein the Karnataka High Court, while dealing with an analogous issue, held as follows: “7. In support of the petitioner's claim, reliance is placed on the landmark judgment of the Supreme Court in Jagdish Prasad Saini v. State of Rajasthan¹. The Hon'ble Supreme Court, in its wisdom, has categorically held that leave encashment forms an integral part of an employee's salary. The Court further emphasized that authorities cannot absolve themselves of their statutory obligations towards discharging the leave encashment dues of retiring employees. 8. The matter before this Court raises significant constitutional questions regarding the entitlements to leave encashment. At the heart of this case lies the determination of whether these benefits are to be considered as mere discretionary bounties or as enforceable legal rights under the Constitution of India. 9. The petitioners, in the present case, assert that their entitlements to pension, health gratuity, and leave encashment are integral to their fundamental rights as guaranteed by the Constitution of India. They contend that these entitlements should not be subject to arbitrary withholding or denial based on administrative instructions lacking the force of law, 10. The Supreme Court, in its landmark judgment in Deokinandan Prasad v. State of Bihar, decisively settled the legal status of pension and gratuity. The Court categorically rejected the antiquated notion that these benefits are mere gratuitous payments subject to the discretionary will of the employer. Instead, the Court held that pension and gratuity are legal rights accruing to an employee upon retirement, not contingent upon the employer's discretion or designation. 11. Building upon the foundation laid in Deokinandan Prasad's case, it becomes evident that the entitlements to pension, health gratuity, and leave encashment are integral to the fundamental rights enshrined in Article 19(1)(f) and Article 31(1) of the Constitution of India. These rights safeguard an individual's economic and personal liberties, ensuring that they are not deprived of their rightful entitlements without due process of law. Page 24 of 25 12. The principle of administrative instructions, while valuable for organizational efficiency, cannot supersede the constitutional protections guaranteed to citizens. Article 300-A of the Constitution mandates that the State cannot deprive an individual of their property (which includes entitlements like leave encashment) except by authority of law. Therefore, any attempt to withhold or curtail these entitlements based solely on administrative directives would be contrary the constitutional mandate and, to consequently, unconstitutional.” 28. Having regard to the aforesaid discussion, this Court is of the considered opinion that gratuity and leave encashment cannot be withheld merely on the basis of an administrative circular or because a criminal prosecution remains pending, particularly when no departmental proceeding was ever initiated against the petitioners and the statutory conditions contained in Section 4(6) of the Act of 1972 are admittedly not attracted. 29. The continued withholding of the petitioners’ gratuity and leave encashment solely on the ground of absence of vigilance clearance is, therefore, arbitrary, unsupported by any statutory authority, contrary to Section 4 of the Act of 1972 and violative of Article 300A of the Constitution of India. 30. Resultantly, the writ petition succeeds and is accordingly allowed. 31. The respondent authorities are directed to release and disburse the entire outstanding gratuity and leave encashment payable to the petitioners within a period of one month from the date of receipt of a certified copy of this order. 32. Ordered accordingly. JUDGE Comparing Assistant