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Judgment
The present Writ Petition is filed questioning the action of Respondent No.2 in passing the impugned order dated 30.04.2026 refusing to release the retirement benefits to the Petitioner and to declare the same as illegal and arbitrary.
The Petitioner had initially joined as Junior Assistant in the year 1985 in Respondent No.2-Corporation and thereafter promoted as Godown Keeper in the year 1989 and further promoted as Warehouse Manager Grade-III. Later, the Petitioner was promoted to the rank of General Manager (Project Implementation Unit). In course of time, the Petitioner had retired from service on attaining the age of superannuation on 31.08.2023. While the Petitioner was in service it is submitted that the Principal Accountant General (Audit) had taken up audit of the accounts of Respondent No.2-Corporation for the period 2015 to 2017 and raised certain objections.
On the basis of the objections, show-cause notices were issued to Petitioner and 9 others on 08.04.2022. As per the show-cause notice issued to the Petitioner, there was violation of GFR 21, 179, 180, 181, 183 and 185. The Petitioner gave explanation stating that the Petitioner worked as Warehouse Manager Grade-1 in Finance and Accounts Section from 19.11.2013 to 29.05.2017 and denied involvement in any of the wrong doings alleged in the show-cause notice. It was further stated that the Petitioner was not instructed by his superior officers or his colleagues to process and in accordance with GFR (General Finance Rules) and that there is no standard operational procedure or job description to the post. Thereafter, no further action was taken.
As mentioned above, the Petitioner had retired from service on 31.08.2023 and his retirement benefits were not released in spite of his representations. The Petitioner then filed W.P.No.17256 of 2025 before this Court and the same was disposed of on 02.03.2026 with certain directions. Pursuant thereto, the impugned order was passed on the ground that the issue was referred to Audit Committee and that the Audit Committee after examination had dropped 6 of the 9 charges against the Petitioner vide letter dated 16.04.2026 and therefore till finalization of the case against the Petitioner, the retirement benefits of the Petitioner were withheld.
In the Counter-Affidavit filed by Respondent No.2, it is stated that the Writ Petition cannot be maintained, as the liability of the Petitioner is yet to be determined. It is stated that three audit objections are not ordinary procedural objections and the same relate to i) pending recovery of huge advances amounting to Rs.80.16 Lakhs, ii) expenditure incurred towards Foreign travel to Japan and China resulting in pending settlement of advances amounting to Rs.60.99 Lakhs and iii) selection of M/s. KPMG as Consultant without following the procedure prescribed under the General Financial Rules involving expenditure of Rs.2.96 Crores. It is stated that vide Andhra Pradesh State Warehousing Corporation Employees Gratuity Fund Regulations, 1974 can withhold the gratuity amount payable to the employee.
Heard Sri M. Vijay Kumar, learned Senior Counsel representing Sri Manoj Kumar Bethapudi, learned counsel for the Petitioner and Sri A.V.G. Madhava Rao, learned Standing Counsel appearing for Respondent No.2-Society.
The Petitioner had earlier filed W.P.No.17256 of 2025 and this Court taking note of the lax approach of the Respondents had disposed of the Writ Petition with certain directions. Thereafter, the impugned order came to be passed.
The first question that arises is the right of Respondents to withhold retirement benefits. It is well known that retirement benefits are a property under Article 300-A of the Constitution of India and deprivation to property can be only in accordance with law. A similar view was taken by the Hon’ble Supreme Court in State of Jharkhand v. Jitendra Kumar Srivastava1, and paragraphs 16 and 17 thereof are extracted below;
“16.The fact remains that there is an imprimatur to the legal principle that the right to receive pension is recognised as a right in “property”. Article 300-A of the Constitution of India reads as under:
“300-A. Persons not to be deprived of property save by authority of law.—No person shall be deprived of his property save by authority of law.”
Once we proceed on that premise, the answer to the question posed by us in the beginning of this judgment becomes too obvious. A person cannot be deprived of this pension without the authority of law, which is the constitutional mandate enshrined in Article 300-A of the Constitution. It follows that attempt of the appellant to take away a part of pension or gratuity or even leave encashment without any statutory provision and under the umbrage of administrative instruction cannot be countenanced.”
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
1 (2013) 12 SCC 210 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.
A similar view was also expressed in Hira Lal v. State of Bihar2,. Though the gratuity can be withheld under section 4(6) of the Payment of Gratuity Act, 1972, the same should be preceded by termination of the employee. In the present case, no departmental action was initiated so far and the question of termination of the Petitioner just does not arise as the Petitioner had retired from service.
The reliance on Regulation 6 of the Andhra Pradesh State Warehousing Corporation Employees Gratuity Fund Regulations, 1974 is misplaced as the same contemplates withholding of gratuity in situations where the employee is convicted in a Criminal Court, dismissed for dishonesty or misconduct in Corporation. Apart from that the above, the Regulation contemplates withholding on account of loans due or advances made. The Regulation 6 is extracted below;
“6.No member of the staff can claim any relief under these regulations as a matter of right. Gratuity shall not be paid to any employee who has been convicted of criminal offence, or has been dismissed for dishonesty or misconduct to the Corporation. Any amount that may be due to the Corporation by any member of the staff on account of any advance made
2 (2020) 4 SCC 346 or loans given or any other account shall be adjusted at the discretion of the Corporation from gratuity and only the balance, if any, paid.”
For the aforesaid reasons, the Writ Petition is allowed with following directions;
The Respondents are directed to release the Retirement benefits to the Petitioner;
The time for compliance of the above direction is two (2) months from the date of receipt of a copy of this order;
No order as to costs.
As a sequel, pending applications, if any, shall stand closed.
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Nyapathy Vijay, J Date: 17.08.2026 IS HON’BLE SRI JUSTICE NYAPATHY VIJAY WRIT PETITION No.16415 of 2026
Date: 17.08.2026 IS