HC holds retirement benefits cannot be withheld for CB clearance

18/06/2025

JAMMU, Jun 17: Justice Rajesh Sekhri of Jammu & Kashmir and Ladakh High Court held that retirement benefits could not be withheld merely on the grounds of pending clearance from crime branch, especially when the FIR has been closed as 'not proved'. The court ruled that even when if the FIR investigations were pending, it does not amount to 'judicial proceedings', and thus, cannot be used to deny retirement benefits. Thus, the court directed the employer to provide all retirement benefits, along with interest.
The facts of the case are that in 2011, Prem Kumar retired from his post as a storekeeper in the Jammu and Kashmir Cooperative Supply and Marketing Federation Ltd. (JAKFED). In 1995, he was implicated in an FIR for alleged misappropriation of food grains. However, that case was closed as 'not proved' by the Vigilance Organisation, after an approval from the Commissioner of Vigilance. A closure report was accepted by the anti-corruption court too.
Later in 2019, J&K administration decided to wind up JAKFED. A liquidator was appointed to assess assets and liabilities, and to also settle any pending dues with former JAKFED employees. However, instead of releasing Prem Kumar's retiral benefits, the liquidators published a public notice stating that about Rs. 4 lakhs were outstanding against him. In a response, Kumar attached his 'no dues' certificate and detailed his pending claims: about Rs. 8.4 Lakhs.
When there was no satisfactory response, Prem Kumar filed a writ petition to claim his retiral benefits and dispute the outstanding dues.
Justice Rajesh Sekhri after hearing Adv Shivani Jalali for the petitioner, held that the mere pendency of FIR investigations does not amount to 'judicial proceedings', and thus, cannot be used to deny retirement benefits. The court ruled that judicial proceedings require active adjudication before a court that is capable of passing a judgement on the matter.
Court also ruled that employees cannot be denied retiral benefits solely due to ongoing investigations. The court held this to be especially relevant, as the Union Territory had already taken a policy decision in July 2023 to clear all pending claims of JAKFED employees and further held that clearance from crime branch is not a necessary condition for the receiving of retirement benefits. The court held that such a requirement has no basis, especially since the FIR is also closed. The court ruled that withholding these benefits any further in these circumstances would violate Articles 14, 16 and 21 of the Constitution.
With these observations, Court allowed the petition. Consequently, the court ordered the release of all pending retirement benefits along with interest.

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