Panchayat & Rural Development Department & Ors. Vs. Santosh Kumar Shrivastava,

[Civil Appeal arising out of SLP (C) No. 21625 of 2025], delivered by Justice Sanjay Karol (with Justice Prashant Kumar Mishra concurring) on 22 September 2025.


1️⃣ Main Issue Before the Court

The Supreme Court considered the legal question:

Whether failure to vacate government accommodation after retirement can justify withholding payment of pension, gratuity, or other retiral dues.

2️⃣ Facts in Brief

Respondent (Santosh Kumar Shrivastava) was a government employee who retired on 30 June 2013.

His pension and gratuity were not released for almost three years.

The Department justified this delay by alleging that he did not vacate his official residence until 31 August 2015.

When his dues were finally released, deductions were made towards penal house rent (₹1,56,187) and excess salary payment (₹1,46,466).

3️⃣ Findings of the High Court

The Single Judge held that withholding pension and gratuity merely because of pending recovery or non-vacation of residence was illegal.

Ordered refund of deductions with 6% interest.

The Division Bench upheld this order, leading to the present appeal.

4️⃣ Supreme Court’s Reasoning
(a) Pension and Gratuity Are Legal Rights

The Court reaffirmed that pension, gratuity, and retiral dues are not bounties but vested rights earned through service.

Cited precedents:

PEPSU RTC v. Mangal Singh (2011) 11 SCC 702

U.P. Roadways Retired Officials Assn. v. State of U.P. (2024) 9 SCC 331

“Payment of retiral dues is a matter of right, not a charity.”

(b) No Justification to Withhold Dues

The Department’s reason — that the employee did not vacate government accommodation — has no legal nexus with withholding pension.

The right to pension arises from long service;
the right to official residence arises from holding a specific post.
These are two distinct and independent matters.

“The latter (residence) cannot obstruct or defeat the former (pension).”

(c) Illegal Recovery of Excess Salary

The Court held that the recovery of alleged excess pay after retirement was impermissible.

Referred to Syed Abdul Qadir v. State of Bihar (2009) 3 SCC 475, which held that:

Recovery cannot be made if excess payment was not due to employee’s fraud or misrepresentation, and

If the employer made a mistake, the employee should not be penalized.

The respondent had not committed any fraud; therefore, the recovery was unjustified.

(d) Department’s Conduct Criticized

The Court noted that the Department delayed payments for over three years without valid justification.

The State acted unreasonably and unfairly, holding back pension as a “sword over the retiree’s head.”

(e) Interest Award Justified

Since the delay was solely due to the Department,
the Court upheld the direction to pay 6% interest on the delayed amounts.

The award of interest was equitable and legally proper.

5️⃣ Conclusion

Appeal dismissed.

The respondent was entitled to refund with 6% interest.

No order as to costs.

📘 ESSENCE OF THE REASONS (ENGLISH SUMMARY)

Pension and gratuity are statutory rights, not discretionary benefits.

Non-vacation of government quarters cannot justify withholding such dues.

Recovery of excess payment not allowed when employee acted in good faith.

Department’s delay was arbitrary and unfair.

Award of 6% interest on delayed payment upheld.

Appeal dismissed — High Court order sustained

                                                                 TELUGU


1️⃣ ప్రధాన ప్రశ్న

ఉద్యోగ విరమణ తర్వాత ప్రభుత్వ నివాసం ఖాళీ చేయకపోవడం కారణంగా, పింఛన్ లేదా గ్రాచ్యుటీ చెల్లింపులను నిలిపివేయడం చట్టబద్ధమా?

2️⃣ కేసు నేపథ్యం

ప్రతివాది సంతోష్ కుమార్ శ్రీవాస్తవ 2013 జూన్ 30న పదవీ విరమణ చేశారు.

మూడు సంవత్సరాల పాటు ఆయనకు పింఛన్ మరియు గ్రాచ్యుటీ చెల్లింపులు నిలిపివేయబడ్డాయి.

శాఖ కారణం చూపింది — ఆయన ప్రభుత్వ గృహాన్ని ఖాళీ చేయలేదని.

2016లో చెల్లించినప్పుడు కూడా జరిమానా ఇల్లు అద్దె ₹1,56,187 మరియు అధిక వేతన రికవరీ ₹1,46,466 కత్తిరించబడ్డాయి.

3️⃣ హైకోర్టు తీర్పు

హైకోర్టు సింగిల్ జడ్జి పేర్కొన్నారు:
ప్రభుత్వ నివాసం ఖాళీ చేయకపోవడం వల్ల పింఛన్ నిలిపివేయడం చట్ట విరుద్ధం.

6% వడ్డీతో రీఫండ్ చేయమని ఆదేశించారు.

డివిజన్ బెంచ్ కూడా దీనిని సమర్థించింది.

4️⃣ సుప్రీంకోర్టు తర్కం
(a) పింఛన్ మరియు గ్రాచ్యుటీ హక్కులు

పింఛన్, గ్రాచ్యుటీ వంటి రిటైర్మెంట్ లాభాలు దయ లేదా బహుమతి కాదు,
అవి ఉద్యోగి సేవ ద్వారా సంపాదించిన హక్కులు.

కోర్టు PEPSU RTC v. Mangal Singh (2011),
U.P. Roadways Retired Officials Assn. v. State of U.P. (2024) కేసులను ఉదహరించింది.

“పింఛన్ చెల్లింపు ఉద్యోగి హక్కు — ప్రభుత్వ అనుకంప కాదు.”

(b) పింఛన్ నిలిపివేయడానికి కారణం లేదు

ప్రభుత్వ నివాసం ఖాళీ చేయకపోవడం మరియు పింఛన్ చెల్లింపుకు ఎటువంటి సంబంధం లేదు.

పింఛన్ హక్కు ఉద్యోగ సేవల ఆధారంగా,
నివాస హక్కు ఆ పదవి ఉన్నంతకాలం మాత్రమే ఉంటుంది.
ఇవి రెండు వేర్వేరు అంశాలు.

“నివాస హక్కు పింఛన్ హక్కును అడ్డుకోలేడు.”

(c) అధిక వేతనం రికవరీ చట్టవిరుద్ధం

ఉద్యోగి తప్పు చేయకపోతే అధిక చెల్లింపును రికవర్ చేయడం అన్యాయం.

Syed Abdul Qadir v. State of Bihar (2009) తీర్పును కోర్టు ప్రస్తావించింది.
ఇందులో స్పష్టంగా పేర్కొంది:

ఉద్యోగి మోసం చేయకపోతే,

ప్రభుత్వ తప్పిదం వల్ల చెల్లింపు జరిగితే,
రికవరీ చేయరాదు.

(d) శాఖ ప్రవర్తనపై విమర్శ

శాఖ మూడు సంవత్సరాల ఆలస్యం చేసింది,
ఎటువంటి సరైన వివరణ ఇవ్వలేదు.

పింఛన్‌ను ఒత్తిడి సాధనంగా వాడటమని కోర్టు పేర్కొంది.

(e) వడ్డీ చెల్లింపు సమంజసం

ఆలస్యం పూర్తిగా ప్రభుత్వ కారణంగానే జరిగింది కాబట్టి,
6% వడ్డీ చెల్లించడం సరైన నిర్ణయం అని కోర్టు తెలిపింది.

5️⃣ తుది తీర్పు

అపీలు కొట్టివేయబడ్డాయి.

పింఛన్, గ్రాచ్యుటీ మొత్తాలను 6% వడ్డీతో చెల్లించాలి.

ఖర్చుల ఆదేశం లేదు.

⚖️ తీర్పు సారాంశం (తెలుగులో)

పింఛన్, గ్రాచ్యుటీ ఉద్యోగి సంపాదించిన చట్టబద్ధ హక్కులు.

ప్రభుత్వ నివాసం ఖాళీ చేయకపోవడం వల్ల పింఛన్ నిలిపివేయడం చట్టవిరుద్ధం.

ఉద్యోగి తప్పు చేయకపోతే వేతన రికవరీ తప్పు.

శాఖ ప్రవర్తన అన్యాయం, ఆలస్యం కారణం శాఖదే.

6% వడ్డీతో చెల్లింపు సరైనది.

అపీలు రద్దు.


                 JUDGEMENT
Panchayat & Rural Development Department & Ors. Vs. Santosh Kumar Shrivastava

[Civil Appeal Nos._________ of 2025 arising out of SLP (C) No. 21625/2025]

Sanjay Karol, J.

1. Leave granted.

2. In this appeal, the Panchayat & Rural Development Department, Government of Madhya Pradesh challenges judgment and order dated 4th November 2024 passed in Writ Appeal No.2531 of 2024 filed under Section 2(1) of the Madhya Pradesh Uchcha Nyayalaya (Khand Nyaya Peeth Ko Appeal) Adhiniyam 2005, questioning the order dated 30th July 2024 passed in Writ Petition No.16351 of 2017 whereby the respondent's writ petition seeking to quash a recovery of Rs.1,56,187/- (penal house rent) and Rs.1,46,466/- (excess payment of salary), was allowed. The said writ petition also accepted the respondent's prayer for payment of interest on the delayed payment of pension and gratuity.

3. The facts lie in a narrow compass. The respondent was recruited into the services of the State in the year 1980. During his service, he was posted at various positions. In the year 2009, the State brought in the M.P. Revision of Pay Rules, 2009 according to which his pay stood revised by order dated 14th December 2011. He superannuated from service on 30th June 2013. However, neither was his pension sanctioned nor was the payment of retiral dues made.

The appellant passed an amendment order dated 23rd January 2014 which quashed the order dated 14th December 2011 through which the pay revision was undertaken and, his salary was relegated to the lower scale. Such action was challenged by way of Writ Petition No.5201 of 2014 by the Respondent, the effect of which was that the refixation of salary by the latter order was withdrawn by order dated 23rd July 2014. Consequently, the said writ petition was withdrawn. The dispute over retiral dues did not end there.

4. Even after the order of refixation of salary was withdrawn, the amounts were not paid. This time on account of the respondent having not vacated the official residence. He eventually vacated such residence on 31st August 2015. At this point in time, no payments had been made to him. On 10th February 2016, finally the payment of gratuity and pension amount was carried out however the two amounts noted in para 2 were deducted therefrom.

5. Having withdrawn his earlier Writ Petition in view of intervening developments, the writ petition which gave rise to the present proceedings came to be filed. The learned Single Judge allowed the writ petition observing that the entire amount of pension and gratuity could not have been withheld on account of there being an order for recovery. It was held that since the amounts were not paid to him forthwith on his retirement, the appellants could not have charged him for illegal occupation of his government residential premises.

Support for such a view was drawn from HK Saxena (Dr.) v. Dr. Harisingh Gour Vishwavidyalaya and Anr.1. The recovery of the amount was thus held illegal, and the appellants were also directed to pay 6% interest on the total amount to be refunded to the respondent as also 6% interest on the amount of pension and gratuity paid to him from the date of superannuation till payment. The same was directed to be done within a period of three months.

6. On appeal, the learned Division Bench observed that no error could be found in the order of the learned Single Judge and accordingly, the writ appeal was dismissed.

7. We have heard the learned counsel for the parties. The short question for our consideration in this appeal is whether on account of failure to vacate government residence upon superannuation is a valid justification for withholding the payment of retiral dues/pension.

8. It has long been held that the payment of retiral dues/gratuity/pension is not a matter of bounty but in fact a matter of right of every employee, should there be some rule or statute from where the right may originate. [See: PEPSU RTC v. Mangal Singh2 and U.P. Roadways Retired Officials & Officers Assn. v. State of U.P.3]

9. This makes it clear that the Courts below were correct in holding that there was no justification for the appellants having not paid the dues rightly belonging to the respondent to him even after the passage of almost three years after the retirement. We may also observe that there was no occasion whatsoever for the Appellant to have conducted re-fixation of pay after retirement of the Respondent and then proceed to recover the excess amount from the retiral dues payable to the latter. This is a well-settled position in law. A Bench of 3 learned Judges in Syed Abdul Qadir v. State of Bihar4, held as follows:

"57. This Court, in a catena of decisions, has granted relief against recovery of excess payment of emoluments/allowances if (a) the excess amount was not paid on account of any misrepresentation or fraud on the part of the employee, and (b) if such excess payment was made by the employer by applying a wrong principle for calculating the pay/allowance or on the basis of a particular interpretation of rule/order, which is subsequently found to be erroneous.

58. The relief against recovery is granted by courts not because of any right in the employees, but in equity, exercising judicial discretion to relieve the employees from the hardship that will be caused if recovery is ordered. But, if in a given case, it is proved that the employee had knowledge that the payment received was in excess of what was due or wrongly paid, or in cases where the error is detected or corrected within a short time of wrong payment, the matter being in the realm of judicial discretion, courts may, on the facts and circumstances of any particular case, order for recovery of the amount paid in excess.

See Sahib Ram v. State of Haryana [1995 Supp (1) SCC 18 : 1995 SCC (L&S) 248], Shyam Babu Verma v. Union of India [(1994) 2 SCC 521 : 1994 SCC (L&S) 683 : (1994) 27 ATC 121], Union of India v. M. Bhaskar [(1996) 4 SCC 416 : 1996 SCC (L&S) 967], V. Gangaram v. Director [(1997) 6 SCC 139 : 1997 SCC (L&S) 1652], Col. B.J. Akkara (Retd.) v. Govt. of India [(2006) 11 SCC 709 : (2007) 1 SCC (L&S) 529], Purshottam Lal Das v. State of Bihar [(2006) 11 SCC 492 : (2007) 1 SCC (L&S) 508], Punjab National Bank v. Manjeet Singh [(2006) 8 SCC 647 : (2007) 1 SCC (L&S) 16] and Bihar SEB v. Bijay Bhadur [(2000) 10 SCC 99 : 2000 SCC (L&S) 394].

(emphasis supplied)

59. Undoubtedly, the excess amount that has been paid to the appellant teachers was not because of any misrepresentation or fraud on their part and the appellants also had no knowledge that the amount that was being paid to them was more than what they were entitled to."

The exceptional scenarios provided in the judgment extracted supra undoubtedly are not of application in the present case.

10. Insofar as the Appellants position that failure to vacate is the reason that retiral dues were not being granted to him, we fail to see the nexus between these two aspects. In the counter affidavit before the High Court, the Appellants put their position on record as thus:

"3. That the petitioner has been directed to vacate the government residential house allotted to him vide office letter No. 571/EsttRMS/14, Indore dated 26.06.14 annexure R/2 so that the Department may issue a certificate of vacancy of the government residential house to the petitioner and the petitioner can get pension etc. but petitioner is not we getting the government residential house and is maintaining his possession unauthorizedly and is also not paying the licence the of the residential house, hence the appeal of the petitioner is liable to be dismissed with costs.

6. That, in order to receive the pension amount as per the instructions given in the pension payment order No. 140501280 dated 23.09.14 issued by the divisional pension officer, who passed the Department of Housing estate has written a letter No. 593/ EsttRMS/15, Indore, dated 27.3.2015 annexure R/5 to the petitioner for issuing the certificate of vacancy of the government residential house, but the residential house was not vacated by the petitioner till date, nor these licence fee amount was deposited in the government treasury, hence the petitioner himself is responsible for not getting the pension EDC., therefore the petition filed by the petitioner is dismissible at the cost"

11. In essence, what the Appellants did before the High Court was to blame the Respondent for the delay in him receiving benefits rightly owed to him. We cannot accept this position. Pension and other retiral dues are benefits that have been earned by an employee due to the service rendered to the institution paying the pension/other retirement benefits.

The grant of a residence corresponds to the position held at the time by such employee. The width of these two aspects is separate and distinct. Pension and retirement benefits accrue from a much wider base as the culmination of all efforts, across employment whereas the latter is only for a limited time, till such a person is holding that position. The latter cannot obstruct or defeat the former. The Appellant cannot be allowed to withhold a duly accrued right on this count.

12. Since the delay is entirely on part of the Appellant, and no reasonable explanation acceptable to law is forthcoming except for the attempt to hold back pensionary benefits as a sword on the Respondent's head for not having vacated his government allotted accommodation, in the facts of this case we see no error in the order of the learned single Judge awarding interest to the Respondent.

13. The appeal is accordingly dismissed. However, there shall be no order as to cost. Pending application(s) if any, shall stand closed.

....................J. (Sanjay Karol)

....................J. (Prashant Kumar Mishra)

New Delhi;

September 22, 2025

1 (2004) 1 MPLJ 69

2 (2011) 11 SCC 702

3 (2024) 9 SCC 331

4 (2009) 3 SCC 475