Last Updated on November 9, 2026 by Satish Mishra

Mere Pendency of a Criminal Case Cannot Justify Indefinite Withholding of Retirement Benefits: CAT Chandigarh Directs Northern Railway to Release DCRG and Pension.

The Central Administrative Tribunal (CAT) and higher courts have consistently ruled that a government employee’s regular pension and increments cannot be withheld solely due to a pending criminal case or investigation, unless the employee is eventually convicted of a serious crime or found guilty of grave misconduct under the CCS (Pension) Rules, 1972.

Legal Principles Pension Release & Pending Criminal Case CAT 

Case: Naresh Kumar Sood v. Union of India & Others
Case No.: OA No. 060/478/2023
Court: Central Administrative Tribunal, Chandigarh Bench
Coram: Hon’ble Mr. Ramesh Singh Thakur, Member (J)
Date of Decision: 1 September 2026

Can the Railway Administration indefinitely withhold a retired employee’s gratuity and other pensionary benefits merely because a criminal case remains pending before a criminal court?

The Central Administrative Tribunal (CAT), Chandigarh Bench, addressed this important service-law question in Naresh Kumar Sood v. Union of India & Others, OA No. 060/478/2023, decided on 1 September 2026.

The Tribunal held that the mere description of a criminal matter as “sub judice” cannot automatically justify indefinite withholding of retirement benefits. The stage of the criminal proceedings, the status of departmental proceedings and the existence of any subsisting finding of misconduct or quantified financial loss are relevant considerations.

The Tribunal accordingly quashed the orders withholding the applicant’s retiral benefits solely on account of the pending criminal case and directed the respondents to release the legally admissible benefits within eight weeks.

Facts of the Case

The applicant, Naresh Kumar Sood, had served the Northern Railway and retired from the post of Chief Enquiry-cum-Reservation Supervisor on 31 August 2021, upon attaining the age of superannuation.

During his service, a criminal case, Case No. 24 of 2021 under Section 143 of the Railways Act, was registered against him in connection with alleged irregularities in the issuance and sale of railway reservation tickets.

The applicant was arrested on 19 January 2021 and granted bail on 20 January 2021. The Railway authorities also placed him under suspension, which was subsequently revoked.

Departmental proceedings dropped

The Railway Administration initiated departmental proceedings against the applicant through a charge-sheet bearing SF-5 dated 23 August 2021. The allegations included accepting ₹400 for issuing tickets out of turn and unauthorised issuance of PRS tickets.

However, after the departmental inquiry and consideration of his defence, the competent authority dropped all departmental charges by an order dated 26 July 2022.

The suspension period from 19 January 2021 to 11 March 2021 was also treated as duty, with full pay and allowances released.

Withholding of retirement benefits

Despite the dropping of departmental proceedings, the Railway Administration withheld certain retirement benefits on the ground that the criminal case was still pending.

The applicant had received certain benefits, including GPF, GIS and leave encashment, and was sanctioned provisional pension. However, his DCRG/gratuity, regular pension and commutation of pension were withheld.

His representations seeking release of these benefits were rejected through communications dated 8 September 2022 and 27 February 2023. His subsequent grievances through CPGRAMS also did not result in relief.

Consequently, he approached the Central Administrative Tribunal under Section 19 of the Administrative Tribunals Act, 1985.

Stand of the Applicant

The applicant contended that the continued withholding of his retiral benefits was legally unsustainable for the following reasons:

1. The departmental proceedings initiated against him had already been dropped by the competent authority on 26 July 2022.
2. No charge had been framed against him by the competent criminal court in the criminal case under Section 143 of the Railways Act.
3. The criminal proceedings remained at the pre-charge evidence stage.
4. Mere registration of an FIR or pendency of a criminal complaint could not automatically justify withholding of retirement benefits.
5. No departmental finding of misconduct or quantified financial loss survived against him.

He relied upon the Supreme Court judgment in Union of India v. K.V. Jankiraman, JT 1991 (3) SC 527, and other judicial precedents to support his contention that the stage of proceedings is material.

He also relied upon the principle that pension and gratuity are valuable rights and cannot be withheld without authority of law.

The applicant sought release of his withheld benefits along with interest at 18% per annum.

Stand of the Railway Administration

The respondents opposed the application, contending that the criminal case relating to alleged irregularities in PRS ticketing was still pending before the Court of the Chief Judicial Magistrate, Ludhiana.

Their principal argument was based on Para 10(1)(C) of the Indian Railway Pension Manual, 1993.

According to the respondents, gratuity could not be released until the conclusion of the judicial proceedings and the passing of the final order by the competent court.

They further relied upon the RPF investigation and allegations concerning unauthorised ticketing, alleged commission payments and priority allotment of reservation tickets.

The respondents therefore maintained that withholding gratuity was justified under the applicable pension provisions.

Issues Before the Tribunal

The principal issue before the CAT was:

Whether the Railway Administration was justified in withholding the applicant’s DCRG, commutation of pension and regular pension merely because a criminal case under Section 143 of the Railways Act was pending, particularly when the departmental proceedings had already been dropped and no criminal charge had been framed against him?

Findings and Observations of the Tribunal

After considering the pleadings, documents and rival submissions, the Tribunal decided the matter in favour of the applicant.

1. Departmental proceedings had already been dropped

The Tribunal noted that the departmental proceedings initiated through SF-5 dated 23 August 2021 had been dropped by the competent authority on 26 July 2022.

The applicant’s suspension period had also been treated as duty, with full pay and allowances.

Therefore, no departmental proceedings survived against him, and there was no subsisting departmental finding of misconduct or pecuniary loss.

2. Criminal proceedings had not reached the stage of framing of charges

The Tribunal considered it significant that no charge had been framed against the applicant by the competent criminal court.

The matter continued at the stage of pre-charge evidence. The applicant had neither been convicted nor had the criminal court found sufficient grounds to frame a charge against him.

The Tribunal therefore distinguished the situation from cases in which criminal prosecution has progressed to the stage of framing of charges.

3. Pension and gratuity are valuable rights

The Tribunal observed that pension and gratuity are not matters of bounty but constitute valuable rights of a retiring employee.

Their deprivation must have clear authority of law.

The pension provision relied upon by the respondents had to be strictly construed and could not be invoked mechanically merely because an FIR or criminal case continued to remain on record.

4. Mere pendency of a criminal case cannot justify indefinite withholding

The Tribunal disapproved of the respondents’ approach of treating the mere pendency of the criminal case as an automatic justification for withholding retiral benefits indefinitely.

It observed that such an interpretation would permit the administration to deprive a retired employee of earned retirement dues for an uncertain period, even when the criminal prosecution had not progressed to the stage of framing of charges.

The Tribunal emphasised that the description of a matter as “sub judice” cannot, by itself, constitute sufficient justification for indefinite withholding of retirement benefits.

5. Reliance on K.V. Jankiraman

The Tribunal referred to the Supreme Court judgment in Union of India v. K.V. Jankiraman, JT 1991 (3) SC 527.

It noted the underlying principle that mere suspicion, investigation or initiation of proceedings cannot be equated with a concluded determination of culpability.

Applying this principle to the facts before it, the Tribunal considered that the departmental proceedings had ended in favour of the applicant and the criminal prosecution had not reached the stage of framing of charges.

6. No subsisting finding of misconduct or quantified financial loss

Another important consideration was that the respondents had failed to establish any subsisting departmental proceeding, finding of misconduct, quantified pecuniary loss or other specific legal ground warranting continued withholding of the applicant’s DCRG and other retiral dues.

The Tribunal therefore found that continued withholding, in the circumstances of the case, was harsh and disproportionate.

Final Decision and Directions

The Central Administrative Tribunal, Chandigarh Bench, allowed the Original Application.

The Tribunal passed the following directions:

1. The impugned order dated 8 September 2022 and subsequent communication/order dated 27 February 2023 were quashed and set aside to the extent that they denied the applicant’s retirement benefits solely on account of pendency of the criminal case.
2. The consequential rejection and closure of the applicant’s CPGRAMS representations were also set aside to the relevant extent.
3. The respondents were directed to release the applicant’s DCRG/gratuity and other legally admissible retiral benefits, including regular pension and commutation of pension.
4. The payments were directed to be made within eight weeks from the date of receipt of a certified copy of the Tribunal’s order, subject to verification of applicable statutory conditions.

Interest on delayed retirement benefits

The applicant had claimed interest at 18% per annum.

However, the Tribunal did not grant interest at that rate. It directed that interest on delayed payment of DCRG and other retiral dues would be payable at the rate admissible under the applicable pension rules and instructions, from the date the respective amounts became due until actual payment.

Criminal case to be decided independently

Importantly, the Tribunal clarified that the release of retiral benefits would not amount to an expression of opinion on the merits of Criminal Case No. 24 of 2021.

The criminal proceedings were to be decided independently by the competent criminal court in accordance with law.

There was no order as to costs.

Legal Significance of the Judgment

This decision is significant for retired government and Railway employees whose pensionary benefits are withheld because of pending criminal or departmental proceedings.

It highlights several important principles:

First, the administration cannot mechanically rely upon the expression “sub judice” to justify indefinite withholding of retirement benefits.

Second, the stage and status of criminal proceedings are relevant when examining whether continued withholding is legally sustainable.

Third, the dropping of departmental proceedings and the absence of any surviving finding of misconduct or quantified financial loss are important factors.

Fourth, pension and gratuity are valuable legal rights, and their withholding must be supported by applicable law.

Fifth, even where pension rules contain provisions permitting withholding of gratuity during proceedings, the power must be exercised in accordance with the statutory scheme and cannot be treated as unrestricted or absolute.

The judgment is particularly relevant to cases where departmental proceedings have concluded in favour of the employee but criminal proceedings remain pending without charges having been framed.

Important Caution: Does This Mean Gratuity Can Never Be Withheld During Pending Criminal Proceedings?

No.

The Tribunal did not hold that gratuity can never be withheld whenever criminal proceedings are pending.

It expressly acknowledged that Railway Pension Rules contain provisions enabling the competent authority to withhold gratuity in appropriate cases where departmental or judicial proceedings, as contemplated under the rules, are pending.

The decision turned on the particular circumstances before the Tribunal, including:

• Departmental proceedings had been dropped.
• No charge had been framed against the applicant.
• The criminal case remained at the pre-charge stage.
• No subsisting departmental finding of guilt or quantified pecuniary loss was established.
• The respondents had not demonstrated a specific legal ground justifying continued withholding in the circumstances.

Therefore, the judgment should be understood in the context of its facts and the applicable pension provisions. It does not automatically override every statutory provision governing withholding of gratuity.

Frequently Asked Questions (FAQs)

Q1. Can Railway authorities withhold DCRG merely because a criminal case is pending?

Not automatically in every case. In this judgment, CAT Chandigarh held that mere pendency of the criminal case, without the criminal court having framed charges and in the absence of surviving departmental findings or another specific legal justification, did not warrant indefinite withholding.

Q2. What if departmental proceedings have already been dropped?

The dropping of departmental proceedings is a relevant consideration. In this case, the Tribunal noted that all departmental charges had been dropped and no departmental finding of misconduct or pecuniary loss survived.

Q3. Is framing of charges relevant for withholding pensionary benefits?

The Tribunal considered the fact that no charge had been framed and the criminal case remained at the pre-charge stage to be significant. It relied upon the underlying principle discussed in Union of India v. K.V. Jankiraman.

Q4. Did CAT Chandigarh grant 18% interest on delayed gratuity?

No. The Tribunal granted interest at the rate admissible under the applicable pension rules and instructions. It declined the specific claim for 18% interest per annum.

Q5. Within what period were the Railway authorities directed to release the benefits?

The respondents were directed to release the legally admissible DCRG and other retiral benefits within eight weeks from receipt of a certified copy of the order.

Q6. Does release of gratuity mean that the criminal case stands concluded?

No. The Tribunal expressly clarified that its decision would not affect the merits of the pending criminal case, which must be decided independently by the competent criminal court.

Conclusion

The decision in Naresh Kumar Sood v. Union of India & Others reinforces the principle that retirement benefits cannot be withheld indefinitely through a mechanical reference to pending criminal proceedings.

Where departmental proceedings have been dropped, no charge has been framed in the criminal case, and the administration cannot establish a specific legal basis for continued withholding, the employee’s right to receive admissible retiral dues deserves due consideration.

For retired Railway and government employees facing similar circumstances, this judgment provides an important legal reference for challenging arbitrary withholding of gratuity, DCRG and other pensionary benefits.

Case Reference: Naresh Kumar Sood v. Union of India & Others, OA No. 060/478/2023, Central Administrative Tribunal, Chandigarh Bench, decided on 1 September 2026.

Disclaimer: This article is intended solely for general legal information and educational purposes. It is based on the judgment discussed above and should not be treated as legal advice. The applicability of the decision depends upon the relevant statutory provisions and facts of each individual case.

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