Gratuity is property under Article 300-A of Indian Constitution

Chhattisgarh High Court held that Gratuity is property of retired Govt. servant and property within the meaning of Article 300-A of the Constitution of India.

Relevant Extract of Chhattisgarh High Court Judgment

10. In the matter of State of Jharkhand and others v. Jitendra Kumar Srivastava and another1, it has been held by Their Lordships of the Supreme Court that gratuity and pension are not bounty and it is thus a hard earned benefit which accrues to an employee and is in the nature of property. This right to property cannot be taken away without the due process of law as per the provisions of Article 300-A of the Constitution of India. It has been held following the decisions of the Supreme Court in the matters of Deokinandan Prasad v. State of Bihar2 and D.S. Nakara v. Union of India. The report states as under: –

“It is an accepted position that gratuity and pension are not the bounties. An employee earns these benefits by dint of his long, continuous, faithful and unblemished service. Conceptually it is so lucidly described in D.S. Nakara and Ors. Vs. Union of India; (1983) 1 SCC 305 by Justice D.A. Desai, who spoke for the Bench, in his inimitable style, in the following words: (SCC pp.319-20, paras 18-20)

“18. The approach of the respondents raises a vital and none too easy of answer, question as to why pension is paid. And why was it required to be liberalised? Is the employer, which expression will include even the State, bound to pay pension? Is there any obligation on the employer to provide for the erstwhile employee even after the contract of employment has come to an end and the employee has ceased to render service?

19. What is a pension? What are the goals of pension? What public interest or purpose, if any, it seeks to serve? If it does seek to serve some public purpose, is it thwarted by such artificial division of retirement pre and post a certain date? We need seek answer to these and incidental questions so as to render just justice between parties to this petition.

20. The antiquated notion of pension being a bounty a gratituous 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 Deoki Nandan Prasad v. State of Bihar and Ors. 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 any one’s discretion.

It is only for the purpose of quantifying the amount having regard to service and other allied maters 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 and Anr. V. Iqbal Singh (1976) 2 SCC 1.” It is thus hard earned benefit which accrues to an employee and is in the nature of “property”. This right to property cannot be taken away without the due process of law as per the provisions of Article 300-A of the Constitution of India.

14. The right to receive pension was recognised as a right to property by the Constitution Bench judgment of this Court in Deokinandan Prasad v. State of Bihar.” 11. Applying the law laid-down by the Supreme Court in the aforesaid cases and as per the Rules, it appears that the Government is entitled to retain the gratuity during pendency of judicial proceedings not more than 50% subject to consideration the gravity of charges levelled against such government servant.

12. The respondent No.3 in its order dated 16.1.2014 (Annexure P/1) has not assigned any reason for not considering the petitioner’s case in the light of Rule 64(1) (a) of the Pension Rules as to why the petitioner is not entitled for 50% of gratuity amount, whereas it has held in the foregoing paragraphs that gratuity and pension are not bounties, but is a property in the hands of the government servant. The respondent No.3 was obliged to consider the case of the petitioner in terms of the said Rules especially this Court by its order dated 17.12.2013 clearly directed consideration of the petitioner’s case in accordance with Rule 64 of the Pension Rules. Such a course adopted by the respondent No.3 is wholly impermissible in law ignoring the law laid down by the Supreme Court in the aforesaid judgment (supra).

13. Consequently, order dated 16.1.2014 (Annexure P/1) passed by the respondent No.3 declining to grant gratuity in terms of Rule 64 of the Pension Rules is hereby set aside. The respondent No.3 is directed to consider the case of the petitioner for grant of 50% of gratuity in terms of Rule 64 of the Pension Rules within thirty days from the date of receipt of certified copy of this order.

(Source: taxguru.in)