Pensionary Benefits Can't Be Withheld Indefinitely On Account Of Possible Disciplinary Proceedings In Future: Karnataka High Court

The Karnataka High Court has said that pensionary and retiral benefits of a former employee cannot be withheld indefinitely on account of a possible disciplinary proceedings on a future date.A division bench of Chief Justice Vibhu Bakhru and Justice C M Joshi held thus while dismissing appeal by Bangalore Electricity Supply Company Limited against single judge's order directing the company to pay all retirement benefits–death-cum-retirement gratuity, entitlement for leave encashment benefit and other pensionary benefits along with interest from the date of retirement to one Malathi B. "We are not persuaded to accept that the pensionary and retiral benefits of respondent No.1 could be withheld indefinitely on account of a possible disciplinary proceedings at a future date," the bench said. The company had challenged the single judge order which had allowed the petition filed by Malathi B and directed the company to pay all retirement benefits, that is, death-cum-retirement gratuity, entitlement for leave encashment benefit and other pensionary benefits along with interest from the date of retirement. The said benefits had not been settled for the reason that a show cause notice was issued to Malathi B in 2019.The bench referred to Regulation 171 of the Karnataka Electricity Board Employees' Service Regulations issued in 1966, which pertains to "Withholding or withdrawal of pensions and recoveries therefrom. Referring to Regulation 171 (b)(ii), the court said departmental proceedings cannot be instituted in respect of an event which took place more than four years before such an institution. Noting that in the present case show cause notice was issued to Malathi on 25.05.2019. After the issuance of the said show cause notice, she was repatriated to her parent organization. She was also promoted to the post of Deputy Controller of Accounts in the year 2022. She attained the age of superannuation on 31.07.2023. The bench said “It is noticed that more than seven years has lapsed from the issuance of the show cause notice and no disciplinary proceedings have commenced.” Rejecting the contention of the appellant that the cause of action is a continuing one and the show cause notice did not specify any period the court said:“The show cause notice had clearly spelt out the quantum of loss suffered and are articulated in the allegations which was responded to by respondent No.1. It is clear that more than four years have elapsed from the date of the incident and, therefore, no departmental proceedings could be instituted in terms of Regulation 171(b) of the Regulations. In the given circumstances, the decision of the learned Single Judge directing that the retiral and other pensionary benefits be paid to respondent No.1, cannot be faulted.” Appearance: Advocates Swamini G Mohanambal, Sandeep S Patil for Appellant.Advocate Abhishek N V for Respondent. Citation No: 2025 LiveLaw (Kar) 300Case Title: Bangalore Electricity Supply Company Limited AND Malathi B & ANR Case No: WRIT APPEAL NO. 1577 OF 2024.Click Here To Read/Download Order

Pensionary Benefits Can't Be Withheld Indefinitely On Account Of Possible Disciplinary Proceedings In Future: Karnataka High Court

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