The Supreme Court of India has dismissed an appeal filed by a retired employee of the Himachal Pradesh Road Transport Corporation, clarifying that the statutory bar on the payment of gratuity under Rule 69(1)(c) of the Central Civil Services (Pension) Rules, 1972, remains in effect as long as either departmental or judicial proceedings are pending.
The Bench comprising Justice Prashant Kumar Mishra and Justice Vipul M. Pancholi, in its judgment dated April 7, 2026, held that the word “or” in the rule acts as a disjunctive, expanding the scope of the embargo to ensure the financial interests of the State are safeguarded until all proceedings reach a final conclusion.
Background of the Case
The appellant, Bikram Chand Rana, joined the Himachal Pradesh Road Transport Corporation (the “Corporation”) as a Clerk in 1979 and was promoted to Senior Assistant in 2000. He retired upon reaching the age of superannuation on February 28, 2009.
Between May and July 2006, allegations surfaced regarding the appellant’s involvement in the leak of the Combined Pre-Medical Test (CPMT) question paper. Consequently, FIR No. 140/2006 was registered under Sections 406, 418, 420, and 120B of the Indian Penal Code (IPC). Parallelly, the Corporation initiated departmental proceedings under Rule 14 of the CCS (CCA) Rules, 1965.
The Inquiry Officer, in a report dated February 26, 2009, concluded that there was no material establishing the appellant’s involvement in the scam but noted:
“….Apart from this, the case is under consideration of Honourable Court and until the Court’s decision, it would not be appropriate to say anything. Based on the documents, it is not seemed that the Accused was involved in the scam.”
While the appellant was granted a provisional pension upon retirement, his gratuity and other terminal benefits were withheld due to the pending criminal trial.
Arguments of the Parties
The appellant challenged the withholding of his benefits, arguing that since the departmental inquiry had concluded in his favor (with charges found “not proved” in May 2015), the gratuity should be released. He contended that the expression “departmental or judicial proceedings” in Rule 69(1)(c) should be interpreted to mean that gratuity becomes payable upon the conclusion of either set of proceedings.
Furthermore, the appellant relied on Rule 9(1) of the 1972 Rules, suggesting that the Corporation would not be left “remediless,” as any disbursed amounts could be recovered in the event of a subsequent conviction.
The Corporation maintained that the pending criminal trial regarding the CPMT paper leak constituted a “judicial proceeding,” thereby maintaining the statutory bar on the release of gratuity.
Court’s Analysis and Observations
The Supreme Court rejected the appellant’s interpretation, stating that it would lead to an “anomalous result.” The Court observed:
“Rule 69(1)(c) operates as an ’embargo’ or a statutory bar, not as an enabling provision. The use of the ordinary disjunctive ‘or’ expands the scope of this bar, indicating that gratuity shall not be paid so long as either departmental or judicial proceedings are pending.”
The Court cited the case of Babu Manmohan Das Shah & Ors. vs. Bishun Das (1967), noting that the word “or” should be construed in its ordinary meaning unless it leads to absurdity. The Bench remarked that accepting the appellant’s view would “altogether defeat the purpose of the provision, which is to safeguard the financial interests of the State.”
Regarding the distinction between the two types of proceedings, the Court noted:
“Even in the instant case, where both the proceedings stem from identical allegations, their nature, scope, and standard of proof remain fundamentally different.”
Addressing the argument regarding Rule 9(1), the Court concurred with the High Court’s view that the provision is “downstream in its operation” and cannot justify the release of gratuity during the interregnum while proceedings are pending.
The Decision
The Supreme Court found no reason to interfere with the High Court of Himachal Pradesh’s judgment. While acknowledging the appellant’s advanced age and the fact that students in the same scam had been acquitted in 2016, the Court held these facts “cannot alter the statutory position governing the release of gratuity under Rule 69(1)(c).”
The Appeal was accordingly dismissed. However, the Court reiterated the direction to the Trial Court to expedite the trial arising out of FIR No. 140/2006.
Case Details:
- Case Name: Bikram Chand Rana v. Himachal Pradesh Road Transport Corporation
- Case No: Civil Appeal No. 14669 of 2025
- Bench: Justice Prashant Kumar Mishra, Justice Vipul M. Pancholi
- Date of Judgment: April 07, 2026
