IMPORTANT POINT
The main legal point established in the judgment is that the authorities have no power to withhold gratuity and pension even during the pendency of disciplinary/judicial proceedings if the government servant is allowed to retire. Without the sanction of law and a legal foundation for such punitive action, it is not open to the authorities to withhold the lawful benefits due and payable to a retired employee on the ground that he or she may, thereafter, be found guilty of causing pecuniary loss to the Government.

JUDGMENT

Sanjay Kumar, CJ. - The point for consideration in this case is whether gratuity and pension payable to a retired employee can be withheld without even initiating disciplinary or judicial proceedings against such employee as per due procedure.

2. A learned Judge of this Court did not think so and allowed W.P(C) No.1013 of 2018 by order dated 30.04.2019, directing finalization and payment of gratuity and pensionary benefits to the petitioner therein, presently respondent No.1, within a time frame. Aggrieved thereby, the State of Manipur and its authorities in the Social Welfare and Vigilance Departments preferred this appeal.

3. Heard Mr. Mangsatabam Rarry, learned Additional Advocate General, Manipur, for the appellants; Mr. H.S.Paonam, learned senior counsel, appearing for respondent No.1; and Mr. S.Suresh, learned counsel for respondent No.2.

4. Respondent No.1 was appointed as a Child Development Project Officer in the Social Welfare Department of the State on 02.02.1991. She was promoted to the post of Programme Officer (ICDS) on 03.01.2000. She was transferred to the State Cell on 24.01.2005. By order dated 27.12.2005, the Programme Officer, State ICDS Cell, was declared to be the Drawing and Disbursing Officer and also Head of Office in respect of the Directorate of Social Welfare, Manipur. In consequence, respondent No.1 became the Drawing and Disbursing Officer (DDO) from that date.

5. In March, 2014, a report was published in a local newspaper about Rs.1.21 Crore meant for old age pensions being parked in the DDO's account for the previous two years. In that context, the Director (Social Welfare), Manipur, addressed letter dated 26.03.2014 to the Principal Secretary (Social Welfare), Government of Manipur, confirming that Rs.1.21 Crore had been sanctioned towards old age pensions and was deposited in the DDO's account but the same was not available in the account as on date but no documents were available evidencing release of the amount to the beneficiaries. The Joint Secretary (Social Welfare), Government of Manipur, replied vide letter dated 01.04.2014, asking the Director (Social Welfare), Manipur, to refer the matter to the Vigilance Department for inquiry. The Director (Social Welfare), Manipur, accordingly wrote to the Superintendent of Police, Vigilance Department, Manipur, on 04.04.2014, asking him to take necessary further action. Thereupon, the Vigilance Department registered Vigilance Case No.1/SP-V/2014 in relation to the missing Rs.1.21 Crore and Vigilance Case No.1/SP-V/2015 apropos another sum of money which was not properly accounted for. Respondent No.1, being the DDO, was therefore involved in these vigilance inquiry cases.

6. While so, respondent No.1 attained the age of superannuation. Order dated 25.6.2016 was issued by the Deputy Secretary (Social Welfare), Government of Manipur, allowing her to retire from service with effect from 31.03.2016. However, the order made it clear that payment of her gratuity would be subject to completion of Vigilance Cases No.1/SP-V/2014 and No.1/SP-V/2015 pending against her. However, the Director (Vigilance), Manipur, addressed Integrity Certificate/Vigilance Clearance dated 10.10.2016 to the Director (Social Welfare), Manipur, informing him that no vigilance case was pending against respondent No.1. The Director (Social Welfare), Manipur, addressed letter dated 25.07.2017 to the Director (Vigilance), Manipur, referring to the Integrity Certificate/Vigilance Clearance dated 10.10.2016, and requested him to issue closure details of both vigilance cases so as to enable the department to process her retirement benefits. In response, the Director (Vigilance), Manipur, addressed letter dated 26.09.2017 informing the Director (Social Welfare), Manipur, that the State Vigilance Commission had recommended to the Social Welfare Department to institute a special audit to look into the step-by-step outflow of the Rs.1.21 Crore meant for old age pensions during the financ