No Absolute Right to Pension After Retirement, Especially Where Misconduct Is Presumed: Calcutta High Court Refuses Relief to Retired Headmaster Accused of Fund Defalcation

“Full Pension Is Not a Matter of Course… Reasonable Presumption of Misconduct Is Sufficient to Withhold”, In a significant ruling addressing the interplay between pension rights and financial misconduct, the Calcutta High Court refused to grant relief to a retired headmaster seeking a No Liability Certificate (NLC) and release of his pension and gratuity, holding that there existed a strong presumption of defalcation of school funds and the matter was sub judice in a pending criminal trial.

Justice Rai Chattopadhyay, exercising constitutional writ jurisdiction on the appellate side, held that the right to pension, though constitutionally protected under Article 300A, is not absolute, especially in light of the Death-cum-Retirement Benefit (DCRB) Scheme, 1981, which empowers authorities to withhold pension on grounds of misconduct, even after retirement.

"Pension Is Not Automatic; Must Be Earned Through Satisfactory Service" – HC Applies Scheme 19 of DCRB Scheme, 1981

The Court took a clear stance that pension is not a matter of entitlement by default, and quoted Scheme 19(1) of the DCRB Scheme, 1981, which stipulates:

“The full pension admissible under this Scheme is not to be given as a matter of course or unless the services rendered have really been approved by the competent authority.”

It further emphasized Scheme 19(4), stating that even a "presumption of corruption based on recorded facts" is enough to deny full pension:

“The service of an employee against whom a charge of corruption has been proved, whether in a specific case or by any presumption based on recorded facts, cannot be considered to be thoroughly satisfactory.”

In this context, the audit report conducted by Loharuka & Co., appointed by the Directorate of School Education, found the petitioner guilty of defalcation to the tune of ₹5,47,993, including unaccounted sports equipment grants.

Headmaster Retired in 2017, Seeks Pension; School Alleges Misappropriation of Funds

The petitioner, Gopal Chandra Patra, retired as Headmaster of Bikrampur High School (H.S.) on 28 February 2017, after over 35 years of service. Though he handed over charge and claimed to have submitted satisfactory accounts accepted by the school’s Finance Sub-Committee, the school authorities refused to issue a No Liability Certificate, citing serious accounting discrepancies during his tenure.

A letter dated 06 July 2017 from the Teacher-in-Charge to the petitioner detailed missing vouchers for several financial years, tampered documents, and unaccounted grants, prompting initiation of a criminal case under Sections 409 (criminal breach of trust by public servant) and 465 (forgery) of the Indian Penal Code, which is currently pending trial.

"Criminal Proceedings and Audit Findings Create Strong Presumption of Guilt" – No Arbitrary Deprivation of Pension

Rejecting the petitioner’s argument that he was being arbitrarily deprived of his pension without any departmental enquiry, the Court held that the audit report, combined with the filing of a criminal case and submission of chargesheet, was sufficient to create a prima facie case of financial misconduct.

Justice Chattopadhyay observed:

“Strong presumption can be formed on the basis of the auditor’s report... by virtue of which the incomplete account books and possession of the petitioner over a substantial amount of the school fund is evident.”

Thus, the Court held that the withholding of final pension and gratuity was not arbitrary, but logical and supported with well-founded reasons, pending outcome of the criminal proceedings.

Provisional Pension Can Be Considered, But Gratuity Barred Until Case Concludes

Importantly, the Court invoked Scheme 19(5) of the DCRB Scheme, 1981, which permits grant of provisional pension where judicial proceedings are pending, while withholding gratuity. The Court directed the Principal Secretary, School Education Department to independently consider whether the petitioner could be granted provisional pension, stating:

“The person may be provided with a provisional pension commencing from the date of his retirement... but no gratuity or death-cum-gratuity shall be paid.”

Accordingly, the Court referred the matter to the Principal Secretary to decide within eight weeks, after affording an opportunity of hearing to both the petitioner and the school authority.

Contentions Rejected: Pension Not an Absolute Right, DCRB Scheme Applies Even Post-Retirement

The petitioner had argued, relying on precedents such as Dr. Hira Lal v. State of Bihar and State of Jharkhand v. Jitendra Kumar Srivastava, that pension is a protected right under Article 300A, and cannot be withheld without due process. He also contended that the DCRB Scheme, 1981, ceased to apply to him after retirement, since the employer-employee relationship had ended.

The Court rejected these arguments squarely:

“The said Scheme is found to be applicable also in case of a pensioner whose misconduct is on record and/or well presumable.”

It distinguished the judgments cited by the petitioner, including Md. Sayed and Dr. Anisur Rahaman, observing that those cases involved no audit findings, no criminal case, and no presumption of misconduct, unlike the present case.

“Audit, Complaint and Criminal Case Distinguish Present Case from Cited Precedents” – Court Declines to Issue NLC

Justice Chattopadhyay clarified that precedents cannot be applied mechanically and emphasized the distinct factual matrix of the current matter, where:

• Repeated complaints were made during service;
• Audit was delayed due to inaction by higher authorities;
• Subsequent audit revealed concrete evidence of defalcation;
• A formal complaint under Section 156(3) CrPC was entertained, leading to police registration of FIR and filing of charge sheet.

Therefore, the Court found no merit in the prayer for issuance of a No Liability Certificate or for immediate release of pension and gratuity.

Final Pension and Gratuity Rightly Withheld Pending Outcome of Criminal Trial; Provisional Pension May Be Granted

The High Court concluded that while pension is a protected right, its release is contingent on the conduct of the employee and subject to the statutory provisions of the DCRB Scheme, 1981, which explicitly allows for withholding of benefits in case of misconduct.

“Given such factual background, it cannot be termed as an arbitrary deprivation of the petitioner from being granted with pension. On the contrary, the same is logical and supported with well-founded reasons.”

The writ petition was disposed of, with direction to the Principal Secretary, School Education Department, to consider the grant of provisional pension within eight weeks, by passing a reasoned order after hearing all parties.

Date of Decision: 13 January 2026