Retiral Benefit Is the Exclusive Property of the Deceased Employee; Cannot Be Withheld Without Proved Misconduct: Calcutta HC Orders Pension Release Despite Pending Criminal Allegation

“The allegation against the deceased teacher has not been proved… therefore, the liability of payment of the alleged defalcated amount cannot be attached with the retiral benefit.” - In a significant ruling concerning service jurisprudence and pension rights, the Calcutta High Court directed the State authorities to release the pending retiral benefits and family pension of a deceased teacher, despite unresolved allegations of defalcation. Justice Biswajit Basu held that mere suspicion or pendency of criminal proceedings, without a conclusive finding or disciplinary action, cannot deprive a retired government employee (or their legal heirs) of entitled benefits.

The case involved Smt. Kananbala Thokdar & Others v. The State of West Bengal & Others, where the petitioners, legal heirs of a deceased school teacher, had been denied pension and retiral dues for over a decade due to the lack of a ‘No-Liability Certificate’ from the school.

The deceased teacher, who was the Teacher-in-Charge of Gangadevi High School (Malda), had allegedly misappropriated ₹4,00,000 under the Sarva Shiksha Abhiyan, leading to his suspension and initiation of a criminal case under Section 409 IPC (Chanchal PS Case No. 85/2008).

He retired on June 30, 2009, while under suspension, and sought disbursal of retiral dues. Though a writ petition in 2010 led to issuance of the Pension Payment Order (PPO) in 2018, the disbursement was stalled because the school refused to issue the requisite ‘No-Liability Certificate’, citing unresolved financial discrepancies.

In the meantime, the teacher passed away, and the criminal case was abated. His heirs approached the High Court seeking pension arrears and family pension for the widow.

The central legal issue was whether retiral benefits of a deceased teacher can be withheld indefinitely based on unproven allegations, especially when no disciplinary proceeding was ever initiated, and criminal proceedings abated upon death.

Senior Advocate Mr. Kamalesh Bhattacharyya, appearing for the petitioners, relied on Paragraph 19(5), Chapter V of the Death-cum-Retirement Benefit (DCRB) Scheme, 1981, which governs denial or reduction of pension. He argued:

“No disciplinary proceeding was initiated during the teacher’s service, and the criminal case was never concluded. Hence, the scheme does not permit denial of full pension.”

The school, represented by Mr. P.S. Deb Barman, claimed inability to issue the certificate due to audit reports showing the teacher’s failure to account for withdrawn funds.

However, the District Inspector of Schools had already sought an opinion from the Directorate of Pension, Provident Fund & Group Insurance (DPPG), which categorically stated: “There is no provision to deduct the said amount from the admissible gratuity… the retiral benefit is the property of the incumbent exclusively.”

The Court emphasized that retiral benefits cannot be withheld without due process: “The said teacher though was put under suspension on the said allegation of defalcation of money but no disciplinary proceeding was initiated against him.”

“The facts and circumstances of the present case do not attract paragraph 19(5) of the said scheme… the allegation against the deceased teacher has not been proved.”

Noting that the pension was already sanctioned via PPO in 2018, the Court criticized the prolonged non-payment and held: “The liability of payment of the alleged defalcated amount… cannot be attached with the said property [retiral benefit].”

The Court referred to the relevant government order requiring the teacher to collect a no-liability certificate at superannuation but noted that: “At the said point of time, he could not have insisted to issue such certificate due to the pendency of the criminal case… which ultimately abated.”

The High Court ordered as follows: “The respondent no. 4 is directed to issue the No-Liability certificate in favour of the said deceased teacher within a period of three weeks… the respondent no. 3 shall take necessary steps for disbursement of the retiral benefits… and also take steps for grant of family pension in favour of the petitioner no. 1.”

The Court clarified: “The State is free to take steps for recovery of the said amount from the petitioners in accordance with law.”

Thus, while holding that the estate of the deceased cannot be penalized without proof, the Court did not shut the door on future civil remedies by the State.

Date of Decision: 30 April 2025