New Delhi, Sept 22 – In a strong rebuke, the Supreme Court dismissed an appeal by the Madhya Pradesh Panchayat & Rural Development Department after it withheld a retired employee’s pension and gratuity for nearly three years. The bench, led by Justice Sanjay Karol, ruled that refusing to vacate a government residence cannot be used as an excuse to block rightful retirement benefits.
Background
Santosh Kumar Shrivastava, a state employee since 1980, retired on June 30, 2013. Despite completing service, he faced an unexpected hurdle: his pension and gratuity were not released. Authorities claimed he continued to occupy his government-allotted house after retirement. Payments were finally made in February 2016, but not before deducting over ₹3 lakh, citing penal rent and alleged excess salary.
Earlier, the High Court had sided with Shrivastava, directing a full refund with 6% interest, and rejecting the department’s claim that housing occupation justified withholding dues. The state appealed to the Supreme Court, hoping to overturn this order.
Court’s Observations
The apex court minced no words. “Payment of retiral dues is not a matter of bounty but a matter of right,” the bench observed, pointing to previous rulings that pension cannot be treated as charity. It highlighted that the department tried to link two separate issues-retirement benefits and housing possession-without legal basis.
Citing the precedent of Syed Abdul Qadir vs. State of Bihar, the Court clarified that excess payments made by administrative error cannot be clawed back when the employee has committed no fraud. “We fail to see the nexus between these two aspects,” the judges remarked, rejecting the argument that non-vacation of housing justified delay.
Decision
The Supreme Court upheld the High Court’s order, confirming that the withheld amounts must be returned with 6% annual interest. The appeal was dismissed without costs. In simple terms, the court made it clear: a government department cannot dangle pension rights to force a retired employee out of a house.
Case: Panchayat & Rural Development Dept., Madhya Pradesh v. Santosh Kumar Shrivastava
Decision Date: 22 September 2025