The High Court of Jammu and Kashmir and Ladakh, in a significant judgment, held that retirement benefits cannot be denied just because crime branch clearance is pending, especially when the FIR against the employee has already been closed.
Justice Rajesh Sekhri, presiding over a single-judge bench, observed that even if FIR investigations are pending, it does not count as “judicial proceedings” and cannot justify the withholding of retiral benefits. The court directed the employer to release all pending dues with applicable interest.
“The pendency of an FIR investigation is not equivalent to judicial proceedings and cannot be used to deprive an employee of their retiral benefits.”
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Background of the Case
Prem Kumar, a retired storekeeper from Jammu and Kashmir Cooperative Supply and Marketing Federation Ltd. (JAKFED), had retired in 2011. He had earlier been named in a 1995 FIR related to misappropriation of food grains. However, that FIR was closed as “not proved” after approval from the Vigilance Commissioner, and the closure report was accepted by the Anti-Corruption Court.
In 2019, the government initiated the winding up of JAKFED, and a liquidator was appointed to manage dues. Instead of releasing Prem Kumar’s retiral benefits, a public notice claimed that ₹4 lakhs were outstanding against him. Prem Kumar responded with his ‘no dues’ certificate and raised a claim of ₹8.4 lakhs.
With no resolution in sight, Prem Kumar filed a writ petition seeking the release of his retiral dues.
Prem Kumar argued that despite full cooperation and submission of required documents, the benefits were unjustly held. He cited Sanjeev Bhagat v. UT of J&K, where it was ruled that mere pending investigations cannot delay or deny retiral benefits.
The respondents claimed the pending dues were due to alleged misappropriation and cited SRO 233 of 1988, which mandates crime branch clearance for cooperative institution employees. They also said that the petitioner failed to comply with a public notice issued in September 2023.
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Justice Sekhri noted that Prem Kumar’s service had ended in 2011 and his dues were sanctioned in 2014. There was no legal ground to link the release of retirement benefits with crime branch clearance, especially when the FIR was already closed.
“Withholding retirement benefits under these circumstances violates Articles 14, 16 and 21 of the Constitution.”
Citing Ghulam Mohi-ud-Din Lone v. State of J&K, the court held that FIR investigations do not qualify as judicial proceedings. The court emphasized that policy decisions taken in July 2023 also directed clearing pending JAKFED employee dues.
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The judge concluded that the condition of requiring crime branch clearance lacks any legal support and cannot be a barrier to retiral benefit disbursement.
“The employer cannot invent conditions which have no legal standing, especially when the FIR is closed and no judicial proceedings are active.”
The High Court allowed the writ petition and directed the release of all pending retiral dues along with interest.
Decided on: 26 May 2025
Case Number: WP(C) No. 2279/2024
Petitioner’s Counsel: Ms. Shivani Jalali
Respondents’ Counsel: Mr. P.D. Singh (Dy. AG), Ms. Sagira Jaffar (for Sr. AAG Mrs. Monika Kohli)
