Madhya Pradesh High Court
Shri Rakesh Kumar Upadhyay vs M/S N.T.P.C Ltd Singrauli on 4 November, 2025
1 WP-13469-2025
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK JAIN
ON THE 4 th OF NOVEMBER, 2025
WRIT PETITION No. 13469 of 2025
SHRI RAKESH KUMAR UPADHYAY
Versus
M/S N.T.P.C LTD SINGRAULI AND OTHERS
Appearance:
Shri Lalit Kharya - Advocate for the petitioner.
Shri Greeshm Jain- Advocate with Ms. Sana Khan- Advocate for
respondents.
ORDER
By way of this petition, the petitioner has challenged the action of the respondent/N.T.P.C Ltd in withholding the gratuity of the petitioner and so also performance related pay ("PRP" for short) upon his superannuation, which took place on 31.01.2025. The petitioner was holding the post of Additional General Manager (AGM), Business Excellence at Vindhyanchal, District Singrauli (M.P). The stoppage of gratuity and PRP has been made on the ground that the criminal investigation against the petitioner is pending pursuant to registration of FIRs by Anti Corruption Branch, CBI Jabalpur under section 13 of Prevention of Corruption Act relating to disproportionate assets of the petitioner. Copies of FIRs have been placed on record as Annexure P-3 dated 08.11.2023 and Annexure P-4 dated 20.5.2024.
2. It is contended by counsel for the petitioner that the only enabling Signature Not Verified Signed by: TARUN KUMAR SALUNKE Signing time: 06-11-2025 12:11:33 2 WP-13469-2025 provision for withholding of gratuity is Rule 31.2 (iii), as per which there has to be a disciplinary proceeding pending against the employee as on the date of superannuation, but since the petitioner was allowed to superannuate without any charge sheet having been issued against the petitioner, therefore, the respondents could not have withheld gratuity. It is further contended that in the criminal FIR, still investigation is pending and therefore, the gratuity could not be withheld.
3. Per Contra, it is contended by counsel for the respondent-NTPC that the petitioner is facing as many as two FIRs, which are placed as Annexure P-3 and Annexure P-4 both of which are under section 13 of Prevention of Corruption Act. First relates to disproportionate assets and second relates to extending undue favour to a contractor. It is contended by counsel for respondent that since the petitioner is facing criminal investigation and there is likelihood that at later stage he may be convicted in the said cases. Therefore, the gratuity has been withheld. It is contended that no forfeiture of gratuity or PRP has been made by the respondents and only the gratuity and PRP have been withheld, which does not give any valid cause of action to the petitioner to make challenge at this stage.
4. Upon hearing the rival parties, it is clear that as many as two FIRs were registered against the petitioner during his service tenure. First was on 8.11.2023 and the other was on 20.05.2024. The petitioner superannuated on 31.01.2025 and therefore the employer had sufficient opportunity and time to issue charge sheet to the petitioner and institute disciplinary proceedings prior to his superannuation.
Signature Not Verified Signed by: TARUN KUMAR SALUNKE Signing time: 06-11-2025 12:11:333 WP-13469-2025
5. As per Clause 31.2, the provision for disciplinary proceedings/imposition of penalty on employees after their retirement has been laid down in NTPC Conduct, Discipline & Appeal Rules, 1977 (for short referred to as CDA Rules). As per Clause 31.2, which reads as under:-
Clause 31.2 Disciplinary proceedings/Imposition of Penalty on Employees after their Retirement
(i) The disciplinary authority may impose penalty on delinquent employees on conclusion of such departmental proceedings which were initiated during their service time and have continued beyond the date of their superannuation.
(ii) Disciplinary proceedings, if instituted while the employee was in service whether before his/her retirement or during his/her reemployment, shall, after the final retirement of the employee, be deemed to be proceeding and shall be continued and concluded by the authority by which it was commenced in the same manner as if the employee had continued in service.
(iii) During the pendency of the disciplinary proceeding, the disciplinary authority may withhold payment of gratuity, for ordering the recovery from gratuity of the whole or part of any pecuniary loss caused to the company if the employee is found in a disciplinary proceeding or judicial proceeding to have been guilty of offences/misconduct as mentioned in subsection (6) of Section 4 of the Payment of Gratuity Act, 1972 or to have caused pecuniary loss to the company by misconduct or negligence, Signature Not Verified Signed by: TARUN KUMAR SALUNKE Signing time: 06-11-2025 12:11:33 4 WP-13469-2025 during his/her service including service rendered on deputation or on reemployment after retirement. However, the provisions of Section 7(3) and 7(3A) of the Payment of Gratuity Act, 1972 should be kept in view in the event of delayed payment, in case the employee is fully exonerated.
6. The aforesaid Clause 31.2 empowers the disciplinary authority to impose penalty on such delinquent employees in proceedings which are initiated during their service time and continued beyond the date of their superannuation. Such proceedings as per Clause 31.2 (ii) shall be deemed to be valid disciplinary proceedings and shall be continued and concluded by the authority by whom it was commenced in the same manner as if the employee had continued in service. Clause 31.2(iii) further provides that during pendency of the disciplinary proceedings the disciplinary authority may withhold payment of gratuity or ordering recovery from gratuity of pecuniary loss caused to the company if the employee is found to have been guilty of misconduct as defined in Section 4 (6) of Payment of Gratuity Act, 1972 or to have caused pecuniary loss to the company by his misconduct or negligence.
7. From the above, it is clear that the enabling provision to continue disciplinary proceeding is only where the proceedings had been commenced while the employee was in service. In the present case, no charge sheet was issued till the date of superannuation of the petitioner, eventhough two FIRs were registered against him well before his superannuation and the employer had sufficient time to issue charge sheets. Even after retirement, no charge Signature Not Verified Signed by: TARUN KUMAR SALUNKE Signing time: 06-11-2025 12:11:33 5 WP-13469-2025 sheet has been issued. Although, if chargesheet(s) had been issued after retirement, the same would have been in nullity and without jurisdiction. The case therefore, does not fall in the category of pendency of disciplinary proceedings because no disciplinary proceedings are pending.
8. So far as the question of withholding of gratuity in terms of section 4(6) of Payment of Gratuity Act, 1972 is concerned which is authorized under clause 31.2 (iii), section 4(6) of Payment of Gratuity Act, 1972 reads as under:-
"4. Payment of gratuity:
....
(6) Notwithstanding anything contained in sub-section (1),-
(a) the gratuity of an employee, whose services have been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused;
(b) the gratuity payable to an employee [may be wholly or partially forfeited] [ Substituted by Act 25 of 1984, Section 3, for " shall be wholly forfeited" (w.e.f. 1.7.1984).]-
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, Signature Not Verified Signed by: TARUN KUMAR SALUNKE Signing time: 06-11-2025 12:11:33 6 WP-13469-2025 provided that such offence is committed by him in the course of his employment."
9. From the perusal of section 4(6) of the Payment of Gratuity Act, 1972 , it is clear that to invoke the said clause, termination of services of employee is the pre-requisite and without termination of services of employee, gratuity cannot be withheld or forfeited. Therefore, the respondents are not under authority to forfeit the gratuity on account of pendency of criminal proceedings because no termination of services took place under section 4(6) of Payment of Gratuity Act, 1972 , and the said Act does not authorize forefeiture or withholding of gratuity only on account of pendency of criminal case.
10. Counsel for the respondents had argued that respondents have not forfeited the gratuity, but have only withheld it. The respondents may have only withheld the gratuity, but even for withholding the gratuity, the respondents have to point out that ultimately they have power to withhold the gratuity. If they cannot forfeit the gratuity ultimately, then the power to withhold gratuity also cannot be read into the competence of the employer. If ultimately no forefeiture can be made, then there is no point in withholding the payment of gratuity of a retired employee.
11. So far is withholding of PRP is concerned, as the petitioner has already worked and based upon his performance, if he is entitled to any performance related pay, then that has to be released to him and pendency of criminal proceedings would have no bearing on payment or withholding of pay of the petitioner, for which, no enabling provision could be pointed out Signature Not Verified Signed by: TARUN KUMAR SALUNKE Signing time: 06-11-2025 12:11:33 7 WP-13469-2025 by learned counsel for the respondents. Consequently, it is directed that the respondents shall release the gratuity and PRP of the petitioner within a period of 45 days from the date of production of certified copy of this order, failing which the amount of gratuity would carry interest @ 8% per annum from the date of this order till actual payment.
12. In above terms, this petition is allowed.
(VIVEK JAIN) JUDGE tarun Signature Not Verified Signed by: TARUN KUMAR SALUNKE Signing time: 06-11-2025 12:11:33