The Jammu and Kashmir High Court has held that retirement benefits cannot be withheld merely on the ground of pending clearance from the Crime Branch, especially when the FIR against the employee has been closed as "not proved".

Justice Rajesh Sekhri, sitting as a single judge, ruled that even ongoing investigations do not qualify as “judicial proceedings” and therefore cannot justify denial of retiral dues.

Prem Kumar, who retired in 2011 as a storekeeper from the Jammu and Kashmir Cooperative Supply and Marketing Federation Ltd. (JAKFED), was denied his retiral benefits after a 2019 decision by the administration to wind up the Federation. A liquidator was appointed to settle dues but issued a public notice stating that Kumar owed around ₹4 lakhs. In response, Kumar submitted a 'no dues' certificate and claimed approximately ₹8.4 lakhs in pending benefits.

Notably, Kumar had been named in a 1995 FIR alleging misappropriation of food grains. However, the case was closed as “not proved” by the Vigilance Organisation with the approval of the Commissioner of Vigilance. The closure report was also accepted by the Anti-Corruption Court.

Kumar filed a writ petition challenging the withholding of his benefits and the demand for dues. He argued that with the FIR closed and no judicial proceedings pending, there was no legal ground for the non-payment. Citing Sanjeev Bhagat v. UT of J&K, he submitted that mere procedural formalities or unsubstantiated claims cannot be used to withhold retirement dues.

The respondents contended that under SRO 233 of 1988, clearance from the Crime Branch was essential, and Kumar had failed to comply with a public notice issued in September 2023. They further alleged a liability of ₹4 lakhs on his part from past misappropriations.

The Court rejected the respondents’ arguments and made the following observations:

• Closure of FIR: Since the 1995 FIR had been conclusively closed and accepted by a competent court, there was no pending criminal case to justify the withholding of benefits.

• Investigations ≠ Judicial Proceedings: The court reiterated that the mere pendency of an investigation, in the absence of a court proceeding, does not qualify as a judicial proceeding that could affect entitlement to retirement dues (Ghulam Mohi-ud-Din Lone v. State of J&K).

• Policy to Clear Dues: Referring to a July 2023 policy decision to settle all pending dues of JAKFED employees, the Court held that the petitioner’s claim could not be excluded arbitrarily.

• Constitutional Rights Violated: The Court emphasized that continued denial of retiral benefits, despite closure of the FIR, was violative of Articles 14, 16, and 21 of the Constitution.

Allowing the writ petition, the Court directed the release of all pending retirement benefits to Prem Kumar along with applicable interest.