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Stating that an appeal is a continuation of the proceedings in trial and would be, thus, a continuation of judicial proceedings, the Supreme Court on Tuesday held that during the pendency of the appeal filed by an employee against an order of conviction, the State cannot be disentitled from withholding the Death-cum-Retirement Gratuity (‘DCRG’).

Court added that the time period of pendency of appeal would be considered a hiatus period within which certain arrangements have to be made which would be dependent on the outcome of the appeal.

Essentially, the bench of Justices Sanjay Kishan Kaul and MM Sundresh was faced with a question as to whether on the conviction in a criminal case for violation of integrity norms in performance of official duties and an appeal pending before the High Court, is the employee still entitled to the release of his DCRG?"

An appeal was filed by the government of Kerala assailing a judgment of the Full Bench of the Kerala High Court, wherein it had opined that the DCRG would have to be released to the respondent-employees pending consideration of the criminal appeal.

In the impugned judgment, the High Court also struck down Rule 3A of the Kerala Service Rules (KSR) which held that the recovery under Rule 3 of the KSR could only be against pension and not DCRG.

The top court noted that the separate departmental proceedings against the two employees had not been concluded within the given timeframe of one year. 

It was found that the very objectives of holding back pension or the DCRG could be, one, to recover the amounts found due from the delinquent employee of any nature whatsoever after appropriate notice and proceedings and second, if an employee is dismissed from service.

It was further held that in the second eventuality of the dismissal from service the employee would not lose all retirement benefits.

Moreover, the bench held that Rule 3, Note 2, Ruling 3, and Rule 3A of the KSR have to be read in conjunction as they provide for the treatment of the DCRG in case of disciplinary or judicial proceedings pending at the stage of retirement.

Case Title: The Secretary, Local Self Government Department & Ors. etc. v. K. Chandran etc.