Srinagar: In a significant ruling on retiral benefits of government and public sector employees, the High Court of Jammu & Kashmir and Ladakh has held that pensionary and retiral benefits cannot be withheld merely because an FIR is under investigation and no charge-sheet has been filed, particularly when no loss to the employer has been established in departmental or judicial proceedings.
The court directed the J&K Projects Construction Corporation (JKPCC) to release the withheld retirement dues and salary of its former General Manager, Vikar Mustafa Shonthu, within two months.
Justice Sanjay Dhar while delivering his judgment in the case observed that mere pendency of an investigation does not amount to a judicial proceeding, and under Article 168-A of the J&K Civil Service Regulations, recovery from pension or withholding of retiral benefits can only be justified where losses caused to the employer are determined through judicial or departmental proceedings.
According to court records, Shonthu served the corporation in various capacities, rising to the post of General Manager (Civil) in 2015. In 2018, he was assigned the additional responsibility of Managing Director on an in-charge basis, a decision later ratified by the corporation’s Board of Directors. He retired from service in 2021.
A controversy arose after a fact-finding committee examined certain aspects of the corporation’s functioning and recommended a probe into the circumstances surrounding Shonthu’s appointment as in-charge Managing Director.
Based on the committee’s recommendations, a criminal case was registered by the Crime Branch, leading to departmental proceedings and the eventual withholding of his salary and retirement benefits
The Bench of Justice Dhar in his judgment held that investigation alone is not a ground to withhold pensionary benefits of the petitioner employee, and that withholding retiral benefits requires proof or determination of loss caused to the employer.
The bench further said once the employee is discharged and the charge-sheet is dismissed, retiral benefits cannot continue to be withheld on that basis.
An employee who has not caused financial loss to the employer and has not gained monetarily from the alleged acts cannot be denied terminal benefits, said the court.
The petitioner argued that although an inquiry was conducted against him, he neither received the salary attached to the post of Managing Director nor any charge allowance.
Despite this, the corporation decided to withhold his gratuity, leave salary and other benefits pending the outcome of criminal proceedings, he added.
During the hearing, the court noted a significant development, that Shonthu had already been discharged by the Special Judge, Anti-Corruption, Srinagar, in the criminal case arising from FIR No. 10/2019, and the charge-sheet against him had been dismissed in August 2025.
Consequently, no criminal charges were pending before any court in relation to that matter, it noted.
It said that once the charge-sheet had been dismissed and the petitioner discharged, the corporation could not continue withholding his retiral benefits on that basis.
The court further noted that a separate FIR still under investigation could not be treated as a judicial proceeding warranting such action, especially when no charge-sheet had yet been filed.
The judgment emphasized that under Article 168-A of the J&K Civil Service Regulations, recoveries from pension or retirement benefits can only be made when losses caused to the employer have been established through judicial or departmental proceedings.
The court found no evidence that Shonthu’s actions had caused any financial loss to the corporation or resulted in any monetary gain to him.
Allowing the petition, the High Court directed JKPCC to release all pending retiral benefits and unpaid salary to Shonthu within two months.
The court also ordered that if payment is not made within the stipulated period, the outstanding amount will carry interest at six percent per annum from the date of filing of the petition until realization.
