Gratuity: RBE No.196/1989: Withholding of Gratuity

No.F(E)III/88/LG1/1, dated 07.08.1989

Sub: Withholding of gratuity.      

1.     Cases have come to notice that gratuity is giving withheld on the Railways, when some investigation by Vigilance and other authorities are being conducted to enquire into the truth of any imputation of misconduct or misbehavior against the Railway servant, even though no formal charge sheet had been issued before retirement as required under Para 315 of MRPR which corresponds to Rule 2308 – R.II. One of the Railways has stated that gratuity in such circumstances is being withheld in terms of Para 318 of MRPR as it stipulates that Para 315 of MRPR applies to pension and commuted pension only and not to gratuity. 

2.     The matter has been carefully examined in consultation with DOP&PW and it is clarified that para 315 empowers the President to withhold and withdraw pension in full or part thereof permanently or for a specified period. Here the term pension includes gratuity also.

3.     Withholding gratuity on the basis of some enquiry or investigation being under process, therefore, would not be in order unless a railway servant has either been placed under suspension or a formal charge sheet has been issued before his retirement as per para 315 of MRPR. As para 318 of MRPR is open to open is misleading interpretation and is also not in line with other connected provisions after deletion of Para 313 of MRPR in terms of Board’s letter No.F(E)III/80/PN-1/9, dated 11.10.1983, it has been decided to treat this para as deleted. (Correction slip is enclosed).

4.     It may be reiterated that gratuity may be withheld in terms of para 315 of MRPR duly satisfying that the conditions laid therein are fulfilled. This is however without prejudice to the extant provisions that the Government dues can be recovered from the DCRG.

5.     It has also been observed that in some cases, the amount of encashment of LAP admissible to the retiring employee is also being withheld in contravention of the provisions. It may be reiterated that in terms of Board’s orders No.F(E)III/82/LE1/2, dated 29.12.1983 the authority competent to grant leave can withhold whole or part of cash equivalent of LAP only if the employee is under suspension on the date of retirement or the disciplinary and criminal proceedings are pending against him if in the view of the said authority there is a possibility of some money becoming recoverable from the employee on conclusion of the proceeding against him. On completion of the proceedings, he will become eligible to the amount so withheld after adjustment of railway dues, if any. These instructions may be strictly followed in letter and spirit.

6.     As Para 318 of MRPR stands deleted as stated in Para 3 above, necessary correction accordingly be carried out in the Manual as per Correction Slip No.63 enclosed as Annexure-I.

Correction Slip No.63

Manual of Railway Pension Rules

Para 318 (Para 11):

Para 318 stands deleted.

[Railway Board’s letter No.F(E)III/88/LG1/1, dated 07.08.1989]

Download Railway Board Circular RBE No. 196/1989

Forward reference ⇒ RBE No.