Ashok Kumar Dabas (Dead Through Legal Heirs) vs. Delhi Transport Corporation (2025)

Supreme court: DTC cannot deny gratuity on resignation without Section 5 exemption; pension forfeiture under Rule 26 upheld.
Supreme Court of India

Legal provisions involved: Section 4 and Section 5 of the Payment of Gratuity Act, 1972; Rule 26 of the CCS Pension Rules, 1972.

Judgement by: Supreme Court

Bench/Judge: Justice Rajesh Bindal and Justice Manmohan

Facts

A DTC conductor who joined in 1985 resigned in 2014 due to personal reasons. His resignation was accepted, but when he later sought pension, gratuity, and leave encashment, DTC denied all benefits except the provident fund, stating that his service stood forfeited under Rule 26 of the CCS Pension Rules. After his death, his family continued the case before the Supreme Court.

Key legal provisions

Issues raised

Whether DTC could deny gratuity on the ground of resignation, and whether pension and leave encashment were payable?

Arguments of the case

The employee’s side argued that gratuity is a statutory right under the Gratuity Act. DTC contended that resignation leads to forfeiture of past service, barring pension and other benefits.

Judgement

The Supreme Court held that pension cannot be granted due to the clear bar under Rule 26. However, gratuity cannot be denied because DTC was not exempted from the Gratuity Act under Section 5. Since the employee had completed over five years of service, he was entitled to gratuity and leave encashment, which the Court directed to be released with 6% interest.

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