Punjab & Haryana High Court Quashes Illegal Recovery From Salary and Retiral Benefits; Holds Deduction Without Charge-Sheet or Inquiry Unsustainable

Case Name: Renu Sharma v. Dakshin Haryana Bijli Vitran Nigam Limited and Others
Date of Judgment: 11 December 2025
Citation: CWP-36958-2025
Bench: Hon’ble Mr. Justice Harpreet Singh Brar

Held: The Punjab and Haryana High Court allowed a writ petition challenging unilateral recovery of amounts from the salary and retiral benefits of a deceased employee. The Court held that deductions made without issuance of a charge-sheet or conduct of a departmental inquiry are illegal and arbitrary, particularly where a departmental inquiry itself found that the employee was not responsible for the alleged loss. The Nigam was directed to release the withheld amount along with interest.

Summary: The petition was filed by the widow of a retired Junior Engineer of the respondent-Nigam, assailing deductions made from her husband’s salary and retiral benefits on allegations of shortage of transformer oil and missing parts. It was contended that the recovery was effected without issuing any charge-sheet or conducting a disciplinary inquiry, despite the fact that a detailed inquiry by the concerned XEN had concluded that the losses could not be attributed to the employee.

The respondents were unable to dispute the finding of the departmental inquiry absolving the employee of responsibility. The High Court held that recovery of alleged losses without adherence to due process was impermissible in law. It reiterated that issuance of a charge-sheet and conduct of a departmental inquiry are sine qua non before fastening financial liability on an employee.

The Court further held that audit objections or internal assessments cannot justify unilateral deductions from salary or retiral dues, particularly when the employee stands exonerated. Relying on settled precedent, the Court concluded that amounts illegally recovered must be refunded with interest, and delay in seeking relief, when satisfactorily explained, cannot defeat a legitimate claim.

Decision: The writ petition was allowed. The respondents were directed to release the unreleased amount deducted from salary along with interest and to pay interest on the amount earlier recovered from retiral benefits. All consequential reliefs were granted in favour of the petitioner.