SC:Forfeiture of pension due to termination isn’t continuing cause of action

The Hon’ble Supreme Court, on 27thAugust 2019, in the matter of Prahlad v. All India Institute of Medical Sciences observed that once there is cessation of employer-employee relationship by an order of termination, the cause of action would necessarily arise when the order of termination is passed. The forfeiture of pensionary benefits by reason of a punitive order of termination is not a continuing cause of action.

The Hon’ble Supreme Court observed that:

The law of limitation is founded on public policy. The object of limitation is to put a quietus on stale and dead disputes. A person ought not to be allowed to agitate his claim after a long delay.  (Para 44)

There can be no doubt that when retiral benefits are withheld without cause, there would be a continuing cause of action. (Para 44)

When retirement benefits are withheld by way of disciplinary action, the order would necessarily have to be challenged within the period of limitation or alternatively there would have to be sufficient cause for the delay. (Para 44)

Once there is cessation of employer-­employee relationship by an order of termination, the cause of action would necessarily arise when the order of termination is passed. The forfeiture of pensionary benefits by reason of a punitive order of termination is not a continuing cause of action. (Para 44)

Copy of judgement: Judgement_27-Aug-2019

-Adv. Tushar Kaushik

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