“Golden Handshake” Ends Long-Running MAKAIAS Disciplinary Dispute; Supreme Court Awards ₹20.14 Lakhs in Full and Final Settlement to Employee

Supreme Court: In an appeal, arising out of disciplinary proceedings against the appellant, an Administrative-cum-Finance Officer of the Maulana Abul Kalam Azad Institute of Asian Studies (MAKAIAS), challenging the Division Bench of the Calcutta High Court’s judgment restoring the penalty of compulsory retirement, the Division Bench of Pamidighantam Sri Narasimha and Alok Aradhe, JJ., without examining the merits of the disciplinary action and impugned judgment, encouraged an amicable resolution, culminating in the conversion of the penalty into a “golden handshake” and a full and final settlement of ₹20.14 lakhs to the appellant.

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Factual Matrix

The appellant was appointed as the Administrative-cum-Finance Officer of the MAKAIAS in April 2009. During his tenure, disputes arose between him and Respondent 3, Institute’s Director. According to the record, he had raised complaints concerning alleged financial irregularities within the Institute. Thereafter, following a complaint of sexual harassment made by the Personal Secretary to Respondent 3, he was placed under suspension on 6 November 2015. A departmental charge-sheet subsequently alleged insubordination and lack of integrity against him. The appellant filed a writ petition challenging the suspension but the writ petition was dismissed.

The disciplinary proceedings culminated in an order compulsorily retiring him from service. Challenging the disciplinary action, the appellant contended that Respondent 3, against whom he had earlier levelled allegations, could not lawfully act as the disciplinary authority because the proceedings were vitiated by bias.

Procedural History

The Single Judge of the Calcutta High Court, in Dipak Kumar Dutta v. Union of India, 2023 SCC OnLine Cal 3303, accepted the appellant’s challenge, holding that the disciplinary proceedings suffered from bias and malice. The Court quashed both the disciplinary proceedings and the order of compulsory retirement and directed his reinstatement. However, it declined to grant monetary benefits for the intervening period.

Thereafter, cross appeals were preferred before the Division Bench. The appellant challenged the denial of back wages, while MAKAIAS questioned the quashing of the disciplinary proceedings. The Division Bench, in Dipak Kumar Dutta v. Union of India, 2024 SCC OnLine Cal 11901, held that the issue regarding Respondent 3’s competence and authority had already attained finality in earlier litigation and could not be reopened. Applying the doctrine of res judicata, it set aside the Single Judge’s decision and restored the penalty of compulsory retirement. Consequently, the appellant’s writ petition stood dismissed.

Aggrieved, the appellant challenged the Division Bench judgment before the Supreme Court through present appeal.

Issues for Determination

The issue before the Court was whether the Division Bench judgment restoring the order of compulsory retirement required interference, and whether the dispute could be resolved in light of the settlement arrived at between the parties during the pendency of the appeals.

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Analysis

The Court consciously refrained from examining the merits of the disciplinary proceedings or the correctness of the Division Bench’s reasoning. Instead, noticing that the parties had expressed willingness to resolve the dispute, the Court encouraged an amicable settlement. Pursuant to the Court’s suggestion, MAKAIAS placed on record an office memorandum dated 22 May 2026 offering to convert the punishment of compulsory retirement into a “golden handshake”.

The office memorandum provided that:

1. the penalty of compulsory retirement would stand converted into a golden handshake with effect from 9 May 2017;

2. the suspension period from 2015 to 2017 would be regularised;

3. increments admissible under the 7th Pay Commission would be extended;

4. a sum of ₹10,14,141 would be paid to the appellant after adjusting admissible retiral dues; and

5. necessary steps would be taken for release of pensionary benefits upon rectification of pension records.

Having considered the proposal, the Court opined that the interests of justice would be better served by enhancing the settlement rather than undertaking an adjudication on the disciplinary dispute.

Decision

Accepting the consensual settlement, the Court disposed of the civil appeals with the following directions:

1. MAKAIAS should pay an additional ₹10,00,000 over and above the amount already offered under the office memorandum.

2. The appellant agreed to accept ₹20,14,141 as a full and final settlement of all claims.

3. The agreed amount should be paid within 8 weeks.

4. The appellant should also be entitled to withdraw the provident fund standing to his credit.

5. Pensionary benefits should be processed after completion of the necessary documentation by both sides.

Also Read: ‘Compulsory retirement not a punishment, does not have any stigma attached to it’; Chhattisgarh HC upholds compulsory retirement of a 50-year-old man

[Dipak Kumar Dutta v. Union of India, Civil Appeal (arising out of SLP (C) Nos. 7112-7113 of 2025), decided on 31-7-2026]

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Advocates who appeared in this case:

For the Appellant: Mr. Suraj Mishra, Adv. Mr. Shivam Singhania, Adv. Mr. Monu Kumar, Adv. Mr. Kartik Dey, Adv. Mr. Ayush Anand, AOR

For the Respondents: Mr. Swarnendu Chatterjee, AOR Mr. Santanu Sinha, Adv. Mr. Amit Kumar Roy, Adv. Mr. Amitabha Sen, Adv. Ms. Deepakshi Garg, Adv. Mr. Nishant Kumar, AOR