The Patna High Court has allowed a writ petition filed by a contract employee of a Central Government–aided university in Bihar, directing the institution to release her pending salary with interest and to issue a clean No Dues Certificate. The Court found that the university had withheld the petitioner’s salary without furnishing reasons, while attempting to tie her dues to alleged outstanding charges related to accommodation allotted in the name of her spouse (who had a separate employment contract with the same university). The decision reiterates two settled principles: (i) administrative authorities must act on reasons, especially when their decisions affect civil consequences; and (ii) liabilities under a separate contract cannot be foisted on a different individual in the absence of any rule or privity.
In this case, the petitioner had worked as a Laboratory Assistant on successive short-term contracts. After a brief extension in April 2019, the university ended her contract effective mid-May 2019 and asked her to complete formalities for relieving. The petitioner obtained departmental endorsements on a No Dues form; despite that, payment of her April salary and pro-rated salary for 14 days in May (totalling ₹68,053) remained unpaid. The finance wing recorded a remark referencing substantial electricity and other charges allegedly outstanding in the name of the petitioner’s spouse (a faculty member on a separate tenure-track contract). The university then refused to clear her dues unless a “No Dues Certificate” with those finance remarks was accepted. The Court rejected this approach.
Summarising the pleadings, the Court noted that the petitioner consistently sought release of her dues, including through emails and a legal notice. The university, in turn, relied on (a) a performance memo issued a year earlier, (b) the mandatory-break nature of the petitioner’s short-term contracts, and (c) its practice of allowing the spouse’s family to remain temporarily in staff accommodation even after his contract ended, all to argue that the petitioner must first secure a No Dues Certificate without objections. However, critically, the alleged dues were in the spouse’s name and arose from a different contractual arrangement (faculty accommodation and electricity use) rather than from the petitioner’s own employment. The Court held that this conflation of liabilities was impermissible.
On the core question—can an employer withhold an employee’s earned salary for reasons not attributable to that employee and without supplying reasons?—the Court answered in the negative. The judgment emphasizes that the power of an administrative authority to take decisions with civil consequences is circumscribed by the duty to act fairly and to record reasons. The Court took note of the petitioner’s reliance on the Constitution Bench decision of the Supreme Court in S.N. Mukherjee v. Union of India, which affirms that administrative or quasi-judicial decisions must disclose reasons unless the law expressly or by necessary implication dispenses with that requirement. Applying those principles, the Court found that withholding the petitioner’s salary by invoking unrelated dues of her spouse lacked legal foundation and violated fairness.
Granting relief, the Court directed the university to pay ₹68,053 towards salary (April 2019 and 14 days of May 2019) along with simple interest at 4% per annum from the date the amounts became due until actual payment. The Court further directed issuance of a No Dues Certificate to the petitioner “without any remarks” by the finance department about the spouse’s alleged dues and to complete settlement within three months from the date of receipt/production of the order. This part of the order is important because it stops the practice of embedding third-party liabilities in an employee’s clearance process. The Court also observed that any dues claimed against the spouse may be addressed in independent proceedings or adjusted in his separate case; they cannot be set off against the petitioner’s salary in the absence of a legal basis.
The judgment will serve as a helpful reference for government institutions, universities, and public bodies dealing with contract employees and exit formalities. It reinforces that earned wages cannot become a leverage point for recovery of unrelated dues, and that reasoned decision-making is non-negotiable when affecting an employee’s civil rights.
Significance or Implication of the Judgment (For general public or government)
• For employees: The ruling assures contract and temporary staff that earned salary cannot be withheld arbitrarily or tied to liabilities of other persons—even close family members—unless the governing statute, service rules, or a contract clause expressly provides for it.
• For public institutions and universities: The decision cautions administrative authorities to adhere to principles of natural justice. If dues are claimed, they must be disclosed, quantified, and legally attributable to the concerned employee, not to a third party.
• For HR and finance departments: No Dues Certificates must reflect legally sustainable and employee-specific liabilities. Institutional convenience or broad “household” assumptions cannot override privity of contract.
• For litigation management: If an institution asserts a claim regarding accommodation or electricity use against a particular allottee, it should pursue appropriate recovery proceedings against that allottee rather than blocking a different employee’s salary clearance.
• For policymaking: The case encourages clear written policies that separate employment dues from accommodation/allotment dues, and that define the scope of set-off, if any, with an employee’s explicit acknowledgment.
Legal Issue(s) Decided and the Court’s Decision with reasoning
• Whether the university could withhold the petitioner’s earned salary by citing accommodation/electricity dues recorded in her spouse’s name.
— Decision: No. The Court directed payment of ₹68,053 with 4% p.a. interest from the date due until payment, holding that such withholding lacked legal basis and violated fairness. The alleged dues were in a different person’s name and under a separate contractual arrangement; without a rule permitting set-off, the employer could not appropriate the petitioner’s dues.
• Whether a No Dues Certificate can carry finance remarks about third-party liabilities and thereby impede release of salary.
— Decision: No. The Court ordered issuance of a No Dues Certificate “without any remarks” from the finance department concerning the spouse’s dues and mandated settlement within three months. This ensures employee-specific accountability and stops cross-liability practices lacking privity.
• Whether administrative decisions with civil consequences must be reasoned.
— Decision: Yes. Relying on established jurisprudence, the Court reiterated that administrative/quasi-judicial authorities must record reasons unless the requirement is dispensed with by statute or necessary implication. The university’s approach failed this test.
Judgments Referred by Parties
• S.N. Mukherjee v. Union of India, (1990) 4 SCC 594 — Constitution Bench decision cited for the proposition that administrative authorities must record reasons for decisions having civil consequences.
Judgments Relied Upon or Cited by Court
• The Court endorsed the principle from S.N. Mukherjee v. Union of India, (1990) 4 SCC 594, on the duty to furnish reasons in administrative decision-making.
Case Title
Veena Jha Vs. Nalanda University
Case Number
• Civil Writ Jurisdiction Case No. 3169 of 2020.
Citation(s)
2025 (1) PLJR 328
Coram and Names of Judges
• Hon’ble Mr. Justice Anjani Kumar Sharan. (CAV; judgment dated 10.12.2024; uploading date 10.12.2024)
Names of Advocates and who they appeared for
• For the petitioner: Learned counsel (team including advocates as recorded).
• For the respondents (University side): Learned Senior Counsel assisted by counsel.
Link to Judgment
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