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2024 Supreme(AP) 1217
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
DHIRAJ SINGH THAKUR, C.J., R. RAGHUNANDAN RAO, J.
A.P. State Warehousing Corporation and Ors. – Appellants
Versus
B. Sambasiva Rao and Ors. – Respondents
Writ Appeal No. 83 of 2024
Decided On : 06-03-2024
Advocate Appeared:
For the Appellant : Kasa Jaganmohan Reddy
For the Respondents: Subbarao Korrapati
IMPORTANT POINT
Retiral benefits cannot be withheld without established misconduct; recovery from gratuity is limited to specific conditions under the regulations.
Headnote:
(A) Andhra Pradesh Warehousing Corporation Employees Provident Fund Regulations, 1965 - Rule 6 - Retiral benefits - The 1st respondent, a retired General Manager, claimed his retiral benefits which were withheld by the 1st appellant-corporation due to alleged losses. The learned Single Judge held that the 1st respondent was entitled to these benefits as no misconduct was established. (Paras 5, 16)
(B) Recovery of amounts - The court clarified that recovery from gratuity is permissible only under specific conditions, and the rule does not extend to earned leave encashment or provident fund amounts. (Paras 15, 16)
Facts of the case:
The 1st respondent retired on 31.08.2020 and claimed his retiral benefits which were withheld due to alleged losses incurred during his tenure. The learned Single Judge ruled in favor of the 1st respondent, directing the release of benefits.
Findings of Court:
The court upheld the learned Single Judge's decision, stating that the 1st appellant could not recover amounts from the 1st respondent without proper justification and due process.
Issues: The main issues were whether the 1st appellant could withhold retiral benefits based on alleged losses and the interpretation of Rule 6 of the regulations.
Ratio Decidendi: The court ruled that the regulation allows recovery only under specific conditions and does not permit arbitrary withholding of benefits.
Result: Writ Appeal disposed of with directions to release benefits.
JUDGMENT :
R. Raghunandan Rao, J.
1. Heard Sri Kasa Jaganmohan Reddy, learned counsel for the appellants and Sri Subbarao Korrapati, learned counsel for the 1st respondent.
2. The 1st respondent herein had retired as a General Manager of the 1st appellant-corporation on 31.08.2020. He approached this Court by way of W.P. No. 25668 of 2020 on the ground that his retiral benefits were not being given to him by the 1st appellant-corporation.
3. It is the stand of the 1st appellant-corporation that the 1st respondent is entitled to payment of gratuity of Rs. 18,37,400/-, earned leave encashment of Rs. 11,09,094/-and provident fund amount of Rs. 8,69,777/-, aggregating to a sum of Rs. 38,16,271/-as his retiral benefits. However, the 1st appellant-corporation is entitled to recover the loss of Rs. 64,75,819/-, sustained by the corporation on account of recovery of these amounts from the 1st appellant corporation by M/s. Food Corporation of India (herein referred to as "FCI"). The 1st appellant-corporation took the stand that the FCI had recovered two separate amounts of Rs. 31,30,638/-towards shortage of rice bags found during the regional vigilance authorities inspection on 09.07.2013 and a further amount of Rs. 33,45,181/-towards excess storage losses declared by the 1st respondent while working as Warehouse Manager, Kodada, for the months of January, February, March, August and September, 2013. These recoveries fell to the share of M/s. Telangana Warehousing Corporation, which sought these amounts to be recovered by the 1st appellant from the 1st respondent herein.
4. The 1st appellant also took the stand that the aforesaid retiral benefits of Rs. 38,16,271/-was adjusted against the loss of Rs. 64,75,819/-and that the 1st respondent still owes an amount of Rs. 26,59,548/-, to the 1st appellant-corporation and the same was also demanded from the 1st respondent by a letter dated 12.10.2020. It is the contention of the 1st appellant that such amounts are recoverable under Rule 6 of the Andhra Pradesh Warehousing Corporation Employees Provident Fund Regulations, 1965, which is extracted herein below:
"No member of the staff can claim any relief under these regulations as a matter of right. Gratuity shall not be paid to any employee who has been convicted of criminal offence, or has been dismissed for dishonesty or misconduct in the Corporation. Any amount that may be due to the Corporation by any member of the staff on account of any advance made or loans given or any other account shall be adjusted at the discretion of the Corporation from gratuity and only the balance, if any, paid."
5. The learned Single Judge interpreted the aforesaid regulations to mean that money can be recovered from a member of the staff only if he is convicted of a criminal offence or has been dismissed for dishonesty or misconduct in the corporation. The Learned Single Judge held that the 1st respondent is entitled to all these retiral benefits as no criminal case has been registered against the 1st respondent nor was he dismissed from the corporation on the grounds of dishonesty or misconduct. Consequently, the Learned Single Judge, allowed the writ petition by an order dated 04.08.2023, directing the release of retiral benefits to the 1st respondent within a period of three (03) months from the date of receipt of the order and to pay interest @ 9% from the date of retirement till the payment, if such release of retiral benefits is not done within three months.
6. Aggrieved by the said order, the appellants have moved the present writ appeal before this Court.
7. Sri Kasa Jaganmohan Reddy, learned counsel for the appellants would submit that Rule 6 of the Andhra Pradesh Warehousing Corporation Employees Provident Fund Regulations, 1965, extracted above, does not shut out recovery of any amounts, even if the member of the staff had not been convicted of a criminal offence or was dismissed for dishonesty or misconduct. He would submit that there are two limbs to the
