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IN THE HIGH COURT OF KARNATAKA
Suraj Govindaraj, J.
Chandramathi - Appellant
Versus
Deputy General Manager, Bsnl - Respondent
Writ Petition No. 32210 of 2017 (L PG)
Decided On : 28-07-2022
Gratuity - Employee Absorption - CCS Pension Rules - Rules 71 to 73 - Recovery of Excess Payment - Interest - [Gratuity] - [Employee Absorption] - [Payment of Gratuity Act, 1972, Rule 37A; Central Civil Service (Leave) Rules, 1972 (Pension Rules), Rules 71 to 73] - The court discussed the applicability of CCS Pension Rules and the deduction of excess payment from gratuity. It highlighted the legal provisions of Rules 71 to 73 and their interpretation in the context of recovery of excess payment and entitlement to gratuity. The court's decision was influenced by the interpretation of these rules and the principle that no recovery can be made from a retired employee or an employee due to retire within one year of the order of recovery.
Fact of the Case:
The petitioner sought relief from the court after being denied the full gratuity amount by the Controlling Authority and the Appellate Authority under the Payment of Gratuity Act, 1972. The petitioner, an employee of BSNL, retired after 38 years of service and claimed a higher gratuity amount than what was paid, citing the Central Civil Service (Leave) Rules, 1972 (Pension Rules). The authorities had deducted a sum from the gratuity for an excess payment made in the past.
Finding of the Court:
The court found that the petitioner was entitled to the full gratuity amount and that the deduction made by the authorities was not permissible, especially considering the petitioner's retirement status. The court also ruled that the respondent must pay the deducted amount along with interest from the date of the petitioner's retirement.
Issues: The key issue was whether the petitioner was entitled to the full gratuity amount and whether the deduction made by the authorities was valid under the CCS Pension Rules.
Ratio Decidendi: The court's decision was based on the interpretation of the CCS Pension Rules, particularly Rules 71 to 73, and the principle that no recovery can be made from a retired employee or an employee due to retire within one year of the order of recovery.
Final Decision: The writ petition was allowed, and the orders of the Controlling Authority and the Appellate Authority were quashed. The respondent was directed to make payment of the deducted amount along with interest from the date of the petitioner's retirement.
JUDGMENT
1. The petitioner is before this Court seeking for the following reliefs:
" (a) Call for records in Application no.48(87) 2014-B3 on the file of the Controlling Authority under Payment of Gratuity Act, 1972-cum-Assistant Labour Commissioner (Central) Bangalore and in Appeal No.36(14) 2016-B1 on the file of the Appellate Authority under payment of Gratuity Act, 1972 and Deputy Chief Labour Commissioner (Central) Bangalore.
(b) Issue a writ of certiorari or any other writ or order quashing the order dtd. 19/1/2016 (Annexure-K) passed by the Controlling Authority under the Payment of Gratuity Act 1972 and Assistant Labour Commissioner (Central) Bangalore in Application No.48(87) 2014-B3 and order dtd. 30/11/2016 (Annexure-Q) passed in Appeal No.36(14)/2016-B1 passed by Appellate Authority under the payment of Gratuity Act, 1972 and Deputy Chief Labour Commissioner (Central), Bangalore and consequently, allow the claim of the petitioner in its entirety."
2. The petitioner joined the service of Bharat Sanchar Nigam Limited (Hereinafter referred to as 'BSNL' for short) as Telephone Operator on 29/11/1974 and worked in various exchanges/offices in Bangalore. She was promoted as Senior Sec. Supervisor in the year 1993. The petitioner was permanently absorbed in BSNL with effect from 1/10/2000, in pursuance to the order dtd. 1/2/2002 passed by the Director, Department of Tele Communications, Government of India. The petitioner retired from service on attaining the age of superannuation on 31/8/2013 after rendering service of 38 years, 9 months and 2 days. The gratuity amount for a sum of Rs.6,86,901.00 (Rupees Six lakh eighty six thousand nine hundred one only) after deducting a sum of Rs.1,84,778.00 (Rupees One lakh eighty four thousand seven hundred seventy eight only) towards recoveries on account of over-payment in pay and allowances.
3. It is aggrieved by the same that the petitioner had approached the Assistant Labour Commissioner (Central) - Controlling Authority, contending that the total amount which was due is Rs.8,71,679.00 (Rupees Eight lakh seventy one thousand six hundred seventy nine only) and no recovery of the sum of Rs.1,84,778.00 (Rupees One lakh eighty four thousand seven hundred seventy eight only) could be made, in terms of Rules 71 to 73 of Central Civil Service (Leave) Rules, 1972 (Pension Rules), (Hereinafter referred to as 'CCS Pension Rules' for short).
4. The Controlling Authority dismissed the claim of the petitioner on the ground that on the absorption of the petitioner with BSNL it is the CCS Pension Rules which would be applicable and in terms of Rule 37A of the said Rules, there is no gratuity which is liable to be paid as such the petitioner nor his family would be entitled to pension and not gratuity. But however, awarded simple interest at the rate of 10% on the amount of Rs.6,86,901.00 (Rupees Six lakh eighty six thousand nine hundred one only) which was paid belatedly.
5. The petitioner and respondents filed an appeal before the Deputy Chief Labour Commissioner (Central). The Deputy Chief Labour Commissioner (Central), vide its order dtd. 30/11/2016, dismissed the claim of the petitioner in so far as deduction of Rs.1,84,778.00 (Rupees One lakh eight four thousand seven hundred seventy eight only) is concerned, on the ground that in terms of CCA Pension Rules, there is no gratuity which is required to be paid to the petitioner and hence, there is no question of interest being paid. It is in that background, the petitioner is before this Court challenging the aforesaid orders.
6. Sri.Ananda Rama, learned counsel appearing for petitioner would submit that the petitioner an employee as Telephone Operator and was subsequently absorbed with the BSNL-respondent. The respondents having made a payment of gratuity in terms of Annexure-A Rs.6,86,901.00 (Rupees Six lakh eighty six thousand nine hundred one only) the question of the respondents subsequently contending that there is no gratuity which is
The central legal point established in the judgment is that no recovery can be made from a retired employee or an employee due to retire within one year of the order of recovery, as per the interpret....
Interpreting Act unequivocally indicate that payment of gratuity would not depend upon employee filing an application before employer demanding gratuity but will have to be paid immediately on cessat....
Interest under the Payment of Gratuity Act is due from the date of entitlement unless hindered by claim delays, resulting in dismissal of a petition for earlier interest claims.
Recovery of excess payments from employees is impermissible when no fault or misrepresentation is established on their part.
Withholding gratuity post-retirement without notice or opportunity to contest alleged incorrect pay fixation is impermissible and deemed harsh.
Gratuity under the Payment of Gratuity Act cannot be withheld on the basis of dues unless misconduct is established prior to retirement.
Gratuity is a statutory right that cannot be withheld or adjusted against employer claims or dues, except under the specific conditions prescribed in S. 4(6) of the Payment of Gratuity Act, 1972.
Recovery of excess gratuity payments from a retired employee is legally impermissible in the absence of fraud or misrepresentation. When overpayments occur due to the employer’s own calculation error....
The main legal point established in the judgment is that once departmental proceedings are concluded and an order of penalty has been imposed, the gratuity cannot be withheld on the ground of pendenc....
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