Pradeep Nandrajog, J. :

1. Having joined service under the appellant on May 30, 1975, the respondent superannuated from service on November 29, 2013.

2. While in service the respondent was served with a charge sheet in June, 2004 but proceedings thereto were dropped by the Competent Authority on May 04, 2006. It appears that the reason was that the respondent was facing a criminal prosecution concerning the same acts of omission and commission alleged against him in respect of which departmental proceedings were initiated.

3. As on the date of his superannuation the criminal proceedings were pending against the respondent.

4. Leave encashment and gratuity payable by the appellant to the respondent became a bone of contention resulting in the respondent filing W.P.(C) No. 337/2014 which has been allowed by the learned Single Judge vide impugned judgment dated April 24, 2014.

5. As regards leave encashment, the view taken by the learned Single Judge is that unless a rule exists to withhold leave encashment pending trial of an employee of the appellant before a criminal court, the leave encashment cannot be denied. No rule being shown, direction issued is that the appellant should encash the leave lying to the credit of the respondent on the date of superannuation and pay the money equivalent.

6. The appellant does not challenge said part of the impugned order.

7. On the issue of gratuity, the learned Single Judge has noted that Rule 35A of the Discipline and Conduct Rules framed by the appellant deals with withholding of gratuity. The rule reads as under:-

“35A Withholding of Gratuity during the pendency of disciplinary proceedings: During the pendency of disciplinary proceedings, the disciplinary authority may withhold payment of gratuity, for ordering the recovery from gratuity of the whole or part of any pecuniary loss caused to the Company if the employee is found in a disciplinary proceeding or judicial proceeding to have been guilty of offences/misconduct as mentioned in sub-Section (6) of Section 4 of the Payment of Gratuity Act, 1972 or to have caused pecuniary loss to the Company by misconduct or negligence, during his service including service rendered on deputation or on re-employment after retirement. However, the provisions of Section 7(3) and 7(3-A) of the Payment of Gratuity Act, 1972 should be kept in view in the event of the delayed payment, in case the employee is exonerated.”

8. The view taken by the learned Single Judge is that the rule in question permits withholding of gratuity if disciplinary proceedings are pending when the employee superannuates from service and as regards judicial proceedings pending, the learned Single Judge has held that the rule must take its colour from the main statute.

9. The main statute is the Payment of Gratuity Act, 1972. The learned Single Judge has held that a perusal of sub-Section 6 of Section 4 of the Act would require it to be held that as per the rule gratuity can be withheld if it a case of termination of service.

10. The reasoning of the learned Single Judge is in paragraph 7.2 to 7.4 of the impugned decision. It reads as under:-

“7.2 A reading of the Rule clearly brings to fore the fact that there is no power vested in NFL to firstly, withhold dues payable towards leave encashment. Secondly, the power to withhold gratuity, to recover wholly or partly pecuniary loss caused to NFL, is confined to a finding returned either in the disciplinary proceeding or in a judicial proceeding in relation to offences/misconduct referred to in Section 4(6) of the Payment of Gratuity Act, 1972 (in short PGA). Gratuity, can also be withheld to recover pecuniary loss caused to NFL due to misconduct or negligence of the delinquent employee. The question then is : what is the meaning to be ascribed to the expression “judicial proceeding’ in the context of Rule 35A. The setting of an expression is important, as the meaning is contextual. The expression “judicial proceeding’, by itself, ber