Surcharge proceedings cannot be continued after the retirement of an employee, and the gratuity amount is protected from attachment under Section 13 of the Payment of Gratuity Act, 1972.

JUDGMENT

(Prayer:Writ Petition filed under Article 226 of the Constitution of India, praying to issue a Certiorarified Mandamus, calling for the records relating to the memo Na.Ka.740/2013 Pa Tho (2) dated 19.07.2017 of the second respondent, quash the same and consequently, direct the second respondent to release the gratuity amount standing to the credit of the petitioner''s deceased husband to the petitioner, without any further delay.)

1. Challenging the order of the second respondent, dated 19.07.2017, the present Writ Petition has been filed by the petitioner, who is the wife of the deceased employee Subramanian.

2. Heard Mr.S.Venkataraman, learned counsel for the petitioner and Mr.D.Gopal, learned Government Advocate appearing on behalf of the respondents.

3. The petitioner''s husband, namely, Late Subramanian (hereinafter referred to Late employee) was subjected to surcharge proceedings on the allegations that he along with the President and other Board of Directors had caused loss to the assets of the Society, while he was serving as a Co-operative Sub Registrar / Managing Director in Uthangarai Agricultural Producers Co-operative Marketing Society for the period between 01.12.1996 to 05.04.1998. A surcharge order dated 07.06.2004 was passed, holding the late employee and other liable for the loss amount of Rs.22,64,379/-, together with interest of Rs.21,62,078/- upto 31.03.2002, totalling to Rs.44,26,457/-, with further interest at 21%. The surcharge order was set aside on ''appeal'' by the Special Tribunal for Co-operative Cases (Tribunal) on 04.10.2012 and on revision, the Madras High Court had remitted back the matter to the Tribunal for reconsideration. Thus, the matter is now pending before the Tribunal. The late employee was permitted to retire from the Government service with effect from 31.05.2008 on attaining the age of superannuation, without prejudice to the surcharge order and to the out come of the enquiry under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983. The petitioner''s husband died on 27.03.2015.

4. In this background, the second respondent herein had issued the impugned order dated 19.07.2017, sanctioning the General Provident Fund Accumulation, Encashment of earned and unearned leave on private affairs and Special Provident Fund to the petitioner. However, the provisional pension that was being paid was stopped and the family pension proposal was also not forwarded to the Accountant General.

5. The main issue that arises for consideration in this case, is with regard to the right of the Society to continue the proceedings under Section 87 of the Act against a retired employee.

6. When a reference was made to a Larger Bench of Three Judges in the case of S. Andiyannan Vs. The Joint Registrar, Co-operative Societies, Madurai & another reported in2015 (3) LW 513 with regard to the aforesaid issue, the Hon''ble Full Bench had held that surcharge proceedings under Section 87 of the Act, cannot be continued after the retirement of any employee, in the absence of any enabling provision in the relevant Service Rules or Bye-Laws of the Society. Such a finding was rendered in the following manner:-

 “27. A bare reading of the said Section would show that it relates to recovery of the amount from any employee or any other person who has caused financial loss to the co-operative society. It is not in dispute that the term “surcharge” need not necessarily related to punishment being imposed on the employee. As contended by the learned counsel appearing for the petitioners, the scope of Section 87 of the Act pertaining to surcharge is to recover the amount from the person, who caused loss to the co-operative society. In the light of the decisions rendered by the Hon''ble Apex Court, it is clear that Section 87 of the Act could not be construed as an enabling provision to the authorities to continue or extent the departmental proceeding after the retirement of