Back
2018 Supreme(P&H) 3777
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Shekher Dhawan, J.
Punjab State Civil Supplies Corporation Limited - Appellants
Versus
Appellate Authority Under Payment Of Gratuity Act And Others - Respondent
Civil Writ Petition No. 22201 of 2015, 22208 of 2015, 22333 of 2015, 4047 of 2016, 7164 of 2016, 7280 of 2016, 8054 of 2016, 8056 of 2016, 9120 of 2016, 13324 of 2016, 16061 of 2016, 24333 of 2016, 24461 of 2016, 1143 of 2017, 1152 of 2017, 1987 of 2017, 3532 of 2017, 13069 of 2017, 14574 of 2018
Decided On : 30-08-2018
Tarun Singla, Adv., Sumer Singh Brar, Adv., Suman Devi Saxena, Adv., Deepali Puri, Adv., Anil Kumar Sharma, Adv., Deepak Sabharwal, Adv., Ritam Aggarwal, Adv., Padam Kant Dwivedi, Adv., S.M. Goyal, Adv., S.S. Grewal, Adv., Padamkant Dwivedi, Adv., Anurag Chopra, Adv., Paramdeep, Adv., Gaurav Chopra, Adv.
The main legal point established in the judgment is that the government can withhold gratuity or other retiral benefits except pension during pendency of an enquiry, especially in cases of serious allegations of misconduct causing substantial loss to the employer.
Headnote:
Gratuity - Retiree Entitlement - Payment of Gratuity Act, 1972 - Rule 2.2(b) & (c) of Punjab Civil Services Rules - The court discussed the entitlement of a retiree to the payment of gratuity if disciplinary proceedings were initiated against the employee before retirement. The court referred to Rule 2.2(b) & (c) of Punjab Civil Services Rules and previous judgments to determine the legality of withholding gratuity in cases of pecuniary loss to the employer and pending disciplinary proceedings.
Fact of the Case:
The petitioner-Corporation challenged the orders passed by the Appellate Authority and Controlling Authority under the Payment of Gratuity Act, 1972, claiming that the orders were illegal and violative of the Punjab Civil Services Rules. The petitioner contended that the employees are governed by these rules and that gratuity was withheld pending departmental inquiries/civil cases due to charge sheets issued for embezzlement.
Finding of the Court:
The court found that the factual and legal question involved was whether the petitioner-Corporation had the right to withhold payment of gratuity as per provisions of Rule 2.2 (b) & (c) of the Punjab Civil Services Rules if disciplinary proceedings were initiated against an employee during the period of employment.
Issues: The main issue was whether the petitioner-Corporation had the right to withhold payment of gratuity in cases of pending disciplinary proceedings and pecuniary loss to the employer.
Ratio Decidendi: The court relied on Rule 2.2(b) & (c) of Punjab Civil Services Rules and previous judgments to establish that the government can withhold gratuity or other retiral benefits except pension during pendency of an enquiry. The court also referred to a judgment stating that the employer has the right to withhold the gratuity pending departmental inquiry if serious allegations of misconduct causing substantial loss to the employer are proved.
Final Decision: The court set-aside the impugned orders passed by the Controlling Authority and Appellate Authority under the Gratuity Act, and directed the Managing Director to pass a speaking order considering the date of issuance of charge sheet, date of retirement, pecuniary loss, and the amount of gratuity payable to the employees. The court ruled that retired employees would not be entitled to gratuity if charge-sheet/disciplinary proceedings were initiated before retirement and were still inconclusive, but would be entitled to gratuity if the proceedings were initiated after retirement or the charges were other than causing pecuniary loss to the Corporation.
JUDGMENT
Shekher Dhawan, J. - In the above titled bunch of writ petitions (at Sr. No. 1 to 17) filed by Punjab State Civil Supplies Corporation Limited (for short, "the petitioner-Corporation") and two writ petitions bearing CWP Nos. CWP No.7164-2016 and CWP No.8054-2016 (Sr. No. 18 and 19) filed by the retired employees under Articles 226/227 of the Constitution of India, the moot question involved is - Whether a retiree is entitled to the payment of gratuity, if he had caused any pecuniary loss to the employer and some disciplinary proceedings were initiated against him before the date of his retirement? Therefore, with the consent of the parties, all these writ petitions have been taken up together and are being disposed of by this common order. For facility of reference, facts are being taken from CWP No.7280 of 2016, Punjab State Civil Supplies Corporation Ltd. Vs. The Appellate Authority under Payment of Gratuity Act and Others.
2. Punsup - petitioner-Corporation has challenged the order dated 23.10.2015 (Annexure P/3) and order dated 23.04.2014 (Annexure P/2) passed by Appellate Authority (respondent No.1) and Controlling Authority (Respondent No.2) under the Payment of Gratuity Act, 1972 (for short, " the Gratuity Act") on the ground that the same are illegal, violative of provisions of Punjab Civil Services Rules which govern the employees of petitioner-Corporation.
3. As per the petitioner, the employees of the petitionerCorporation are governed by Punjab Civil Services Rules which are adopted for governing the terms and conditions of services of its employees. Respondent No.3, Nachhatar Singh was working as Inspector Grade II with the petitioner-Corporation and he retired on 31.1.2011. He had embezzled huge amount of the petitioner-Corporation for which various charge-sheets were issued to him and recovery proceedings to the tune of Rs. 11,80,270/- and Rs. 5,72,544/- were initiated against him, which are pending adjudication.
4. At the time of retirement, the retiral benefits, i.e. Gratuity was withheld pending departmental enquries/civil cases in terms of charge sheets. However, the Controlling Authority, respondent No.2, directed the petitioner to release gratuity to the tune of Rs. 6,13,830/- alongwith interest @ 12% per annum from the date it fell due i.e. 28.02.2011 vide impugned order dated 23.04.2014 (Annexure P/2). The petitioner preferred an appeal against the said order and vide order dated 23.10.2015 (Annexure P/3 the order, Annexure P/2 was modified only to the extent that simple interest was payable @ 9% per annum from the date of passing of the order by respondent No.2, i.e., 23.04.2014.
5. Learned counsel for the petitioner-Corporation contended that the impugned orders, Annexure P/2 and P/3, have been passed by the authorities under the Gratuity Act in contravention of Rule 2.2(b) of the Punjab Civil Services Rules (Vol-II). The relevant Rule 2.2(b) and , as reproduced in the writ petition, are extracted below:-
"Rule 2.2(b) The Government further reserve to themselves the right of withholding or withdrawing a pension or any part of it, whether permanently or for a specified period and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to Government, if, in a departmental or judicial proceeding, the pensioner is found guilty of grave mis-conduct or negligence during the period of his service, including service rendered upon re-employment after retirement :
Provided that -
(1) Such departmental proceedings, if instituted while the officer was in service, whether before his retirement or during his re-employment, shall after the final retirement of the officer, be deemed to be a proceeding under this article and shall be continued and concluded by the authority by which it was commenced the same manner as if the officer had continued in service;
(2) Such departmental proceedings, if not instituted while the officer was in service whether before his retire
