Back
2019 Supreme(All) 2537
IN THE HIGH COURT OF ALLAHABAD
J.J. MUNIR, J.
Baroda Uttar Pradesh Gramin Bank - Petitioner
Versus
Union of India and 3 Others - Respondents
Writ - C No. 39978 of 2018
Decided On : 06-08-2019
For the Petitioner: Pradeep Kumar Sinha.
For the Respondent: A.S.G.I., Amit Kumar Srivastava, Arpan Srivastava, Dr. Mukteshwar Upadhyay.
Point of Law: No gratuity payable under this Act[and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under Section 5] shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court.
Headnote:
Payment of Gratuity Act, 1972 –Sections 13, 4, 7(7), 14(2)– Issue on entitlement of gratuity –Mere forbearance from passing an order of forfeiture of gratuity, petitioner cannot defeat mandate of Section 4(6) of Act - This would well stand test of legality of proposition on multiple count - In case, employers had proceeded to order forfeiture of sum of Rs. 5,00,000/-from fourth respondent’s gratuity that they have adjusted in penalty against him by means of the order the order of forfeiture would be bad under Section 4(6) of the Act for the simple reason that in consequence of disciplinary proceedings, the services of fourth respondent have not been terminated.
Facts of the case: Learned counsel for the petitioner submits that the entitlement to gratuity of an employee depends upon the post that is held by him at the time of retirement, and is calculated on the basis of the wages last drawn –He submits that though the fourth respondent retired from service upon attaining the age of superannuation, demitting office of Officer Grade-IV (Chief Manager) then held by him, but that would not be the post from which he would be deemed to have retired for the purpose of calculation of his post retiral benefits, including gratuity
Finding of the court: It has been held in Union Bank of India and others vs. C.G. Ajay Babu (supra) that forfeiture of gratuity is attracted only where his conduct has led to a termination of his service – Elsewhere also, no different view of law has been taken, which is the clear purport of Section 4(6) of the Act –The result is that short of the actual exercise of the power of forfeiture, the petitioners have exercised that power by resort to a camouflage, dubbing it as mere recovery from the gratuity – This goes against that well settled principle of law that whatever the law prohibits being done directly, cannot be done indirectly – Thus, the answer to the question (ii) is in the negative
Result: Petition dismissed
JUDGMENT :
1. This writ petition preferred by the Baroda Uttar Pradesh Gramin Bank through its Chairman is directed against an order dated 11.04.2018 passed by the Controlling Authority, Payment of Wages Act, 1972, rendered in P.G. Case no. LKO 36(09)/2017, and the order dated 16.10.2018 passed by the Appellate Authority, Payment of Gratuity Act, 1972 in File no. K-36/17/2018/C.1., affirming the order of the Authority of first instance.
2. The facts giving rise to this petition are that the fourth respondent, Nihar Kanti Lal was posted as the Chief Manager, Fatehpur Main Branch of the petitioner, the Baroda Uttar Pradesh Gramin Bank from 11.07.2011 to 29.12.2012, and again from 09.11.2013 to 30.04.2014. During this period of time, he committed serious financial irregularities, that the petitioner have described as those ‘involving Rs.2.24 crores potential loss to the petitioner Bank’. Disciplinary proceedings were initiated against the fourth respondent, and a charge sheet was served upon him by the petitioner Bank on 31.03.2015. This was followed by another charge sheet dated 23.06.2015. A departmental inquiry ensued. Pending disciplinary proceedings, the fourth respondent was due to superannuate on 30.06.2015. The petitioner Bank appear to have informed the fourth respondent by their letter, dated 30.05.2015 that he would cease to be in service in accordance with Regulation 45(3) and Regulation 45(4) of the Baroda Uttar Pradesh Gramin Bank (Officers and Employees) Service Regulations, 2010 (for short ‘ the Regulations’), but the disciplinary proceedings initiated against him would continue. It was further indicated in the letter dated 30.05.2015 that though the fourth respondent would cease to be in service on the date of superannuation, but payment of his retirement benefits shall be subject to Regulation 45(4) of the Regulations. A perusal of Regulation 45(4) shows that it lays an embargo on the right of an employee to receive any pay or allowance after the date of superannuation, as also post retirement benefits, till disciplinary proceedings are completed, and a final order is passed disposing of those proceedings. The only exception is the employee’s entitlement to his own contribution of the Contributory Provident Fund.
3. The fourth respondent was found guilty on all charges by the Inquiry Officer. The Disciplinary Authority, acting on the report of the Inquiry Officer, punished the fourth respondent vide order dated 24.04.2016 in the following terms (extracted verbatim from the punishment order):
“1. Reduction from his present grade i.e. Scale-iv (Chief Manager) to a lower grade-I (Assistant Manager) with initial Basic Pay of Rs.23700/-
2. Recovery of Rs. five lacs from his terminal benefits.”
4. The aforesaid order of punishment was challenged in a departmental appeal by the fourth respondent before the Appellate Authority in the petitioner Bank’s establishment, which was dismissed vide order dated 24.04.2014, affirming the order of punishment, dated 24.08.2016. The appellate order was not challenged further, and is said to have become final. This position has not been denied by the fourth respondent in his counter affidavit. Post finalization of all these departmental proceedings, the petitioner Bank calculated the gratuity payable to the fourth respondent, worked out on his basic pay and allowances applicable to the post of Officer Grade-I (Assistant Manager), the post to which the fourth respondent had been reduced in rank post retirement, in consequence of the punishment order. It was not calculated with reference to the emoluments last drawn by the fourth respondent at the time of his retirement, on 30.05.2015. It may be well to remember that the fourth respondent demitted office on the day last mentioned while holding post of Scale-IV, Chief Manager, that he lost to the order of reversion passed in disciplinary proceedings on 24.08.2016. The petitioner Bank determined the fourth respondent’s gratuity at a sum of Rs.
