IN THE HIGH COURT OF ALLAHABAD, LUCKNOW BENCH
ATTAU RAHMAN MASOODI, BRIJ RAJ SINGH, JJ.
U.P. Rajya Nirman Sahkari Sangh Ltd. Lko. and Another - Appellants
Versus
Purushottam Verma and Others - Respondents
Special Appeal No. 2 of 2024
Decided On : 07-02-2024
Gratuity - Employee Dues - Payment of Gratuity Act, 1972 - The court interpreted Section 4(6) of the Act, emphasizing that gratuity cannot be withheld without proper proceedings, influencing the decision to quash orders obstructing payment of dues.
Fact of the Case:
The case involves an intra-Court appeal against a writ petition that directed the payment of withheld retiral dues, including gratuity and leave encashment, to an employee after quashing previous orders that obstructed these payments.
Finding of the Court:
The court found that the writ court's directions to release the entire retiral dues were justified, as the conditions for withholding gratuity under Section 4(6) of the Payment of Gratuity Act were not met.
Issues: Whether the writ court correctly directed the payment of retiral dues and quashed the orders that withheld these payments based on audit objections.
Ratio Decidendi: The court held that gratuity cannot be withheld without initiating proper proceedings as stipulated in Section 4(6) of the Payment of Gratuity Act, and the previous orders lacked legal justification.
Result: The appeal was dismissed, upholding the writ court's order to pay the entire retiral dues.
JUDGMENT :
Heard learned counsel for the appellants, Sri Alok Mishra learned counsel who has put in appearance on behalf of the respondent No. 1/petitioner. Respondent Nos. 2 and 3 are the proforma parties.
2. The intra-Court appeal under Chapter VIII Rule 5 of Allahabad High Court Rules, 1952 is directed against the order dated 22.9.2023 passed in Writ-A No. 6409 of 2023, whereby the writ petition filed by the respondent/petitioner has been allowed with certain directions as well as the order dated 28.11.2023 passed in Civil Misc. Review Application No. 239 (D) of 2023 whereby the review petition filed by the department has been allowed negatively. The aforesaid writ petition was firstly decided on 22.9.2023 and while allowing the writ petition, the writ Court in paragraph Nos. 6 to 8 issued the following directions :
''6. Impugned order dated 10.5.2023 is quashed.
7. Respondents are directed to pay the entire dues, including the gratuity and leave encashment withheld vide impugned order dated 10.5.2023, to the petitioner within a period of three months.
8. The petitioner shall also be entitled to interest at the rate of 7% per annum from 30th day of retirement till actual payment/realization on the unpaid amounts''.
3. The appellants herein feeling aggrieved chose to file an intra-Court appeal arising out of the writ Court's order passed on 22.9.2023 and the same being registered as Special Appeal No. 502 of 2023 was disposed of on 28.10.2023 in terms of the following order :
''1. Learned counsel for the appellant submits that ends of justice would be served if the appellant is permitted to file review application before the same Bench.
2. In view of above, the appeal is, accordingly, disposed of permitting the appellant to file appropriate application before the writ Court''.
4. It appears that the order dated 21.9.2023 which obstructed the release of retiral dues was already placed on record along-with the counter-affidavit but the same had escaped attention of the writ Court while issuing the directions extracted above. This anomaly led the appellants (employer) to invoke the remedy of filing the review application for which permission was granted by order dated 28.10.2023 mentioned above.
5. It is in this backdrop that the review application was filed by the appellants to put-forth the entire explanation so as to justify the impediments coming in the way of release of the entire post-retiral dues admissible to the respondent No. 1(employee).
6. The option to pursue the course of review might have been opted looking to the prayer set-out in the writ petition wherein nothing, except the order dated 10.5.2023, was assailed, therefore, the directions issued by the Writ Court were understood to have been issued beyond the scope of relief. The review application instituted by the appellants was registered as Civil Miscellaneous Review Application Defective No. 239 of 2023. The writ Court after hearing the parties allowed the delay condonation application and proceeded to consider on merit the review application on the same day. In paragraph 11 of the order dated 28.11.2023, the Court allowed the review application. But to the utter surprise, in the preceding paragraph, the writ Court proceeded to set aside the order dated 21.9.2023 apart from the order dated 10.5.2023 which was already set aside. The operative part of the order passed on review application reads as under :
''10. Considering the submissions made at the bar, in the judgment dated 22.9.2023, this Court was of the view that unless the proceedings as contemplated under Section 4(6) of the Act are initiated merely on the basis of audit objection, the retiral dues including the gratuity cannot be withhold and the same is in violation of the provisions of Article 300-A of the Constitution of India. Even the subsequent order dated 21.9.2023 is based upon the audit objection. As no proceedings have been initiated, which can be deciphered in the order dated 21.9.2023, the analogy on
AI
Gratuity cannot be withheld without proper legal proceedings as per Section 4(6) of the Payment of Gratuity Act, 1972.
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In the absence of specific provisions empowering the employer to withhold the pension of an employee, the same cannot be withheld, especially after the employee has been acquitted from criminal charg....
The mandatory requirement of passing the Departmental Accounts Examination for up-gradation or promotion in the pay-scale, and the impermissibility of allowing the illegality to be perpetuated.
The main legal point established in the judgment is that while the respondents were justified in withholding the retiral benefits of the petitioners due to pending disciplinary proceedings initiated ....
The withholding of retiral benefits, including gratuity and leave encashment, based on a pending criminal case, must be in accordance with the relevant statutory provisions and cannot be applied retr....
The central legal point established in the judgment is that recovery from retiral dues after retirement is impermissible in certain situations, and the protection of pension and gratuity rights of re....
Retired employees of Class-IV are protected against recovery of overpayments not due to their fault; withholding retirement benefits without just cause is impermissible.
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