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2022 Supreme(UK) 91

IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Sharad Kumar Sharma, J.
Balam Singh Aswal - Petitioner
Versus
Managing Director and others – Respondents
Writ Petition (S/S) No. 1593, 1595, 1596, 1624, 1625, 1626, 1627, 1628, 1634, 1635, 1679 of 2021, 23, 24, 96, 97, 147, 301, 302, 303, 304, 305, 306, 309, 514, 517, 525, 943 of 2022
Decided On : 14-06-2022

Advocate Appeared:
For the Petitioner:Mr. B.M. Pingal, Mr. N.K. Papnoi, Mr. Kishore Kumar, Mr. K.K. Joshi, Mr. I.D. Paliwal, Mr. Nikhil Singhal, Mr. Nandan Singh Bisht and Mr. Ashok Kumar Saxena, Advocates on behalf of Mr. Ganesh Kandpal, Advocates
For the Respondent:Mr. Ashish Joshi, Mr. Lalit Samant and Mr. N.S. Pundir, Advocates, Mr. T.S. Phartiyal, Addl. C.S.C. with Mr. Pradeep Hairiya, Standing Counsel

A statutory corporation cannot withhold the post-retirement benefits of its retired employees without providing them with an opportunity of hearing.

Headnote:

The court held that a statutory corporation created under an Act, which is a separate legal statutory entity, cannot at all exercise its powers for withholdment of the post retiral benefits payable to the retired employees, under the different heads, including the payment of gratuity, under the Payment of Gratuity Act, 1972.

Fact of the Case:

The petitioners, who are retired employees of Uttarakhand Transport Corporation, filed writ petitions challenging the respondents' action of withholding their post-retirement benefits, including gratuity, leave encashment, and other admissible retiral dues. The respondents contended that the withholdment was due to the wrongful fixation of service benefits and ACP benefits, which resulted in an overpayment to the petitioners.

Finding of the Court:

The court found that the respondents' action of withholding the retiral benefits was arbitrary and unreasonable, and that the petitioners were not responsible for any wrongful fixation of their service benefits or ACP benefits. The court also found that the respondents had failed to provide the petitioners with an opportunity of hearing before taking the decision to withhold their benefits.

Issues: 1. Whether a statutory corporation can withhold the post-retirement benefits of its retired employees? 2. Whether the respondents' action of withholding the petitioners' retiral benefits was justified? 3. Whether the petitioners were entitled to an opportunity of hearing before the respondents took the decision to withhold their benefits?

Ratio Decidendi: 1. A statutory corporation created under an Act, which is a separate legal statutory entity, cannot at all exercise its powers for withholdment of the post retiral benefits payable to the retired employees, under the different heads, including the payment of gratuity, under the Payment of Gratuity Act, 1972. 2. The respondents' action of withholding the petitioners' retiral benefits was arbitrary and unreasonable, and that the petitioners were not responsible for any wrongful fixation of their service benefits or ACP benefits. 3. The petitioners were entitled to an opportunity of hearing before the respondents took the decision to withhold their benefits.

Final Decision: The court allowed the writ petitions and directed the respondents to pay the petitioners their entire retiral benefits with arrears, as sought for by the petitioners in each of the respective Writ Petition, as expeditiously, as possible but not later than three months from the date of production of certified copy of this order.

JUDGEMENT :

Before proceeding to address these bunch of 27 Writ Petitions on their own merit, this Court feels it apt to initially deal with the interlocutory orders, which were passed in these bunch of Writ Petitions, which engage a consideration of issue to the following effect :-

    "As to whether, at all, a statutory Corporation created under an Act, which is a separate legal statutory entity, can at all exercise its powers for withholdment of the post retiral benefits payable to the retired employees, under the different heads, including the payment of gratuity, under the Payment of Gratuity Act, 1972."

2. Invariably, all these Writ Petitions, are similar based, on same legal issue, but there is a slight variation in determination of the factual aspects, which has constituted as to be a foundation for the respective claims raised by the petitioners.

3. The Petitioner of Writ Petition (S/S) No. 1593 of 2021, was appointed as a Driver with the respondents/Cooperation way back on 22nd April, 1988, and had later attained his age of superannuation on 31st December, 2020, having retired from the said capacity from Bhowali Depot, District Nainital. It is further not in controversy, that the leave encashment, which the petitioner was otherwise entitled, as a consequence of his superannuation, stood sanctioned by the respondents by an order dated 4th January, 2021, but despite of it, when the leave encashment amount, the amount payable towards interest on gratuity amount under Section 7 (3A) of Payment of Gratuity Act, on the amount of the gratuity, as determined to be made payable to the petitioner (Annexure-2), when it was not remitted, the present Writ Petition was preferred.

4. The petitioner of Writ Petition (S/S) No.1595 of 2021, was appointed initially as a Conductor on a daily wages basis on 8th July, 1981, and has retired from the services from the post of Senior Clerk on 31st March 2021, from Bhowali Depot, Nainital. The petitioner contends that he was sanctioned with the leave encashment on 31st March, 2021, and the gratuity too stood sanctioned on 30th October 2021, but still, despite the sanction, the same was not remitted, hence, he filed the Writ Petition for payment of gratuity, leave encashment and the interest payable on it under Section 7 (3A) of the Payment of Gratuity Act.

5. In Writ Petition (S/S) No. 1596 of 2021, the petitioner was appointed as a Driver with the U.P. State Road Transport Corporation on 5th November, 1986, and after having been transferred to Uttarakhand Transport Corporation having being allocated to the Corporation, he stood superannuated from the post of Driver on 31st October, 2021, from Bhowali Depot, Nainital. He contends that on 28th January, 2021, the leave encashment was sanctioned in his favour, but despite of the sanction having being granted, no payment has been made. Hence, he filed a Writ Petition for the payment of the sanctioned leave encashment, gratuity, as well as the interest payable on it under Section 7 (3A) of Payment of Gratuity Act.

6. The petitioner of Writ Petition (S/S) No. 1624 of 2021, had contended that after completing the age of superannuation from the services of the respondent on 30th June, 2020, he retired as a Senior Clerk from the Rudrapur Depot of the respondents. But despite of having attained the age of superannuation, he was not paid with the retiral dues, and when despite of the repeated requests, it was not paid and he was ultimately declined to be paid despite the sanction made on 06.07.2020, on the ground, that the issue required a final re-fixation of the pay of the petitioner, which the respondents have contended that it was wrongly fixed. The petitioner has submitted that this action of the respondents taken later on as an afterthought, on the basis of the impugned Order No.164/H.Q./E.S.T./III-Special Audit/2019 dated 11.11.2020, would be bad in the eyes of law and would be rather in contravention of the principals laid down in the judgement of State o

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