IN THE HIGH COURT AT CALCUTTA

CIVIL APPELLATE JURISDICTION

APPELLATE SIDE

Present:

The Hon’ble Justice Lanusungkum Jamir

And

The Hon’ble Justice Rai Chattopadhyay

FMA 959 of 2025

with

CAN 01 of 2025

arising out of

WPA 15908 of 2019

MSTC Limited

Vs.

Malay Sengupta and Ors.

For the Appellant : Mr. Soumya Majumder, ld. Sr. Adv.

: Mr. Victor Chatterjee

: Ms. Jayeeta Sengupta

For the Respondent No. 1 : Mr. Biplab Ranjan Bose

Heard on : 28/10/2025 Judgment on : 10/12/2025

Rai Chattopadhyay, J. :-

1. In this intra-Court appeal, the appellant/company has challenged

a judgment of the Hon‟ble Single Judge dated March 25, 2025, in WPA 15908 of 2019, raising question as to the legality and propriety thereof, on the ground that it has actually erroneously upheld the applicability of the provisions of the Payment of Gratuity Act, 1972 in case of the respondent No. 1, who does not fall within the definition of „employee‟ as per the Act of 1972 and should be solely and exclusively subjected to the Conduct, Discipline and Appeals Rules, 1980 of the appellant/company

(MSTC CDA Rules), provisions of which are binding on the said respondent.

2. Facts of the case are narrated in details in the judgment dated March 25, 2025, which need not again be gone into, in so much detail. Some dates are relevant, which may be mentioned. The respondent No. 1, who was a Presidential appointee to the Board of Directors of the appellant, was working as the Chairman and Managing Director (CMD) of the appellant/company. He has been issued with a memorandum of charge-sheet for initiation of major penalty proceedings, on April 20, 2009. On April 24, 2009, the Ministry, by letter directed the appellant/company to withhold gratuity of the respondent No. 1, pending completion of disciplinary proceeding. On April 30, 2009, the respondent retired. After conclusion of the disciplinary proceeding an order dated April 30, 2013, was issued, imposing upon the respondent, a penalty for recovery of Rs. 10 lakhs, payable to him on account of gratuity, as per provision under Rule 23 (d) read with Rule 30A(ii) of the MSTC CDA Rules, for the loss caused to the company by the respondent due to his negligence in conduct and breach of order. A review application dated October 28, 2013, filed by the said respondent against that order, has been rejected by the Ministry being the Disciplinary Authority vide its order dated March 20, 2014.

3. On April 03, 2017, the respondent writes to the company for payment of gratuity and also lodges his claim of gratuity before the competent statutory authority. The Controlling Authority has rejected the respondent‟s claim as above, vide order dated February 20, 2018. In an appeal against the same, the Appellate Authority has reversed the order of the Controlling Authority and directed vide his order dated April 30, 2019, for payment of gratuity to the respondent with simple interest at the rate of 8 per cent, with effect from April 30, 2009.

4. The question remains if the provisions under the Payment of Gratuity Act, 1972 and those in MSTC CDA Rules are mutually exclusive or that in case of the respondent the MSTC CDA Rules, shall override provisions under the Act of 1972.

5. Mr. Soumya Majumder, learned senior counsel has argued that the respondent cannot be allowed any benefit otherwise and indirectly, to which he is not entitled to or rather is disqualified to be allowed with the same, directly. He mentions Rule 30A (ii) of the MSTC CDA Rules 1980 (as amended on April 30, 2014), which he says is an enabling provision to permit recovery from gratuity of the whole or part of any pecuniary loss caused to the company due to misconduct of negligence by the respondent, proved in a disciplinary proceeding. He says that the later part of Rule 30A (ii) of the MSTC CDA Rules has no link with misconduct enumerated in Section 4(6) of the Payment of Gratuity Act, 1972; that the later part of Rule 30A (ii) of the MSTC CDA Rules permits recovery from gratuity without reference to miscondu