CAV JUDGMENT

(PER: THE HON'BLE MR JUSTICE V KAMESWAR RAO)

This appeal has been filed by Canara Bank challenging the order dated 13.09.2022 passed by the learned Single Judge in W.P.No.11463/2020 (L-RES), whereby the learned Single Judge has dismissed the writ petition filed by Canara Bank and thereby directing the Canara Bank to comply with the order of the Appellate Authority within three weeks from the date of receipt of copy of the order.

2. Some of the relevant facts to be noted from the record are, Shrimantha D. Pujari, the husband of respondent (who has since expired) joined the service of the appellant-Bank on 13.03.1975. At relevant point of time i.e., on 14.12.2005, while he was working as a Clerk, disciplinary proceedings were initiated against him in respect of misconduct relating to discounting of cheques/TODs in the SB A/c No.16818 of the respondent.

3. The punishment of ‘Compulsory Retirement’ was imposed on him.

4. Sri. Pujari had challenged the said punishment in an Industrial Dispute. During the pendency of the Industrial Dispute, Sri. Pujari expired. Resultantly, his legal heirs withdrew the Industrial Dispute on 11.12.2018. In the meanwhile, an application was filed by Sri. Pujari for release of Gratuity amount before the Controlling Authority, which was rejected.

5. The case of the appellant-Bank was that at the time of compulsory retirement of Sri. Pujari, there were direct and indirect liabilities outstanding in his name, which were to be cleared by him. As on 15.09.2019, the liabilities were Rs.9,85,420.24/- under staff clean OD apart from Staff Welfare Fund liability of Rs.1,29,691/- payable along with interest at 10% p.a.

6. Sri. Pujari challenged the order of Controlling Authority before the Appellate Authority in Appeal No.36(129)/2018/B1. Pursuant to his death on 04.05.2018, the said appeal was prosecuted by his wife, who is the respondent in these proceedings.

7. The Appellate Authority by its order dated

31.10.2019 (read with Corrigendum dated 13.11.2019), has allowed the appeal by directing the appellant-Bank to pay gratuity amount of Rs.2,81,290/- along with interest at the rate of 10% p.a. from the date it became due till the actual date of payment.

8. The said order became the subject matter of the writ petition being W.P.No.11463/2020, wherein the impugned order has been passed by the learned Single Judge.

9. Learned Single Judge has dismissed the petition by interalia holding that while Staff Welfare Fund comes within the domain of service conditions, but home loan occupies a different position as home loan is governed by the agreement of loan and it is for the appellant-Bank to act in terms of the said agreement and exercise all rights under the said agreement as against the debtor; therefore, the appellant-Bank could not on the basis of an authorization, recover the same from the Gratuity amount payable by it.

10. The submission of Sri. Sandesh Chouta, learned Senior Counsel appearing for the appellant-Bank is primarily the home loan which is an outstanding liability of Rs.12,60,314.18 as on 30.09.2022 is not the subject matter of these proceedings. The appellant-Bank intended to adjust the Gratuity amount towards the Staff Clean OD and Staff Welfare Fund liability and not home loan. According to him, it is settled law that employers are entitled to adjust Gratuity against dues payable to employees and as such, the Bank is justified in adjusting the aforesaid two amounts against the Gratuity and not home loan as dealt with by the Learned Single Judge. 11. According to him, the learned Single Judge failed to appreciate that immediately after the exit from the services of the Bank, late Sri. Pujari was requested to come forward and discharge his liabilities towards the appellant- Bank. However, he did not come forward and failed to discharge his liability. Therefore, the appellant-Bank had no choice, but to proceed for adjustment of terminal benefits towards his liabilities and the respondent being