IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on: 19.06.2024 Delivered on: 24.07.2024 CORAM :

THE HON'BLE MRS. JUSTICE J.NISHA BANU AND THE HON'BLE MR. JUSTICE P.DHANABAL W.A.No.1293 of 2022 S.Sundaram Assistant General Manager (QC) Retd.

No.28/8, Sowripalayam Housing Unit Peelamedu,Coimbatore 641 004. ...Petitioner Vs

1. The Area Manager, Food Corporation of India District Office, No.1, Bharathi Road, Cuddalore.

2. The General Manager, Food Corporation of India Regional Office, No.8, Mayor Sathyamurthy Road, Chetpet, Chennai 600 031.

3. The Executive Director Food Corporation of India Zonal Office, No.3, Haddows Road, Chennai 600 006.

4. The Appellate Authority Under the Payment of Gratuity Act and Deputy Chief Labour Commissioner ( Central)

No.26, Haddows Road, Shastri Bhavan,Chennai 600 006

5. The Assistant Labour Commissioner ( Central)

DA2, BSNL Staff Quarters, Jaya Nagar, Reddiar Palayam ( PO), Puducherry 605 010. .... Respondents PRAYER: Writ Appeal filed under Clause 15 of the Letters Patents to set aside the order dated 27.08.2019 in W.P.No.37816 of 2015 as illegal, arbitrary and contrary to law and consequently direct the Respondent Corporation to pay the forfeited Gratuity of Rs.5,00,000/- along with interest at the rate of 10% per annum and award costs.

For Petitioner : Mr.Balan Haridas For Respondents ( 1to 3) : Mr. Imthias

JUDGMENT

(Judgement of the Court was made by J.NISHA BANU, J. and P.DHANABAL.J. )

This Writ Appeal has been preferred by the employee as against the order passed in W.P.No.37816 of 2015, whereby the Writ Court quashed the order of the Assistant Labour Commissoner (Central) dated 17.12.2014 and consequently the order dated 04.11.2015 made in Gratuity Appeal No.56 of 2014, in and by which the Statutory Authorities directed the respondents 1 to 3 -Food Corporation of India (Employer) to pay Rs.5,00,000/- gratuity amount with interest at 10% per annum.

2. The facts of the case in nutshell is as follows:-

(2.1.) The appellant was employed as Assistant General Manager (Quality Control) in the respondent Food Corporation of India. Five days before his retirement, a charge sheet was issued under Regulation 58 of Food Corporation of India (Staff) Regulations, 1971 [hereinafter called as “Rules”]. Charges framed against the employee is that while he was working as Area Manager, FCI, Cuddalore, in the physical verification by a squad, it was found that there was shortage of food grains bags valued to the tune of Rs.91,96,140/-

.

(2.2) Appellant submitted his explanation to the charge memo. As the explanation was not satisfactory, an inquiry was held. In the Inquiry report, it was held that charges framed against the employee are proved on account of ineffective supervision over depot personnel and its operations leading to misappropriation and thereby caused huge loss to the Management.

(2.3) On serving of the inquiry report, employee denied that there was no shortage of bags. The Disciplinary Authority, on perusing the findings of the inquiry report, imposed penalty of compulsory retirement along with forfeiture of 50% of gratuity payable to the employee-appellant herein.

(2.4) Aggrieved by the deprivation of 50% gratuity, employee preferred Gratuity Application No.56/2014 before the 5^th respondent herein [Controlling Authority]. The Controlling Authority, held that the employee is entitled to payment of Rs.5,00,000/- as per the provisions of the Act and interest thereon at 10% per annum on the said gratuity.

(2.5) The FCI-Employer preferred appeal in Gratuity Appeal No.113 of

2015 before the 4^th respondent herein [Appellate Authority]. The Appellate Authority confirmed the order of the Controlling Authority.

(2.6) Aggrieved by the order of the Appellate Authority, the Employer filed W.P.No.37816 of 2015. The Writ court, held that it is a case of 'punishment', hence, forfeiture of Gratuity is permissible. Thereby, the Writ Court quashed the orders of Controlling and Appellate Authorities and directed the Controlling Au