Terminal benefits such as gratuity and group insurance cannot be withheld by an employer if the disciplinary proceedings used as the justification for such withholding have been set aside or modified by a court of law.

ORDER:

The present Writ Petition has been filed to declare the respondent’s action in withholding amounts due to the petitioner towards Gratuity and Group Life Insurance amount on the ground that a disciplinary enquiry is pending, as illegal.

2. Heard Smt. K. Udaya Sri, learned counsel for the Petitioner and Sri A.H. Rama Krishna Rao, learned Standing Counsel, appearing for the respondents. Perused the record.

3. Brief facts of the case are as follows:

(a) The Petitioner was appointed as a Staff Assistant in the year 1971 in the respondent Bank and got superannuation as Junior Officer/SPP on 31.01.2003. On retirement, he is entitled to a refund of E.P.F. amounts standing to his credit in his E.P.F. account No.286 and the gratuity amount. Both amounts are payable upon the employee’s superannuation. The employer has no right to withhold any part of either E.P.F. amount, gratuity group life insurance amount or pension in view of the prohibition under Section 60 r/w provisions under the Pension Act, Gratuity Act and E.P.F. Act, 1952.

(b) Earlier, the respondent had issued a charge memo alleging that the Petitioner had committed misconduct in scrutinizing excess loan applications in the year’s loan programme for DCC Bank, Warangal, and on that ground, the respondent authorities imposed a penalty of reducing the pay to the minimum of the scale. Due to the pendency of the enquiry, the said amounts were not paid to him. Hence, the present Writ Petition.

4. Learned counsel for the Petitioner submits that the respondent authorities have no jurisdiction or authority to withhold the amounts due to the Petitioner under the Payment of Gratuity Act and Group Insurance amount, as well as under the provisions of the Employees Provident Fund Act, 1952 . The said action of the respondent authorities is contrary to law as held by the Hon’ble Supreme Court as well as this Court in AIR 1976 SC 1163, AIR 1985 SC 996, AIR 1987 SC 808 , 1997(8) SCC 60 and 1997(6) ALT 62.

5. Learned counsel for the Petitioner further submits that the Petitioner challenged the action of the respondent before this Court vide W.P.No.21507 of 2002, and the same is pending before this Court. The Petitioner represented to the Trustee on 04.02.2003 and to the E.P.F. Commissioner on 05.02.2003. The E.P.F. Commissioner has directed the Trustee under the respondent to settle the E.P.F. amount immediately, and the respondent has paid only the E.P.F., but has not paid the gratuity and GLIS amount, leave encashment salary security deposit, and interest on E.P.F. for the period from 01.04.2003 to 24.04.2003. Accordingly, prayed to allow the Writ Petition.

6. Learned Standing Counsel for the respondent filed a counter affidavit by contending that the Petitioner was allowed to retire from the services of the bank on 31.01.2003 without prejudice to the disposal of disciplinary actions pending or proposed against him. The Petitioner and Sri Sambaiah, Legal Assistant of DCCB, Warangal, together have scrutinized 13750 loan applications to a tune of Rs.61.09 crores for the year 1998-99, as against the allotted loaning program of Rs.18.75 crores. The DCCB, Warangal, could disburse only Rs.17.79 crores as on 31.03.1999, and mortgage bonds worth Rs.36.00 crores were pending for disbursement.

7. Learned Standing Counsel for the respondent submits that similarly, for the year 1999-2000, Warangal DCCB was allotted Rs.18.30 crores in view of the restricted loaning program. Thus, the Petitioner and another officer have recommended a large number of loans in dis