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MAHESH BAL BHARDWAJ versus U.P.COOPERATIVE FEDERATION LTD. THRU CHAIRMAN & ANR.

High Court of Judicature at Allahabad

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Mahesh Bal Bhardwaj v. U.P.Cooperative Federation Ltd. Thru Chairman & Anr. - SERVICE BENCH No. - 1395 of 2006 [2007] RD-AH 18144 (21 November 2007)

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH

Court No. 1.

IN THE HON'BLE HIGH COURT OF JUDICATURE AT

ALLAHABAD, LUCKNOW BENCH, LUCKNOW.

Writ Petition No. 1395 (SB) of 2006

Mahesh Bal Bhardwaj

Petitioner

U.P. Cooperative Federation Limited and another

Respondents

Sri Manish Kumar, Advocate

Sri Raghvendra Singh, Advocate

Sri Dhirendra Singh, Advocate

Hon'ble Pradeep Kant, J.

Hon'ble Rajiv Sharma, J.

DATED : 21/11/2007

JUDGEMENT :

The petitioner having been denied the payment of gratuity after he reached the age of superannuation on 31.7.06, has approached this Court under Article 226 of the Constitution, praying for the release and payment of the same alongwith earned leave encashment, security deposit with an interest at the rate of 18% per annum.

The petitioner was appointed on 7.1.70 in the U.P. Co-operative Federation Ltd. After putting in 36 years of unblemished service, he retired on attaining the age of superannuation.

As per the PCF Service Regulations and provisions of payment of Gratuity Act, 1972, post retiral dues should have been paid immediately after retirement. It is the admitted case of both the sides that post retiral dues were withheld because of the pendency of criminal case pending before the Chief Judicial Magistrate, Meerut, in which charge sheet has been issued, in which name of the petitioner has been shown as accused.

It is also the case of the petitioner that incident relates to the year 1978, name ly, there were some audit objections for the year 1977-78 and on the basis of the same an F.I.R. was lodged. According to the petitioner, two main persons who were found guilty for any such lapse, were Manohar Lal and Som Dutt Tyagi, whose names find mention in the audit objections and against whom also charge sheet has been issued. The petitioner's name does not find place in the audit objections, as he was not looking after the job of cloth business, for which the auditors had pointed out the anomalies. There were certain other persons, who were associated with the said work and their names also find place in the audit objections.

It is not relevant to enter into the question as to whether the petitioner was in any way connected with the objections which were raised by the audit party or that whether he can be held guilty for any criminal offence, for which a case is pending before the criminal court, as the fact of the matter is that in view of the respondents' own case, the gratuity has not been released or paid to the petitioner, because of pendency of the aforesaid criminal case. number 67A/83.

The learned counsel for the petitioner Sri Manish Kumar has submitted that pendency of criminal proceedings/trial in itself, cannot be a ground for withholding the gratuity and that gratuity in the instant case, is governed by the provisions of Payment of Gratuity Act, 1972, which specifically deal with the situation, in which the gratuity can be stopped and since the petitioner's case does not fall under any of the aforesaid conditions, therefore, gratuity could not have been stopped.

Sri Dhirendra Singh, holding brief of Sri Raghvendra Singh, in response, submitted that since charge sheet has been issued in criminal case against the petitioner, therefore, though in the departmental proceedings initiated by the Federation, the petitioner has been punished by awarding an adverse entry but the punishment order also says that, on the outcome of the criminal proceedings and as per its result, he would be further punished.

However, respondents could not show that there is any provision under service rules or in the government orders applicable to the Federation, for withholding gratuity during pendency of criminal case and moreso, in violation of provisions of Payment of Gratuity Act, 1972.

A Division Bench of this Court in which one of us (Pradeep Kant, J.) was a member, had an occasion to consider the similar question in Writ Petition No. 1189 (SB) of 2002: Bangali Babu Misra Vs. State of U.P. and others, decided on 5.12.02, where because of pendency of criminal case with respect to a trap case, post retiral dues including gratuity were withheld. In that case, the learned Standing Counsel placed reliance upon a Government order dated 28.7.89 and in particular para 3(3) of the said Government order, saying that it permits the withholding of retiral dues during pendency of the criminal proceedings. The matter was considered by the Bench and the plea was rejected with the following observations:

"A bare perusal of the aforesaid paragraph of the Government order reveals that it relates to such a government servant against whom some department/judicial or administrative enquiry is pending on the date of retirement. It nowhere provides that if criminal proceedings are pending even then the said Government order would apply. Suffice it would to mention that such a provision could not have been made for the simple reason that unless departmental proceedings have been initiated or some judicial or administrative proceedings have been initiated for the purpose of determining the guilt of the government servant during the course of service, mere pendency of the criminal proceedings cannot be a ground for taking any action against the petitioner with respect to payment of his post retiral dues. It may be taken note of that Rule 470-B of the Civil Service Regulations is no more available as the same has been deleted. Any departmental enquiry with respect to a government servant, cannot be either initiated or continued after he reaches the age of superannuation otherwise in accordance with the provisions of Regulation 351-A of the Civil Service Regulations as per the aforesaid Regulations."

In the absence of any provision or rule under which the gratuity can be withheld because of pendency of criminal trial, the same could not have been withheld by the respondents. It is also to be seen that in the criminal trial only the person accused can either be convicted or sentenced as per the provisions of criminal law or he would be acquitted. Even if any fine is imposed, that cannot be recovered from the service dues or post retiral dues of the incumbent. Mere conviction or award of sentence would not divest the incumbent from having his post retiral dues, unless, of course, there is any such rule validly made, which permits to do so.

The Federation does not have any rule which permits any such stoppage of post retiral dues because of pendency of criminal trial nor any such rule has been placed before us, despite respondents repeatedly being required to produce any such rule. To the contrary, U.P. Co-operative Federation Ltd. Employees Service Regulations, 1980, in Regulation 91 says that gratuity would be paid in accordance with the provisions of Payment of Gratuity Act, 1972.

The provision of payment of gratuity has been provided under Section 4 of the Act, wherein sub-clause (6) spells out the conditions, under which gratuity of an employee can be stopped or withheld.

Section 4 sub-clause (1) says that gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years- (a) on his superannuation; (b) on his retirement or resignation; or (c) on his death or disablement due to accidence or disease; and sub-clause (6) reads as under:

"(6). Notwithstanding anything contained in sub-section (1)--

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss or destruction of property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused:

(b) the gratuity payable to an employee may be wholly or partially forfeited-

(i) If the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or

(ii) If the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment."

A Division Bench of this Court in which one of us (Pradeep Kant,J) was a member, in Writ Petition No. 1519 (SB) of 2002: Kanti Prasad Sharma Vs. U.P. Co-operative Dairy Federation and Milk Union Centralised Services and another, decided on 26.4.04, had an occasion to consider the provisions of the aforesaid Section 4 of Payment of Gratuity Act and the Court found that if none of the conditions aforesaid as given in Section 4 sub-clause (6) exists, the gratuity cannot be withheld.

In the present case also, none of the conditions aforesaid do exist as the petitioner's services were not terminated nor he fall under any of the conditions otherwise given in sub-section 6 and its sub clauses.

The petitioner, in fact, was subjected to departmental proceedings and it is curious to note that despite the fact that he was not found guilty of any charge in the enquiry and there was no material before the enquiry officer or the appointing authority to conclude otherwise, deliberately and intentionally and apparently in a malicious manner, the petitioner was punished by award of an an adverse entry. The order which was passed in disciplinary proceedings is dated 22.8.89, wherein it was decided to close the proceedings. The General Manager (Administration), Sri Rajendra Pandey, observed that despite the fact that in accordance with report of enquiry officer, no charge against the petitioner is proved but since he had made the work distribution from 10.8.77 to 1.12.77 amongst the employees, therefore, it is clear that for one reason or the other or in one way or the other, he was looking after the cloth business and, therefore, he lacked effective control upon the employees. On the basis of the aforesaid observation, the petitioner has been punished with award of an adverse entry and at the same time, despite the disciplinary proceedings having been closed, it was provided that on the outcome of the criminal trial, the petitioner would be punished again.

We fail to appreciate that if the enquiry officer did not find the charge proved, then merely on his own surmises, conjunctures and presumptions how he could have awarded any punishment, may be a minor punishment. But in any case, if that adverse entry was awarded and enquiry proceedings were closed, there could not have been any authority with the General Manager to say that further punishment would be awarded on the outcome of the criminal trial.

Learned counsel for the respondents has not been able to indicate any service rule or any law, under which after dropping the departmental proceedings, still the matter can be kept alive for the purpose of awarding some major punishment after the criminal trial is concluded in respect of the case of alleged embezzlement.

The argument of the counsel for the respondents that because the petitioner himself obtained a stay order staying the criminal proceedings by filing a writ petition in this Court, therefore, he cannot raise the plea that criminal proceedings are pending since long and the gratuity cannot be withheld, equally untenable.

We may clarify that this is not the consideration of the Court nor it is the case of the petitioner that because of delay in conclusion of criminal proceedings, the gratuity or post retiral dues be released, but the plea is that because of pendency of the criminal case or criminal trial, gratuity and other post retiral dues could not have been stopped.

We are thus, of the considered opinion that gratuity and other post retiral dues, to which the petitioner is otherwise entitled under rules, could not have been withheld either on the pretext that criminal proceedings were pending against the petitioner or for the reason that on the outcome of the criminal trial, some more punishment was intended to be awarded. The delay in making the payment of gratuity, therefore, entitles the petitioner to get the statutory interest as provided under Section 7 of the Payment of Gratuity Act.

We, therefore, issue a writ in the nature of mandamus directing the respondents to release and make payment of the entire post retiral dues including gratuity, leave encashment, security deposit etc. as per rules within a maximum period of two months from the date of receipt of a certified copy of this order. The petitioner shall also be paid interest at the rate of 8% per annum toward the delayed payment of gratuity, namely, from the date when it became payable and till it is actually paid.

The writ petition is allowed. Costs easy.

21.11.07

MFA


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Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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