Bank Of Baroda Thru Chairman & ... vs Appellate Authority Under The ...
2016 Latest Caselaw 6577 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

AFR	
 
Reserved
 
Court No. 08
 

 
Writ Petition No. 5361 (M/S) of 2015
 

 
Bank of Baroda and others 		..........	Petitioners
 

 
Versus
 

 
The Appellate Authority and others ..........	Opposite parties
 

 
*******
 
Hon'ble Dr. Devendra Kumar Arora, J.

Heard Mr. Lalit Shukla, learned Counsel for the Bank-petitioners and Mr. Parveen Bhatnagar (third respondent)-in-person.

Through this writ petition under Article 226 of the Constitution of India, petitioners have inter-alia challenged the order dated 27.02.2015/12.03.2015 passed by Controlling Authority under Payment of Gratuity Act, 1972 & Regional Labour Commissioner (Central), Lucknow, whereby Bank-respondent has been directed to pay a sum of Rs.12,58,333/- to third respondent, namely, Sri Praveen Bhatnagar towards gratuity and interest thereupon. Petitioners have further challenged the Appellate Order dated 12.08.2015/19.08.2015, whereby the Deputy Chief Labour Commissioner, Kanpur/Appellate Authority under Payment of Gratuity Act, 1972 returned the appeal filed by the Bank along with demand draft on the ground that the appeal has been filed beyond the period of limitation.

Submission of learned Counsel for the petitioners is that petitioners-Bank of Baroda is a Nationalized Bank constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970. Sri Praveen Bhatnagar (third respondent), who was the Manager of Assets Recovery Branch, Vibhuti Khand, Gomti Nagar, Lucknow, attained the age of superannuation on 31.07.2012. During the service period, third respondent was subjected to disciplinary proceedings in a case of fraud which ultimately culminated into imposition of penalty vide order dated 8.1.2007 and awarded punishment of reduction of his basic salary by two stages in the time scale of pay for a period of two years and during the period of such reduction, he will not earn his normal annual increment, if any, and on the expiry of such period the reduction will have the effect of postponing his future increments. Apart from the disciplinary proceedings, Sri Praveen Bhatnagar was also prosecuted by the Central Bureau of Investigation (in short 'CBI') under Section 420 IPC.

On account of pendency of criminal case against Sri Praveen Bhatnagar, the gratuity was not paid to him in terms of the Bank of Baroda (Employees') Pension Regulations, 1995 (in short 'the Regulation 1995'). Later on, vide judgment and order dated 11.03.2013, Sri Praveen Bhatnagar was discharged from the criminal case by the Special Judge, Anti Corruption, CBI West, Lucknow. Being aggrieved by the order dated 11.03.2013, the CBI has filed a Criminal Revision (D) No.388 of 2003 (Union of India through CBI Vs. Praveen Bhatnagar and others) before this Court, which is still pending.

In the backdrop of the aforesaid facts, it has been contended that appeals and revisions are continuous proceedings of the original proceedings and are also judicial proceedings, therefore, on account of pendency of the criminal revision, the delinquent employee (third respondent) is not entitled for the gratuity in the light of the Regulation 46 of the Regulation 1995.

To strengthen his submission, learned Counsel for the petitioners has invited attention of the Court towards Regulation 46 of Regulation 1995 wherein it is provided that an employee, who has retired on attaining the age of superannuation or otherwise and against whom any departmental or judicial proceedings are instituted or where departmental proceedings are continued, a provisional pension, equal to the maximum pension which would have been admissible to him, would be allowed subject to adjustment against final retirement benefits sanctioned to him, upon conclusion of the proceedings but no recovery shall be made where the pension finally sanctioned in less than the provisional pension or the pension is reduced or withheld etc. either permanently or for a specified period and in such cases the gratuity shall not be paid to such an employee until the conclusion of the proceedings against him and the gratuity shall be paid to him on conclusion of the proceedings subject to the decision of the proceedings. Any recoveries to be made from an employee shall be adjusted against the amount of gratuity payable.

It has next been contended by learned Counsel for petitioners that Section 4 (6)(a) and Section 7(2) of the Payment of Gratuity Act, 1972 also provides for forfeiture of gratuity under certain conditions. There is no provision under the Gratuity Act either providing or barring withdrawing of gratuity whereas forfeiture provides complete deprivation of gratuity amount, while withholding of gratuity is not payment gratuity amount for certain period and for certain purpose. Therefore, it is clear that both forfeiture and withholding of gratuity have different connotations and implications, as such, there is no conflict between Payment of Gratuity Act and the Regulation, 1995.

Lastly, it has been contended by learned Counsel for petitioners that the Controlling Authority, while passing the impugned order, has failed to consider the decision of the Apex Court in Y.K. Singhla Vs. Punjab National Bank; (2013) 3 SCC 472, wherein it has been observed that the High court was justified in withholding the gratuity till the culmination of the proceedings pending against him. Therefore, the impugned orders passed by the Controlling Authority awarding the amount of gratuity along with interest is illegal and without considering the law laid down by the Apex Court in the case of Y.K. Singhla (Supra). Similarly, the Appellate Authority without application of mind has also passed the impugned order dated 12.08.2015/ 19.08.2015 rejecting the appeal of the Bank as time barred.

On the contrary, the private respondent has submitted that no departmental proceedings were pending against him at the time of superannuation. Therefore, Section 7(2) and Section 4(6) (a) of Payment of Gratuity Act, 1972 is not applicable because Section 4(6)(a) provides for a situation where an employee has been terminated for willful omission or negligence causing loss to the property belonging to the employer whereas the petitioner was not terminated from service as he had attained the age of superannuation on 31.07.2012 whereas the proceedings had already been closed on 08.01.2007. It has also been submitted by opposite party no.3 that the word "gratuity" has been used nowhere except in sub-clause (2) of Regulation 46 which is in highly contradiction with Section 13 of the Payment of Gratuity Act, 1972. Section 13 provides that no gratuity payable under this Act [and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under section 5] shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court. Thus no recovery can be made or adjusted against the amount of gratuity payable and thus the provision as mentioned under Regulation 46(2) of the Regulation 1995 is against and grossly in conflict with the Payment of Gratuity Act, 1972.

It has been further contended that as per Section 14 of the Payment of Gratuity Act, matters relating to payment of gratuity uniformly throughout the country has overriding effect to all other rules including Regulation 1995, therefore, the employee is entitled for payment of gratuity along with interest for delayed payment.

It has also been argued by opposite party no.3 that after the discharge order dated 11.03.2013 passed by the Special Judge, Anti Corruption (West) CBI, Lucknow, the pending Criminal Revision (D) No.388 of 2003 before this court was for offences alleged under relevant law wherein criminality was to be examined which by itself provides for appropriate penalty for the offences, if proved and there can be no reason for withholding the gratuity as a measure of punishment. It has also been argued that the criminal revision is pending before this Court and pendency of criminal case will have to reach its own logical conclusion and in case of conviction, the appropriate penalty be imposed on the accused without any relevance to the payment of gratuity. Therefore, the action of petitioner-Bank withholding the amount of gratuity is illegal and without jurisdiction as also contrary to the provisions of the Payment of Gratuity Act, 1972.

It has also been contended that the Controlling Authority in a very fair manner passed the impugned order awarding gratuity along with interest in favour of employee, therefore, there is no reason to interfere with the impugned order.

So far as the Y.K. Singla' case (Supra) is concerned, after looking into the case in its totality, it has been found that the Hon'ble Apex Court has awarded full gratuity, interest for the delayed payment in favour of employee, therefore, this case does not help the Bank-petitioners.

The payment of Gratuity Act, came into existence on 21st August, 1972. The Act applied to only certain establishments prior to its amendment. The gratuity was paid to persons who are covered within the meaning of the term ''employee' under section 2(e) of the Act, subject to the conditions mentioned in Section 4 of the Payment of Gratuity Act, 1972. "Employee" means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment, to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.

One should not forget that the Payment of Gratuity Act 1972 is a social security enactment. An Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, Railway companies, shops or other establishments. The significance of this legislation lies in the acceptance of the principle of gratuity as a compulsory statutory retiral benefit. The Act accepts, in principle, compulsory payment of gratuity as a social security measure to wage earning population in industries, factories and establishments. Thus, the main purpose and concept of gratuity is to help the workman after retirement, whether retirement is a result of the rules of superannuation, or physical disablement or impairment of vital part of the body. Thus, it is a sort of financial assistance to tide over post retiral hardships and inconveniences. It is derived from the word ''gratuitous', which means ''gift' or ''present'. However, having being enacted as a social security form, it ceases to retain the concept of a gift but it has to be seen as a social obligation by an employer towards his employee.

It may be added that Payment of Gratuity Act is on the genre of statutes like the Minimum Wages Act, ESI etc. which lay down the relevant minimum benefits which must be made available to the employees. Payment of Gratuity Act is a welfare measure introduced in the interest of the general public to secure social and economic justice to workmen to assist them in old age and to ensure them a decent standard of life on their retirement. Therefore the Act imposed a reasonable restriction on the employer in respect of the fundamental right under Article 19(1)(g)[xxxv]. The provision for payment of gratuity contained in section 4(1)(b) of the Act is one of the minimum service conditions which must be made available to the employees notwithstanding financial capacity of employer to bear its burden and it is reasonable restriction on the right of the employer to carry on business within the meaning of Article 19 of the Constitution and section 4(1)(b) of the Act is legal and valid.

As averred above Payment of Gratuity Act, 1972 holds the status of central law and from the mandate of Section 14 of the Gratuity Act, it is crystal clear that provisions of the Gratuity Act would have overriding effect, with reference to any inconsistency therewith in any other provision or instrument. In other words, Section 14 of the Act leaves no room for any doubt, that a superior status has been vested in the provisions of the Gratuity Act, vis-a-vis, any other enactment (including any other instrument or contract) inconsistent therewith. Therefore, insofar as entitlement of an employee to gratuity is concerned, it is apparent that in cases where gratuity of an employee is not regulated under the provisions of the Gratuity Act, the legislature having vested superiority to the provisions of the Gratuity Act over all other provisions/enactments. At this juncture, it would be useful to reproduce para 13 and 14 of the recent verdict given by the apex court in the case of State of jharkhand and others vs jitendra kumar Srivastava and another, 2014(1) AWC 159(SC):-

" 13. In State of West Bengal v Haresh C. Banerjee and others,(2006)7 SCC 651, this court recognized that even when, after the repeal of Article 19(1) (f) and Article 31(1) of the Constitution vide constitution( fourty-fourth amendment) Act , 1978 w.e.f 20th June 1979, the right to property was no longer remained a fundamental right, it was still a constitutional right, as provided in article 300A of the Constitution . Right to receive pension was treated as right to property. Otherwise, challenge in that case was to the vires of rule 10(1) of the West Bengal Services( death-cum-retirement benefit) rules, 1971 which conferred the right upon the governor to withhold or withdraw a pension or any part thereof under certain circumstances and the said challenge was repelled by this court.

Fact remains that there is an imprimatur to the legal principle that the right to receive pension is recognised as a right in "property".

14.Article 300-A of the constitution of India reads as under:-

"300A persons not to be deprived of property save by authority of law-no person shall be deprived of his property save by authority of law."

once we proceed on that premise, the answer to the question posed by us in the beginning of this judgment becomes too obvious. A person cannot be deprived of his pension without the authority of law, which is the constitutional mandate enshrined in article 300A of the constitution. It follows that attempt of the appellant to take away a part of pension or gratuity or even leave encashment without any statutory provision and under the umbrage of administrative instruction cannot be countenanced."

As far as criminal case is concerned, it relates to offence under the Indian Penal Code which itself provides for appropriate penalty for the offences, if proved and there can be no reason for withholding the gratuity as a measure of punishment. My view is fortified by the decision of the Apex Court in the case of D.V.Kapoor Vs.Union of India and others 1990 AIR 1923, wherein it has been observed that there is no provision under the Payment of Gratuity Act which empowers the employer to withhold the gratuity as well, if he retires, as a measure of punishment. Furthermore, there is inordinate delay in filing the Criminal Revision and the delay has yet not been condoned. Mere filing of criminal revision with delay, would not vest any power upon the Bank to withhold the gratuity for all time to come.

It may be observed that after putting about 39 years of service, the answering respondent has attained the age of superannuation on 31.7.2012. As averred above, the departmental proceedings had concluded by awarding punishment vide order dated 8.1.2007. Thus, no departmental proceedings were pending on the date when the petitioner had attained the age of superannuation.

In view of the aforesaid discussions, I find no infirmity or illegality in the impugned orders.

Accordingly, the writ petition is dismissed. Before parting, I would like to point out that vide order dated 14.09.2015, petitioners were directed to deposit the entire amount of gratuity before the Controlling Authority/ opposite party no.2.By another order dated 25.05.2016, this Court directed that amount of gratuity shall be deposited in Interest Bearing Account by the Controlling Authority. In the event the amount of gratuity is lying with the opposite party no.2, same shall be released forwith in favour of the third respondent. In case, the amount was not deposited by the Bank, as directed earlier, the amount of gratuity together with interest shall be released in favour of opposite party no.3 within a maximum period of forty five days from the date of production of certified copy of this order.

Order Dated:20th October, 2016

MH/-