Surya Bir Srivastava vs Registrar, Cooperative ...
2017 Latest Caselaw 3466 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

?A.F.R. 
 
Court No. - 37
 

 
Case :- WRIT - A No. - 52024 of 2007
 
Petitioner :- Surya Bir Srivastava
 
Respondent :- Registrar, Cooperative Societies And Others
 
Counsel for Petitioner :- V.K. Dixit,G.K. Dixit
 
Counsel for Respondent :- C.S.C.,Abhishek Mishra,H.R. Misra,S.K.Rai
 

 
Hon'ble Amreshwar Pratap Sahi,J.

Hon'ble Rajiv Lochan Mehrotra,J.

This writ petition has been filed for quashing of the order dated 14th August, 2007 Annexure No. 1 to the writ petition passed by the second respondent whereby an amount of Rs. 1,75000/- that was payable as gratuity to the petitioner has been withheld on account of a doubtful involvement of the petitioner in an incident of certain fraudulent payments through two fake pay-orders of the respondent bank amounting to Rs. 1,18000/- said to have been negotiated by one Shri Ajay Singh under the forged signatures of the then cashier /clerk Shri Sunil Kumar Agarwal and Senior Assistant, Gyan Chandra Pal.

The contention raised by Shri Dixit is three fold. Firstly, that there was no element of any proof for finding the petitioner to be guilty of having misappropriated or participated in the misappropriation of the amount, the loss whereof has resulted in the deductions that have been made under the impugned order. The second ground raised is that withholding of gratuity by the respondent bank is not in conformity with Section 4(6) of the Payment of Gratuity Act, 1972 and is not even commensurate to the alleged loss, as stated to have been caused by the petitioner. The third submission of the learned counsel for the petitioner is that the inquiry which was conducted, ultimately concluded in passing of a resolution by the bank for treating the said loss to be a non-profitable account, as the first information report which had been lodged in respect of the said transaction ended up in the submission of a final report. He submits that in the said proceedings nowhere was the petitioner found to be involved at all and the notice was given to the petitioner for the proposed deduction long after the retirement of the petitioner.

Shri Dixit therefore, submits that in the aforesaid background the action taken for having deducted the said amount is unjustified and the impugned order deserves to be quashed.

Replying to the said submissions, Shri S.K.Rai, learned counsel for the respondent bank has invited the attention of the Court to the counter affidavit and the documents appended thereto to contend that an internal inquiry had been made and it was found that it was negligence of the petitioner that had resulted in the loss to the bank as the petitioner was the Section In-charge when the said pay order is stated to have been issued and encashed by one Shri Ajay Singh. An audit objection was also carried out where it was pointed out that the said lapse is on the part of the petitioner for which reliance has been placed on the letter of the District Assistant Registrar dated 15th October, 2004 copy whereof is annexure No. 4 to the counter affidavit. He further submits that in view of the inquiry report and the aforesaid report of the District Assistant Registrar regarding audit, it was resolved to impose the said liability on the petitioner for which the petitioner was given a show cause notice on 3rd April, 2006 to which he submitted a reply whereafter the Managing Committee passed a resolution for deducting the said amount. Consequently, an order was passed by the General Manager on 20th June, 2006, copy whereof is annexure no. 9 to the writ petition, which order has not been challenged by the petitioner. It is therefore, urged that the liability has already been fixed and the order has been passed keeping in view the provisions of the 1972 Act after putting the petitioner to notice and considering his reply. It is, therefore, urged that any such claim made by the petitioner does not in any way give any explanation about his conduct and in the absence of any challenge to the order dated 20th June, 2006 the petitioner is not entitled to any relief as prayed for. 

A rejoinder affidavit to the counter affidavit has been filed refuting the aforesaid submissions and it has been urged that the petitioner could not have been saddled with the liability in the manner in which it has been done keeping in view the submissions raised hereinabove. 

We have considered the aforesaid submissions and in order to appreciate the controversy it would be appropriate to refer to the report submitted by the Senior Manager to the General Manager of the Cooperative Bank on 20th April 1995, copy whereof has been filed as annexure no. 1 to the counter affidavit. This is the first report in respect of the said alleged loss caused to the bank on account of the encashment of the two pay orders that were allegedly forged. The said report clearly recites that one Ajay Singh is said to have tendered the said orders before the Bank of Baroda under the fake signatures of Sunil Kumar Agarwal and Gyan Chandra Pal. The same nowhere mentions any act  or role on the part of the petitioner indicating his involvement either in the issuance or the tendering of the said pay orders or even its clearance resulting in the alleged loss. The second aspect is that keeping in view the alleged loss, an amount of Rs. 78,000/- was made good through the insurance amount of the bank as a result whereof a sum of Rs. 40,000/- was the actual loss caused to the bank. The petitioner, however, was put to notice in respect of the entire amount of Rs. 1,18000/- which was denied by him through his reply dated 17.4.2006 and 11.5.2006. We do not find any proper consideration of the said reply except for the recital in the impugned order dated 14.8.2007 that  the role of the petitioner was found to be doubtful in the internal inquiry that had been conducted.

A mere doubt on the basis of an internal inquiry will not establish the entire loss being on account of the petitioner. The provisions of sub-Section (6) of Section 4 clearly require that forfeiture is permitted to the extent of the damage or loss so caused on account of any negligence. In the instant case even assuming for the sake of argument that there was a negligence on the part of the petitioner, the realisation of the amount could be only to the extent of the damage or loss so caused as per Sub-Section (6) of Section 4. The provision of Sub-Section (6) of Section 4 of the Payment of Gratuity Act, 1972, is extracted herein under:-

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

(a) the gratuity of an employee, whose services have been terminated for any act, willful omission or negligence causing any damage or loss to, 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 shall be wholly 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."

It would be appropriate to extract the provisions contained in paragraph No. 13 of the judgment of the Apex Court in the case of Jaswant Singh Gill Vs. Bharat Coking Coal Ltd. and others reported in (2007) 1 SCC 663 where while considering the above quoted provision it has been held as follows:-

" 13. The Act provides for a close-knit scheme providing for payment of gratuity. It is complete code containing detailed provisions covering the essential provisions of a scheme for a gratuity. It not only creates a right to payment of gratuity but also lays down the principles for quantification thereof as also the conditions on which he may be denied therefrom. As noticed hereinbefore, sub-section (6) of Section 4 of the Act contains a non obstante clause vis-a-vis sub-section (1) thereof. As by reason thereof, an accrued or vested right is sought to be taken away, the conditions laid down thereunder must be fulfilled. The provisions contained therein must, therefore, be scrupulously observed. Clause (a) of sub-section (6) of Section 4 of the Act speaks of termination of service of an employee for any act, wilful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of damage or loss caused. The disciplinary authority has not quantified the loss or damage. It was not found that the damages or loss caused to Respondent 1 was more than the amount of gratuity payable to the appellant. Clause (b) of sub-section (6) of Section 4 of the Act also provides for forfeiture of the whole amount of gratuity or part in the event his services had been terminated for his riotous or disorderly conduct or any other act of violence on his part or if he has been convicted for an offence involving moral turpitude. Conditions laid down therein are also not satisfied."

As indicated above the damage caused is to the tune of  Rs. 40,000/-. It is also to be noted that the loss reported was of Rs. 1,18,000/- out of which Rs. 78,000/- has been indemnified through insurance funds. Thus by no calculation the amount of Rs. 1,75,000/- could have been withheld as the loss caused was less than that. If the respondents are to add interest, then they would also have to pay interest on the amount unlawfully withheld. It would be needless to enter into any such calculation in view of the petty amount involved herein.

The petitioner has died and has now been substituted by his heirs. In the aforesaid background and keeping in view the facts of the present case and the discussions hereinabove, we find it appropriate that the respondent bank be permitted to deduct a sum of Rs. 40,000/- only from the petitioner. The withholding of the entire amount of Rs. 1,75000/- does not appear to be justified on the facts of the present case. Consequently after deducting the amount of Rs. 40,000/- the balance of Rs. 1,35,000/- shall be paid to the petitioner within three months from today. The impugned order dated 14th August, 2007, therefore, is accordingly modified subject to the directions hereinabove.

The writ petition is partly allowed.

Order Date :- 22.8.2017

BKM/-