HON'BLE DR. JUSTICE K. MANMADHA RAO
WRIT PETITION No.23053 of 2022
ORDER :
This petition is filed under Article 226 of the
Constitution of India for the following relief:-
"...to issue a writ order or direction more particularly one in the nature of Writ of Mandamus directing the fourth respondent to pay the amount due and payable to the petitioner towards gratuity, leave encashment and arrears on account of pay revision scale for the period from 01.11.2017 to 30.06.2019 with interest at 12% per annum on the delayed payment, without causing any further delay and to pass such other order or orders......."
2. The case of the petitioner is that he was selected
and appointed as Staff Assistant/ Supervisor in the District
Cooperative Central Bank Limited, SPSR Nellore and joined
duty on 16.07.2012 and after training he was posted to
NDCCB Kota Branch at Kota and worked there from
1.8.2012 to 30.06.2019. The main grievance of the
petitioner is that he was not paid terminal benefits.
Therefore, he made representations on 6.10.2019 and
20.01.2021 to the 4th respondent seeking to release of his
terminal benefits. Then, the 4th respondent informed him 2
that the bank will settle terminal benefits on finalization of
the surcharge enquiry. Basing on the vigilance report, the
4th respondent has terminated the petitioner from his service
four days before his retirement on superannuation i.e.,
26.6.2019, his retirement date is 30.06.2019 and also
mentioned that treating the suspension period of four days
as loss of pay besides recovery of loss caused to the bank.
Basing on the inspection report, the 3rd respondent
has initiated surcharge proceedings on 10.06.2020 under
Section 600(1) of AP Cooperative Societies Act 1964 against
the petitioner and other employees. Challenging the same
the petitioner has preferred writ petitions vide WP Nos.
15532 of 20220 and 15541 of 2020 before this Court, which
are pending consideration. It is further stated that since the
specific exemption is given under the A.P. Cooperative
Societies Rules 1964, the 4th respondent cannot withhold
his terminal benefits on the ground that surcharge
proceedings are pending, which is highly illegal and
arbitrary. Hence, the present writ petition.
3. Counter affidavit is filed by the respondent denying
all the allegations made in the petition and contended that 3
the petitioner was retired from service of the Bank on
30.06.2022 and at the time of his retirement he was under
suspension. While communicating the retirement
intimation, the Bank has informed that the retirement
benefits of the incumbent will be released on finalization of
enquiries and charges pending if any. But after completion
of enquiry, the enquiry officer concluded that the charges
leveled against the charged employee is established and
therefore the charge is held proved, the act of the employee
comes under gross misconduct. Hence, by following the due
procedure, the competent authority has issued the
proceedings dated 02.03.2020 terminating the petitioner
from service and the suspension period will be treated as
loss of pay besides recovery of the effected loss caused to the
Bank funds of Rs.2,94,37,748/- @ 18% of interest from tehd
ate of disbursement of concerned loans. It is also stated
that when an employee is terminated from the service he is
not entitled to receive the terminal benefits and hence the
Bank has not paid the terminal benefits to the petitioner.
4. Heard Smt M. Siva Jyothi, learned counsel for the
petitioner and learned Government Pleader for Cooperation 4
and Mr. Siva Prasad Reddy Venati, learned counsel
appearing for the respondents.
5. During hearing, learned counsel for the petitioner
while reiterating the averments made in the petition,
submits that, the petitioner was retired from service only
four days before his superannuation. Basing on the inquiry
report, the 3rd respondent has initiated surcharge
proceedings under Section 60(1) of the A.P. Cooperative
Societies Act 1964, which is highly illegal and arbitrary.
Therefore, he requests this Court to pass appropriate orders
as stated supra.
6. On the other hand, learned counsel for the
respondents while reiterating the averments made in the
counter and submits that the petitioner has caused loss to
the funds of the Bank to a tune of Rs.2,94,37,748/-. The
act of the employee comes under gross misconduct.
Therefore, by following due procedure, the competent
authority rightly issued proceedings. So the petitioner is not
entitled for gratuity and leave encashment. The bank has
obtained the properties of the incumbent for recovery of the
effected loss to the bank, but the obtained property 5
valuation was not sufficient for recovery of the loss amount.
So the arrears on account of pay revision were not paid to
the petitioner.
7. On hearing this Court observed that, Andhra
Pradesh Co-operative Societies Act, 1964, is no doubt a
special enactment and the 1st respondent is a creature
under the statute. The Order or Decree passed under
Section 60 of the Act is executable under Section 70 thereof.
Several modes of recovery are provided under Section 70 of
the Act Under Section 72 the Registrar or any person
authorized by him is deemed to be a Civil Court for the
purpose of Article 182 of the First Schedule to the Indian
Limitation Act while exercising the powers of executing the
decree. The question now is as to whether or not the
gratuity is immune from attachment and so also the amount
towards encashment of leave. In exercise of the rule making
power under Section 130 of the Act, A P. Co-operative
Societies Rules, 1964 (hereinafter referred to as the Rules')
have been framed and the relevant rule is 52 relating to the
execution of the orders and decrees passed by the Registrar.
Rule 52(5)(0) of the Rules exempts all moveables, which are 6
exampled under proviso to Section 60 CPC. [Under Section
50 of CPC, stipends and gratuities allowed to pensioners of
the State Government or of a local authority or of any other
employer are exempted from attachment or sale in execution
of any decree or order As such, this exemption, which is
adopted by Rule 52(5)(0) of the Rules comes into play. So
far as encashment of leave is concerned, since no specific
exemption is provided under the proviso to Section 60 CPC,
the same can be a subject matter of attachment. Even
before the 1976 amendment of CPC, there were some
judgments holding that the benefit of exemption from
attachment or sale provided under the proviso to Section
60(1) C.P.C. could not be waived. But, such question of
interpretation is unnecessary as a specific provision - Sub-
section (1-A) was incorporated after Section 60(1) in C.P.C.
by way of amendment in the year 1976, expressly forbidding
the waiver of the benefit of exemption provided under
proviso to Section 60(1) of C.P.C.
In view of what is stated supra, hold that
(a) Section 60(1) surcharge proceedings under the Act are not disciplinary proceedings and 7
can be initiated even against a retired employee of the Society.
(b) While the gratuity be withheld pending surcharge proceedings. the amount towards encashment of leave can be withheld,
(c) The 1st respondent is, therefore, directed to pay the amount payable to the petitioner towards gratuity (excluding the amount to the extent of 1/4th, which was already paid), within a period of 15 days from the date of receipt of a copy of this order, and
(d) The 2nd respondent is directed to complete the surcharge proceedings within a period of four (4) months from the date of receipt of a copy of this order. Depending upon the outcome of the surcharge proceedings, the amount towards encashment of leave shall be dealt with. It is made clear that if the surcharge proceedings are not completed within the above stipulated time, the amount towards encashment of leave shall also be paid to the petitioner.
8. In a case of Balasa Rama Rao v. General
Manager, District Cooperative Central Bank Ltd.,
Srikakulam1, wherein the learned Judge of this Court
noticed that Section 60 of the Civil Procedure Code is also
made applicable as per Rule 52(5) (o) of the Act, which
clearly states that the movable properties exempted from
attachment under Section 60 of CPC, shall not be attached
1 1995(3) ALT 556 8
under the Cooperative Societies Rules. As per Section 60(g)
of CPC, gratuity cannot be attached.
9. On a perusal of the above judgment, this Court is
of the opinion that the above Rule squarely applies to the
facts and circumstances of the present case. The rule and
judgment clearly state that gratuity cannot be withheld
pending surcharge proceedings also.
10. Having regard to the facts and circumstances of
the case and in view of the clear position of law and in view
of the judgment of Balasa Rama Rao's case (cited supra),
this Court deems fit to allow the writ petition by giving
direction to the respondents.
11. Accordingly, the Writ Petition is allowed. The 4 th
respondent is directed to pay the gratuity, leave encashment
and arrears on account of pay revision scale for the period
from 01.11.2017 to 30.06.2019 within 30 days from the
date of receipt of a copy of this order. Failing which, the
respondents shall be paid the interest @12% p.a., to the
petitioner. There shall be no order as to costs. 9
As a sequel, interlocutory applications, if any pending,
shall stand closed.
______________________________ DR. K. MANMADHA RAO, J.
Date : -10-2022
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HON'BLE DR. JUSTICE K. MANMADHA RAO
WRIT PETITION No.23053 of 2021
Date : .10.2022
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