Bombay High Court
Chairman Cum Managing Director, ... vs Pramod Gulabchand Baid on 23 December, 2015
Bench: A.S. Chandurkar
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FARAD CONTINUATION SHEET
IN THE HIGH COURT OF JUDICATURE OF BOMBAY
APPELLATE SIDE,
NAGPUR BENCH, NAGPUR.
WRIT PETITION NO.98 OF 2012
CHAIRMAN CUM MANAGING DIRECTOR, WESTERN COALFIELDS LTD., COAL
ESTATE, CIVIL LINES NAGPUR.
VS
SHRI PRAMOD GULABCHAND BAID AND OTHERS
Office Notes, Office Memorandum of Court's or Judges Order
Coram appearances, Court's orders or
directions & Registrar's orders.
Shri A. M. Gordey, Senior Advocate with Shri Tushar Darda, Advocate for
the petitioner.
Shri M. M. Sudame, Advocate for the respondent No.1.
CORAM: A.S. CHANDURKAR, J.
DATE ON WHICH SUBMISSIONS WERE HEARD: 14-12-2015.
DATE ON WHICH ORDER IS PRONOUNCED: 23-12-2015.
P.C.
1. By following the procedure analogous to provisions of
Order 47 Rule 8 of the Order of Civil Procedure Code 1908, the
learned Counsel for the parties have been re-heard on the question as
regards entitlement of respondent No.1 to receive amount of gratuity
despite the fact that he has been dismissed from service after holding
departmental enquiry.
2. On behalf of the petitioner, it was submitted by Shri A. M.
Gordey, learned Senior Counsel that a dismissed employee was not
entitled to receive gratuity. Reference was made to the provisions of
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Section 4(1) of the said Act to urge that as respondent No.1 had been
dismissed from service, he would not be covered by provisions of
Section 4(1)(a) to (c). These clauses contemplate entitlement for
gratuity on superannuation, retirement, resignation, death or
disablement. Reference was also made to provision of Section 4(6) of
the said Act. Reliance was placed on the judgment of the Supreme
Court in Y.P. Sarabhai Vs. Union Bank of India and another (2006) 5
SCC 377 and especially para 11 thereof. Reliance was also placed on
the judgments in Sabarkantha District Central Cooperative Bank vs.
Ramanbhai Patel 2011(1) CLR 871, and Indian Aluminium Company
Ltd. Vs. Regional Labour Commissioner 2003 (2) LLN 939. It was,
therefore, submitted that respondent No.1 was not entitled to receive
any amount of gratuity.
3. Shri M. M. Sudame, learned Counsel for respondent No.1
then submitted that respondent No.1 could not be deprived of the
amount of gratuity though he had been dismissed from service. He
referred to provisions of Section 2(q) of the said Act and urged that
dismissal of an employee would amount to "retirement" for the
purposes of said Act and, therefore, under provisions of Section 4(1)
(b) of the said Act, the respondent No.1 was entitled to receive
gratuity. He submitted that there was no order passed directing
forfeiture of the amount of gratuity for any damage or loss caused by
respondent No.1 to the petitioner. It was not the case that respondent
No.1 was guilty of any riotous behaviour. The learned Counsel placed
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reliance on the judgments of the Supreme Court in Garment Cleaning
vs. The Workmen, AIR 1962 SC 673 and Jaswant Singh Gill Vs. Bharat
Mills Limited and others (2007) 1 SCC 663. He submitted that the latter
judgment arose under the same Rules under which departmental
enquiry had been held against respondent No.1. He also referred to
judgment of learned Single Judge in Maharashtra State Road Transport
Corporation Vs. Maruti Ramchandra Mastud 2011 I CLR 743. It was,
therefore, submitted that both the Authorities rightly found respondent
No.1 entitled for gratuity.ig
4. I have considered the respective submissions and I have
gone through the material placed on record. It is not in dispute that
under provisions of the Coal India Executive Conduct (Discipline and
Appeal) Rules, 1978 (for short, the CDA Rules) an enquiry was held
against respondent No.1. After said enquiry, a penalty of dismissal
under Rule 27(1) of the CDA Rules came to be imposed on 27-1-2009.
The appeal filed by respondent No.1 was also dismissed by the
Appellate Authority by order dated 21-6-2010. This order of dismissal
is the subject matter of challenge in Writ Petition No.3428/2010 and
said writ petition has been admitted for final hearing. The respondent
No.1 initiated proceedings for receiving amount of gratuity under the
said Act and the Controlling Authority by order dated 12-4-2011 held
respondent No.1 entitled to receive an amount of Rs.14,34,614/-
towards gratuity with 10% interest per annum from 27-1-2009 till its
realization. This order has been confirmed by the Appellate Authority
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on 1-11-2011 by holding that in the disciplinary proceedings neither
the Disciplinary Authority nor the Appellate Authority have found
respondent No.1 disentitled for gratuity.
5. As noted above, the enquiry proceedings were held
against respondent No.1 under the CDA Rules. Rule 27 of the CDA
Rules provides for major penalties which include reduction to a lower
grade, compulsory retirement, recovery from pay or gratuity of the
whole or part of any pecuniary loss caused to the Company by
negligence or breach of orders or trust, removal from service and
dismissal. It is, therefore, clear that the Disciplinary Authority is
empowered to direct recovery either from the pay or gratuity the
whole or the part of any pecuniary loss that is caused to the Company
on account of the negligence or breach of orders or trust. In the
present case, punishment of dismissal has been imposed on respondent
No.1. The question, therefore, is whether in a case where the penalty
of recovery from gratuity of any amount of pecuniary loss could have
been imposed but instead a penalty of dismissal is imposed, can the
amount of gratuity payable under the said Act be withheld.
6. In Jaswant Singh Gill (supra), the very same CDA Rules
that were applied in the present case were under consideration. The
facts of said case indicate that the employee therein was serving on the
post of Chief General Manager and a chargesheet was issued to him on
the allegation of shortage of coal. The employer took the stand that
the gratuity had been withheld for the purposes of making an
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adjustment dependent on the disciplinary proceedings. The amount of
gratuity was withheld and the Controlling Authority permitted the
Disciplinary Authority to proceed with the enquiry. During pendency
of the departmental proceedings he was permitted to retire. The
Disciplinary Authority thereafter directed forfeiture of his gratuity, but
the Controlling Authority held the employee entitled for gratuity on
the ground that his services had not been terminated for any
misconduct under Section 4(6) of the said Act. This order of the
Controlling Authority was maintained by the Appellate Authority.
These orders were not interfered with by learned Single Judge of the
High Court but the learned Division Bench set aside the orders of the
Controlling Authority. The Supreme Court after considering provisions
of the CDA Rules held that the provisions of said Act would prevail
over the CDA Rules. Rule 27 of CDA Rules provided for recovery from
gratuity only to the extent of loss caused which penalty must be
imposed on the employee as long as he remains in service. It was
further held that the Disciplinary Authority had not quantified any loss
or damage and the conditions laid down in Section 4(6) of the said Act
had not been satisfied. It was categorically held that termination of
services for any of the clauses enumerated in Section 4(6) of the said
Act was imperative. The Supreme Court, therefore, reversed the
judgment of the learned Division Bench. It is, thus, clear that for the
purposes of forfeiture of gratuity or part thereof under the said Act the
contingencies contemplated by Section 4(6) of the said Act would have
to be satisfied.
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7. In the present case, a penalty of dismissal under Rule 27
of the CDA Rules has been imposed. Admittedly, it was open for the
Disciplinary Authority to impose punishment of recovery from the pay
or gratuity of respondent No.1 the amount of pecuniary loss alleged to
be caused by him. Instead, a punishment of dismissal came to be
imposed. The Disciplinary Authority, therefore, having chosen not to
impose penalty for recovering any pecuniary loss from the amount of
gratuity, it cannot be permitted to deny the amount of gratuity to
respondent No.1 only on the ground that respondent No.1 was
dismissed from service. It is not in dispute that the contingencies
contemplated by Section 4(6)(b) of the said Act are not satisfied in the
present case. Thus, considering the penalty of dismissal already
imposed on respondent No.1 especially when it was open for the
Disciplinary Authority to direct recovery of any loss caused from
amount of pay or gratuity, the action of withholding gratuity only on
the ground that respondent No.1 was a dismissed employee cannot be
sustained. The penalty that could have been imposed on respondent
No.1 having not been imposed, the respondent No.1 cannot be
permitted to fall back upon the provisions of Section 4(6) of the said
Act especially when the termination of service has not been effected on
said count.
8. The reliance placed on the decision in Y. P. Sarabhai
(supra) is on the basis of the following observations in para 11 of said
decision.
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"11.........................................................................
It is settled law that a person who is dismissed
from service is entitled to get only the provident
fund but no gratuity............................................"
The decision in Jaswant Singh Gill arises under the CDA Rules which
are also applicable to the facts of the present case and hence, the law
as laid down in Jaswant Singh Gill (supra) is being followed.
In Maharashtra State Road Transport Corporation (supra),
learned Single Judge held that in absence of termination of services of
an employee under Section 4(6) of the said Act, the amount of
gratuity cannot be withheld. Said decision supports the stand taken by
respondent No.1. The decision of Gujarat High Court in Sabarkantha
District Central Cooperative Bank Ltd. (supra) is clearly distinguishable
on facts as on being denied various benefits including the amount of
gratuity the concerned employee had approached the competent court
under industrial law and said proceedings were pending. Said
decision, therefore, does not assist the case of the petitioner. Similarly,
the decision of the Jharkhand High Court in Indian Aluminium
Company Ltd. (supra) is also distinguishable as the services of the
employee therein were terminated under the relevant service Rules on
the ground of misconduct.
9. The Controlling Authority in its order dated 12-4-2011
has specifically held that the order of dismissal did not contain any
direction to withhold the amount of gratuity or as regards non
entitlement of respondent No.1 to said amount. The Appellate
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Authority while confirming said order has also observed that the
Chairman, Coal India Limited had not passed any order forfeiting
gratuity payable to respondent No.1 and in view of non-applicability
of provisions of Section 4(6) (b) of the said Act, the amount of
gratuity could not be withheld. Both the Authorities have, therefore,
rightly concluded that respondent No.1 was entitled to receive the
amount of gratuity. The finding recorded in that regard, therefore, is
not liable to be interfered in writ jurisdiction. It is, therefore, held
that respondent No.1 though dismissed from service after holding the
departmental enquiry is entitled in the facts of the present case to
receive the amount of gratuity.
10. As regards the question of entitlement to gratuity for an
amount exceeding Rs.10,00,000/-, by order dated 2-9-2015 the
question in that regard has already been referred for consideration by
a larger bench.
JUDGE
/Muley/
