Union Of India And Others vs Gurtiboina Appaia V.G. Shankar
2021 Latest Caselaw 5698 Cal

                        In the High Court at Calcutta
                       Constitutional Writ Jurisdiction
                                Appellate Side

 The Hon'ble Justice Sabyasachi Bhattacharyya
                And
 The Hon'ble Justice Jay Sengupta


                           W.P.C.T. No.140 of 2019

                         Union of India and others
                                    Vs.
                       Gurtiboina Appaia V.G. Shankar


 For the petitioners                  :      Mr. Rabindranath Bag,
                                             Mr. Mukesh Kumar Gupta

 For the respondent                   :      Mr. Saptarshi Roy,

Ms. Kakali Das Chakraborty

Hearing concluded on : 30.09.2021

Judgment on : 17.11.2021

Sabyasachi Bhattacharyya, J.:-

1. The Union of India and the South-Eastern Railway Authorities have

preferred the instant writ petition against a judgment and order dated

July 29, 2019 passed by the Central Administrative Tribunal, Kolkata

Bench in Original Application No.350 of 1117 by 2016. Learned counsel

for the appellants argues that the Tribunal acted palpably in violation of

law in directing the appellants-Authorities to refund the amount of the

gratuity of the respondent, deducted in lieu of damages and rent, with

interest at the rate of eight per cent per annum.

2. By placing reliance on Rule 16(8) of the Railway Services (Pension) Rules,

1993, learned counsel submits that, in case the Railway accommodation

is not vacated even after the permissible period of retention after

superannuation, etc., the Railway Administration shall have the right to

withhold, recover or adjust from the Death-Cum-Retirement Gratuity

(DCRG), the normal rent and other amounts as may be due from the ex-

Railway employee and return only the balance, if any, on vacation of the

Railway accommodation. Clause (e) of sub-Rule (8) also provides that

dispute, if any, regarding recovery of damages or rent from the ex-

Railway employee shall be subject to adjudication by the concerned

Estate Officer appointed under the Public Premises (Eviction of

Unauthorised Occupants) Act, 1971 (for short, 'the PP Act'). It is

contended that the Estate Officer issued a notice of eviction to the

respondent prior to the respondent vacating the accommodation and

thereafter started eviction proceedings, which was duly concluded by

directing the gratuity dues of the petitioner to be paid after deduction of

Rs.3,28,092/- as damage rent and electric and water charges from total

DCRG of Rs.5,61,617/- as per Rules. As such, Rule 16(8) of the 1993

Rules was complied with in its entirety.

3. It is further contended that the Estate Officer, by an order dated May

22/23, 2017, clearly ascertained the dues from the respondent and

directed such amount to be deducted, pursuant to Rule 16(8)(c). As

such, the Tribunal acted without jurisdiction in reversing such

deduction.

4. It is next submitted by learned counsel for the appellants that initially,

the wife of the appellant was working as Matron and a 'Type-III' quarter

was allotted to her, which was a Medical Pool Quarter. The said quarter

was subsequently regularized in favour of the Respondent under the

'husband and wife rule' while the applicant was working in the

Commercial Department, on a similar hierarchical footing as his wife.

Subsequently, after retirement of the applicant on February 28, 2014, he

was requested to vacate the said quarter.

5. Due to demise of the respondent's wife, while in service, their son was

appointed as 'Peon' on compassionate ground. As per Rules, permission

was given to the respondent to retain the Railway quarter for a

maximum period of eight months, that is, up to October 31, 2014.

6. Although the respondent as well as his son had applied for a quarter for

the son and for regularizing the occupation being enjoyed by the

respondent in favour of his son, it was not possible to grant such

request, since the son was employed in a category below the respondent

and his wife, and, as such, would not be entitled to the 'Type-III' quarter.

Moreover, the said quarter was under the Medical Pool, hence, could not

be allotted to the respondent's son.

7. The respondent, it is submitted, vacated the quarter on December 26,

2016, which he was occupying as an unauthorised occupier since

November 1, 2014, despite having been served with a notice to vacate

prior to the expiry of his extended occupation.

8. As such, there was no illegality in the deduction of gratuity in lieu of

damage rent recoverable from the respondent, it is contended.

9. Learned counsel for the respondent places reliance on Section 4(6) of the

Payment of Gratuity Act, 1972 (for short, 'the Gratuity Act'). The said

sub-section specifically provides, in Clause (a) thereof, that the gratuity

of an employee whose services have been terminated for any act, or

destruction of, property belonging to the employer shall be forfeited to

the extent of the damage or loss so caused. Under Clause (b), the

gratuity payable to an employee may be wholly or partially forfeited:

(i) if the services of such employee have been terminated for the

riotous or disorderly conduct or any other acts 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.

10. Learned counsel contends that, since none of the aforesaid criteria is

applicable to the respondent, there is no scope for the appellants-

Authorities to deduct any amount from the gratuity.

11. Learned counsel for the respondent further places reliance on Section 13

of the Gratuity Act, which provides that no gratuity payable under the

Act and no gratuity payable to an employee in any establishment,

factory, mine, oil field, 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.

12. Section 5 of the Gratuity Act provides certain powers to the appropriate

Government to exempt, by notification, certain establishments from the

operation of the provisions of the said Act, which was not done in the

present case.

13. Learned counsel next relies on Section 14 of the Gratuity Act, which

stipulates that the provisions of the Act or any rule made thereunder

shall have effect notwithstanding anything inconsistent therewith

contained in any enactment other than that act or in any instrument or

contract having effect by virtue of any enactment other than the said act.

14. Learned counsel cites the Supreme Court judgment of Gorakhpur

University and others Vs. Dr. Shitla Prasad Nagendra and others,

reported at AIR 2001 SC 2433, in support of the proposition that pension

and gratuity are no longer matters of any bounty to be distributed by

Government but are valuable rights acquired and property in their

hands and any delay in settlement and disbursement whereof should be

viewed seriously and dealt with severely by imposing penalty in the form

of payment of interest. Withholding of quarters allotted, while in service,

even after retirement, without vacating the same, has been viewed to be

not a valid ground to withhold the disbursement of the terminal benefits,

it was observed by the Supreme Court.

15. Learned counsel next places reliance on a Division Bench judgment of

this Court, reported at 2004 (1) CHN 662 [Eastern Coalfields Limited Vs

Kripa Sankar Somany], wherein the overriding effect of the Gratuity Act,

as provided in Section 14, thereof was taken into consideration and it

was held that, unless the service regulation comes within the exception

provided under Section 4(6) of the said Act, such regulation cannot be

sustained for the purpose of withholding gratuity in a case outside the

scope and ambit of the exception provided in sub-section (6). Service

regulations or rules inconsistent with Section 4(6) cannot be sustained,

it was held.

16. Learned counsel for the respondent next relies on a judgment of a

learned Single Judge of this Court rendered in Lallan Thakur Vs. Union

of India and others, reported at MANU/WB/0764/2017. The learned

Single Judge, upon considering all the relevant judgments of the

Supreme Court holding the field, reiterated the above proposition.

17. Upon considering the contentions of the parties, it is relevant to

scrutinize Rule 16(8) of the Railway Services (Pension) Rules, 1993 in

proper perspective. Clause (a) thereof provides, inter alia, that where a

Railway accommodation is not vacated by a railway servant after

superannuation, the full amount of retirement gratuity, death gratuity,

etc., shall be withheld and such amount shall remain with the Railway

Administration in the form of cash, as per Clause (b).

18. Clause (c) provides that, in the case of Railway accommodation not being

vacated even after the permissible period of retention after the

superannuation, the Railway Administration have the right, inter alia, to

withhold, recover, or adjust from the Death-Cum-Retirement Gratuity,

the normal rent, special licence fee or damage rent, as may be due from

the ex-Railway employee and return only the balance, if any, on vacation

of the Railway accommodation.

19. Clauses (a) and (c), read in conjunction with Clause (e) of Rule 16(8) of

the 1993 Rules, indicates that, if there is no dispute regarding recovery

of damages or rent, the same shall be subject to adjudication by the

concerned Estate Officer appointed under the PP Act.

20. On the other hand, Section 4(6) provides the specific circumstances

under which the gratuity of an employee, whose services have been

terminated for the reasons stated therein, may be wholly or partially

forfeited. Section 13 of the Gratuity Act prevents the attachment in

execution of any decree or order of any civil, revenue or criminal court in

respect of gratuity payable under the Act to employees of various

concerns, including a Railway company.

21. The aforementioned two provisions clearly lay down the limited periphery

within which gratuity of employees, including Railway employees, may

be wholly or partially forfeited.

22. However, Section 14 of the Gratuity Act contains a non obstante clause,

providing that the said Act or any Rule made thereunder shall have

effect notwithstanding anything inconsistent therewith contained in any

enactment other than the said Act or in any instrument or contract

having effect by virtue of any enactment other than the Gratuity Act.

23. Moreover, the Supreme Court, as well as this Court, has consistently

held that the deduction of gratuity and superannuation is not

permissible and has to be seriously dealt with, if necessary, by imposing

interest.

24. Hence, there is no iota of doubt that, as per the relevant provisions of

the Gratuity Act, that is, Sections 4(6) and 13, provide for the Gratuity

Act to override any subordinate legislation, including the Railway

Services (Pension) Rules, 1993 as well as other statutes.

25. Read in such context, in order to be intra vires, the Clause (a) of Rule

16(8) of the 1993 Rules has to be read down to the extent that, if the

Railway accommodation is not vacated after termination of the Railway

servant, as envisaged in Section 4(6) of the Gratuity Act, the gratuity

may be withheld. Apart from such interpretation, Clause (a) of sub-rule

(8) of Rule 16 has to be declared ultra vires.

26. That apart, Clauses (b), (c) and (d) also have to be read down to the

extent that withholding or adjustment from the Death-Cum-Retirement

Gratuity in lieu of dues can only be done from the Death-Cum-

Retirement Gratuity in the event there is a termination as contemplated

in Section 4(6) of the Gratuity Act.

27. Any other interpretation of Rule 16(8) of the 1993 Rules will render the

same open to be overridden by the Gratuity Act, in view of Section 14 of

the said Act.

28. In the present case, whatever might have been the explanation for not

regularizing the accommodation-in-question in favour of the respondent,

as advanced on behalf of the appellants-Authorities, the same could not

be a justification of deducting/withholding any amount of gratuity even

if the Railway employees did not vacate his/her accommodation after

superannuation or after the permissible period of retention after the

superannuation.

29. Even looking into Clause (e) of Rule 16(8) of the 1993 Rules, the dispute

regarding recovery of damages or rent from the ex-Railway employee

shall be subject to adjudication by the concerned Estate Officer

appointed under the PP Act. Section 7 of the PP Act specifically

empowers the Estate Officer to require payment of rent or damages in

respect of public premises where any person is in arrears of rent payable

in respect of the public premises. Without due compliance with the

detailed procedure as laid down chronologically in the various sub-

sections of Section 7 of the PP Act, no other recourse is open to the

Railway Authorities to recover the dues.

30. However, in the present case, no such proceeding was taken out at all by

the Estate Officer.

31. On the contrary, an eviction proceeding under the specific provisions of

Section 5 of the PP Act, but eviction of the respondent was directed in

the month of May, 2017, that too, suo moto, although the respondent

had already vacated his quarters on December 26, 2016.

32. Thus, the proceeding under Section 5 of the PP Act had already become

infructuous and could not provide a handle to the appellants-Authorities

to bye-pass the provisions of Section 7 of the PP Act and direct damage

rent to be deducted from the gratuity of the respondent as per the

latter's legal entitlement.

33. Hence, on a conjoint reading of Sections 4(6) and 13 of the Gratuity Act

and Sections 5 and 7 of the PP Act, together with the proposition laid

down by the Supreme Court and this Court in several judgments, it is

evident that the appellants acted de hors the law and exceeded its

powers in deducting an arbitrary amount of Rs.3,23,092/- towards

damage rent to be deducted out of the amount of Rs.5,61,617/-,

payable to the respondent.

34. Hence, the Tribunal was justified in passing the judgment and order

impugned herein.

35. Accordingly, W.P.C.T. No.140 of 2019 is dismissed on contest. The

appellants are directed to pay the deducted sum of Rs,3,28,092/- in lieu

of damage rent, along with the interest accrued thereon in view of the

investment, if any, made with a nationalised bank in terms of the ad

interim Order dated September 21, 2020 passed by a co-ordinate Bench

in this matter.

36. Such entire sum, including the interest actually accrued and, in the

event no such deposit has been made, with interest at the rate of

eighteen per cent per annum, shall be disbursed by the appellants in

favour of the respondent at the earliest, latest by November 15, 2021. In

default, the appellants shall pay further interest at the rate of six per

cent per annum on the total decretal sum (including interest) accrued till

the date of such payment.

37. Both parties and all concerned shall act on the written communication

of the learned Advocates for the parties, accompanied by a server copy of

this order, without insisting upon prior production of a certified copy

thereof.

38. There will be no order as to costs.

39. Urgent certified server copies shall be supplied to the applying parties,

subject to due compliance with the necessary requisites.

(Sabyasachi Bhattacharyya, J.)

I agree.

(Jay Sengupta, J.)