Calcutta High Court

Samar Bijoy Bhowmick vs Garden Reach Ship Builders & ... on 26 September, 2023

                     IN THE HIGH COURT AT CALCUTTA
                       Constitutional Writ Jurisdiction
                               ORIGINAL SIDE



BEFORE
The Hon'ble Justice RAJA BASU CHOWDHURY


                                WPO/1881/2006

                 SAMAR BIJOY BHOWMICK
                         VERSUS
  GARDEN REACH SHIP BUILDERS & ENGINEERING LIMITED & Ors.



For the Petitioner :      Mr. Subir Sanyal, Advocate
                          Ms. Sumitra Das, Advocate

For the Respondents:      Mr. Ranjay De, Advocate

Heard on               : 26.09.2023

Judgment on            : 26.09.2023


RAJA BASU CHOWDHURY, J.:

1. The petitioner claims to be an ex-employee of the respondent no.1. It is

his case that he was appointed in the year 1974 as Assistant Medical

Officer and was subsequently promoted to the post of Assistant Chief

Medical Officer in the year 1997. While officiating in the said post, on the

basis of a complaint lodged against the petitioner before the

Superintendent of Police, ACB, Nizam Palace, Kolkata, an investigation

was started by the Central Bureau of Investigation (in short, CBI ) and a

charge sheet dated 16th November, 2001 was issued against the

petitioner under Section 7 of the Prevention of Corruption Act, 1988.

2. In course of such investigation, the petitioner was apprehended by the

investigating agency. Following his apprehension and arrest by letter

dated 5th September, 2001, the petitioner was suspended in terms of rule

20(1)(b) of the Garden Reach Shipbuilders & Engineers Ltd., Conduct

Discipline and Appeal Rules, 1977 (hereinafter referred to as the "said

Rules").

3. It is the petitioner's case that the petitioner was enlarged on bail by an

order dated 18th October, 2001. According to the petitioner, the

respondents were obliged in terms of Rule 20(2) of the said rules to

revoke the order of suspension, upon the petitioner being enlarged on

bail. The respondents having not revoked such order of suspension, a

writ application was filed before the Hon'ble Court challenging the said

order of suspension. By an order dated 8th December, 2006, a Coordinate

Bench of this Hon'ble Court while entertaining the writ application was,

inter alia, pleased to direct exchange of affidavits.

4. During pendency of the writ application, since the petitioner was due to

retire by a notice in writing dated 20th December, 2006, the respondents

had notified the petitioner with regard to the imminent date of

superannuation. By such notice, the petitioner was further informed that

by reason of pendency of judicial/criminal proceeding against him, the

management had decided that the gratuity shall be paid to the petitioner

on conclusion of the proceeding subject to decision of the appropriate

Court/authority. By such notice it was, however, clarified that

accumulated balance in provident fund and cash equivalent amount of

earned leave standing in the credit of the petitioner as on the date of

suspension would be disbursed in his favour on his retirement.

5. Subsequently, upon the petitioner reaching the age of superannuation on

31st August, 2007, by a communication dated 8 th February, 2007, the

respondents had intimated the petitioner that inasmuch as 'no dues

certificate' had not been issued by the administrative department, by

reason of failure to vacate the company's accommodation, the finance

department could not be advised to release petitioner's terminal benefits

at that stage as per the rules of the company. By such letter, the

petitioner was, however, informed that accumulated balance in provident

fund would be released in his favour subject to the petitioner contacting

the provident fund section of the respondent no.1. In terms of the office

order dated 8th February, 2007, the respondents had released a sum of

Rs.15,27,442.03 in favour of the petitioner on account of provident fund

dues vide cheque no.156373 dated 1 st February, 2007.

6. In the interregnum, by a judgement and order dated 31 st August, 2012

passed by the Special Judge CBI Court, Alipore, South 24 Parganas in

case no.SPL 15 of 2001, the petitioner was acquitted, in view of Section

248(1) of Criminal Procedural Code, from the charges, for the offences

punishable under Section 7 and 13(2) read with Section 13(1)(d) of the

Prevention and Corruption Act, 1988 and was discharged from the bail

bond and was set at liberty.

7. By incorporating the aforesaid development in a supplementary affidavit

filed on behalf of the petitioner, the aforesaid fact were brought on

record. Since then, the matter was taken up for consideration by this

Court. Pursuant to the leave granted by this Court, the respondents have

since, filed a supplementary affidavit. Dealing with the contents of the

said supplementary affidavit, a rejoinder captioned affidavit-in-reply to

the supplementary affidavit has been filed by the petitioner in Court

today which is taken on record.

8. Mr. Subir Sanyal, learned Advocate representing the petitioner, by

drawing attention of this Court to the notice of superannuation dated

20th December, 2006 submits that the respondents at that stage without

any authority in law had purportedly hold out that they would withhold

the gratuity payable to the petitioner by reasons of pendency of

judicial/criminal proceedings. Subsequently, the respondents having

realised their mistake, by letter dated 8th February, 2007 had specifically

omitted the ground for withholding the gratuity, as is reflected in the

notice dated 20th December, 2006. By drawing attention of this Court to

the notice dated 8th February, 2007, it is submitted that the ground on

which the 'no dues certificate' was held back by the respondents is

absolutely arbitrary, has no sanction of law. The petitioner having retired

on 31st January, 2007 could not have been called upon to vacate the

quarters prior thereto, in any event withholding of 'no dues certificate' by

reason of the petitioner occupying the quarter is contrary to the settled

legal principles. By referring to the provisions of the Conduct Disciplinary

and Appeal Rules as applicable to the petitioner, it is submitted that the

provisions contained in the said rules do not authorise the respondents

to withhold the petitioner's terminal benefits, on account of pendency of

any judicial/criminal proceedings. The said rules also cannot authorise

the respondents hold back the terminal benefits, inter alia, on the guise

of non-issuance of no dues certificate, especially when the petitioner had

no role to play in issuance of such certificate. By placing reliance on the

statements made in paragraph 3(g) of the said supplementary affidavit

filed by the respondents, affirmed by Subardan Toppo on 8 th May, 2023

(hereinafter referred to as the "said Supplementary Affidavit"), it is

submitted that on the basis of the respondent's own showing, a sum of

Rs.19,87,372/- is due and payable to the petitioner. Since, the

respondents have no authority in law to hold back the same, necessary

direction may be issued to forthwith release the aforesaid amount. By

placing reliance on a judgment delivered by the Hon'ble Supreme Court

in the case of R Kapur v. Director of Inspection (Paining and

Publication) Income Tax and Another, reported in (1994) 6 SCC 589,

it is submitted that the Hon'ble Supreme Court has repeatedly held that

death-cum-retiral benefits cannot be withheld merely because an

employee had not vacated the premises allotted to him during the course

of his employment. It is still further submitted that the Hon'ble Supreme

Court taking note of the failure of the employer to release the terminal

benefits had granted interest at the rate of 18% per annum since, right to

gratuity is not dependent upon the employee vacating the quarter. He

has also relied on a judgment delivered by the Hon'ble Supreme Court in

the case of Gorakhpur University and Others v. Dr. Shitla Prasad

Nagendra and Others, reported in (2001) 6 SCC 591, which also takes

a similar view. Having regard to the aforesaid, it is submitted that the

respondents should forthwith be directed to release the terminal benefits

as admitted by them in paragraph 3(g) of the said supplementary

affidavit along with interest at the rate of 18% per annum.

9. Per contra, Mr. Ranjay Dey, learned Advocate representing the

respondents, on the other hand, submits that the respondents always

intended to clear the terminal benefits as were payable to the petitioner.

The terminal benefits had been held back by reason of pendency of the

criminal proceedings. He submits that the Central Bureau of

Investigation, has since, preferred an appeal from the judgment and

order dated 31st August, 2012 and this Hon'ble Court by an order dated

21st July, 2013, in CRM SPL No.31 of 2013, has, inter alia, granted

special leave to appeal. Having regard to the aforesaid, it is submitted

that the appeal is a continuation of a proceeding and, as such, there is

no change in the circumstances for the petitioner to apply before this

Hon'ble Court for release of and disbursal of the terminal benefits. By

placing reliance on the office memo dated 16 th December, 1999, it is

submitted that the original decision to withhold the gratuity was taken,

based on the aforesaid office memorandum dated 16 th December, 1999.

He, however, candidly submits that the office memorandum has not been

incorporated in the said Rules. By placing reliance on office

memorandum dated 20th July, 2007, he submitted that Rule 31(c) has,

however, been incorporated in the Conduct, Discipline and Appeal Rules,

1977, by amending the same w.e.f. 11th January, 2007, so as to confer

authority on the respondents to withhold gratuity in the event of certain

eventuality as provided therein. It is further submitted that the petitioner

despite being put on notice did not to vacate the company's quarter and

had retained such quarter at least upto the year 2018 when the

respondents were able to obtain possession of such quarter through the

intervention of the Hon'ble Court. Having regard to the aforesaid, it is

submitted that in the event this Court considers directing disbursal of

terminal benefits in favour of the petitioner, no interest ought to be

granted in favour of the petitioner, at least until 8 th June, 2022, when

the quarter could actually be repossessed by the respondents. The

respondents in fact had to remove two number of locks and one steel

almirah from the quarter which was in the occupation of the petitioner,

for which a sum of Rs.2822/- had been incurred by the respondents. The

respondents are entitled to set off the aforesaid amount from the

petitioner's claim.

10. In reply, Mr. Sanyal submits that the office memorandum dated 20 th

April, 2007 cannot be made applicable in so far as the petitioner is

concerned. Admittedly, the petitioner retired on 31 st January, 2007 and

as on the date of retirement of the petitioner, the said office

memorandum had not been issued and the same had not seen the light

of the day. In so far as the office memorandum dated 16 th December,

1999 is concerned, by referring Conduct, Discipline and Appeal Rules, it

is submitted that the said office memorandum had not been adopted by

the respondents and for the reasons aforesaid, same does not appear in

the Conduct, Discipline and Appeal Rules. Having regard to the same,

the respondents should immediately be directed to release the terminal

benefits to the petitioner.

11. Having heard learned Advocates appearing for the respective parties

and considered the materials on record, I find that the petitioner was an

employee of the respondent no.1. It is also an admitted position that an

inquiry was initiated by the CBI, following the inquiry the petitioner was

taken into custody and in terms of Rule 20(1)(b) of the said Rules, the

petitioner was suspended. Subsequently, the petitioner was enlarged on

bail by an order dated 18th October, 2001. Since, the respondents despite

being obliged in terms of Rule 20(2) of the said rules, having not revoked

the order of suspension upon the petitioner being enlarged on bail, the

petitioner was constrained to file a writ application before this Court,

inter alia, questioning the authority of the respondents to continue with

the suspension order.

12. Incidentally, during the pendency of the writ application, the

petitioner was served with a notice of superannuation, as would appear

from the office order dated 20th December, 2006. It appears that the

respondents while issuing the notice of superannuation had categorically

provided therein that since, judicial/criminal proceeding against the

petitioner was in progress, the respondents had decided that gratuity

should be paid to the petitioner on conclusion of the proceeding subject

to the decision of the appropriate Court or authority.

13. Subsequently, however, after the petitioner having retired by an office

order dated 8th February, 2007, the petitioner was, inter alia, informed as

follows:-

"Since 'No Dues' certificate has not been issued by the

Administrative Department due to your failure to vacate

Company's accommodation, Finance Department can not be

advised to release your terminal benefit at this stage as per

the Company's Rules except accumulated balance in

Provident Find for which you are requested t contact PF

Section of the Company."

14. In terms of the aforesaid order, the respondents had, however,

disbursed the provident fund dues as payable to the petitioner on 1 st

February, 2007. Since then, the proceeding initiated against the

petitioner under the provisions of Section 7 and Section 13(2) of the

Prevention and Corruption Act, 1988 was finally decided by a judgment

and order passed by the Special Judge, CBI Court, Alipore on 31 st

August, 2012, whereby the petitioner as an accused person was

acquitted, in view of Section 248(1) Criminal Procedure Code from the

charges, for the offences punishable under Sections 7 and 13(2) read

with Section 13(1)(d) of the Prevention and Corruption Act, 1988. The

writ application since then, has come up for consideration.

15. Although, it has been the contention of the respondents that by

reasons of pendency of the judicial/criminal proceedings the terminal

benefits are not payable in favour of the petitioner, I am of the view that

the Conduct, Discipline and Appeal Rules do not support such

contention as rightly pointed out by Mr. Sanyal. The office memorandum

dated 16th December, 1999, which has been relied on by the respondents

for withholding the terminal benefits has not been incorporated by the

respondents in the Conduct, Discipline and Appeal Rules. In absence of

any provision authorising the respondents to withhold, the gratuity or

the terminal benefits, I am of the view that the respondents in terms of

provision of Payment of Gratuity Act, 1972 were obliged to make

payment of the gratuity. Admittedly, Section 13 of the Payment of

Gratuity Act, 1972 accords protection of gratuity while Section 14 gives

an overriding effect to the provisions of Sections 13 of the Payment of

Gratuity Act, 1972. Sections 13 and 14 of the Payment of Gratuity Act,

1972 are extracted below:-

"Section 13. Protection of gratuity.

No gratuity payable under this Act and no gratuity payable to an employee employed in any establishment, factory, mines, oilfield, plantation, port, railway company or shop exempted under section shall be liable to attachment in execution of any decree or order in any civil, revenue or criminal court.

Section 14. Act to override other enactments, etc. The provisions of this Act or any rule made there under shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act."

16. Having regard to the aforesaid, I am of the view that under no

circumstances the respondents could have withheld gratuity payable in

favour of the petitioner, in absence of any provision authorising the

same. It, however, appears from the notice dated 8 th February, 2007 that

the respondents have contended that by reasons of non-issuance of no

dues certificate, the terminal benefits have been withheld. Admittedly,

the petitioner had been superannuated on 31 st January, 2007. Having

regard to the same, I am of the view that respondents ought not to have

held back the no dues certificate on the ground of the failure on the part

of the petitioner to vacate the company's quarter, as the date of the

superannuation was within a month from the date of issuance of such

notice. In any even the Hon'ble Supreme Court in the case of R. Kapur

(Supra) in paragraph 11 has been, inter alia, pleased to observe as

follows:

"11. The Tribunal having come to the conclusion that DCRG cannot be withheld merely because the claim for damages for unauthorised occupation is pending, should in our considered opinion, have granted interest at the rate of 18% since right to gratuity is not dependent upon the appellant vacating the official accommodation. Having regard to these circumstances, we feel that it is a fit case in which the award of 18% is warranted and it is so ordered. The DCRG due to the appellant will carry interest at the rate of 18% per annum from 1-6-1986 till the date of payment. Of course this shall be without prejudice to the right of the respondent to recover damages under Fundamental Rule 48-A. Thus, the civil appeal is allowed. However, there shall be no order as to costs."

17. The same view has been reiterated in the judgment delivered in the

case of Gorakhpur University and Others (Supra).

18. Having regard to the aforesaid, I am of the view that on account of

non-vacating of company's quarter, the respondents could not have

withheld either the terminal benefits or gratuity payable to the petitioner.

Although, Mr. De has submitted that no wrong can be attributed to the

respondents for withholding the terminal benefits, I am unable to accept

the same. It is well settled that the terminal benefits are computed well

in advance. The Hon'ble Supreme Court has time and again deprecated,

withholding of terminal benefits. In view thereof, there shall be an order

directing the respondents to forthwith release the terminal benefits as

admitted in paragraph 3(g) of the said supplementary affidavit in favour