Chattisgarh High Court

Siyaram Basanti vs Chhattisgarh Rajya Gramin Bank on 10 October, 2022

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                                                                   AFR
           HIGH COURT OF CHHATTISGARH, BILASPUR

                        WPS No. 503 of 2020

                  Order Reserved On : 08.07.2022

                  Order Delivered On : 10.10.2022

      Siyaram Basanti, S/o Late Shri N.L. Basanti, Aged About 64
      Years, Retired As Officer Scale-I, resident of Jarhabhata,
      Bilaspur, Tahsil & District- Bilaspur (C.G.)
                                                         ---- Petitioner

                              Versus
1.    Chhattisgarh Rajya Gramin Bank, through It's Chairman, 15
      Recreation Road, Mahadev Ghat Road, Sunder Nagar, Raipur,
      District- Raipur (C.G.)
2.    The Board of Directors, Chhattisgarh Rajya Rural Bank, Head
      Office, Mahadev Ghat Road, Sunder Nagar, Raipur, District-
      Raipur (C.G.)
3.    The General Manager (Administration) Chhattisgarh Rajya Rural
      Bank, Mahadev Ghat Road, Sunder Nagar, Raipur, District-
      Raipur (C.G.)
4.    The Regional Manager, Regional Office, Baisagar Para, Behind
      Hotel Awas, Baikunthpur, District- Koriya (C.G.)
                                                         Respondents
________________________________________________________

For Petitioner     :    Ms. Sharmila Singhai, Sr. Advocate with Mr.
                        Kanwaljeet Singh Saini, Advocate.

For Respondents    :    Mr. N.Naha Roy, Advocate.
________________________________________________________

                  Hon'ble Shri Narendra Kumar Vyas, J.

CAV ORDER

1. The Petitioner who was initially appointed as Branch Manager in

the respondent Bank on 07.10.1982, has been promoted on the

post of Officer Scale II, subsequently he has been promoted on the

post of Officer Scale I and his services were dismissed on

05.05.2015 after departmental enquiry.

2. The punishment order of dismissal from services specially provides

that the dismissal from service shall ordinarily be disqualification

from future employment. Against that, petitioner has preferred an

appeal before the appellate authority who vide order dated

13.10.2015 has dismissed the appeal. Against the dismissal from

service the petitioner has preferred writ petition being WP(S) No.

1148/2016 which is pending consideration before this Court. It has

been further contended that the petitioner after 33 years of service

is entitled to gratuity, provident fund and leave encashment which

have been withheld by the respondent Bank without rhyme and

reason. Therefore, he has moved an application before the

respondent Bank for releasing the gratuity on 01.03.2019,

18.06.2019 and 02.12.2019. But, no decision has been taken on

the said applications. It has also been contended that the

respondent bank vide memo dated 10.06.2019 has declined to

grant him pension also in view of Regulation 20, 29 of Chhattisgarh

Rajya Gramin Bank (Karmchari) Pension Regulation, 2018 which

are applicable to the officers / employees of the bank.

3. On above factual foundation the petitioner has filed writ petition and

prayed for grant of gratuity, provident fund and leave encashment.

The respondent Bank has filed their return in which they have

contended that as per Regulation 72 of Chhattisgarh Rajya Gramin

Bank (Officers and Employees) Service Regulation, 2013 the

eligibility of an employee for payment of gratuity is governed as per

the provisions of Payment of Gratuity Act, 1972 and Regulation

No. 72(2) provides that eligibility of gratuity on retirement, death,

disablement rendering unfit for further service or resignation after

10 years of continuous service or termination of service in any

other way except by way of punishment after 10 years of service.

Since the petitioner has been dismissed from service by way of

misconduct therefore he is not entitled to get gratuity. it is further

submitted that these regulations have statutory force and operate

against the petitioner which prohibits payment of gratuity to the

petitioner in view of dismissal from service. So far as claim of

provident fund is concerned the petitioner is entitled to get

provident fund subject to submission of form before the appropriate

office and since he has been dismissed from service, therefore, he

is not entitled to get leave encashment also. It has been further

contended that the petitioner has not exhausted the remedy

available to him under Payment of Gratuity Act, 1972 by filing an

application before the Controlling Authority and thereafter filing an

appeal, thus present writ petition is not maintainable in view of

efficacious alternative remedy available to the petitioner and would

pray for dismissal of the writ petition.

4. The petitioner has filed rejoinder wherein he has stated that from

bare perusal of Regulation 72 of Regulation 2013 it is clear that

every officer or employee shall be eligible for gratuity provided that

there shall be no forfeiture of gratuity on dismissal on account of

misconduct except in cases where such misconduct causes

financial loss to the bank and in that case to that extent only. It has

also been stated that though the petitioner was dismissed from

service by way of punishment but no financial loss has been

caused to the bank as reflected from the punishment order dated

05.05.2015. It has also been contended that the Regulation, 2018

is not applicable as the petitioner was already dismissed from

service on 05.05.2015. It has also been contended that as per Rule

45 of Regulation of 2013 it specifically provides for releasing the

normal retiral benefits and there is explanation to this clause which

provides that normal retiral benefits such as encashment of

privileged leave and gratuity may be withheld till the completion of

disciplinary proceedings and passing of final order by the

competent authority and release of benefit can be as per the final

order of the competent authority.

5. The learned Sr. Advocate for the petitioner would submit that since

there is no prohibition in releasing the gratuity and leave

encashment while passing the order of dismissal on 05.05.2015 the

petitioner is entitled to get gratuity with interest and leave

encashment amount.

6. I have heard learned counsel for the parties and perused the record

with utmost satisfaction.

7. Before examining the case on merit it is expedient for this Court to

consider the objection raised by the learned counsel for the

respondent about maintainability of the writ petition. It is not in

dispute that Payment of Gratuity Act, 1972 provides complete

mechanism which relates to gratuity. Section 4 of the Payment of

Gratuity Act provides filing of application before the Controlling

Authority under Payment of Gratuity Act for issuance of direction to

the employer for releasing the gratuity. Section 7 of Payment of

Gratuity Act provides appellate forum of filing appeal by the

aggrieved person against the order/direction passed by the

Controlling Authority. But the availability of alternative efficacious

remedy is no bar for this Court to entertain writ petition as in the

present case there is no disputed fact involved only interpretation

of regulations and provisions of the Gratuity Act has to be

examined. The facts about the dismissal from service of the

petitioner and denial gratuity by the respondents are admitted facts

therefore, this Court can very well entertain this writ petition. This

issue of availability of alternative remedy vice versa maintainability

of the writ petition has come up for consideration before the

Hon'ble Supreme Court in case of M/S Radha Krishan Industries

vs The State of Himachal Pradesh reported in (2021) 6 SCC 771

wherein the Hon'ble Supreme Court has held as under:-

"27. The principles of law which emerge are that ;- 27.1. The power under Article 226 of the Constitution to issue writs can be exercised not only for the enforcement of fundamental rights, but for any other purpose as well;

27.2. The High Court has the discretion not to entertain a writ petition. One of the restrictions placed on the power of the High Court is where an effective alternate remedy is available to the aggrieved person. 27.3. Exceptions to the rule of alternate remedy arise where (a) the writ petition has been filed for the enforcement of a fundamental right protected by Part III of the Constitution; (b) there has been a violation of the principles of natural justice; (c) the order or proceedings are wholly without jurisdiction; or (d) the vires of a legislation is challenged;

27.4 An alternate remedy by itself does not divest the High Court of its powers under Article 226 of the Constitution in an appropriate case though ordinarily, a writ petition should not be entertained when an efficacious alternate remedy is provided by law; 27.5 When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion; and

27.6. In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with."

8. In view of above stated factual and legal position the objection

raised by the learned counsel for the respondent with regard to

maintainability of writ petition is turned down and the writ petition is

being examined by this Court on merits.

9. Before adverting to the factual and legal matrix of the case it is

expedient for this Court to extract relevant provisions of the

Chhattisgarh Rajya Gramin Bank (Officers and Employees) Service

Regulation, 2013 which has been published in Government

Gazette on 25.02.2015. The relevant portion thereof is reproduced

as under:-

45. Disciplinary proceedings after retirement. - (1) An officer or employee who is under suspension on a charge of misconduct and who attains the age of superannuation, shall be deemed to be in service even after the age of superannuation for the specific purpose of continuation and conclusion of the disciplinary proceedings and issue of final orders thereon. (2) The officer or employee who is under suspension shall not be eligible for any subsistence allowance for the period beyond the date of superannuation. (3) The officer or employee against whom disciplinary proceeding has been initiated shall cease to be in service on the date of superannuation but the disciplinary proceeding shall continue as if he was in service until the proceedings are concluded and final order is passed in respect thereof.

(4) The officer of employee against whom disciplinary proceedings has been initiated shall not receive any pay and/or allowances after the date of superannuation and also not be entitled for the payment of retirement benefits till the proceeding is completed and final order is passed thereon except his own contribution to Contributory Provident Fund (CPF).

Explanation. - For the purposes of this regulation, the normal retirement benefits such as encashment of privi- lege leave and Gratuity may be withheld till the comple-

tion of the disciplinary proceedings and passing of final

order by the Competent Authority and the release of benefits shall be as per the final order of the Competent Authority.

Regulation 72 provides for gratuity and is reproduced hereinafter:-

72. Gratuity. - (1) An officer or employee shall be eligible for payment of gratuity either as per the provisions of the Payment of Gratuity Act, 1972 (39 of 1972) or as per sub-regulation (2), whichever is higher. (2) Every officer or employee shall be eligible for gratuity on,-

(a) retirement,

(b) death,

(d) resignation after completing 10 years of continuous service, or

(e) termination of service in any other way except by way of punishment after completion of 10 years of service :

Provided that in respect of an employee there shall be no forfeiture of gratuity for dismissal on account of misconduct except in cases where such misconduct causes financial loss to the bank and in that case to that extent only.

(3) The amount of gratuity payable to an officer or employee shall be one months pay for every completed year of service or part thereof in excess of six months subject to a maximum of 15 month's pay :

Provided that where an officer or employee has completed more than 30 years of service, he shall be eligible by way of gratuity for an additional amount at the rate of one half of a month's pay for each completed year of service beyond 30 years :

Provided further that in respect of an officer the gratuity is payable based on the last pay drawn :

Provided also that in respect of an employee pay for the purposes of calculation of the gratuity shall be the aver- age of the basic pay (100%), dearness allowance and special allowance and officiating allowance payable dur- ing the 12 months preceding death, disability, retire- ment, resignation or termination of service, as the case may be.

8. Provisions contained in Section 4 of the Act of 1972 are also relevant for the present controversy and the relevant extract thereof is reproduced hereinafter:- "4. Payment of gratuity .-(1) Gratuity shall be payable to an employee on the termination of his employment

after he has rendered continuous service for not less than five years,-

(a) on his superannuation, or

(b) on his retirement or resignation, or

Provided that the completion of continuous service of five years shall not be necessary where the termina- tion of the employment of any employee is due to death or disablement:

[Provided further that in the case of death of the em- ployee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a mi- nor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other finan- cial institution, as may be prescribed, until such minor attains majority.] Explanation .-For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.

xxx xxx xxx xxx (5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.

(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 negli- gence causing any damage or loss to, or destruction of, property belonging to the employer, shall be for- feited to the extent of the damage or loss so caused;

(b) the gratuity payable to an employee [may be wholly or partially forfeited]-

(i) if the services of such employee have been termi- nated 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 termi- nated for any act which constitutes an offence involv- ing moral turpitude, provided that such offence is committed by him in the course of his employment."

10. In the light of the above statutory provisions the question that falls

for determination in the facts of the present case is as to whether

petitioner is entitled to payment of gratuity or not? In the present

case there is no order of forfeiture of the gratuity by the respondent

but they have not released the same on the pretext that the

petitioner was dismissed from service which is nothing but

amounting to forfeiture of gratuity, therefore, this Court has to

examine whether forfeiture of the gratuity on the facts and

circumstances of the case is permissible and whether necessary

steps of issuing show cause to the petitioner has been taken by the

bank or not before forfeiting gratuity. The impugned inaction of the

respondents in releasing the gratuity as reflected in the return filed

by them in on the count that petitioner has been dismissed from

service, therefore, he is not entitled to get gratuity without

examining the provisions of Section 4(6)(b)(ii) of the Act of 1972

and Regulation No. 72 (2) of Regulation 2013.

11. From bare perusal of Section 4(6)(b)(ii) of the Act of 1972 it is quite

vivid that it is restricted to commissioning of offence involving moral

turpitude only in the course of employment. The proviso to

regulation 72 of the Regulations of 2013 also stipulates that in

respect of a dismissed employee there shall be no forfeiture of

gratuity on account of misconduct except in cases where such

misconduct causes financial loss to the bank and in that case to

that extent only. The payment of gratuity in the facts of the present

case is in accordance with regulation 72 of the Regulations of

2013, and therefore, the forfeiture can only be for the reason and to

the extent permissible by the proviso to regulation 72(2). It is not

the case of respondent Bank that dismissal of petitioner is on

account of misconduct which has not caused only financial loss to

the bank. The case of petitioner does not fall within the proviso to

regulation 72(2) of the Regulations of 2013, and therefore, the

forfeiture/denial of petitioner's gratuity would not be permissible in

law. There is no provision in the Regulations of 2013 corresponding

to Section 4(6)(b)(i) of the Act of 1972 nor the said provision has

been invoked by the Bank to justify forfeiture of petitioner's gratuity.

The Hon'ble Supreme Court in Union Bank of India and others vs.

C. G. Ajay Babu and another, (2018) 9 SCC 529 has made

following observations in paragraph nos.17 to 22:-

"17. ''Offence' is defined, under The General Clause Act, 1897, to mean "any act or omission made punish- able by any law for the time being in force".

18. Though the learned Counsel for the appellant- Bank has contended that the conduct of the respon- dent-employee, which leads to the framing of charges in the departmental proceedings involves moral turpi- tude, we are afraid the contention cannot be appreci- ated. It is not the conduct of a person involving moral turpitude that is required for forfeiture of gratuity but the conduct or the act should constitute an offence in- volving moral turpitude. To be an offence, the act should be made punishable under law. That is abso- lutely in the realm of criminal law. It is not for the Bank to decide whether an offence has been committed. It is for the court. Apart from the disciplinary proceedings initiated by the appellant- Bank, the Bank has not set the criminal law in motion either by registering an FIR or by filing a criminal complaint so as to establish that the misconduct leading to dismissal is an offence in- volving moral turpitude. Under sub-Section (6)(b)(ii) of the Act, forfeiture of gratuity is permissible only if the termination of an employee is for any misconduct which constitutes an offence involving moral turpitude, and convicted accordingly by a court of competent ju- risdiction.

19. In Jaswant Singh Gill v. Bharat Coking Coal Limited and others3, it has been held by this Court that forfeiture of gratuity either wholly or partially is permissible under sub-Section (6)(b)(ii) only in the event that the termination is on account of riotous or disorderly conduct or any other act of violence or on account of an act constituting an offence involving

moral turpitude when he is convicted. To quote para- graph-13:

"13. The Act provides for a close-knit scheme provid- ing for payment of gratuity. It is a complete code con- taining detailed provisions covering the essential pro- visions 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 condi- tions on which he may be denied therefrom. As no- ticed hereinbefore, sub-section (6) of Section 4 of the Act contains a non obstante clause vis-à-vis sub-sec- tion (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 ob- served. Clause (a) of sub-section (6) of Section 4 of the Act speaks of termination of service of an em- ployee for any act, wilful omission or negligence caus- ing any damage. However, the amount liable to be for- feited 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 ri- otous or disorderly conduct or any other act of vio- lence on his part or if he has been convicted for an of- fence involving moral turpitude. Conditions laid down therein are also not satisfied."

20. In the present case, there is no conviction of the respondent for the misconduct which according to the Bank is an offence involving moral turpitude. Hence, there is no justification for the forfeiture of gratuity on the ground stated in the order dated 20.04.2004 that the "misconduct proved against you amounts to acts involving moral turpitude". At the risk of redundancy, we may state that the requirement of the statute is not the proof of misconduct of acts involving moral turpi- tude but the acts should constitute an offence involv- ing moral turpitude and such offence should be duly established in a court of law.

21. That the Act must prevail over the Rules on Pay- ment of Gratuity framed by the employer is also a set- tled position as per Jaswant Singh Gill (supra). There- fore, the appellant cannot take recourse to its own Rules, ignoring the Act, for denying gratuity.

22. To sum-up, forfeiture of gratuity is not automatic on dismissal from service; it is subject to sub-Sections (5)

and (6) of Section 4 of The Payment of Gratuity Act, 1972. "

12. In view of the law laid down by the Supreme Court in the case of C.

G. Ajay Babu (supra) it is apparent that forfeiture of gratuity is not

automatic on dismissal from service and it is subject to Section 5(6)

of the Act of 1972. From the return and document annexed with the

return it is quite vivid that before taking decision not to release

gratuity show cause notice has also not been issued to the

petitioner which is also violation of Section 4(6)(a) of Payment of

Gratuity Act and is also against the judgment passed by the

Allahabad High Court in case of Hindalco Indutries Ltd. vs.

Appellate Authority and Others {2004 (101) FLR 1063},

judgment of Karnataka High Court in case of Canara Bank vs

Appellate Authority in WP NO. 40600/2011 (L-PG), judgment of

Madhya Pradesh High Court in case of Manager Western

Coalfiled Ltd. vs. Prayag Modi {2018 (157) FLR 323} and again

the judgment of Gujrat High Court in case of Union Bank of India

vs. K.R. Ajwalia (2005) 1 LLJ 824 Guj. Thus, on the basis of the

settled precedent it is clear that gratuity amount could not have

been forfeited without notice being issued to the employee which

has done by the bank in the present case, also employer cannot

forfeit the amount of gratuity without following the principles of

natural justice and without determining the extent of damages or

loss caused to the employer.

13. In the facts of the present case the provisions of the Regulations of

2013 which contains scheme for payment of gratuity and by virtue

of regulation 72 the only event in which forfeiture of gratuity of a

dismissed employee would be permissible is the act of misconduct

which caused financial loss to the bank and in that case to that

extent only. As there is no accusation of causing financial loss to

the bank as evident from the dismissal order dated 05.05.2015

non-releasing of gratuity is nothing but suffers from arbitrariness or

highhandedness of the bank which deserves to be interfered by

this Court by issuing direction to the bank to release the gratuity

forthwith.

14. Learned Sr. Advocate for the petitioner would submit that the

petitioner is also entitled to get leave encashment as Regulation 45

clearly provides that leave encashment and gratuity can be

withheld till completion of disciplinary proceeding and thereafter

release of benefit shall be as per the final order of the competent

authority. The regulations framed by the Bank is statutory in nature

and binding upon the bank as well as upon the petitioner.

15. In the present case, there is no prohibition for releasing the leave

encashment of privileged leaves as reflected from dismissal order

dated 05.05.2015, if the submission made by the bank in their

return as well as in their oral and written submission with regard

denial of leave encashment then the Regulation 45 of the

Regulation 2013 shall become a dead letter. Such construction of

the bank cannot be considered and deserves to be rejected by this

Court. Therefore, the inaction of the bank in releasing the leave

encashment is also without any legal foundation and the bank

deserves to be directed by this Court to release leave encashment

to the petitioner forthwith. The respondent Bank in their return has

referred to the Chhattisgarh Rajya Gramin Bank (Employees )

Pension Regulations, 2018 and would submit that this provisions

entail for feitures of his entire past service in case of cessation of

service of employee either by resignation not amounting voluntary

retirement or dismissal or termination, meaning thereby that

petitioner's service having come to its end and his entire past

service stands forfeited for the purposes of consideration of

pension and therefore, claim of the petitioner for grant of pension

does not bear any substance at all. This submission is not relevant

for considering the petitioner's claim with regard to gratuity and

leave encashment of privilege leave as there is separate statutory

provisions governing the leave encashment and gratuity. Even

otherwise, while passing the order of dismissal dated 05.05.2015

there was no whisper about non releasing of leave encashment

and gratuity, as such, subsequent stands taken by the bank that in

view of the Regulation 22 the Regulation 2018 the past service of

the petitioner stands forfeited, is not acceptable as Pension

Regulation, 2018 made effective from the date it was published in

the Gazette i.e on 26.09.2018, on that date, the petitioner was not

an employee as defined in the Regulation, 2018. Similar issue in

Bank of Baroda vs S.K. Kool reported in (2014) 2 SCC 715 has

come up for consideration before the Hon'ble Supreme Court,

wherein, Hon'ble the Supreme Court has held in paragraphs 13

and 14 as under:

13. Article 22 of the Regulation, which is relied on to deny the claim of the employee reads as follows: "22. Forfeiture of service:

(1)Resignation or dismissal or removal or termination of an employee from the service of the Bank shall en- tail forfeiture of his entire past service and conse- quently shall not qualify for pensionary benefits." From a plain reading of the aforesaid Regulation, it is evi-

dent that removal of an employee shall entail forfeiture of his entire past service and consequently such an employee shall not qualify for pensionary benefits. If we accept this submission, no employee removed from service in any event would be entitled for pen- sionary benefits. But the fact of the matter is that the Bipartite Settlement provides for removal from service with pensionary benefits "as would be due otherwise under the Rules or Regulations prevailing at the rele- vant time". The consequence of this construction would be that the words quoted above shall become a dead letter. Such a construction has to be avoided.

14. The Regulation does not entitle every employee to pensionary benefits. Its application and eligibility is provided under Chapter II of the Regulation whereas Chapter IV deals with qualifying service. An employee who has rendered a minimum of ten years of service and fulfils other conditions only can qualify for pension in terms of Article 14 of the Regulation. Therefore, the expression "as would be due otherwise" would mean only such employees who are eligible and have put in minimum number of years of service to qualify for pen- sion. However, such of the employees who are not eli- gible and have not put in required number of years of qualifying service shall not be entitled to the superan- nuation benefit though removed from service in terms of clause 6(b) of the Bipartite Settlement. Clause 6(b) came to be inserted as one of the punishments on ac- count of the Bipartite Settlement. It provides for pay- ment of superannuation benefits as would be due oth- erwise."

16. Considering the above stated factual and legal position the writ

petition deserves to be allowed and accordingly it is allowed. The

respondent Bank is directed to release the gratuity and leave

encashment of the petitioner within one month from the date of

receipt of copy of this order passed by this Court, failing which the

gratuity amount will carry 10% interest from the date of receipt of

copy of the order till the payment is actually made.