Dunlop India Limited vs Union Of India (Uoi) And Ors.
2003 Latest Caselaw 845 Del

JUDGMENT

Mukul Mudgal, J.

1. Rule.

2. With the consent of the counsel for the parties the matter is taken up for final hearing.

3. This writ petition challenges the order dated 5th April, 2002 passed by the Controlling Authority as well the order in appeal dated 14th June, 2002 by which the appeal of the petitioner was not admitted on failure to comply with the provisions of Section 7(7) of the Payment of the Gratuity Act requiring deposit of the impugned amount. The petitioner sought to challenge the original order of the Controlling Authority under the Payment of Gratuity Act which directed payment of Rs. 3,50,000/- as gratuity to the respondent before the appellate authority. One of the issues i. e. issue No. 2 was to the effect that the claim raised by the respondent is belated and should be dismissed on this ground. This issue has been deliberated upon by the Controlling Authority which has recorded a finding that it was by virtue of correspondence sent by the respondent No. 4 to the petitioner company, which has assured payment and that the claim was not settled and good reasons were given in the impugned order for condoning the delay. The Tribunal has relied upon the correspondence dated 1st December, 1998, 21-12-1998, 12-01-1999, 15-01-1999, 08-02-1999, 24-02-1999, 01-03-1999, 11-03-1999, 07-04-1999, 26-04-1999, 23-05-1999, 14-01-2000 (marked as Exhibit A-3, A-5, A-6, A-7, A-8, A-9, A-10, A-11-15, A-16, A-17, A-18, A-24, A-25, A-29 and A-3). These letters have been found to contain the respondent No. 4's request for release of gratuity and petitioner's request to him for bearing with the delay in such release. These documents were not challenged by the petitioner before before the Controlling Authority. Thus the Controlling Authority has rightly condoned the delay. Since correspondence was from the company itself, the ground for condoning the delay was correct and accordingly there is no merit in this plea.

4. The learned Senior Counsel for the petitioner Shri J. K. Seth submitted that by agreeing to enhancement of rent beyond Rs. 3500/-, the respondent No. 4 has cheated the company and accordingly in October, 2000 under Sections 418, 420 and 122 a complaint was filed against him. He accordingly relied upon provisions of Section 4(6) which permits the withholding of the gratuity on grounds of negligence, causing any damage or loss to the property of the company or termination of an employee's services on the riotous conduct, violence or act involving moral turpitude during the course of the employment. Section 4(6) reads as follows:

"4. Payment of gratuity -

. . . . . . . . . . .

(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 negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited 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 terminated 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 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.

5. In my view Section 4(6) does not apply as it is not in dispute that the respondent had resigned on 1st June, 1998 and the resignation had been accepted. Since the services of the respondent No. 4 had not been terminated which is the sine-qua-non of the applicability of Section 4(6), clause (6) of Section 4 cannot apply in the present case.

6. The learned counsel for the respondent No. 4 has further pointed out that far from being suspected in fact respondent's work was appreciated as is evident from the letter of appreciation issued by Mr. Manu Chabria, Chairman of the company. He has further pointed out that plea of a criminal act has not been taken up in the written statement before the Controlling Authority. This plea though not taken up in the written statement, was taken only in an affidavit at the time of evidence. In my view the plea not taken in the written statement cannot be sought to be brought on record at the stage of evidence. In any event such plea has become irrelevant as I have already found that in absence of termination of the services of respondent No. 4, Section 4(6) of the Act does not apply.

7. Learned counsel for the petitioner relied upon the judgment of Hon'ble Supreme Court in Sangfroid Remedies Ltd. vs. UOI & Others, and in particular paragraphs 6 and 7 thereof which read as follows:

6. In view of the objection/contention raised throughout by the appellant that no notice was served on them and opportunity given before passing the impugned assessment order by the 3rd respondent, which fact has not been disputed before us, we consider that insisting upon the payment of duty determined, cannot be upheld. Further, there is one another factor in this case and that is the appellant has since been declared as a sick industry by an order dated 23rd April, 1998 by the Board of Industrial and Financial Reconstruction.

7. In these circumstances, we are of the view, that directing the appellant to pay the excise duty as determined as a condition for hearing the appeal is not sustainable. Accordingly, on the facts of the case, the orders of the High Court and that of the Appellate Authority and the 3rd respondent are set aside. "

8. In my view on the facts of the case, the Hon'ble Supreme Court granted the pre-condition of hearing without pre-deposit because of the undisputed fact that the company had not been given notice and opportunity. Another fact which weighed before the Hon'ble Supreme Court was the pendency of the proceedings before BIFR. The counsel for the petitioner submitted that since in the present case also BIFR proceedings were pending the condition of pre-deposit should have been waived. In any event the question of pre-deposit has become academic because I have heard the pleas raised in appeal challenging the order of Controlling Authority on merits and have found such pleas to be devoid of merit.

9. In this view of the matter since no other plea was urged, even if the order of pre-deposit passed by the appellate authority on 14th June, 2002 was not justified, I have heard the matter on merits and am in agreement with the plea of the learned counsel for respondent No. 4 Shri Prosenjeet Banerjee that the impugned order dated 5th April, 2002 sought to be appealed against before the appellate authority does not warrant interference.

10. The writ petition stands dismissed accordingly.