Jagat Singh vs Syndicate Bank & Ors.
2013 Latest Caselaw 2818 Del

$~1
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
+                         W.P.(C) 5177/2011
%                                                           8th July, 2013

JAGAT SINGH                                            ..... Petitioner
                          Through Mr. K. Venkataraman, Advocate with
                          petitioner in person.

                    Versus


SYNDICATE BANK & ORS.                     ..... Respondents

Through Mr. S.K. Taneja, Sr. Advocate with Mr. Puneet Taneja, Advocate for respondent No. 1.

Mr. Keshav Mohan, Advocate for respondents 2 &

CORAM:

HON'BLE MR. JUSTICE VALMIKI J. MEHTA

To be referred to the Reporter or not?          Yes.


VALMIKI J. MEHTA, J (ORAL)

1. This writ petition is filed by the petitioner Sh. Jagat Singh seeking a

writ or order from this Court against the respondent No. 1/Syndicate

Bank/erstwhile employer for directing respondent no.1 to release an amount

of ` 2,07,710/- . Out of this amount, ` 1,07,710/- is the amount of

provident fund of the petitioner and a sum of ` 1,00,000/- is the gratuity due

of the petitioner. Petitioner also seeks payment of interest.

2. It is not disputed that the petitioner stands dismissed from service on

certain charges, however, even after taking those enquiry proceedings as

final, the aforesaid amount is said to be due to the petitioner.

3. On behalf of the respondent No. 1-Bank reliance is placed upon the

letter dated 27.07.1999 sent by it to the petitioner as also another letter dated

06.02.1999 to claim that respondent no.1 has appropriated the amount

claimed on account of losses suffered by it on account of the illegal acts of

the petitioner. In effect the legal plea is of adjustment. These letters of the

respondent No.1-Bank gave break-up of the amounts appropriated towards

the losses caused by the petitioner to the respondent No. 1-Bank. The letters

dated 27.07.1999 and 06.02.1999 read as under:

"Ref. No. 9009/Est/F-j : 38/Est. Date: 27.07.1999

To

Mr. Jagat Singh 1/75, Sadar Bazar Delhi Cantt New Delhi.

Dear Sir,

Sub: Payment of gratuity and EPF-terminal benefits.

We requested you to call on us vide our letter NO.9009/RKEV/STE/j 38 dated 6.2.09, however you did not call on us.

In the circumstances, as per higher authorities instructions we has credited Rs.07,710-00 EPF amount and Rs.1,00,000/- gratuity into you sb account No. 99887. Further the said amount was appropriated towards your liabilities/outstanding as below:

1. Rs.71000/- towards claim paid account of Dhaula Kuan Branch in the matter of cash misappropriation in account of DSOI.

2. Rs.34244/- towards out claim account in the matter of fraudulent withdrawal of Rs.30000/- in the SB account of M.Lal, And Rs.93000/- towards claim paid account in the matter of AFW of account No. 500669 of P.L.Mongia.

3. Rs.5920/-towards Festival Advance and Rs.3546-70 towards leave encashment for LFC for which bills were never submitted.

This is for your kind information.

Yours faithfully, Sd/-

Asst. General Manger."

"Ref: 9009/RKF-V/STF/J-38 Place: R.K.Puram Dated: 06.02.99 By Regd. Post

Mr. Jagat Singh 1/75, Sadar Bazar Delhi Cantt New Delhi

Dear Sir, Reg: Regarding Payment of EPE

Please call on us to complete the formalities for settlement of your EPF account. Please treat the matter as

urgent.

Yours faithfully, Sd/-

Manager"

4. I asked the counsel for the respondent No. 1-Bank to show me what

are the rules of the respondent No. 1-Bank which entitles the respondent No.

1-Bank either to withhold or appropriate the amounts which are otherwise

due to an ex-employee. Learned counsel for the respondent No. 1-Bank

says that as of today no rules are filed on the record of this Court. In my

opinion, even if no rules are filed on the record, yet, whether for withholding

or for appropriation of the amounts, the respondent No. 1-Bank which is a

State under Article 12 of the Constitution of India cannot do so without

conducting necessary enquiries which hold the petitioner guilty of the

alleged losses caused to the bank. Thereafter, it was perfectly permissible for

the respondent No. 1-Bank to appropriate or at least withhold the amounts

which are now claimed by the petitioner, unless a law mandates payment to

the petitioner. I may mention that simple withholding of an amount is not

illegal because even if there are no rules of an organization ( and a relevant

rule is Rule 9 of CCS (Pension) Rules, 1972 entitling withholding of

pension and gratuity) even under the general law, an organization can

always withhold or appropriate/adjust amounts lying with it because

payment in spite of a claim of withholding an appropriation would amount

to payment to be made to an ex-employee which would result in payment of

a disputed amount which is claimed by the organization on account of losses

caused by the employee. In fact there is always a legal right to appropriate

amounts already in the hands of a person and which belongs to another

person, if the person holding/appropriating the same does it towards his

entitlement vide Walchandnagar Industries Ltd. Vs. Cement Corporation

of India, 2012 (2) ARBLR 19 (Delhi). The only exception is if law or rules

of the employer direct/require the payment and thus disentitles

appropriation/adjustment. As already stated above, appropriation is actually

adjustment in legal terms and is part of the genre of equitable set off.

5. I also asked the counsel for respondent No. 1-Bank to show me the

enquiry proceedings and the orders which were passed entitling the

respondent No. 1-Bank to withhold the amount as stated in the

communication dated 27.07.1999, however, counsel for the respondent No.

1-Bank has failed to show me any Departmental Proceedings i. e issuance

of show cause notice, holding of an enquiry and thereafter passing of an

order holding the petitioner guilty of causing losses to the respondent No. 1-

Bank and, therefore, the entitlement of respondent No. 1-Bank to

appropriate this amount.

6. Therefore, the order which is required to be passed in the facts of the

present case is that before appropriating the amount i.e deciding that the

amount has not to be paid to the petitioner, the respondent No. 1-Bank will

have to hold enquiry against the petitioner. Respondent No. 1-Bank is

entitled to conduct an enquiry to find out whether petitioner is liable for the

losses as stated in the letter dated 27.07.1999. However, on a query put to

the counsel for the petitioner, counsel for the petitioner on instructions from

petitioner who is present in the Court, states that petitioner will not

participate in the enquiry which is to be conducted by the respondent No. 1-

Bank. If that be so, it will be a futility to direct respondent No. 1-Bank to

conduct an enquiry proceeding for determining the amounts which are stated

as having been appropriated in the letter dated 27.07.1999.

7. In view of the aforesaid position, there are disputed questions of facts

which require trial as to whether or not petitioner has caused losses to the

respondent No. 1-Bank or that no loss is caused to the respondent No. 1-

Bank. If loss is caused, under the general law, respondent No. 1-Bank can

always withhold and appropriate the amount due to it from the person who

caused loss to the respondent No. 1-Bank. Allowing of the writ petition

would therefore amount to passing of a money decree for an amount when

there exists disputed questions of facts. It is only after such disputed

questions of facts are decided by an appropriate civil court in favour of the

petitioner can then there be issued the direction as being prayed by the

petitioner.

8. In view of the above, the writ petition is dismissed reserving liberty to

the petitioner to file a civil suit for recovery of the amounts which are

claimed by him and the amount respondent No. 1-Bank is held presently

entitled to withhold the amounts of the petitioner with it subject to the final

decree of the civil court.

9. The writ petition is accordingly dismissed and disposed of with the

aforesaid observations.

VALMIKI J. MEHTA, J JULY 08, 2013 godara