Neeraj vs Air India Ltd. Through: The ...
2017 Latest Caselaw 6411 Del

     IN THE HIGH COURT OF DELHI AT NEW DELHI

                       Judgment reserved on: September 25, 2017
                       Judgment delivered on: November 14, 2017

+      W.P.(C) 6547/2015
NEERAJ                                                      ..... Petitioner
                             Through:     Mr. Sanjay Ghose, Adv. & Mr.
                                          Rishabh Jetly, Adv.
                  Versus

AIR INDIA LTD. THROUGH: THE CHAIRMAN
& MD                                           ..... Respondent
                   Through: Mr. Lalit Bhasin, Mr. Ratna D.
                            Dhingra & Ms. Bhavna Dhami, Advs.

      CORAM:
      HON'BLE MR JUSTICE V. KAMESWAR RAO

                                  JUDGMENT

V. KAMESWAR RAO, J

1. The present petition has been filed by the petitioner with the following

prayers:-

"In view of the aforesaid facts and circumstances, it is respectfully prayed that the Hon‟ble Court may be pleased to grant the following prayers:

i) Issue an appropriate writ, order or direction, to quash and set aside Respondent‟s letter dated 02.01.2015 as being iniquitous, harsh and arbitrary;

            ii)        Issue an appropriate writ, order or direction to





           the Respondent No.1 to immediately release all
          retirement    benefits   along   with   any   arrears    of

Petitioner‟s late husband to the Petitioner with such interest as is deemed appropriate by this Hon‟ble Court;

iii) Issue an appropriate writ, order or direction to the Respondent to grant monetary compensation of Rs. One Crore to the Petitioner on account of the mental agony and harassment caused to the Petitioner due to the various acts and omissions of the Respondent.

iv) In the interim, restrain the Respondent recovering any amount or initiating any suit or legal proceedings for recovery of any amount against the Petitoner;

          v)         Any Order appropriate in the interest of
          justice.
          vi)        Any other appropriate Order."

2. It is the case of the petitioner that her husband who was working as a

Pilot with the respondent developed certain health complications in the year

2006. He was declared temporarily medically unfit for flying for a period of

eight weeks effective from November 06, 2006. In the year 2009, respondent

called upon the husband of the petitioner to undergo Class-I medical

examination. It appears, the husband of the petitioner has been writing to the

respondent his intention to undergo License Renewal Medical Examination.

It is also noted from the writ petition that the CMD wrote to ED-Finance and

ED-Internal Audit directing an audit into petitioner's husband allowances and

stating that all allowances drawn by him are recoverable. On May 24, 2010, a

charge sheet was issued to the late husband of the petitioner. On May 28,

2010, the husband of the petitioner was informed that all his retirement

benefits will be withheld, excluding his contribution towards Provident Fund,

subject to the outcome of the Departmental proceedings. On May 31, 2010,

the husband of the petitioner retired from service. Suffice to state, the

husband of the petitioner submitted reply to the charge sheet. The inquiry was

conducted under the aegis of Commissioner of Enquiries, Central Vigilance

Commission. Before the Disciplinary Authority could pass a final order, the

husband of the petitioner passed away on October 12, 2010 due to various

medical complications. On February 01, 2013, the petitioner approached the

respondent demanding the retirement dues and inquiring about the pending

proceedings. She was informed that the clearance from the Vigilance

Department is essential before retirement dues are granted. On January 23,

2014, the Central Vigilance Commission vide its Memorandum dated January

23, 2014 advised the closure of the disciplinary case against the husband of

the petitioner. On January 02, 2015, the petitioner received a letter from the

respondent stating that an amount of Rs.45,04,084/- of retirement benefits of

the husband of the petitioner will be retained by the Company and a recovery

suit will be filed for recovery of Rs.2,07,72,048/- from his estate.

3. The respondent has filed the counter affidavit, wherein they have

primarily stated that they are within their rights to withhold payment of retiral

dues of the late husband of the petitioner, inasmuch as the Company has to

recover an amount of Rs.2,07,72,048/-, which was paid to the petitioner's

husband due to the acts of fraud and dishonesty committed by him during his

tenure with the respondent Company. It is also stated that the husband of the

petitioner participated in the enquiry proceedings; the enquiry proceedings

concluded while he was alive. The Inquiry Officer after scrutinizing the

documents and evidence lead before him, held the charges against the

petitioner's husband as proved and forwarded the enquiry report to the

Competent Authority, who had accepted the said report. It is also stated that

an amount of Rs.37,81,608/- against employee's share of Provident Fund and

Rs.10,00,000/- towards Gratuity have been paid to the petitioner. According

to the respondent, it has not paid the employer's share of Provident Fund

amounting to Rs.21,89,865/-; salary of May 2010 amounting to Rs.78,164/-,

PLI for April, 2010 amounting to Rs.11,70,780/-, PLI for May 2010

amounting to Rs.8,71,583/-. They have also stated that a recovery of an

amount of Rs.2,07,72,048/- has to be made.

4. Rejoinder has been filed by the petitioner wherein, the petitioner has

denied that the petitioner's husband committed fraud and dishonesty. She has

taken a strong objection to the scandalous averments made by the respondent.

It is also stated that the copy of the enquiry report, alleged to have been

submitted by the Inquiry Officer has not been served on the husband of the

petitioner.

5. Mr. Sanjay Ghose, ld. Counsel for the petitioner reiterates the stand

taken in the pleadings on behalf of the petitioner that the respondent could not

have withheld the terminal benefits/retiral benefits to be paid to her husband.

According to him, the allegations against the petitioner's husband of

committing fraud and dishonesty are denied. The said charges have not been

proved against the petitioner's husband and as such, cannot be a ground to

withhold the same. He seeks grant of reliefs as prayed. He would rely upon

the judgment reported as 2001 Law Suit(Jhar) 238 Jayanti Devi v. State of

Bihar decided on May 01, 2001.

6. Mr. Lalit Bhasin, learned counsel appearing for the respondent would

submit that the petitioner is not entitled to the retiral benefits as her husband

has committed serious acts of fraud, which resulted in payment of allowances,

which he was not entitled to under the Rules. According to him, if a benefit

has been given to an employee, which he is not entitled to, the respondent is

within its right to recover the same from the retirement dues. He relied on the

enquiry report filed on record to submit that the Inquiry Officer has proved the

allegations against the husband of the petitioner. Hence, it is a foregone

conclusion that the husband of the petitioner was involved in misdemenour.

The respondent is only recovering the financial benefits reaped by the

petitioner's husband because of the misdemenour and nothing more. He has

drawn my attention to the charges framed against the petitioner and the

conclusion arrived at by the Inquiry Officer against the husband of the

petitioner, wherein he has proved three components of Article of Charge-I as

proved and four components as partially proved. He conceded that before any

action could be taken on the Enquiry Report against the petitioner's husband,

unfortunately he expired. He also reiterated, that amount of Rs.37,81,608/-

against employee's share of Provident Fund and Rs.10,00,000/- towards

Gratuity have been paid to the petitioner and withholding different amounts as

stated in the counter affidavit. He has also drawn my attention to the extracts

of the Minutes of the 63rd Board meeting of Air India Ltd. held on November

05, 2014 wherein it has been decided that an amount of Rs.45,04,084/-

towards Company's contribution to the employees Provident Fund be retained

with the Company and a suit be filed in the Court of law for recovery of

amount of Rs.2,07,72,048/-. He would also state that in terms of Clause 23 of

the Indian Airlines Employees' Provident Fund Regulations, 1955, which

contemplates, if a Member is dismissed for serious and/or willful misconduct,

the Company may send intimation thereof to the Board and the Board shall

have powers to forfeit the employer's contribution together with the interest

thereon in respect of the entire service of the employee or for such shorter

period as may be decided by the Authority competent to dismiss the

employee. He also refers to Clause 23(3), which inter-alia contemplates for

deduction from the amount of Provident fund, so payable and pay to the

Company any amount due under a liability incurred by a Member of the

Company not exceeding in any case the total amount of the employer's

contributions and interest thereon standing to the credit of the Member. In

other words, it is his submission that the impugned action of the respondent to

withhold the employer's contribution towards Provident Fund has the sanction

of the Provident Fund Regulations referred above. He would, in support of

his contention rely upon the judgment of the Supreme Court in the case

reported as (2012) 8 SCC 417 Chandi Prasad Uniyal & Ors v. State of

Uttarakhand & Ors to contend that any excess payment made to an employee

can always be recovered because if that is not done, it would amount to

unnecessary enrichment of the concerned employee. He refers to the

judgment of the High Court of Jharkhand at Ranchi in the case of Neelam

Dubey v. State of Jharkhand and Ors W.P.S) No. 3810/2002 decided on

May 10, 2013, wherein the High Court had relied upon the judgment of the

Supreme Court in Chandi Prasad Uniyal & Ors (supra), justifying the

recovery by the employer. He also relies upon the judgment of the High

Court of Karnataka at Bangalore in W.P.(C) No. 13372/2013 Smt. Mallava

Sabanna Kaladagi v. The Managing Director, Karnataka Power

Transmission Corporation Limited and another wherein it has been held that

recovery can be effected from the pensionary benefits and from the estate of

the deceased employee.

7. Having heard the learned counsel for the parties, the issue, which falls

for consideration is, whether the respondent could have withheld the amount

of the employer's share of PF and other benefits. It is the case of the

respondent that the allowances were paid because of fraud perpetuated by the

petitioner's husband. There is no dispute that a charge sheet was issued to the

late husband of the petitioner, which was enquired into. The charges inter alia

were that he derived illegal benefits from the Company on account of

Simulate Training Hours, which were remunerated at a higher rate than flying

hours. The husband of the petitioner had participated in the said proceedings.

It is the stand of the respondent that the Inquiry Officer has submitted his

report proving/partially proving the charges. Before the enquiry report could

be acted upon, the husband of the petitioner had expired. The death of the

husband of the petitioner, resulted in abatement of the proceedings against

him. In fact, the Central Vigilance Commission has advised the closing of the

Disciplinary Proceedings against the husband of the petitioner on his death.

The result thereof is that the allegations so made against the husband of the

petitioner have not been proved. It is also a settled law that Disciplinary

Proceeding culminate with the issuance of a final order by the Disciplinary

Authority. It is not such a case here. Mr. Bhasin had placed reliance on

Regulation 23 of the PF Regulations, 1995. The said Regulations reads as

under:

"23. Deduction on dismissal.

1) Notwithstanding anything contained in regulation 20, if a member is dismissed for serious and / or willful misconduct, the Company may send intimation thereof to the Board and the Board shall have powers to forfeit the employer‟s contribution together with the interest thereon in respect of the entire service of the employee or for such shorter period as may be decided by the authority competent to dismiss the employee. Provided that the member concerned shall be asked to show cause why the forfeiture shall not be made and shall be afforded an opportunity to make representation which shall be duly considered before making the forfeiture.

2) Save as provided in sub-regulation (3) of Regulation 23 any amount forfeited under Clause (1) and the net profit or loss, if any, from the sale of investments, shall be credited to the „Reverse Account‟ of the Fund.

3) Notwithstanding anything contained in Regulation 20, when the sum standing to the credit of any member becomes payable on cessation of membership, the Board shall, if so directed by the Company deduct from the amount so payable and pay to the Company any amount due under a liability incurred by a member to the Company not exceeding in any case the total amount of the employer‟s contributions and interest thereon standing on the credit of the member."

8. It is clear from Regulation 23 (1) that it is only in the eventuality an

employee is dismissed from service, that the respondent through the Board has

powers, to forfeit the employers contribution together with interest. Even

Regulation 23(3) contemplates an eventuality, where a sum standing to the

credit of any member becomes payable on cessation of membership, the

Board on the direction of the Company deduct the amount and pay to the

company any amount due under a liability incurred by a member to the

Company not exceeding the total amount of employers contribution. Even

this regulation would have no applicability, as no liability of the petitioner's

husband has been determined by the Company so as to enable the Board to

deduct the amount from the contribution to pay to the Company. In fact Mr.

Bhasin is precluded from placing reliance on the Regulation 23 of the PF

Regulations and the enquiry report, when it is the case of the respondent itself

that, a decision has been taken by the Board, to file a suit for recovery of the

amount allegedly due from the petitioner's husband.

9. I agree with the reliance placed by Mr. Ghose on the judgment of the

Bombay High Court in the case reported as 1986 LAB. I.C. 248 Hirabai

Deshmukh and another v. State of Maharashtra and others. Paras 6, 7 and

8 are reproduced as under:-

"6. The provisions with regard to dismissal, removal and suspension of the civil servant do not permit holding of any further enquiry into the conduct of such a civil servant after his death. Such proceedings are intended to impose departmental penalty and would

abate by reason of the death of civil servant. The purpose of proceedings is to impose penalty, if misconduct is established against the civil servant. That can only be achieved if the civil servant continues to be in service. Upon broader view the proceedings are quasi-criminal in the sense it can result in fault finding and further imposition of penalty. The character of such proceedings has to be treated as quasi-judicial for this purpose. In the light of the character of the proceedings and the nature of penalty like dismissal or removal, or any other penalties, minor or major, it has nexus to the contract of service. Therefore, if the person who has undertaken that contract is not available, it should follow that no proceedings can continue. Thus when the proceedings are quite personal in relation to such a contract of service, the same should terminate upon death of the delinquent. By reason of death, such proceedings would terminate and abate. We think that such a result is also inferable from the provisions of Rule 152-B of the Bombay Civil Services Rules.

7. Once the proceedings come to an end by reason of death, the provisions of Rule 152-B, Sub-rule (2) of the Bombay Civil Services Rules state that notwithstanding anything contained in Rule 151 where a Government servant under suspension dies before the disciplinary proceedings are concluded, the period between the date of suspension and the date of death has to be treated as duty for all purposes and the family of such civil servant is required to be paid full pay and allowances for that period subject to adjustment in respect of subsistence allowance already paid.

8. These being the express provisions available in the Bombay Civil Services Rules which were admittedly applicable to the Talathi, the petitioners, who are the members, were entitled as of right to have full pay and allowances which were payable to Bhikanrao subject to

deduction of subsistence allowance, if any, already paid."

10. Insofar as the reliance placed by Mr. Lalit Bhasin on the judgment of

the Supreme Court in the case of Chandi Prasad Uniyal & Ors (supra) in

support of his contention that, employer is within his right to make recovery

of excess amount paid to the employee is concerned, the said judgment would

not be applicable to the facts of this case, inasmuch as it is the case of the

respondent that the husband of the petitioner has drawn the allowance by

playing fraud. Apparently, the charge against the petitioner's husband is of

very serious nature. The same could not be proved despite issuance of a

charge sheet to him. It follows that if fraud is not proved, then withholding of

retiral benefits is not justified. Even during the course of the submissions,

nothing has been brought to the notice of this Court that the monetary benefits

received by the husband of the petitioner were contrary to the Rules and

Regulations.

11. That apart, Mr. Bhasin cannot take support of the judgment in the case

of Chandi Prasad Uniyal & Ors (supra), inasmuch as in a subsequent

judgment reported as (2014) 8 SCC 883 State of Punjab v. Rafiq Masih,

wherein the Supreme Court referring to Chandi Prasad Uniyal & Ors

(supra), has culled out certain situations wherein a recovery of excess

monetary gains have been held to be impermissible including in the case

where a person has retired. In the case in hand, in view of the fact that the

employee of the respondent Capt. Ashok Raj having expired, the recovery

cannot be effected by the respondent, even on this ground as well. In view of

this, the judgment of the Jharkhand High Court in Neelam Dubey (Supra) is

not applicable. It is also not applicable in view of the decision of the Board of

the respondent to file a suit for recovery of the amount.

12. Insofar as the reference made by Mr. Bhasin in the case of Smt.

Mallava Sabanna Kaladagi (supra) is concerned, wherein the respondent

intended to recover an amount of Rs.3,82,895/- of the alleged misuse of

material by the petitioner's husband from the petitioner being the legal heir.

The writ petition was disposed of by the Karnataka High Court, setting aside

the notice issued to the petitioner, reserving the right of the respondent to

issue a show cause notice to the petitioner and furnishing full detail of the

amount, if any to be recovered from the estate of the husband of the petitioner.

In the case in hand, a decision in that regard has been taken by the respondent

Company to file a suit for recovery of amount of Rs. 2,07,72,048/- from the

estate of the husband of the petitioner. So, the judgment would not help the

respondent, in so far as their action to withhold the benefits is concerned. The

respondent in contemplation, that such recovery suit shall be filed and their

claim shall be allowed, cannot withhold the amount as payable to the legal

heirs of Capt. Ashok Raj. It may so happen, the claim may not be allowed.

13. Accordingly, in view of my above discussion, the writ petition is

allowed. The letter dated January 02, 2015 is set aside. The respondent is

directed to release all the withheld amounts from the retiral benefits / other

benefits payable to Late Capt. Ashok Raj to the legal heirs of Capt. Ashok Raj

in accordance with law with interest @ 9% per annum calculated from the

date, the same were payable within two months from the receipt of this order.

No costs.

CM No. 11918/2015 Dismissed as infructuous.

V. KAMESWAR RAO, J

NOVEMBER 14, 2017/ak