Union Of India vs A S M Malek
2021 Latest Caselaw 2984 Guj

         C/SCA/5329/2020                                         JUDGMENT




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             R/SPECIAL CIVIL APPLICATION NO. 5329 of 2020


FOR APPROVAL AND SIGNATURE:


HONOURABLE MS. JUSTICE SONIA GOKANI

and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN

==========================================================

1     Whether Reporters of Local Papers may be allowed to
      see the judgment ?

2     To be referred to the Reporter or not ?

3     Whether their Lordships wish to see the fair copy of the
      judgment ?

4     Whether this case involves a substantial question of law
      as to the interpretation of the Constitution of India or any
      order made thereunder ?

==========================================================
                               UNION OF INDIA
                                    Versus
                                A S M MALEK
==========================================================
Appearance:
MR NIRAL R MEHTA(3001) for the Petitioner(s) No. 1,2,3,4,5

MR DHAVAL N VAKIL(3556) for the Respondent(s) No. 1
==========================================================

    CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI
           and
           HONOURABLE MS. JUSTICE SANGEETA K. VISHEN

                                Date : 22/02/2021



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     C/SCA/5329/2020                                          JUDGMENT



                    ORAL JUDGMENT

(PER : HONOURABLE MS. JUSTICE SONIA GOKANI)

1 By way of this petition under Articles 226 and 227

of the Constitution of India, the petitioners

challenge the order dated 07.06.2019 passed in

OA No.520 of 2017 with M.A.No.479 of 2017 by

Central Administrative Tribunal, Ahmedabad in

the following factual background:-

1.1 The respondent was working at Kim post office on

the post of in-charge Sub-Post Master (SPM). On

attaining the age of superannuation on

30.04.2013, he demitted the office. While

working as SPM, Kim from 26.0.04.2011 to

09.04.2012, he was alleged to have

misappropriated an amount of Rs.36,117/-

realized from the addresses of 25 delivered VP

articles by the respondent by not crediting this

amount into Government account.

2        Under Article 14 of the Central                 Services Rules,







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1965, the proceedings were initiated against him

by issuing notice on 22.03.2013 and while these

proceedings were incomplete, his date of

superannuation had arrived. Therefore, the

proceedings continued under Rule 9 of the

Central Civil Services Rules (pension), 1972 (" the

CCS Rules).

3 The police complaint also was registered at Olpad

police station being CR.No.I-159 of 2012 for the

offences under section 409 of the Indian Penal

Code against the respondent and in these

proceedings, chargesheet came to be issued on

14.04.2013, yet the case is still pending for

adjudication.

4 After the departmental proceedings, which

continued under Rule 9 of the CCS Rules, the

same came to be concluded on 23.12.2014 and

the respondent had been imposed with

punishment of 30% of the monthly pension to be

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withheld for the period of 05 years with a further

direction to release the gratuity, if not required

otherwise in any other case.

4.1 As the criminal case was pending for adjudication,

the amount of gratuity has been retained by the

authority under Rule 69(1)(c) of the CCS Rules on

the ground that unless and until there is a

conclusion of the departmental or judicial

proceedings, the same cannot be released.

5 It is the say of the petitioner, therefore, that since

the judicial criminal proceedings initiated against

the present respondent is pending, the said

amount of gratuity cannot be released. Therefore,

the Tribunal's order of releasing the said amount

with interest of 9% is wholly erroneous, illegal

and calls for interference. It is also a serious

miscarriage of justice to interpret Rule 69(1)(c) of

the CCS Rules and the manner in which it is

done.

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6        The Tribunal, without condoning the delay or

without deciding the application for delay in the

main OA, has held in favour of the respondent

and that also is arbitrary action on its part.

Resultantly, the following prayers:

"6) For the reasons stated hereinabove and such other as may be advanced at the time of hearing of this petition, petitioners, therefore, prays:-

A) Be pleased to admit and allow this Petition;

B) Be pleased to call for the record and proceedings of the learned advocate. CAT, Ahmedabad and after perusing it's legality and propriety, be pleased to quash and set aside the order dated 07/06/2019 passed in OA/520/2017 passed by the learned advocate. Central Administrative Tribunal, Ahmedabad.

C) Pending admission till final disposal of this petition, be pleased to grant ad interim relief in terms of staying operation, implementation and/or execution of the order dated 07/06/2019 passed in OA/520/2017 with M.A 479/2017 passed by the Ld.Central Administrative Tribunal, Ahmedabad.

D) Be pleased to pass such other and further orders as may be deemed fit in the interest of justice."

     C/SCA/5329/2020                               JUDGMENT



7        This Court issued notice on 12.03.2020 and also

noted that there is no application for execution

moved. However, in the event of such application

being moved, the petitioner would be at liberty to

approach this Court. Later on, on 06.10.2020,

this Court (Coram: R.M. Chhaya & Ms.Vaibhavi

D.Nanavati, J.,J.) made the rule returnable and

ad interim relief in terms of para 6(C) has been

granted by further directing that subject to the

condition that, in case if the petition is dismissed

on merits, the respondent shall be entitled to

simple interest at the rate of 6% per annum.

8 This Court has heard Mr. Niral Mehta, learned

standing counsel for the petitioner, who has

argued at length that Rule 69(C) of the CCS

Rules, if is interpreted in a manner done by the

Tribunal, it may cause a serious issue for other

matters, where the departmental proceedings are

kept pending, subject to the outcome of the

C/SCA/5329/2020 JUDGMENT

judicial criminal proceedings, if both are initiated

on identical set of facts.

8.1 He has urged that the criminal proceedings, in the

instant case, are still pending and, hence, the

granting of gratuity is improper. The Tribunal

committed serious error in so doing and, hence,

the Court needs to interfere.

9 Mr. Dhaval Vakil, learned advocate for the

respondent has strongly and strenuously resisted

the stand taken by learned standing counsel and

has urged that the departmental proceedings not

only are over, but the penalty imposed is

deduction of 30% of monthly pension for the

period of 05 years and that has already been

done. Thus, the order has been implemented and

along with this, in the departmental proceedings

itself, where there is a direction to release the

gratuity, if not required, in any other case and the

same has not been done, but amounts to

C/SCA/5329/2020 JUDGMENT

disrespecting its own authority and implementing

the order in a truncated manner as may suit the

petitioner. He further has urged that the gratuity

is the right of the person and that cannot be

withheld under any circumstances. He has

emphasized that there is no such case, other than

the one for which the penalty is imposed and also

implemented. He has urged the Court that the

person has attained the age of superannuation

long back and is suffering physically and

financially and, therefore, the amount of gratuity

be released without further delay.

10 Having thus heard both the sides and also

considering the decision, which is under

challenge, we notice that the departmental

proceedings initiated against the petitioner for the

alleged misappropriation of the amount of

Rs.36,117/- by realizing from the addresses of

25 delivered VP Articles, from 26.04.2011 to

C/SCA/5329/2020 JUDGMENT

09.04.2012, while working as in-charge SPM, Kim

has already culminated into holding the petitioner

guilty by way of directing punishment of 30% of

monthly pension to be withheld for 05 years and

gratuity, if not required in any other matter, be

released in his favour.

11 It is also to be noted that the First Information

Report, registered with Olpad police station being

CR.No.I-159 of 2012 for the offences under

section 409 of the Indian Penal Code was for the

temporary misappropriation of the amount, has

continued till date, this has not attained finality.

12 Noticing the fact that in such circumstances the

amount of gratuity has not been released, despite

the specific direction of the order of penalty by

the department itself, the view taken by the

petitioner is of Rule 69(1)(c) of the CC Rules of not

permitting such amount.

  C/SCA/5329/2020                                      JUDGMENT



13    We notice that the Tribunal has interpreted the

rules to note that there can be no wisdom in the

wordings of legislature and the use of the word

"or" cannot be read as an "and".

14 It has also spoken of the decision of the Apex

Court in the case of State of Jharkhand and

orhters vs. Jitendra Kumar Srivastava and

another passed in Civil Application No. No.6770

of 2013 and H.L. Gulati vs. Union of India

and others passed in Civil Application No.

No.8224-8225 of 2011 and in the decision

rendered by this Court in the case of Rajnagar

Textile Mills vs. Gunvant Lalchanddas

Kayastha in Special Civil Application No. 3491 of

2010 and other decisions.

15 Noticing the fact that the departmental

proceedings are still continued, it has chosen to

hold that on the basis of Rule 69 of the CCS

Rules, the proceedings referred to in Clause (c)

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relate to disciplinary proceedings or criminal

proceedings and the same cannot be constituted

as disciplinary proceedings and criminal

proceedings, bar of Clause (c) of Rule 1 of Rule

69 of the CCS Rules, according to the Tribunal,

ceases to operate on the conclusion and on the

issue of " and / "or", i.e. either of the two, it has

distinguished the decision of Tulsi Ram Arya

vs. The Chairman Delhi Transco Ltd. and

others in Letters Patent Appeal No. 219 of 2013

on 22.08.2013 to hold that there was no

departmental proceedings initiated against the

delinquent and only criminal trial was going on.

15.1 Apt would be refer to Rule 69 of the CC Rules as

under:-

"Rule 69. Provisional pension where departmental or judicial proceedings may be pending (1)(a) In respect of a Government servant referred to in sub-

rule (4) of Rule 9, the Accounts Officer shall authorize the provisional pension equal to the maximum pension which would have been admissible on the basis

C/SCA/5329/2020 JUDGMENT

of qualifying service up to the date of retirement of the Government servant, or if he was under suspension on the date of retirement up to the date immediately preceding the date on which he was placed under suspension.

(b) The provisional pension shall be authorized by the Accounts Officer during the period commencing from the date of retirement up to and including the date on which, after the conclusion of departmental or judicial proceedings, final orders are passed by the competent authority.

(c) No gratuity shall be paid to the Government servant until the conclusion of the departmental or judicial proceedings and issue of final orders thereon :

Provided that where departmental proceedings have been instituted under Rule 16 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965, for imposing any of the penalties specified in Clauses (I), (ii) and (iv) of Rule 11 of the said rules, the payment of gratuity shall be authorized to be paid to the Government servant.

(2) Payment of provisional pension made under sub-rule (1) shall be adjusted against final retirement benefits sanctioned to such Government servant upon conclusion of such proceedings but no recovery shall be made where the pension finally sanctioned is less than the provisional pension or the pension is reduced or withheld either permanently or for a specified period."

16    We notice that there is a specific bar created by








 C/SCA/5329/2020                                          JUDGMENT

the said rules that no gratuity shall be given to

the Government servant until the conclusion of

the departmental proceedings "or" judicial

proceedings and issue the final order proviso to

this states that where the departmental

proceedings have been initiated under Rule 16 of

Central Civil Services (Classification, Control and

Appeal) Rules, 1965, for imposing any of the

penalties specified in clauses 1, 2 and 4 of Rule

11 of the Rules, the payment of gratuity shall be

authorised to be paid to the Government servant.

When this rule is read with the proviso that the

apparent wordings are that the proceedings

referred to relate to "disciplinary proceedings or

criminal proceedings" and not "disciplinary

proceedings and criminal proceedings" for the

same to affect the retiral benefits of the employee,

it is also to be noted that this postulates the

scenario where the gratuity is not to be paid to

the Government servant, if the departmental

C/SCA/5329/2020 JUDGMENT

proceedings "or" the judicial proceedings are

concluded and the final order is passed in

departmental proceedings "or" the judicial

proceedings. However, if the departmental

proceedings have been initiated under Rule 16 of

the CCS Rules for imposing any penalty specified

in Clauses 1,2 and 4 of the Rule 11 of the CCS

Rules, which are minor penalties, the payment of

gratuity shall be authorized to be paid to the

Government servant, which would mean that

even during the pendency of departmental

proceedings or the judicial proceedings, it will be

discretion of the authority to pay the amount of

gratuity. In the event of departmental proceedings

having been instituted for imposing of the

penalties, as specified in clauses 1,2 and 4 of

Rule 11, there shall be a need for conclusion of

the proceedings and issuance of final order before

the gratuity is released.

  C/SCA/5329/2020                                        JUDGMENT



17    Adverting to the facts in the instant case, it is

quite clear that so far as petitioner is concerned,

the departmental proceedings, have been already

concluded and he has been imposed the penalty

as stated hereinabove of the 30% deduction of

the pension amount for five years and the same

has been implemented by now. There is a specific

direction from the very authority to release the

amount of gratuity, if not required in any other

case. There is no other case against the petitioner

and the case, which is pending against him, is a

criminal case, which has been initiated from the

very set of facts. Its outcome may eventually lead

him to be punished under the Indian Penal Code,

where there are only six kinds of penal

punishments prescribed under section 54 of the

Indian Penal Code. There are no other kinds of

punishment prescribed, which can be possibly

imposed under the departmental proceedings

even if he is convicted in criminal proceedings

C/SCA/5329/2020 JUDGMENT

since it already culminated into imposing penalty

of deduction of pension to the tune of 30%

deduction of pension for five years.

17.1 Therefore, there is no earthly reason to interpret

that only on conclusion of the departmental

proceedings that the amount of gratuity can be

released. The department has not challenged and

questioned the outcome of the departmental

proceedings before the appellate authority,

whereby it has sought to challenge this direction

of grant of gratuity to the employee. It is because

of non-payment of this amount that the OA

No.520 of 2017 has been instituted by the

employee respondent, which has led to the

Tribunal interpreting the same in favour of the

employee. We have pertinently queried the

learned advocate for the petitioner as to what

purpose is likely to be served awaiting the

outcome of the criminal proceedings, when in

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fact, the same is not only likely to, in any

manner, have any bearing on the departmental

proceedings or the rights of the petitioner under

the CCS Rules. His apprehension is for some

other case, where there could be a possibility of

departmental proceedings being made subject to

the criminal proceedings, which is not the case

here.

18 We can well appreciate that the departmental

proceedings would have been made subject to the

outcome of the criminal proceedings, which since

is not the case here and, therefore, this

withholding of the amount, according to us, is in

no manner, justifiable. The Tribunal is not in

error where in this particular case, it has chosen

to direct the department to follow its own order,

while not interpreting Rule 69 of the CCS Rules.

19 Gratuity is the recognition by the employer of the

services given by the employees for a specified

C/SCA/5329/2020 JUDGMENT

time period, since it has helped the institution to

grow. It is derived from the word "gratuitous",

which would means "the gift". It is also mentioned

to be a social security in the event of retirement,

death etc. The payment of gratuity is governed by

the provisions of the Payment of Gratuity Act,

1972. It recognizes the right of the employee to

claim gratuity and the payment of gratuity is

mandatory and failure on the part of the

employees also is made punishable with

imprisonment under the Act. Services rendered

for not less than 05 years of the superannuation

of the person continuously entitles the person to

get the gratuity. However, the provision also

permits the employer to forfeit the gratuity

payable to an employee in certain circumstances.

Section 4(6) of the Gratuity Act provides for

forfeiting, if there is a termination of services for

any act of the employee due to willful omission or

negligence and, thereby, causing any damage or

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loss or destruction of property of the employer to

the extent of the damage or loss caused.

20 It can also partially forfeit if the riotous or

disorderly conduct on the part of the employee is,

as a result of any violence on his part or if the

termination of the employee involves moral

turpitude, provided such offence is committed in

the course of employment.

21 It would be worthwhile to refer the decisions of the

Apex Court in this regard.

21.1 The Apex Court in the case of D.S. Nakara vs.

Union of India ,1983 AIR 130 held and

observed that the gratuity is a means and tool of

social welfare, meant for social security of the

employee when his age advances, such payment

cannot be withheld, unless specifically permitted

by any provision.

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21.2 In the case of Jaswant Singh Gill vs. Bharat

Coking Coal Limited and others , (2007) 1

SCC 663, the Court laid down the parameters

for fortifying of gratuity. It entails two aspects,

essentially, (1) the termination of service due to

causes referred to in section 4(6) of the Gratuity

Act and the loss caused to the employer and (2)

that the Courts have, time and again, zealously

protected and guarded the right of the employee

to get the gratuity.

21.3 Relevant paragraphs are reproduced as under:-

"[9] A statutory right accrued, thus, cannot be impaired by reason of a rule which does not have the force of a statute. It will bear repetition to state that the Rules framed by Respondent No. 1 or its holding company are not statutory in nature. The Rules in any event do not provide for withholding of retrial benefits or gratuity.

[10] The Act provides for a closely neat scheme providing for payment of gratuity.

It is a complete code containing detailed provisions covering the essential provisions 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

C/SCA/5329/2020 JUDGMENT

conditions on which he may be denied therefrom. As noticed hereinbefore, sub- section (6) of Section 4 of the Act contains a non- obstante clause vis-'-vis sub- section (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 observed. Clause (a) of Sub-section (6) of Section 4 of the Act speaks of termination of service of an employee for any act, willful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of amage 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 No. 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 riotous or disorderly conduct or any other act of violence on his part or if he has been convicted for an offence involving moral turpitude. Conditions laid down therein are also not satisfied.

xxx xxx xxx [12] In Balbir Kaur and Another v. Steel Authority of India Ltd. and Another 2000 (6) SCC 493, this Court opined:

"...As regards the provisions of the Payment of Gratuity Act, 1972 (as amended from time to time) it is no longer in the realm of charity but a statutory right provided in favour of the employee..." [13] Interpreting Section 4(1) of the Act, it

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was held: "...We shall come back to the deposit of the provident fund but as regards the gratuity amount, be it noted that there is a mandate of the statute that gratuity is to be paid to the employee on his retirement or to his dependants in the event of his early death the introduction of the Family Pension Scheme by which the employee is compelled to deposit the gratuity amount, as a matter of fact runs counter to this beneficial piece of legislation (Act of 1972).

The statutory mandate is unequivocal and unambiguous in nature and runs to the effect that the gratuity is payable to the heirs of the nominees of the employees concerned but by the introduction of the Family Pension Scheme, this mandate stands violated and as such the same cannot but be termed to be illegal in nature. We do find some substance in the contention as raised, a mandatory statutory obligation cannot be trifled with by adaptation of a method which runs counter to the statute. It does not take long to appreciate the purpose for which this particular Family Pension Scheme has been introduced by deposit of the provident fund and the gratuity amount and we are not expressing any opinion in regard thereto but the fact remains that statutory obligation cannot be left high and dry on the whims of the employer irrespective of the factum of the employer being an authority within the meaning of Article 12 or not."

xxx xxx xxx xxx xxx xxx [18] Reliance placed by Mr. Mukherjee on a decision of this Court in D.V. Kapoor v.

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Union of India and Others 1990 (4) SCC 314 is misplaced. Therein having regard to the provisions of the Civil Services and Conduct Rules, it was held that a departmental proceeding can be continued even after allowing the delinquent employee to voluntarily retire. However, therein the rules provided for withholding or withdrawing pension permanently. In that case itself, it was opined: " The right to gratuity is also a statutory right. The appellant was not charged with nor was given an opportunity that his gratuity would be withheld as a measure of punishment. No provision of law has been brought to our notice under which, the President is empowered to withhold gratuity as well, after his retirement as a measure of punishment. Therefore, the order to withhold the gratuity as a measure of penalty is obviously illegal and is devoid of jurisdiction."

22 While not endorsing to the interpretation of release of the gratuity for all time to come and keeping the legal question open to be decided in appropriate case where there is a serious issue, in the instant case, the glaring facts would not lead to do otherwise than what has been done by the Tribunal and, therefore, no indulgence is necessitated.

23 Petition is dismissed with a direction to release the amount of gratuity within two weeks from the date of receipt of the copy of this order with

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interest at the rate of 6% from date of the order of the Tribunal i.e. 07.06.2019 passed in OA No.520 of 2017 with M.A.No.479 of 2017 by Central Administrative Tribunal, Ahmedabad.

24 Petition merits no acceptance and hence, dismissed and disposed of accordingly.

(MS. SONIA GOKANI, J. )

(SANGEETA K. VISHEN, J. ) SUDHIR