Gujarat High Court

Ishwarbhai Manjibhai Patel vs Director, Agriculture And Rural ... on 7 April, 2022

Bench: Biren Vaishnav

     C/SCA/7457/2020                            JUDGMENT DATED: 07/04/2022




          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

               R/SPECIAL CIVIL APPLICATION NO. 7457 of 2020

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE BIREN VAISHNAV
================================================================
 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 ?

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                      ISHWARBHAI MANJIBHAI PATEL
                                Versus
               DIRECTOR, AGRICULTURE AND RURAL FINANCE
================================================================
Appearance:
MR JAY B TRIVEDI(7474) for the Petitioner(s) No. 1
MR CHIRAG B PATEL(3679) for the Respondent(s) No. 3
MR KURVEN DESAI, AGP for the Respondent(s) No. 1,2
================================================================
 CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
                  Date : 07/04/2022
                  ORAL JUDGMENT

1. Rule returnable forthwith. Mr. Kurven Desai, learned Assistant

Government Pleader waives service of notice of Rule for the

respondent Nos.1 and 2 as well as Mr. C. B. Patel, learned

counsel waives service of notice of Rule for respondent No.3 -

Agriculture Produce Market Committee, Botad.

2. With the consent of the learned advocates for the respective

C/SCA/7457/2020 JUDGMENT DATED: 07/04/2022

parties, the petition is taken up for final hearing today.

3. Heard Mr. Jay B. Trivedi, learned counsel for the petitioner,

Mr. C. B. Patel, learned advocate for respondent No.3 and Mr.

Kurven Desai, learned Assistant Government Pleader for

respondent Nos.1 and 2. Perused the record.

4. By way of this petition, under Article 226 of the Constitution

of India, the petitioner had initially challenged the action of

APMC - respondent No.3 in not paying the outstanding

retirement benefits to the petitioner such as Provident Fund,

Gratuity, Leave Encashment, Salary and Dearness Allowance.

According to the petitioner, these amounts were not being paid

though the petitioner had been relieved from his services with

effect from 15.2.2020.

5. This Court, on 16.6.2020, after hearing the learned counsel for

the petitioner, issued notice, making it returnable on 30.6.2020.

Thereafter, the hearing of the petition, from time to time was

adjourned.

C/SCA/7457/2020 JUDGMENT DATED: 07/04/2022

6. When the petition was taken up for hearing on 12.10.2020, the

learned counsel for the respondent placed before this Court a

notice dated 3.10.2020 issued against the petitioner, by which,

certain explanations were sought for, from him. The stand of

the learned counsel for the respondent then was that the

amount of gratuity, provident fund, leave encashment and

salaries for certain periods were withheld, as an Inquiry Officer

was appointed. This prompted the petitioner to amend the

petition and bring on record the Show Cause Notice of

3.10.2020 and the documents together with the notice.

7. The facts in brief would indicate that the petitioner was

appointed as an Inspector with the respondent - APMC, Botad

on 1.9.1999. Thereafter, on 9.8.2008, he was transferred as

Inspector to the Babarkot Sub-yard, Babarkot. On 16.8.2017,

one Shri K. R. Ladola, Secretary went on leave, as a result of

which, the Charge of the post of Secretary was handed over to

the petitioner. As In-charge Secretary, on 6.10.2018, he

addressed a letter to the Inspector of the APMC, Botad. The

communication addressed to the Inspector indicated that

certain vegetable vendors were carrying out certain

C/SCA/7457/2020 JUDGMENT DATED: 07/04/2022

irregularities in paying user charges for which complaints were

received. The Inspector, therefore, in accordance with the

powers vested with him should confiscate their Account Books

and submit a report. The petitioner continued to remind the

Inspector for submitting a report in compliance of the

communication dated 6.10.2018.

8. On 13.11.2019, the petitioner submitted an application seeking

to resign from his services of the APMC. The resignation was

disapproved on 25.11.2019.

9. It appears that in the interregnum on 22.11.2019, two of the

Directors addressed a letter to the petitioner questioning the

action of the petitioner in addressing a communication to the

Inspector on his powers to confiscate records in context of user

charges not being paid by certain vegetable vendors. An

explanation was sought asking the petitioner to furnish the

report. Reminders were sent by the petitioner to the Inspector

to submit a report and also the opinion of the District Registrar

was sought as to whether such a report could be given to the

Directors, to which, the Deputy Registrar opined that it cannot

C/SCA/7457/2020 JUDGMENT DATED: 07/04/2022

be so done in view of the pendency of a Court case.

10. On 6.1.2020, on account of certain personal reasons, the

petitioner once again addressed a letter to the Chairman of the

Committee requesting that he be relieved from his services and

his resignation be accepted. The Chairman, by communication

dated 8.1.2020 accepted the request of the petitioner writing to

him that the petitioner would be treated as retired from service

on and from 15.2.2020 after office hours. Accordingly, the

petitioner was to be treated as retired on and from 15.2.2020.

11. Showing this sequence of dates and events, Mr. Jay B. Trivedi,

learned counsel for the petitioner would submit that the action

of the APMC to issue a Show Cause Notice and appoint an

Inquiry Officer by a communication dated 3.10.2020 was

without authority of law, inasmuch as once the petitioner had

been relieved After Office Hours from 15.2.2020, he no longer

was an employee of the APMC, Botad and the appointment of

the Inquiry Officer to hold an inquiry was misconceived as

there was no employer - employee relationship between the

petitioner and the APMC. It was in these circumstances that

C/SCA/7457/2020 JUDGMENT DATED: 07/04/2022

the petitioner was entitled to be paid his gratuity, provident

fund, dearness allowance, leave encashment and salary that

were withheld. Reliance was placed by Mr. Jay B. Trivedi,

learned counsel for the petitioner on a decision in the case of

Kodarbhai Veerabhai Katara v. State of Gujarat reported in

2014(3) GLR 1902.

11.1. Mr. Trivedi, learned counsel for the petitioner

would also invite the Court's attention to a communication

dated 16.1.2020 of the Board, by which, the petitioner's

resignation / retirement was accepted and he was relieved and it

was decided to inquire into the aspect of the irregularity of user

charges which was decided to be handed over to a Chartered

Accountant namely; one M/s. B. G. Dani and Company.

11.2. Drawing support from the report of Chartered

Accountant, Mr. Jay B. Trivedi, learned counsel would submit

from the list of outstanding dues of the vegetable vendors, that

it was apparent that the communication which was addressed

by the petitioner on 6.10.2018 was justified, inasmuch as,

outstanding dues were shown against the names of vegetable

C/SCA/7457/2020 JUDGMENT DATED: 07/04/2022

vendors named in this communication.

11.3. Mr. Trivedi, learned counsel would also rely on the

Rules of the APMC which provided that the employer was

empowered to withhold gratuity based on the conduct of the

employee, when it was found that such an employee's conduct

was bad or that he had caused any loss to the Committee. In the

present case, once the petitioner no longer was an employee of

the Committee, it was not open for the APMC to continue the

inquiry.

12. Mr. C. B. Patel, learned counsel for the respondent - APMC

would submit that Rules 19, 23, 24 and 31(a) of the Employees

Services Rules empowered the APMC to initiate inquiry

against the petitioner for irregularities while the petitioner was

in service and when it was found that the petitioner was not

cooperating in handing over the records, which the learned

counsel for the respondent would show from the

communication annexed to the reply, it was decided by the

Committee to appoint an Inquiry Officer. In his submission,

before the petitioner relinquished his charge on and from

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15.2.2020, on 16.1.2020, the Board resolved that though the

petitioner would be relieved, a Show Cause Notice would be

issued to him. Mr. Patel, learned counsel for the respondent -

APMC would submit that the Chairman was maternal uncle of

the petitioner and it was because of this fiduciary relationship

that the resignation was accepted.

12.1. Mr. Patel would rely on the decision of the Hon'ble

Supreme Court in the case of Mahanadi Coalfields Limited v.

Rabindranath Choubey reported in 2020 SCC online SC 470.

Relying on paragraph No.23 of the decision, Mr. Patel would

submit that even after superannuation from service, if the

disciplinary proceedings are pending, it is within the power of

the employer to withhold the payment of the amount of

gratuity and where a departmental inquiry has been instituted

while he was in service and continued after he attained the age

of superannuation, a punishment can be imposed under the

Rules.

13. Considering the submissions made by the learned counsel for

the respective parties, what is evident is that the petitioner was

C/SCA/7457/2020 JUDGMENT DATED: 07/04/2022

an employee of APMC, Botad. While discharging his duties as

a Secretary on 6.10.2018, he had asked the Inspector to

exercise his powers and impound the accounts of vegetable

vendors who had committed certain irregularities. The reports

were not being submitted by the Inspector. Despite several

reminders, the reports were not being furnished and when the

Directors asked the petitioner to file compliance reports in

view of the opinion of the District Registrar, no action was

taken in response to the communication of the Directors.

14. In the meantime, the petitioner tendered his resignation which

the Chairman of the APMC accepted with a specific order that

the petitioner will be treated to have retired and relieved from

his services with effect from 15.2.2020. That was an

application of tendering voluntary retirement. The

communication of 16.1.2020 cannot be said to be a notice to

the petitioner issued for the purposes of initiating

departmental proceedings. It was a Resolution of the Board

ratifying the action of the Chairman in accepting the

petitioner's retirement and relieving him with effect from

15.2.2020.

C/SCA/7457/2020 JUDGMENT DATED: 07/04/2022

15. What the Resolution indicates is that the inquiry with regard to

recovery of user charges would be handed over to a Chartered

Accountant on the panel namely: M/s. B. G. Dani & Company.

This cannot be said to be a communication in the nature of

Show Cause Notice or the charge-sheet to the petitioner to

support the stand of the APMC, Botad that before the

petitioner was relieved with effect from 15.2.2020, the

proceedings for holding a departmental inquiry were initiated.

In fact, after the petitioner was treated to have been relieved

from 15.2.2020 and after several adjournments in this petition

during the course of hearings, the Committee issued a notice

on 3.10.2020 asking for explanation from the petitioner, on the

very short-comings for which the petitioner had issued notice

to the Inspector in October, 2018 and the inquiry of which was

handed over to the Chartered Accountant. This, therefore, was

not only clearly an after-thought on the part of the Committee

to stall giving all the terminal benefits pursuant to the petition

filed by the petitioner in this Court but to create a situation

where on a purported pending inquiry, such benefits be

withheld.

C/SCA/7457/2020 JUDGMENT DATED: 07/04/2022

16. The decision in the case of Rabindranath Choubey (Supra)

will not be helpful to the respondent - APMC. Before the

Hon'ble Supreme Court, the case on hand, was with regard to

the interpretation of the Regulations of the Bank, which

permitted the Bank to continue the departmental proceedings

on superannuation of an employee under the Regulations of the

Bank. The other aspect was with regard to proceedings initiated

in tandem under the Payment of Gratuity Act. These were the

two questions which were answered by the Hon'ble Supreme

Court, inasmuch as, the Hon'ble Supreme Court held that even

if an employee was dismissed based on a departmental

proceedings, the order of dismissal could be invalid even

though the employee had otherwise superannuated.

17. The facts of this case would indicate otherwise. Here was a

case where by virtue of a resignation letter tendered by the

petitioner for voluntary retirement by a communication dated

8.1.2020, the Chairman of the Committee accepted his

retirement with effect from 15.2.2020. 8 months after he was

relieved from services and when the Committee's Board

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ratified his retirement, a Show Cause Notice was issued

appointing an Inquiry Officer to inquire into some charges.

Once the petitioner had been relieved from the services of the

Committee and the employer-employee relationship had

snapped and in absence of any proceedings prior to he being

relieved and no rule empowering such continuance, it was not

open for the respondent to withhold any of the benefits which

the petitioner was entitled.

18. In the case of Indian Bank and another v. Mahaveer

Khariwal reported in 2021 (2) SCC 632, this precisely was

under consideration of the Hon'ble Supreme Court, where it

was a case in which an employee requested for dispensation of

three months notice and paying the salaries. However, after the

period expired, the Bank sought to reject the application for

voluntary retirement on certain grounds. The Hon'ble Supreme

Court held that once the period of 90 days was over, the

voluntary retirement was deemed to have been accepted and it

was not open for the Bank to reject such an application.

Paragraph Nos.18 to 23 of the decision read as under:

"18. On a fair reading of Regulation 29, it emerges that an employee is entitled to apply for voluntary retirement after he has completed

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20 years of qualifying service. He can apply for voluntary retirement by giving notice of not less than three months in writing to the appointing authority (Regulation 29(1)). However, as per proviso to Sub Regulation (1) of Regulation 29, Sub Regulation (1) of Regulation 29 shall not apply to an employee who is on deputation or on study leave on abroad unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year. The said proviso shall be dealt with and considered herein below.

19. It also appears that as per Sub Regulation (2) of Regulation 29, the notice of voluntary retirement given under Sub Regulation (1) shall require acceptance by the appointing authority. However, as per the proviso to Sub regulation (2), the appointing authority has to take a decision before the expiry of the period specified in the notice. It provides that where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the notice, there shall be deemed acceptance of the voluntary retirement application and the retirement shall become effective from the date of expiry of the period mentioned in the notice. However, at the same time, as per Sub Regulation 3(a), an employee may make a request in writing to the appointing authority for waiver of the three months' notice and may make a request to accept the notice of voluntary retirement of less than three months giving reasons thereof. Sub Regulation 3(b) provides that on receipt of a request for waiver of three months' notice as per Sub Regulation 3(a), the appointing authority may, subject to the provisions of Sub Regulation (2), consider such request for the curtailment of the period of notice of three months on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of notice of three months on the condition that the employee shall not apply for commutation of a part of the pension before the expiry of the notice of three months.

20. In the present case, the application of the employee submitting the voluntary retirement application with a request for curtailment of notice of three months was absolutely in consonance with Regulation

29. The request made by the employee for curtailment of the period of notice of three months was required to be considered by the appointing authority on merits and only in a case where it is found that the curtailment of the period of notice may cause any administrative inconvenience, the request for curtailment of the period of three months' notice can be rejected. On considering the communication dated 20.04.2004 rejecting the application of the employee for voluntary retirement, it does not reflect any compliance of Sub Regulation 3(b) of Regulation 29. As such, no reasons whatsoever have been assigned/given except stating that the request is not in accordance with Pension Regulations, 1995. Even otherwise, it is required to be noted that even the communication dated 20.04.2004 was on the last day of the third month, i.e., 90th day from the date of submitting the voluntary retirement application.

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Therefore, there was no reason to reject the prayer of curtailment of the period of notice considering the grounds mention in Sub Regulation 3(b) of Regulation 29.

21. Be that as it may, the rejection of the application for voluntary retirement was not on the ground that notice of three months is not given. The request made by the employee for curtailment of notice of three months was also not considered on merits. Therefore, as rightly held by the Division Bench of the High Court, the application for voluntary retirement was absolutely in consonance with Regulation 29 and that the rejection was bad in law and contrary to Regulation 29. The Division Bench of the High Court is absolutely justified in quashing and setting aside the communication dated 20.04.2004. We are in complete agreement with the view taken by the Division Bench.

22. Now so far as the submission on behalf of the employer that the employee was not eligible for voluntary retirement in view of proviso to Sub Regulation (1) of Regulation 29 as after he returned to India from Colombo Branch he did not serve for a period of not less than one year is concerned, there is a specific finding given by the Division Bench that the said proviso shall not be applicable to the facts of the case on hand as in the present case the employee was on transfer to Colombo Branch and was not on deputation. If we look at order dated 19.03.1998, it cannot be said that the employee was sent on deputation as Chief Manager, Colombo Branch. It says that he is posted as Chief Manager, Colombo Branch. Even when he was relieved from Colombo Branch to join at Defence Colony Branch, New Delhi, in the communication dated 25.08.2003 (Annexure P5), it speaks about the transfer order dated 13.05.2003. It is not the order of repatriation. Therefore, proviso to Sub Regulation (1) to Regulation 29 shall not be applicable.

23. Now so far as the submission on behalf of the employer that the acceptance or nonacceptance of the voluntary retirement application is required to be taken before the expiry of the period specified in the notice, i.e., in the present case three months and the same was taken on the last date of the three months' period and date of receipt of the decision/communication is not material, it is true that in the present case the decision was taken before the expiry of the period specified in the notice, i.e., on or before three months (last day of the third month), however, as observed hereinabove, the rejection of the application for voluntary retirement itself is found to be illegal and bad in law. Therefore, the aforesaid shall not affect the ultimate conclusion reached by the Division Bench of the High Court. As observed hereinabove, communication dated 20.04.2004 rejecting the voluntary retirement application was bad in law and contrary to Regulation 29. Therefore, the employee shall be entitled to all retiral benefits on the basis of his voluntary retirement. Once, it is held that he is voluntary retired as per his application dated 21.01.2004 and the rejection of the application of voluntary retirement is held to be bad in law, all other subsequent proceedings of departmental inquiry

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will be null and void and shall be non est, as after the voluntary retirement, there shall not be an employer-employee relationship."

19. Accordingly, the petition is allowed. The action of the

respondent - APMC to continue the departmental proceedings

pursuant to the Show Cause Notice of 3.10.2020 are held to be

without authority of law. The petitioner shall be entitled to all

terminal benefits on the basis of he having been relieved from

the APMC with effect from 15.2.2020. The benefits entitled to

be computed and paid to the petitioner such as Provident Fund,

Gratuity, Leave Encashment etc. by the respondent - APMC

within a period of ten weeks from the date of receipt of copy of

this judgment. Rule is made absolute to that extent. Direct