Ramanbhai Mathurbhai Tadvi vs Dakshin Gujarat Vij Co Ltd
2022 Latest Caselaw 1175 Guj

     C/SCA/6835/2019                                    JUDGMENT DATED: 03/02/2022



             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

               R/SPECIAL CIVIL APPLICATION NO. 6835 of 2019

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE A.S. SUPEHIA
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1     Whether Reporters of Local Papers may be allowed                        NO
      to see the judgment ?

2     To be referred to the Reporter or not ?                                YES

3     Whether their Lordships wish to see the fair copy                       NO
      of the judgment ?

4     Whether this case involves a substantial question                       NO
      of law as to the interpretation of the Constitution
      of India or any order made thereunder ?

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                         RAMANBHAI MATHURBHAI TADVI
                                    Versus
                          DAKSHIN GUJARAT VIJ CO LTD
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Appearance:
MR SHAKTI JADEJA FOR MR SP MAJMUDAR(3456) for the Petitioner(s)
No. 1
MR.KRUTARTH K PANDYA(7092) for the Petitioner(s) No. 1
MR DIPAK R DAVE(1232) for the Respondent(s) No. 4
RULE SERVED for the Respondent(s) No. 1,2,3
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    CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
                      Date : 03/02/2022
                     ORAL JUDGMENT

1. The present writ petition has been filed inter alia seeking quashing and setting aside the orders dated 26.02.2019, 30.03.2017, 27.06.2014 and the inquiry report dated 20.08.2016.

2. At the outset, learned advocate Mr.Dipak Dave appearing for the respondent-Company has submitted that appropriate remedy to challenge the aforesaid order is before the concerned

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Labour Court under the Industrial Disputes Act, 1947 and not by way of a writ petition before this Court. He has submitted that the petitioner is a workman and the respondent-Company is an Industry, hence the writ petition is not maintainable.

3. Learned advocate Mr.Shakti Jadeja appearing for the petitioner has submitted that since the impugned orders are passed without authority of law and against the statute, the petitioner has filed the present writ petition directly before this Court challenging the action of the respondents and the dispute is not an industrial dispute and hence, the writ petition is maintainable.

3.1 He has invited attention of this Court to the impugned order dated 30.03.2017 passed by the Executive Engineer forfeiting the amount of leave encashment and gratuity in view of the proved misconduct. He has further invited attention of this Court to the retirement order passed by the respondent authorities retiring the petitioner from service. It is submitted by him that by the order dated 06.06.2014, the petitioner was ordered to be relieved from service on attaining the age of superannuation w.e.f. 30.06.2014. He has submitted that by the order dated 27.06.2014, the petitioner was retired from service subject to final decision of the disciplinary proceedings.

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3.2 Learned advocate Mr.Jadeja has submitted that the impugned orders forfeiting the gratuity of the petitioner is contrary to the provisions of Section 4 of the Payment of Gratuity Act, 1972 (for short "the Act") since the final order of termination has not been passed and without passing such order, the amount of gratuity and leave encashment could not have been withdrawn. He has further submitted that the departmental proceedings are also held illegal since no documents were provided to the petitioner.

3.3 It is submitted by him that the charges levelled against the petitioner pertain to the period of 2007-08 for about 49 work orders however, no documents were produced proving the aforesaid charges. He has submitted that in the departmental proceedings, the petitioner had filed various applications/ letters dated 18.03.2013, 06.04.2013, 06.06.2013, 21.10.2013 and 28.10.2013 and had requested to supply him the documents, however the same were not supplied. It is submitted by him that thus, the inquiry proceedings are also illegal and hence, the impugned orders may be set aside.

3.4 Learned advocate Mr.Jadeja has further placed reliance on the circular dated 20.08.2011, whereby it was decided to implement the Service Regulation No.72 of the respondent-Company. It is submitted that the said Circular reveals that the provision of the Act are required to be followed

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before forfeiting the amount of gratuity pending the disciplinary action. It is reiterated by him that since no termination order or no final order was passed in the disciplinary proceedings, the respondents could not have directly passed the order forfeiting the amount of gratuity and leave encashment.

3.5 In support of his submissions, he has placed reliance on the judgement of the Apex Court in the case of Union Bank of India vs C.G. Ajay Babu, 2018 (9) S.C.C. 529.

4. In response to the aforesaid submissions, learned advocate Mr.Dipak Dave has submitted that the writ petition may not be entertained in view of the alternative efficacious remedy of approaching the Labour Court against the impugned orders and the departmental proceedings. He has submitted that assuming the contention raised by the petitioner with regard to defective inquiry is taken as it is, then also it is always open for the Labour Court to hold the departmental inquiry in this regard and the petitioner will have an opportunity to prove whether the inquiry is invalid or illegal.

4.1 Learned advocate Mr.Dave has submitted that the recent judgement of the Apex Court in the case of Chairman Cum Managing Director Mahanadi Coalfields Limited Vs. Sri Rabindranath Choubey, A.I.R. 2020 S.C. 2978, the Apex Court has

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overruled the judgement in the case of Jaswant Singh Gill vs M/S. Bharat Coking Coal Ltd. & Ors , (2007) 1 S.C.C. 663. He has submitted that the case, upon which the reliance is placed by the petitioner i.e. C.G. Ajay Babu (Supra) is premised on the law declared by the Apex Court in the case of Jaswant Singh Gill (supra), which is subsequently overruled by the recent decision by the Apex Court.

4.2 Learned advocate Mr.Dave has submitted that the regulations of the respondent-Company permit the continuation of the departmental proceedings even after retirement of the employee, more particularly Service Regulation No.72. He has submitted that accordingly, the petitioner, who was facing the serious charges, when he was working at the Ankleshwar Rural Division had reached the age of superannuation. He has submitted that since the Service Regulation No.72 permits the respondent-Company to continue the departmental proceedings even after retirement, accordingly the order dated 27.06.2014 was passed permitting the petitioner to retire from service with observation that the terminal benefits like leave encashment, gratuity will be subject to final order of the disciplinary proceedings.

4.3 Learned advocate has further submitted that since the charges were proved against the petitioner, the impugned order was passed forfeiting the leave encashment and gratuity as

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the petitioner has reached the age of superannuation. Thus, it is submitted that in view of the recent judgement of the Apex Court, the writ petition may not be entertained first, on the ground of having alternative efficacious remedy of approaching the Labour Court and second, the respondent-Company is having powers under the provisions of the Act as well as under their regulations forfeiting the amount of gratuity and leave encashment.

CONCLUSION

5. Heard the learned advocates for the respective parties and also perused the documents as pointed out by them.

6. At the outset, the respondent-Company has raised a specific objection with regard to maintainability of the writ petition before this Court in wake of availability of alternative efficacious remedy of raising industrial dispute by filing appropriate proceedings before the Labour Court.

7. As noted hereinabove, the writ petition is filed directly before this Court without resorting to the remedies under the I.D.Act, 1947 alleging that the action of the respondent- Company is without authority of law and against the provisions of section 4 of the Payment of Gratuity Act. The petitioner has not disputed

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that the provisions of the I.D.Act are not applicable to him. In the considered opinion of this Court, the petitioner has to approach the Labour Court in order to challenge the action of the respondent-Company and to seek a declaration as to whether the impugned order forfeiting his gratuity and amount of leave enchashment is premised on an illegal and invalid inquiry. If the petitioner succeeds in establishing that he has been a victim of the illegal action of the respondent-Company, he will get his gratuity and the amount of leave encashemnt. The Labour Court is vested with ample power to examine the entire dispute. It is well settled proposition of law, that in case of a defective enquiry, the Labour Court can grant an opportunity to lead evidence before it. (Vide : Workmen of Firestone Tyre & Rubber Co. of India (P) Ltd. v. The Management of Firestone Tyre & Rubber Co. of India (P) Ltd and Others., (1973) 1 SCC 813). Thus, the remedy before the Labour Court is a statutory and efficacious, wherein all the facts with regard to holding the departmental inquiry, including issuance of charge-sheet and imposition of the punishment, which is impugned before this Court, can be examined threadbare. Hence, the petitioner has an efficacious statutory remedy under the provisions of I.D.Act, 1947.

8. Before deciding the issue with regard to the exercise of powers by the respondent in

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forfeiting the amount of gratuity and leave encashment, this Court had pointed out to the learned advocate Mr.Jadeja that any observations made in this regard may affect his case before the Labour Court. However, he has insisted that the issue may be decided since it only pertains to examining the exercise of powers by the respondent under the Payment of Gratuity Act and the Regulations.

9. In order to appreciate the challenge of the impugned order dated 30.03.2017 on the ground that the same is without authority of law and in violation of provision of section 4 of the Payment of Gratuity Act, the examination of the following facts would be necessary.

10. The petitioner was served with a charge-sheet on 24.05.2012 for holding a departmental inquiry. During pendency of the departmental proceedings, he reached the age of superannuation on 30.06.2014 and by an Officer Order dated 27.06.2014, the petitioner was permitted to retire from service by observing thus:

"This office order bearing No.ANK/O&M/HR/14/3343 Dtd.06.06.2014 issued for Stands relieved from the company's service w.e.f. 30.06.2014 on account of attaining of superannuation of Age which is unchanged and further addition with the order to read as under:

The disciplinary actions are pending against charge sheet issued to Shri R.M.Tadvi Surveyor vide Charge sheet No. ANK/DGVCL/HR/RMT/12/34 Dtd. 24.05.2012, shall be continued up to till the final

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out come of same the terminal benefits i.e. gratuity and leave encashment as per amendment of SR. No.72 issued vide circular No. DGVCL/HR/SR - 24/SR - 72/SR - 236/07/6423 Dtd. 13.09.2007, shall be withheld and shall be dealt with the final order of finalization of disciplinary action proceedings."

11. A scrutiny of the Office Order reveals that it stipulates that the gratuity and leave encashment shall be withheld and dealt as per the final order passed in the disciplinary proceedings and Service Regulation No.72 issued vide circular dated 13.09.2007. After the departmental proceedings were held, the charges were proved against the petitioner and ultimately, the impugned order dated 30.03.2017 has been passed forfeiting the amount of gratuity and leave encashment. Thus, the petitioner was allowed to retire from service subject to final order passed in the departmental proceedings.

12. It is not in dispute that the aforesaid amount is withheld/forfeited by exercising power under Service Regulation No.72 of the Respondent- Company. The same reads as under:

"Existing provision under SR-72

Notwithstanding any thing contained in the forgoing provisions, an employee against whom disciplinary proceedings is contemplated or has been initiated or has been charge sheeted irrespective of whether employee is under suspension or not, shall be allowed to retire on attaining the age of superannuation and the employer shall have the right to initiate or continue the disciplinary proceedings. However such proceedings shall not be initiated or

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continued beyond four years after the date of retirement. The payment of Gratuity and other terminal benefits shall be withheld during the pendency of such proceedings and the same shall be dealt with in accordance with the final order that shall be issued on completion of the proceedings."

13. A close reading of the Service Regulation No.72 will indicate that the same empowers the respondent-Company to continue the departmental proceedings initiated against the employee even after his retirement and it is specifically prescribed that the amount of gratuity and other terminal benefits shall be withheld pending such proceedings and the same shall be dealt with in accordance with the final order issued on completion of the proceedings. Thus, Service Regulation No.72 empowers the respondent to deal with the amount of gratuity and terminal benefits in accordance with the final order that shall be passed in completion of the departmental proceedings. The power of forfeiting the gratuity and terminal benefit is integral and intrinsic of Service Regulation No.72, otherwise the same will become redundant and will have no deterrent effect. The said Regulation is not challenged by the writ petitioner.

14. The entire case of the petitioner is premised on Section 4 of the Payment of the Gratuity Act. The same reads as under:

"(6) Notwithstanding anything contained in sub- section (1),--

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission

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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 17 [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."

15. It is the case of the petitioner and vehemently contended by the learned advocate Mr.Jadeja that such order could not have been passed, without there being any order of termination of service as stipulated in clause(a) of section 6, since the petitioner had retired from service. It is contended that after reaching the age of superannuation, the impugned order could not have been passed forfeiting the amount of gratuity and leave encashment in absence of any termination.

16. At this stage, it would be apposite to refer to the decision of the Apex Court in the case of Rabindranath Choubey (supra). The Apex Court, while examining the provision of Section 4 of the Payment of Gratuity Act, has held thus:

"10.19 The provisions of Section 4(6) of the Act of 1972 prevail over Section 4(1) as provisions of Section 4(6) contain non obstante clause as to Section 4(1). It would prevail over the provisions made in Section 4(1) and gratuity would not become payable mandatorily as provided in Section 4(1). The provisions of Section 4(6) provide recovery or

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forfeiture where services of employee have been terminated for the reasons prescribed in Section 4(6)

(a) and 4(6)(b). Section 4(6)(a) and (b) both provide for recovery of loss caused or forfeiture wholly or partially in the case of termination of services. In case after superannuation of employee there cannot be any dismissal i.e., termination of services as contemplated in Section 4(6), then there can be no recovery of pecuniary loss caused by employee or forfeiture of gratuity wholly or partially as that can only be done in the event of termination of services on charges found established. Such an interpretation would render continuance of inquiry otiose and would defeat the public policy and the provisions of Act of 1972. The recovery of loss or forfeiture is one of the punishments which depends on exigency of termination by way of dismissal as mandated by Section 4(6). To give effect to the provisions of the Act, the punishment of dismissal can be imposed in view of Rule 34.2, otherwise it would defeat the intendment of provisions contained in Section 4(6)(a) and 4(6)(b) of the Act of 1972.

10.20 Section 4(1) used the expression 'termination of employment after five years by way of superannuation, retirement or resignation or on his death or disablement due to accident or disease' that is in a normal course. It does not deal with a situation where departmental inquiry is instituted and continued and completed after the age of superannuation and termination of employment had not taken place on completion of the age of superannuation as there is a deemed continuation of the employment for the purpose of holding an inquiry and passing the appropriate punishment order after the conclusion of the departmental inquiry on the basis of misconduct if any found established. Provisions of section 4(1) do not impinge upon the continuation of inquiry. Section 4(6) prevails on it. The Payment of Gratuity Act, 1972, can govern the conditions concerning payment of gratuity. It cannot control and provide with respect to an employer's right to hold a departmental inquiry after retirement, and there is no provision prescribing what kind of punishment can be imposed in the departmental inquiry if it is continued after attaining the age of superannuation. The relevant rules would govern such matters. In case the Payment of Gratuity Act, 1972, is interpreted to interdict

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the departmental inquiry after the age of superannuation and to deal with the nature of punishment to be imposed, it would be taken as a case of overinclusion in the Act which deals exclusively with the payment of gratuity."

17. As observed hereinabove, the Service Regulation No.72 of the respondent-Company permits the forfeiture of the gratuity and terminal benefits after the retirement. The Supreme Court has held that it is not only for pecuniary loss caused the proceedings can continue after the date of superannuation, but an employee can be proceeded against for a grave misconduct. The Apex Court has expressed disapproval of the interpretation of Section 4(6) of the Act in the manner as contended by the petitioner, which suggests that "in case after superannuation of the employee, there cannot be any dismissal i.e. termination of service as contemplated in Section 4(6) of the Act, and hence, there can be no recovery of pecuniary loss caused by employee or forfeiture of gratuity wholly or partially as that can only to be done in the event of termination of services on charges found established."

18. Thus, a conjoint reading of the observations made by the Apex Court and Service Regulation No.72 justifies the action of the respondent authorities in forfeiting the amount of leave encashment and gratuity of the petitioner as it empowers the respondent-Company to forfeit the same in case of proved misconduct against the

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employee, after holding the departmental proceedings. There is no requirement of passing actual order of termination since the Apex Court has observed that such order of termination of service of the employee could not be passed after retirement of the employee. Thus, merely because the petitioner has reached the age of superannuation and no termination order is passed; the same will not dilute the powers of the respondent-Company of forfeiting the amount of gratuity and leave encashment under its Regulation.

19. So far as validity of the inquiry proceedings is concerned, which is impugned in the present writ petition, this Court has not expressed any opinion at this stage, since any such observations will directly affect the proceedings before the Labour Court, it the same are intiated by the petitioner.

20. So far as the reliance placed by the learned advocate Mr.Jadeja on the judgement of the Apex Court in the case of C.G. Ajay Babu (supra) is concerned, the same will not rescue the petitioner since the judgement of the Apex Court is premised on the law enunciated in the case of Jaswant Singh Gill (supra), which is subsequently overruled by the recent decision of the Apex Court in the case of Rabindranath Choubey (supra).

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21. In light of the foregoing reasons, in the considered opinion of the Court, the writ petition deserves to be rejected in view of the availability of the alternate efficacious remedy under the provision of the I.D. Act. This Court has only expressed its opinion with regard to the powers exercised by the respondent-Company in forfeiting the amount of gratuity and leave encashment. It goes without saying that in case the petitioner succeeds before the Labour Court in establishing that the disciplinary proceedings are illegal and void; he is bound to get the amount of leave encashment and gratuity.

22. The writ petition is dismissed. Rule is discharged.

Sd/-

(A. S. SUPEHIA, J) NVMEWADA