Karnataka High Court

Sahitya Akademi vs Sri Agrahara Krishnamurthy on 19 January, 2022

Bench: S.Sujatha, Ravi V Hosmani

  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 19TH DAY OF JANUARY, 2022

                       PRESENT

         THE HON'BLE MRS.JUSTICE S.SUJATHA

                         AND

       THE HON'BLE MR. JUSTICE RAVI V. HOSMANI

               W.A.No.3604/2019 (S - DE)

BETWEEN:
SAHITYA AKADEMI
[NATIONAL ACADEMY OF LETTERS]
RABINDRA BHAVAN
35, FEROZESHAH ROAD
NEW DELHI - 110001
REPRESENT BY ITS PRESIDENT
SRI CHANDRASHEKHAR
BASAVANNEPPA KAMBARA.                   ...APPELLANT

             (BY SRI M.NARAYANA BHAT, ADV.)

AND:
SRI AGRAHARA KRISHNAMURTHY
S/O SRI A.P.K. JETTY
AGED ABOUT 67 YEARS
R/AT NO.S-4, 'A' BLOCK
SHANTINIKETAN APARTMENTS
ARAKERE, BANGALORE-560076.              ...RESPONDENT

             (BY SRI GAUTAMADITYA.S., ADV.)

      THIS W.A. IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT PRAYING TO ALLOW THIS WRIT
APPEAL AND SET ASIDE THE ORDER DATED 26.07.2019
PASSED IN WRIT PETITION No.28348/2014 BY THE LEARNED
SINGLE JUDGE OF THIS HON'BLE COURT AND DISMISS THE
WRIT PETITION AS PRAYED FOR.
                           -2-



      THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
12.01.2022,  COMING   ON   FOR  PRONOUNCEMENT    OF
JUDGMENT, THIS DAY, S. SUJATHA, J., DELIVERED THE
FOLLOWING:

                   JUDGMENT

This intra Court appeal is filed by the appellant -

Sahitya Akademi assailing the order dated 26.07.2019

passed in W.P.No.28348/2014 whereby the writ petition

filed by the respondent herein has been allowed.

2. The appellant - Sahitya Akademi claims to

be a society registered under the Societies Registration

Act, 1960. The Service Bye-laws of 1999 ['Bye-laws' for

short] of the Society has come into effect on 04.08.2000

being finally approved by the Executive Board.

3. The respondent contends that he joined the

services of the appellant - Sahitya Akademi in 1986 as

the Deputy Secretary, Southern Regional Office, he

thereafter promoted to the post of Regional Secretary,

Southern Regional Office. He was appointed as the

secretary of the appellant - Sahitya Akademi on

16.05.2006 and retired on 31.01.2013 after attaining

the age of superannuation. The petitioner has

challenged the letter - second show cause notice dated

13.11.2013 [Annexure-AB] issued by the appellant -

Sahitya Akademi along with the enquiry report and the

order dated 03.06.2014 [Annexure-AC] issued by the

appellant - Sahitya Akademi inter alia challenging the

disciplinary proceedings initiated against the

respondent thereby restraining the appellant - Sahitya

Akademi from deducting any amount from the pension,

increments and other emoluments accruable to the

respondent with other consequential reliefs.

4. The matter was contested by the appellant -

Sahitya Akademi. The Learned Single Judge after

hearing both sides, allowed the petition answering the

three issues formulated therein as under:

"(a) This Court has territorial jurisdiction in view of factual aspects analyzed in the proceeding paragraphs.

(b) Petitioner was a Regular holder of the post of Secretary in terms of service byelaws of the Akademi and he was appointed against pay scale with reference to Central Government pay scale read with role of Ministry of Culture, Government of India. Respondent-Akademi would come under purview under Article 12 of the Constitution of India.

(c) Petitioner was regular holder of the post of Secretary with particular scale of pay. Various Government of India Rules and Executive orders are invoked in connection with service conditions, as is evident from Bye-law. Annexure-AB dated 13.11.2013 and Annexure-AC 3.6.2014 are set aside."

Being aggrieved by the said order, the Sahitya

Akademi has preferred this writ appeal.

5. Learned counsel for the appellant has not

seriously pressed the jurisdictional aspect and the

status of the appellant as authority under Article 12 of

the Constitution of India. Thus, the challenge now is

focused on Clause[c] of the paragraph 33 of the learned

Single Judge's order in quashing the Annexure-AB and

Annexure-AC dated 13.11.2013 and 03.06.2014

respectively.

6. Learned counsel for the appellant submitted

that the learned Single Judge having recorded a finding

that the pay, increment, pension, gratuity, holiday,

service conditions of the Sahitya Akademi being

governed by the same Rules as are applicable to Central

Government Employees, erred in coming to a conclusion

that there is no provision for continuation of the

departmental enquiry after the retirement of the

employee and to recover the loss. Inviting the attention

of the Court to Rule 9 of Central Civil Services Pension

Rules, 1972 ['Rules' for short] read with para 31 of

Chapter VII - General Provident Fund and para 36 of

Chapter IX of the Sahitya Akademi Service Bye-laws,

submitted that the interpretation given to para 17

relating to penalties in the Bye-aws runs contrary to the

objective of Bye-aws and the Rules. Learned counsel

has placed reliance on the judgment of the Hon'ble Apex

Court in the case of Chairman-Cum-Managing

Director, Mahanadi Coalfields Limited V/s.

Rabindranath Choubey [2020 SCC OnLine SC 470] in

support of his contention that the employer - Sahitya

Akademi can withhold the payment of gratuity of the

respondent [employee], after his superannuation from

service as the disciplinary proceedings were initiated

against the respondent prior to his retirement.

7. Learned counsel for the respondent

supporting the impugned order submitted that the

penalty provision contemplated in the Bye-laws could not

be imposed on the retired employee albeit initiation of

enquiry during the service period. Distinguishing the

judgment of the Hon'ble Apex Court in Chairman-Cum-

Managing Director, Mahanadi Coalfields Limited

supra, relied upon by the judgment of the Hon'ble Apex

Court in the case of State of Jharkhand and Others

V/s. Jitendra Kumar Srivastava and Another [(2013)

12 SCC 210], it was argued that the Bye-laws of the

appellant relating to para 36 in Chapter-IX provides for

the modalities; Central Government Pension Rules are

not applicable to the Sahitya Akademi; nowhere in the

impugned orders/letters, any reference has been made

to Rule 9 of the said Rules; no mandate prescribed under

Rule 9 has been complied with. Learned counsel

submitted that Para 17 - Penalties have to be read

without deemed importation of Rule 9 of the Rules. The

phrase 'employee' being defined under the Bye-laws,

para 17 has to be interpreted in the light of the said

definition clause. Learned Single Judge has rightly

analyzed these provisions and allowed the writ petition.

Thus, sought for confirmation of the order passed by the

learned Single Judge dismissing the writ appeal.

8. We have given our thoughtful consideration

to the arguments advanced by the learned counsel for

the parties and perused the material on record.

9. As discussed in the preceding paragraphs,

now the controversy is restricted only to Clause[c] of

para 33 of the impugned judgment. Para No.17 of the

Bye-laws relates to penalties and the same is quoted

hereunder for ready reference:

"Penalties 17. The following penalties may, for good and sufficient reasons and as hereinafter provided be imposed on any employee:

(i) censure;

(ii) withholding of increments or promotion;

(iii) suspension;

(iv) recovery of any pecuniary loss caused to the Akademi by negligence or breach of the rules or Bye-laws of the Akademi directions or orders of or superior authorities;

(v) reduction to a lower grade or post or to a lower stage in a time-scale;

(vi) compulsory retirement; and

(vii) dismissal from service."

Paragraphs 31 and 36 of the Bye-laws read thus:

"Application of Central Government Rules

31. In the matter of subscription to the General Provident Fund, withdrawal therefrom and in matters incidental thereto, employees of the Akademi shall be governed by the provision of the General Provident Fund (Central Services) Rules, 1960 as amended from time to time subject to the following modifications:

(a) The expression 'Accounts Officer' means the Deputy Secretary (Accounts) of the Akademi.

(b) The expression 'Head of Office' means, for employees in Group B, C and D, the Deputy Secretary in charge of Establishment and, for employees in Group A, the Secretary.

(d) The expression 'sanctioning authority' means the Secretary for employees in Groups A and B and the Deputy Secretary (Establishment) for

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employees in Groups C and D.

Pension and Gratuity

36. Every employee of the Akademi shall be entitled to pension and gratuity in accordance with the rules of the Government of India in that behalf."

10. Annexure-AB is the show cause notice

issued to the respondent along with the enquiry report

to which the respondent submitted a reply dated

19.12.2013 to the Hon'ble President of India through

the President of appellant - Sahitya Akademi. After

considering the said reply, the order dated 03.06.2014

[Annexure-AC] has been passed by the Sahitya Akademi

imposing compulsory retirement of the respondent by

applying Rule 11 [vii] of CCS [CCA Rules], 1972 read

with Clause 17[vi] of the Bye-laws of the Sahitya

Akademi holding that the respondent is not entitled to

any back-wages, notional increments, consequential

benefits of salary and other allowances, for the period of

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suspension except the subsistence allowance, if already

received may not be recovered with a condition that the

period of suspension may be treated as 'not on duty'.

Further, the General Council having found that the

respondent has committed the pecuniary loss of

Rs.70,36,705/- to the Sahitya Akademi, ordered to

recover a sum of Rs.30,00,000/- as per Rule 11 [iii] of

CCS [CCA Rules] read with Service Byelaw No.17[iv]

from the retirement and pensionary benefits of the

respondent.

11. The Hon'ble Apex Court in the case of

Jitendra Kumar Srivastava and Another supra, held

that the gratuity and pension are not bounties. This

right cannot be taken away without the due process of

law. It is apt to refer to the relevant paragraphs which

read thus:

"8. It is an accepted position that gratuity and pension are not the bounties. An employee earns these benefits by dint of his long, continuous, faithful and un-blemished

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service. Conceptually it is so lucidly described in D.S. Nakara and Ors. Vs. Union of India; (1983) 1 SCC 305 by Justice D.A.Desai, who spoke for the Bench, in his inimitable style, in the following words:[SCC pp. 319-20, paras 18-20]

"18. The approach of the respondents raises a vital and none too easy of answer, question as to why pension is paid. And why was it required to be liberalised? Is the employer, which expression will include even the State, bound to pay pension? Is there any obligation on the employer to provide for the erstwhile employee even after the contract of employment has come to an end and the employee has ceased to render service?

19. What is a pension? What are the goals of pension? What public interest or purpose, if any, it seeks to serve? If it does seek to serve some public purpose, is it thwarted by such artificial division of retirement pre and post a certain date? We need seek answer to these and incidental questions so as to render just justice between parties to this petition.

20. The antiquated notion of pension being a bounty a gratituous payment depending upon the sweet will or grace of the employer not claimable as a right and, therefore, no right to pension can be enforced through Court has been swept under the carpet by the decision of the Constitution Bench in DeokiNandan Prasad v. State of Bihar and Ors. [(1971) Supp. S.C.R. 634]

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wherein this Court authoritatively ruled that pension is a right and the payment of it does not depend upon the discretion of the Government but is governed by the rules and a Government servant coming within those rules is entitled to claim pension. It was further held that the grant of pension does not depend upon any one's discretion. It is only for the purpose of quantifying the amount having regard to service and other allied maters that it may be necessary for the authority to pass an order to that effect but the right to receive pension flows to the officer not because of any such order but by virtue of the rules. This view was reaffirmed in State of Punjab and Anr. V. Iqbal Singh (1976) 2 LLJ 377 SC."

It is thus hard earned benefit which accrues to an employee and is in the nature of "property". This right to property cannot be taken away without the due process of law as per the provisions of Article 300 A of the Constitution of India.

16. Fact remains that there is an imprimatur to the legal principle that the right to receive pension is recognized as a right in "property". Article 300 A of the Constitution of India reads as under:

"300-A. Persons not to be deprived of property save by authority of law. - No person shall be deprived of his property save by authority of law."

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Once we proceed on that premise, the answer to the question posed by us in the beginning of this judgment becomes too obvious. A person cannot be deprived of this pension without the authority of law, which is the Constitutional mandate enshrined in Article 300 A of the Constitution. It follows that attempt of the appellant to take away a part of pension or gratuity or even leave encashment without any statutory provision and under the umbrage of administrative instruction cannot be countenanced."

12. In the case of Chairman-Cum-Managing

Director, Mahanadi Coalfields Limited supra, the

Hon'ble Apex Court while considering the Conduct,

Discipline and Appeal Rules, 1978 ['CDA Rules' for

short] framed by the Mahanadi Coalfields Limited, has

considered two questions. The first question which is

relevant for the purpose of the present case is, whether

it is permissible in law for the employer to withhold

amount of gratuity payable to the employee, even after

his superannuation from service, because of the

pendency of the disciplinary proceedings pending

against him?

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13. Rule 34.3 of the CDA Rules reads thus:

"34.3 During the pendency of the disciplinary proceedings, the Disciplinary Authority may withhold payment of gratuity, for ordering the recovering from gratuity of the whole or part of any pecuniary loss caused to the company if have been guilty of offences/ misconduct as mentioned in Sub-section (6) of Section 4 of the payment of gratuity act, 1972 or to have caused pecuniary loss to the company by misconduct or negligence, during his service including service rendered on deputation or on re-employment after retirement. However, the provisions of Section 7(3) and 7(3A) of the Payment of Gratuity Act 1972 should be kept in view in the event of delayed payment in the case the employee is fully exonerated."

14. Considering Rule 34.3 of the CDA Rules, and

Section 4 of the payment of gratuity act, 1972, the

Hon'ble Apex Court has held thus:

"28. Once it is held that a major penalty which includes the dismissal from service can be imposed, even after the employee has attained the age of superannuation and/or was permitted to retire on attaining the age of superannuation, provided the disciplinary proceedings were initiated while the employee was in service, sub-section 6 of Section 4 of the Payment of Gratuity Act shall be attracted and the amount of gratuity can

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be withheld till the disciplinary proceedings are concluded.

29. Even otherwise, Rule 34.3 of the CDA Rules permits withholding of the gratuity amount during the pendency of the disciplinary proceedings, for ordering recovering from gratuity of the whole or part of any pecuniary loss caused to the company if have been guilty of offences/misconduct as mentioned in sub- section 6 of Section 4 of the Payment of Gratuity Act, 1972 or to have caused pecuniary loss to the company by misconduct or negligence, during his service. It further makes clear that Rule 34.3 for withholding of such a gratuity would be subject to the provisions of Section 7(3) and 7(3A) of the Payment of Gratuity Act, 1972 in the event of delayed payment in the case of an employee who is fully exonerated. Rule 34.3 of the CDA Rules is in consonance with sub-section 6 of Section 4 of the Payment of Gratuity Act and there is no inconsistency between sub-section 6 of Section 4 of the Payment of Gratuity Act and Rule 34.3 of the CDA Rules. Therefore Section 14 of the Act which has been relied upon shall not be applicable as there is no inconsistency between the two provisions."

15. There being a specific provision, Rule 34.3,

for withholding of the payment of gratuity during the

pendency of the disciplinary proceedings vis-à-vis the

power vested with the employer to impose major penalty

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which includes the dismissal from service, even after

the employee has attained the age of superannuation,

the Hon'ble Apex Court considering the grave

misconduct committed by the employee has held that

the amount of gratuity can be withheld during the

disciplinary proceedings. With great respect, this

judgment is not applicable to the case on hand. But in