Madras High Court
The Managing Director vs P.Soundararajan on 2 November, 2021
W.A.No.2202 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE ON WHICH RESERVED: 02.11.2021
DATE ON WHICH PRONOUNCED: 24.11.2021
CORAM:
THE HONOURABLE MR.JUSTICE S.VAIDYANATHAN
and
THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR
W.A.No.2202 of 2021
and
C.M.P.No.13937 of 2021
1.The Managing Director,
The Tamilnadu State Apex Co-operative
Bank Ltd.,
233, N.S.C.Bose Road,
Chennai – 600 001.
2.The Tamilnadu State Apex Co-operative
Bank Ltd.,
Rep. By its President,
233, N.S.C.Bose Road,
Chennai – 600 001.
3.The Deputy General Manager (HRD),
The Tamil Nadu State Apex Co-operative
Bank Ltd.,
233, N.S.C.Bose Road,
Chennai – 600 001. ... Appellants/Respondents
-vs-
P.Soundararajan ... Respondent/Writ Petitioner
Prayer: Writ Appeal filed under Clause 15 of Letters Patent, to allow the Writ
Appeal and quash the order passed by this Court in W.P.No.19880 of 2014, dated
23.12.202.
1/7
https://www.mhc.tn.gov.in/judis
W.A.No.2202 of 2021
For Appellants : Mr.A.Selvendran
For Respondent : Mr.Prakash Goklaney
*****
JUDGMENT
(Judgment of the Court was made by R.VIJAYAKUMAR,J.)
This Writ Appeal has been filed by the petitioners to quash the order, dated
23.12.2020 passed in Writ Petition in W.P.No.19880 of 2014.
2.The respondents in the Writ Petition are the appellants herein. The Writ
Petitioner was working as a Chief Manager in the Appellants' Bank and he retired
from service on 31.01.2013. The Writ Petitioner was settled all the dues except a
sum of Rs.2,84,000/- towards gratuity amount. The Appellants' Bank has passed an
order on 02.02.2013 withholding the gratuity amount to the tune of Rs.2,84,000/-
in lieu of overdues in 14 salary loans sanctioned by the Writ Petitioner while he
was working as a Chief Manager in Adambakkam West Branch.
3.Challenging this order of withholding the gratuity amount, the Writ
Petitioner filed W.P.No.19880 of 2014. After hearing both the parties, the learned
Single Judge allowed the Writ Petition on the grounds that the Appellants' Bank is
not entitled to withhold the gratuity amount even on the ground of pendency of
enquiry and the Appellants' Bank have no power to withhold the gratuity amount.
On the above said finding, the Writ Petition was allowed with a direction to the
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W.A.No.2202 of 2021
Appellants' Bank to settle the balance amount of Rs.1,80,228/- along with statutory
interest within a period of twelve weeks. The said order is under challenge in the
present Writ Appeal.
4. The learned counsel for the appellants contended that the Writ Petitioner
had attained the age of superannuation on 31.01.2013 and the impugned order of
the withholding the gratuity amount was passed on 02.02.2013. On 20.03.2014,
the Writ Petitioner has addressed a letter to the first respondent, authorizing the
bank to adjust the overdue loan amount from the gratuity amount and he was
agreeable to receive the balance amount. According to the Appellants' Bank, based
upon this letter of this Writ Petitioner, the third appellant has passed an order
releasing the balance gratuity amount on 20.03.2014. Once the Writ Petitioner has
given an undertaking to withhold the gratuity amount, now he cannot turn around
and demand the balance gratuity amount.
5.The learned counsel for the respondent/Writ Petitioner contended that
though he addressed the letter to the first appellant on 20.03.2014, he has
addressed another letter on 07.04.2014, retracting the contents found in his letter,
dated 20.03.2014. The learned counsel for the Appellants' Bank admitted that such
a letter has to be received by the Bank on 07.04.2014.
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W.A.No.2202 of 2021
6. Admittedly, the Writ Petitioner had retired on 31.01.2013. The Writ
Petitioner was permitted to retire by the Appellants' Bank without reserving any
right to initiate any disciplinary proceedings. In fact no disciplinary proceedings
were pending on the date of his retirement. Hence, it is clear that the Appellants'
Bank is not entitled to recover or withhold any gratuity amount without even
conducting enquiry and finding that the Writ Petitioner is guilty of any
delinquency. The letter, dated 20.03.2014 though authorized the Bank to withhold
the gratuity amount, the same has been retracted on 07.04.2014. Hence, unless
the Writ Petitioner has found to be guilty and any one of the circumstances as
contemplated under Section 4(6) of the Payment of Gratuity Act, 1972, are made
out he cannot be deprived of the gratuity. Of course, the Apex Court in the
following cases categorically held that gratuity can be adjusted / withheld,
depending upon the circumstances of each case.
i) Chairman-cum-Managing Director, Mahanadi Coalfields Limited vs.
Rabindranath Choubey, reported in AIR 2020 SC 2978;
39. To sum up, my conclusion to the question is as under:
Que. 1-Whether it is permissible in law for the employer to
withhold the payment of gratuity even after the employee has
attained his superannuation from service because of the pendency
of disciplinary proceedings against him?
Ans. I am in agreement with the view expressed by brother
Justice Shah that in view of Rule 34.3 of the Rules, 1978, the
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W.A.No.2202 of 2021
employer has a right to withhold gratuity during pendency of the
disciplinary proceedings.
Que. 2- Whether the penalty of dismissal could be imposed
after the employee stood retired from service?
Ans. In my considered view, after conclusion of the
disciplinary inquiry, if held guilty, indeed a penalty can be inflicted
upon an employee/delinquent who stood retired from service and
what should be the nature of penalty is always depend on the
relevant scheme of Rules and on the facts and circumstances of
each case, but either of the substantive penalties specified Under
Rule 27 of the Rules, 1978 including dismissal from service are not
open to be inflicted on conclusion of the disciplinary proceedings
and the punishment of forfeiture of gratuity commensurate with the
nature of guilt may be inflicted upon a delinquent employee
provided Under Rule 34.3 of Rules, 1978 read with Sub-section (6) of
Section 4 of the Act, 1972.
40. To conclude, the impugned judgment of the High Court
dated 17th July, 2013 is not sustainable and deserves to be set aside
and the disciplinary authority may proceed and conclude the
pending disciplinary proceedings expeditiously and take a final
decision in accordance with the scheme of Rules, 1978 read with
Sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972.”
ii) Steel Authority of India Ltd., vs. Raghbendra Singh and Others,
reported in MANU/SCOR/46090/2020;
“We, however, set aside the observations made in paras 19
and 21 qua the principles of penal rent being charged as we are of
the view that if an employee occupies a quarter beyond the
specified period, the penal rent would be the natural consequence
and such penal rent can be adjusted against the dues payable
including gratuity.”
7. In the present case, no proceedings were initiated as against the
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W.A.No.2202 of 2021
petitioner while he was in service and he was permitted to retire without reserving
any right to initiate / continue disciplinary proceedings and any letter given by the
Writ Petitioner one year after his retirement will not confer any right upon the
Appellants' Bank to withhold the gratuity amount. Hence, we do not find any
reasons to interfere with the order of the Single Judge and the Writ Appeal stands
dismissed. No costs.
8. The Appellants' Bank is directed to pay the balance gratuity amount of
Rs.1,80,228/- within a period of twelve weeks from the date of receipt of copy of
this order along with statutory interest. However, liberty is given to the
Appellants' Bank to initiate appropriate proceedings to recover the overdues in
salary loans from the petitioner, if they are advised so. Consequently connected
miscellaneous petition is closed.
(S.V.N.J.,) (R.V.J.,)
24.11.2021
Index :yes
Internet :yes
vsd
Note:In view of the present lock down owing to COVID-19 pandemic, a web
copy of the order may be utilized for official purposes, but, ensuring that
the copy of the order that is presented is the correct copy, shall be the
responsibility of the Advocate/litigant concerned.
S.VAIDYANATHAN,J.
AND
R.VIJAYAKUMAR,J.
https://www.mhc.tn.gov.in/judis
W.A.No.2202 of 2021
vsd
W.A.No.2202 of 2021
and
C.M.P.No.13937 of 2021
24.11.2021
https://www.mhc.tn.gov.in/judis
