Madras High Court
The Chairman vs Tamil Selvan on 24 April, 2025
Author: R.Subramanian
Bench: R.Subramanian
W.A.No.1233 of 2025
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IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 24.04.2025
CORAM:
THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN
AND
THE HONOURABLE MR.JUSTICE G.ARUL MURUGAN
W.A.No.1233 of 2025
and
C.M.P.No.9365 of 2025
1.The Chairman,
Chennai Port Authority,
Chennai.
2.The Deputy Chairman,
Chennai Port Authority,
Chennai - 600 001.
3.The Chief Mechanical Engineer,
M & EE Department,
Chennai Port Authority,
Chennai - 600 001. ... Appellants
Vs.
Tamil Selvan ... Respondent
PRAYER: Writ Appeal filed under Clause 15 of the Letters Patent, praying to
set aside the order passed in W.P.No.14335 of 2024 dated 08.11.2024.
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W.A.No.1233 of 2025
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For Appellants : Mr.P.M.Subramaniam,
Senior Counsel
For Respondent : Mr.K.C.Karl Marx
*****
JUDGMENT
(Judgment of the Court was delivered by R.SUBRAMANIAN, J.)
Aggrieved by the order of the writ Court directing the employer to
release the retiral benefits of the employee, the employer is on appeal.
2. The employee while in service faced certain criminal charges and an
FIR was registered against him in Crime No.5 of 2021 for offences under
Section 294(b) and 323 of the Indian Penal Code. The employer parallelly
commenced the disciplinary proceedings against the employee. The
disciplinary proceedings were concluded exonerating the employee from the
charges. Thereafter, the employee was allowed to retire on superannuation on
30.04.2024. However, his retiral benefits were not paid. This forced the
employee to move this Court seeking a Writ of Mandamus directing the
respondents to disburse the retiral benefits and pension. Reliance was placed
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on the judgment of the Hon'ble Supreme Court in State of Jharkhand, Pension
and other Vs. Jitendra Kumer Srivastava and others reported in AIR 2013 SC
3383.
3. The claim of the employee was resisted by the appellant/employer
contending that since the criminal proceedings were pending, it will be open to
the employer to withhold the pension or gratuity in terms of Regulation 56-A of
the Chennai Port Trust (Pension) Regulations, 1987, which reads as follows:-
56-A PROVISIONAL PENSION WHERE
DEPARTMENTAL OR JUDICIAL PROCEEDINGS
MAY BE PENDING;
(1) Where any departmental or judicial proceedings is
instituted in respect of an employee referred to under
Regulation 56 (1) or where departmental proceedings are
continued under Clause (i) of the second proviso thereto
against an employee who has retired on attaining the age
of superannuation or otherwise, he shall be paid during
the period commencing from the date of his retirement to
the date on which, upon conclusion of such proceedings,
final orders are passed, a provisional pension not
exceeding the maximum pension which would have been
admissible on the basis of his qualifying service upto the
date of his retirement, or if he was under suspension on
the date of his retirement upto the date immediately
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preceding the date on which he was placed under
suspension; but no Death- Cum-Retirement Gratuity shall
be paid to him until the conclusion of such proceedings
and the issued of final order thereon;
Provided that where departmental proceedings have been
instituted under Regulation-14 of the Chennai Port Trust
Employees' (Classification, Control and Appeal)
Regulations, 1988 for imposing any of the penalties
specified in the Clauses (a) (i), (ii) and (iv) of Regulation 8
of the said Regulations, the payment of Death-cum-
Retirement Gratuity shall be authorized to be paid to the
employee.
(2) Payment of provisional pension made under sub-
regulation (1) above shall be adjusted against the final
retirement benefits, sanctioned to such an employee upon
conclusion of the aforesaid 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.
4. The learned Single Judge, however, concluded that there was no
provision in the Regulations, which would enable the employer to withhold the
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pension and the retiral benefits after having allowed the employee to retire.
The writ Court also came to a conclusion that unless there has been a financial
loss to the employer, the employer will not be justified in withholding the
pension.
5. We have heard Mr.P.M.Subramaniam, learned Senior Counsel
appearing for the appellants and Mr.K.C.Karl Marx, learned counsel appearing
for the respondent.
6. Mr.P.M.Subramaniam, learned Senior Counsel appearing for the
appellants would invite our attention to the Regulation 56-A of the Chennai
Port Trust (Pension) Regulations, 1987 to contend that there is a power vested
in the employer to withhold pension and gratuity till the conclusion of any
judicial proceedings which is pending against the employee on the date of his
retirement. He would also rely upon the judgment of the Hon'ble Supreme
Court in Chairman-cum-Managing Director, Mahanadi Coalfields Limited
Vs. Rabindranath Choubey reported in (2020) 18 Supreme Court Cases 71.
Reliance is also placed on the subsequent judgment in Secretary, Local Self-
Government Department and others, State of Kerala Vs. K.Chandran and
others reported in (2022) 12 Supreme Court Cases 104.
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7. Contending contra Mr.K.C.Karl Marx, learned counsel appearing for
the respondent / employee would submit that though the power to withhold
pension is available under the Regulations, the power to withhold gratuity is
inconsistent with the provisions of Payment of Gratuity Act. Therefore, in view
of Section 14 of the Payment of Gratuity Act, the said Regulations being
inconsistent with the provisions of Gratuity Act cannot be held to be valid. The
sum and substance of the submissions of the learned counsel is that any
Regulations inconsistent with the provisions of Payment of Gratuity Act cannot
be held against the employee.
8.As far as the pension is concerned, it is governed by the Pension
Regulations. If the Pension Regulations invest a power in the employer to
withhold pension during the pendency of any criminal proceedings against the
employee, that would prevail. Therefore, the contention of the employer that it
is entitled to withhold pension in terms of Regulation 56-A of the Chennai Port
Trust (Pension) Regulations, 1987 is well founded.
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9. The writ Court had given a restricted scope to Regulation 56-A,
inasmuch as it came to the conclusion that pension can be withheld only if there
is a financial loss to the employer. Regulation 56-A extracted above does not
attempt such restrictive interpretation. It enables the employer to withhold the
pension and pay provisional pension till such time the criminal case is
concluded. In so far as the restriction on payment of gratuity is concerned, the
same cannot prevail over the provisions of payment of Gratuity Act.
10. Section 7(3) of the Payment of Gratuity Act provides that the gratuity
shall be paid within a period of 30 days, if the gratuity is to be withheld, then
the employer will have to make an application with the Authority under the
Payment of Gratuity Act and seek an order directing the employer to withhold
the gratuity. Sub-Section 6 of Section 4 provides the circumstances under
which gratuity can be forfeited. That would arise only in the even where the
employee's services are terminated for the reasons enumerated under 6(1)(a) or
6(1)(b).
11. In the case on hand, the employee has not been terminated. He has
been exonerated in the disciplinary proceedings and he has been allowed to
retire. Therefore, the circumstances under which the gratuity can be forfeited
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by the employer do not exist in the case on hand. Hence, Section 7(3) would
come into play and the employer should have paid the gratuity within 30 days.
It will be pertinent to point out that proviso to the Regulation 56-A makes it
clear that even during the pendency of the disciplinary proceedings, if the
delinquency complained of could only invite a minor punishment, payment of
Death cum Retirement Gratuity shall be authorized to be paid to the employee.
We have already found that the employee was actually exonerated in the
disciplinary proceedings. Therefore, withholding of the gratuity and other
retiral benefits, in our opinion, is not authorized by any of the statutes
governing the issue.
12. We are however unable to agree with the conclusion of the writ Court
when it said that there is no provision which enables the Port Trust to withhold
the pension and that it can be withhold only in the event of financial loss being
caused to the Port Trust because of the delinquency of the employee.
13. As we have already stated Regulation 56-A does not permit such
restrictive interpretation. We therefore allow the Writ Appeal in part, set
aside the order of the writ Court and direct the Port Trust to pay the Death Cum
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Retirement Gratuity and other retiral benefits of the employee within a period
of twelve (12) weeks from the date of receipt of the copy of the order. In so far
as the pension is concerned, the provisional pension will be continued to be
paid and final decision will be taken after conclusion of the criminal case. It
will be open to the employee to make a claim of interest on gratuity after the
completion of the criminal proceedings. No costs. Consequently, the
connected miscellaneous petition is closed.
(R.S.M.,J.) (G.A.M.,J.)
24.04.2025
dsa
Index : No
Neutral Citation : No
Speaking order
To
1.The Chairman,
Chennai Port Authority,
Chennai.
2.The Deputy Chairman,
Chennai Port Authority,
Chennai - 600 001.
3.The Chief Mechanical Engineer,
M & EE Department,
Chennai Port Authority,
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Chennai - 600 001.
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R.SUBRAMANIAN, J.
and
G.ARUL MURUGAN, J.
dsa
24.04.2025
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