Food Corporation Of India And Anr vs The Union Of India And Ors
2023 Latest Caselaw 4002 Patna

            IN THE HIGH COURT OF JUDICATURE AT PATNA
                        Letters Patent Appeal No.963 of 2018
                                          In
                    Civil Writ Jurisdiction Case No.9886 of 2003
       ======================================================

1. Food Corporation Of India through its Senior Regional Manager Bihar Region [Now General Manager (Region)], Arunachal Building, Exhibition Road, Patna

2. Zonal Manager, Food Corporation of India, 10A Middleton Row, Kolkata 700 071.

... ... Petitioners/ Appellant/s Versus

1. The Union of India through the Secretary, Department of Labour and Welfare, New Delhi.

2. The Regional Labour Commissioner (Central), Patna Morurya Lok Complex, P.S. Kotwali, Distt- Patna 3.

3. The Assistant Labour Commissioner (Central), Patna Maurya Lok Complex, P.S. Kotwali, District-Patna.

4 (1) Smt. Shakuntala Sinha wife of Late Shri Braj Nandan Prasad 4(2) Uday Kumar Sinha son of Late Shri Braj Nandan Prasad 4(3) Sanjay Kumar Sinha son of Late Shri Braj Nandan Prasad 4(4) Rekha Sinha, daughter of Late Shri Braj Nandan Prasad 4(5) Prashant Kumar Sinha son of Late Shri Braj Nandan Prasad 4(6) Miss. Neha, daughter of Late Shri Braj Nandan Prasad, All resident of 229 Sideshwar Nagar, Mainpura, Babhantoli, Patna-1 4(7) Smt. Kiran Sinha, daughter of Late Shri Braj Nandan Prasad, resident of Railway Colony, Nirala Nagar, Kanpur.

... ... Respondents/Respondent/s ====================================================== Appearance :

For the Appellant/s : Mr. Prabhakar Tekriwal, Advocate For the Union of India : Mrs. Kanak Verma, CGC ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHY

ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE)

Date : 24-08-2023

The appellants are the employers and the party Patna High Court L.P.A No.963 of 2018 dt.24-08-2023

respondents 4(1) to 4(7) are the legal representatives of the

deceased employee, who was dismissed from service, the

proceedings against which are also relevant in deciding the

question raised in the present case, of payment of gratuity under

the Payment of Gratuity Act, 1972 (for brevity, 'the Act').

2. The learned Single Judge having discussed the

provisions under the Act found that it leads to an inference that

the gratuity of an employee cannot be forfeited or withheld on

any ground other than what is mentioned in Section 4(6) of the

Act and that too only when the services of the employee is

terminated. The termination of the employee in the present case

has been set aside by the Central Government Industrial

Tribunal (for brevity, 'the Tribunal') and the employer

unsuccessfully challenged the same before this Court. It was

hence held that there could have been no forfeiture/withholding

of gratuity and the employee was entitled to the same. The writ

petition was found to be devoid of merit and a cost of

Rs.50,000/- was imposed.

3. We heard Shri Prabhakar Tekriwal, learned counsel

for the Food Corporation of India; the appellants. There is no

appearance for the private party-respondents despite notice

issued to some of them having been accepted and later, one of Patna High Court L.P.A No.963 of 2018 dt.24-08-2023

them 'Respondent No.4(7)' being issued with notice by way of a

paper publication.

4. Learned counsel for the appellants pointed out that

there was a termination of the service of the employee, by way

of imposition of penalty of dismissal, after a due enquiry

proceedings. It is true that the Tribunal had interfered with the

order of dismissal and directed reinstatement, by which time the

employee had passed the age of superannuation. The employee

challenged the said order but the writ petition was dismissed. It

is also submitted that the gratuity computed by the Tribunal was

far in excess of the limit prescribed under the Act. It is argued

that there was no reason to impose costs on the writ petitioners,

the employers, who had raised valid contentions in the writ petition.

5. As we noticed, the proceedings against the order of

dismissal has relevance insofar as the consideration of the

payment of gratuity, which is the subject matter of the above

appeal.

6. Annexure-1 produced in the writ petition is the

order of the disciplinary authority, finding the delinquent

employee to be guilty of the charges levelled against him, as per

the evidence brought on record in the departmental enquiry. The

delinquent employee was imposed with the penalty of dismissal Patna High Court L.P.A No.963 of 2018 dt.24-08-2023

from service with immediate effect. The order of dismissal was

challenged before the Tribunal in Reference Case No.26 of 1992

which was disposed of by Annexure-2 produced in the writ

petition. The Tribunal found that the enquiry officer had rightly

come to the conclusion that the concerned workman was guilty

of the two charges levelled against him. However, for reason of

the delinquent employee having not been offered an opportunity

of hearing against the proposed penalty and a hearing not being

afforded by the appellate authority, the order of dismissal was

set aside. The delinquent employee was directed to be reinstated

within two months.

7. Annexure-2 order was challenged before this Court

in a writ petition in which Annexure-3 judgment was passed. A

learned Single Judge of this Court relying on Workmen of

Motipur Sugar Factory (P) Ltd. v. Motipur Sugar Factory,

AIR 1965 SC 1803, held that even when there was no enquiry

held before an order of dismissal, it would stand in the same

footing as a defective enquiry and the Tribunal would have the

competence to consider whether the allegations were proper; on

the employer justifying its stand by adducing necessary

evidence to substantiate the charges levelled. This translates as a

right conferred on the employer to seek sustenance of the Patna High Court L.P.A No.963 of 2018 dt.24-08-2023

penalty by adducing necessary evidence before the Tribunal

itself. It was held that when even a total absence of enquiry

would clothe the Tribunal with such powers, the absence of

hearing on the penalty proposed would not result in the setting

aside of the dismissal order. This Court hence set aside the

award to the extent the dismissal order was set aside. The matter

was remitted back to consider whether there could be any

interference caused to the penalty imposed under Section 11A of

the Industrial Disputes Act. Hence, the finding of the Tribunal

regarding the guilt of the delinquent employee, as found by the

enquiry officer and affirmed by the disciplinary authority stood

sustained.

8. On remand, the Tribunal passed Annexure-4 order.

In purported invocation of Section 11A of the Industrial

Disputes Act, the Tribunal set aside the order of dismissal and

directed the employee to be posted in the next below rank he

was holding at the time of dismissal, without any continuity of

service. The delinquent employee was directed to be considered

as newly appointed, commencing from the date of such

reinstatement. Both the employer and the employee challenged

the order of the Tribunal, which writ petitions were both

dismissed by a common order produced as Annexure-5. The Patna High Court L.P.A No.963 of 2018 dt.24-08-2023

Writ Court found that the reinstatement now directed cannot be

effectuated since the delinquent employee has crossed the age of

superannuation. It was held that the order thus causes no

prejudice to the employer. As to the entitlement of pension and

gratuity, the Writ Court found that such issue having not been

considered by the Tribunal, it would be the prerogative of the

employer to consider the same. As far as the writ petition of the

delinquent employee is concerned, it was found that since he did

not challenge the finding of guilt as recorded in the initial order,

there could be no further consideration of the same. The entire

issue of severance of employment thus came to a quietus on

22.07.1998 when Annexure-5 order was passed rejecting both

the writ petitions filed by the employer and the delinquent

employee challenging Annexure-4 order. Hence, by the

rejection of the challenge against the award of the Tribunal, the

termination of dismissal was set aside. The modification to the

penalty imposed by way of directing reinstatement as a fresh

recruitment could not be effectuated since the delinquent

employee had passed the age of retirement. Hence, the

delinquent employee can only be treated as having

superannuated on the latter date and not terminated as on the

date of order of dismissal.

Patna High Court L.P.A No.963 of 2018 dt.24-08-2023

9. The delinquent employee then approached the

Assistant Labour Commissioner (Central), Patna, who was also

the Controlling Authority under the Act with an application for

disbursal of gratuity due. The Controlling Authority by

Annexure-6 order computed the gratuity payable for the thirty-

three years' service at Rs.1,45,596/- and directed simple interest

at the rate of 10% on the gratuity amount, i.e. Rs.98,707/- from

01.07.1995 to 31.5.2002.

10. Before we proceed further, we have to notice that

the dismissal order was passed on 30.03.1991 and the date of

superannuation of the employee was 30.06.1995. True, the

delinquent employee was not employed between the order of the

dismissal and the date of superannuation and he cannot have any

claim for wages during the said period. However, the

entitlement of gratuity has to be determined as on 30.06.1995.

11. The Act of 1972 provides for a limit insofar as the

amount of gratuity payable by sub-section (3) of Section 4

which as of now is an amount not exceeding that notified by the

Central Government from time to time. However, as on the date

of dismissal, i.e. 30.03.1991, the maximum amount that could

be disbursed as gratuity was Rs. 50,000/-. By the Payment of

Gratuity (Amendment) Act, 1994 (34 of 1994) introduced with Patna High Court L.P.A No.963 of 2018 dt.24-08-2023

effect from 24.05.1994, the limit was enhanced from

Rs.50,000/- to Rs.1,00,000/-. Hence, as on the date of

superannuation of the delinquent employee, i.e. 30.06.1995, an

amount of Rs.1,00,000/- is payable. As computed by the

authority, if the total amount payable for thirty-three years'

service, with reference to the wages last drawn by him was

Rs.1,45,596/-, then disbursement has to be confined to

Rs.1,00,000/-.

12. We interfere with the order of the Controlling

Authority as affirmed by the appellate authority to the extent

only of the entire gratuity amounts computed for thirty-three

years with reference to the last wages drawn, being confined to

the maximum prescribed under the Act of 1972. We do not

interfere with the interest granted for the amounts till payment.

If the amounts are not paid till now, the same shall be paid to the

legal heirs of the delinquent employee within a period of three

months from today with interest as ordered by the Controlling

Authority and affirmed by the Appellate Authority. If amounts

have already been disbursed, even in excess of the limit

prescribed, we direct that no refund shall be made, especially

since the delinquent employee is no more. We also delete the

costs directed to be paid in the judgment. On this respect also, Patna High Court L.P.A No.963 of 2018 dt.24-08-2023

we make it clear that if the costs have already been paid, the

appellants shall not attempt to recover the same from the family

of the deceased employee.

13. The Letters Patent Appeal is allowed on the above

terms. The parties are left to suffer their respective costs.

(K. Vinod Chandran, CJ)

(Partha Sarthy, J) Sunil/-

AFR/NAFR                NAFR
CAV DATE
Uploading Date          28.08.2023
Transmission Date