Indrakanti Kamalakar vs Union Bank Of India Formerly ...
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          THE HON'BLE SMT. JUSTICE P.MADHAVI DEVI

                WRIT PETITION No. 25920 of 2022

ORDER:

This writ petition has been filed by the petitioner seeking a writ of

mandamus declaring the action of the respondents in withholding and

not paying full amount of terminal benefits of Gratuity and leave

encashment to the petitioner, as illegal, void and consequently to

direct the respondents (1) to pay the amount of Rs.8,03,000/- which

was withheld by the respondents from the total amount of Gratuity

payable to the petitioner as per the Gratuity Act, with interest @ 10%

from the date of such illegal withholding; and (2) to pay the amount of

leave encashment, permitting the petitioner to encash the unavailed

privilege leave of 240 days credited on compulsory retirement and to

pass such orders or orders as the Hon'ble Court deems fit and proper.

2. Brief facts leading to the filing of the present writ petition are

that the petitioner joined as a clerk in Andhra Bank on 24.05.1985

and worked in various capacities at several branches/offices over a

period of 28 years. While the petitioner was working as Senior Branch

Manager, N.S.Road branch, Hyderabad, the petitioner was issued a

charge memo dated 01.06.2013 regarding certain irregularities in the

transactions in two education loans at N.S.Road Branch i.e., (a)

Education Loan Account of Mr.Kendyala S.Nagarjuna; Rs.10.20 lakhs;

(b) Education Loan Account Ms.Indrakanti Naga Pratyusha; Rs.15

W.P.No.25920 of 2022

lakhs. It was alleged that both the loans were sanctioned by the Zonal

Manager and there were certain procedural irregularities in

disbursement of loan amount by the petitioner. Thereafter, the

petitioner was issued another charge memo dated 11.11.2013 in

respect of certain transaction in two loans at Manuguru Branch i.e., (a)

Clean Loan Account of Dr./Mrs.Ch.V.Ramalaxmi; Rs.2.50 lakhs; (b)

Clean Loan Account of Mr.Sabbani Shanker; Rs.2.50 lakhs. The

petitioner was also charged for borrowing money in violation of

conduct rules. It is submitted that in respect of charge memo dated

01.06.2013, after conducting Domestic Enquiry, the disciplinary

authority has imposed a penalty of "Compulsory Retirement" vide order

of punishment dated 15.03.2014.

3. It is submitted that in respect of the second charge sheet dated

11.11.2013, the competent authority discontinued the domestic

enquiry in view of the punishment of compulsory retirement awarded

to the petitioner and directed the Branch Manager, Manuguru to file a

complaint with the Police. Accordingly the Branch Mananger, Andhra

bank, Manuguru branch, has filed a complaint with Station House

Officer, P.S.Manuguru on 30.05.2014 and Crime No.145, dated

30.05.2014 was registered under Sections 420 and 409 of IPC.

4. It is submitted that at the time of compulsory retirement, the

petitioner was having huge amount of loans borrowed from the bank

and since his retirement benefits and gratuity were paid to the

W.P.No.25920 of 2022

petitioner, he had borrowed from bank and friends to repay the loans

and close the loan amounts and thereafter, the petitioner requested

the respondent bank for early sanction of the terminal benefits vide

representation dated 04.02.2016. Subsequently, vide letter dated

17.06.2016, the respondent bank has sanctioned gratuity of Rs.10

lakhs to the petitioner and directed that the amount of all outstanding

loans and dues including furniture, credit card, co-operative bank,

etc., are to be adjusted from the gratuity. It was also directed to pay

the amount of gratuity after ensuring recovery of all the loans and

other dues payable by the petitioner to the bank. It is submitted that a

sum of Rs.8.03 lakhs was deducted from the gratuity and only a net

amount of Rs.1.97 lakhs was credited to the petitioner's account.

Challenging the said action of recovery from the gratuity and not

paying the entire leave encashment to the petitioner on his compulsory

retirement, this writ petition has been filed.

5. Learned counsel for the petitioner submitted that no notice was

given to the petitioner prior to recovery of sum of Rs.8.03 lakhs, nor

were the details of recovery furnished. It is submitted that aggrieved by

the action of the bank, the petitioner had submitted a letter to the

respondent bank dated 26.07.2013 and the petitioner had also

requested the bank vide his letter dated 26.07.2016 to furnish him the

details/reasons for deducting such huge amount from the gratuity

payable to him and that vide letter dated 30.08.2016 the petitioner was

W.P.No.25920 of 2022

informed about the break-up of sum of Rs.8 lakhs which has been

withheld by the bank.

6. Learned counsel for the petitioner submitted that though the

loan accounts mentioned in the letter were already closed, none of

these accounts were mentioned in the charge sheet and no show cause

notice was given to him and no order was passed by the disciplinary

authority or any other competent authority determining the liability of

the petitioner to the bank and that the same should be recovered from

the gratuity and therefore, the recovery is bad in law and was in

violation of principles of natural justice. The petitioner, therefore, had

filed a representation dated 12.09.2016 with the respondents,

however, no reply was received from the bank is the grievance of the

petitioner.

7. It is submitted that in respect of payment towards encashment of

privilege leave, the respondent bank has replied that the officers whose

services were terminated as a measure of penalty are not eligible for

leave encashment in terms of prevailing guidelines as on the date of

their exit. Though, the petitioner has submitted various

representations on this issue also, the same remained un-responded.

8. Learned counsel for the petitioner submitted that subsequently a

criminal case was registered against the petitioner in C.C.No.178 of

2015 and as a result of an Hon'ble acquittal of the petitioner, the

W.P.No.25920 of 2022

petitioner cannot be held responsible for payment of Rs.8,03,000/-.

Challenging the action of the respondents in withholding a sum of Rs.8

lakhs towards repayment of loans which have already closed and also

in not allowing encashment of privilege leave, the present writ petition

is filed.

9. Learned counsel for the petitioner reiterated the submissions

made as above. There was no appearance for the bank in spite of the

name of the counsel being printed in the list. Since there is no

appearance on behalf of the respondents, the matter was heard ex-

parte the respondents in the writ petition.

10. Learned counsel for the petitioner places reliance upon the

judgment of this Court in W.P.No.8033 of 2019 in similar set of facts

wherein after hearing the learned Standing counsel for the bank (who

happens to be the standing counsel in this case also), this Court had

held that recovery of the amount from the gratuity without issuing any

notice is in violation of principles of natural justice and it was

accordingly set aside and the respondents were directed to reconsider

the case of the petitioner therein for payment of gratuity in accordance

with the provisions under the payment of Gratuity Act.

11. Learned counsel for the petitioner also places reliance upon the

judgment of this Court in Writ Appeal No.502 of 2016, dated

12.08.2016, wherein the petitioner therein was initially dismissed from

W.P.No.25920 of 2022

service on his conviction in the criminal case and subsequently on his

acquittal, his punishment was converted to compulsory retirement and

when his request for leave encashment, was denied on the ground that

an officer who is compulsory retired as a measure of punishment, will

not be entitled to leave encashment. After considering the issue at

length, the Hon'ble Division Bench of Andhra Pradesh High Court has

held that the regulations do not deny a compulsorily retired employee

of his right to encash the privileged leave.

12. Learned counsel for the petitioner submits that the respondents

may be directed to reconsider the case of the petitioner in terms of the

above two judgments.

13. In view of above submissions and also the cases relied upon by

the learned counsel for the petitioner, this Court finds that in the

present case also no notice was given to the petitioner before imposing

the punishment of recovery of sum of Rs.8.03 lakhs from the gratuity

and also in denying the leave encashment to the petitioner without

calling for any explanation. Therefore, this Court is of the opinion that

the same is in violation of principles of natural justice and needs

reconsideration in accordance with the above judgments. Therefore,

the impugned order dated 15.03.2014 is set aside and the respondents

are directed to reconsider the case of the petitioner in the light of the

above two judgments and also the fact that the petitioner has already

paid the loan and there is no outstanding dues from the petitioner and

W.P.No.25920 of 2022

to pass suitable and appropriate orders thereon within a period of four

weeks from the date of receipt of a copy of this order. It is needless to

mention that the petitioner shall be given a fair opportunity of hearing.

It is further directed that the gratuity and leave encashment, if are

found to be payable to the petitioner, they shall be paid to the

petitioner within a period of three months thereafter with interest @

6% per annum from the date of the petitioner's entitlement till the date

of payment.

14. The writ petition is accordingly disposed of. There shall be no

order as to costs.

Miscellaneous applications, if any pending, shall also stand

closed.

_____________________________ JUSTICE P.MADHAVI DEVI Date: 29.10.2022 bak

W.P.No.25920 of 2022

THE HONOURABLE SMT. JUSTICE P. MADHAVI DEVI

WRIT PETITION No. 25920 of 2022

Date: 29.10.2022 bak