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Bombay High CourtIndian Cases

Rajinder Kumar Nangia vs Rashtriya Chemicals & Fertilizers Ltd. on 10 October 2001

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Bombay High Court
Rajinder Kumar Nangia vs Rashtriya Chemicals & Fertilizers Ltd. on 10 October, 2001
Equivalent citations: [2002(92)FLR689], 2002(1)MHLJ518
Author: R.M. Lodha
Bench: R.M. Lodha, Nishita Mhatre
JUDGMENT

R.M. Lodha, J.

1. The decision taken by the respondents to withhold the gratuity payable to the petitioner on his superannuation in view of criminal case pending against the petitioner has led the petitioner to approach this Court for quashing the said decision of the respondents and for direction to them to pay the gratuity amount due to the petitioner along with interest.

2. The petitioner joined the service of erstwhile Fertilizers Corporation of India Limited in the year 1958 as Lower Division Clerk and on formation of Rashtriya Chemicals and Fertilizers Limited (hereinafter referred to as “RCF Ltd.”), petitioner’s services were transferred to the newly formed Company. The petitioner was promoted from time to time and was ultimately superannuated on 28th February 1994. The petitioner thus has put in a continuous service of more than thirty five years. Upon superannuation, the petitioner did receive his legal dues but the gratuity amount due and payable to the petitioner was not paid and accordingly petitioner wrote to the concerned Officer for making payment of gratuity. In response thereto, by letter dated 10th May 1994, the petitioner was informed that his gratuity could not be released in view, of case No. RC 53(A)/93-Bombay CBI. As already indicated above, it is this decision communicated by RCF Ltd. to the petitioner, the present Writ Petition has been filed.

3. It is clear from the letter dated 1st December 1993 sent by Personnel Manager of RCF Ltd. to the petitioner that petitioner on completing the age of 58 years on 22nd February 1994 shall be superannuated with effect from afternoon of 28th February 1994. At the time of superannuation, admittedly no disciplinary proceedings for any misconduct of any sort whatsoever was initiated against the petitioner. It is not disputed before us that petitioner’s services were not terminated due to any act, wilful omission or negligence causing any damage or loss to or destruction of property belonging to the employer nor petitioner’s services were terminated for his riotous or disorderly conduct or any other act of violence on his part nor petitioner’s services were terminated for any act constituting an offence involving moral turpitude. The services of the petitioner came to an end simpliciter on his attaining age of 58 years. There is also no dispute before us that the Payment of Gratuity Act, 1972 is applicable to the petitioner who was governed by RCF Employees (Conduct, Discipline and Appeal) Rules, 1993 as Rule 41 of the said Rules provided that payment of gratuity to the employees shall be regulated as per the provisions of Payment of Gratuity Act as amended from time to time and Rules of RCF Employees’ Gratuity Trust. Section 4 of the Payment of Gratuity Act, 1972 provides for payment of gratuity to art employee. Sub-section (1) and (6) of Section 4 are relevant for our purpose which we reproduce hereunder:

“4. Payment of gratuity. — (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, —

(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease :
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement :
Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
Explanation — For the purposes of this section, disablement means such disablement as incapacitates as employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(2) … … …
(3) …

(4) … … …

(5) … … …

(6) Notwithstanding anything contained in Sub-section (1), —

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused;

(b) the gratuity payable to an employee may be wholly or partially forfeited.

(i) if the services of such employee have been terminated for
his riotous or disorderly conduct or any other act of
violence on his part, or

(ii) if the services of such employee have been terminated for
any act which constitutes an offence involving moral
turpitude, provided that such offence is committed by him
in the course of his employment.”

4. It would be seen that Sub-section (1) of Section 4 of the Payment of Gratuity Act, 1972 provides that gratuity shall be payable to an employee on termination of his employment after he has rendered continuous service for not less than five years. The termination of the employment may be on superannuation or on retirement or resignation or death or disablement due to accident or disease of the employee. Thus, an employee becomes entitled to payment of gratuity under the statute. Sub-section (6) is an exception to Sub-section (1) and makes a provision of forfeiture of the gratuity wholly or partially in the circumstances mentioned therein. According to Sub-section (6), gratuity of an employee may be forfeited to the extent of damage or loss caused to the employer if service of that employee has been terminated for any act, wilful omission or negligence on that ground. The gratuity payable to an employee may also be forfeited wholly or partially if the service of such employee has been terminated for his riotous or disorderly conduct or any other act of violence on his part or service of such employee has been terminated for any act constituting an offence involving moral turpitude. Though a criminal case was registered against the petitioner by CBI in the year 1993, the fact is petitioner’s services have been terminated simpliciter on his superannuation and not for any of the grounds mentioned under Sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972. As a matter of fact, admittedly till petitioner’s superannuation and even till date no departmental proceedings of misconduct have been initiated against the petitioner. In this backdrop of facts, it was not open to the respondents to refuse to release the gratuity amount to the petitioner.
5. The learned Counsel for respondents heavily relied on the judgment of the Apex Court in Jarnail Singh v. Secretary, Ministry of Home Affairs and Ors., 1993 LLJ 962 in support of his contention that gratuity can be withheld by the employer – respondents if any judicial proceedings are pending against the petitioner relating to his misconduct or negligence during the period of his service. We are afraid the judgment of the Apex Court in Jarnail Singh (supra) has no application in the facts and circumstances of the case before us. The Apex Court in the case of Jarnail Singh (supra) was concerned with the provisions of Central Civil Services (Pension) Rules, 1972 and in the light of the specific Rules 3, 9, 69(l)(c), 71 and 73 held that there was nothing wrong in the order of the President in withholding the gratuity of the employee. In the present case, none of the Rules under consideration before the Apex Court or the similar Rules are applicable but the petitioner is governed by the provisions of the Payment of Gratuity Act, 1972 and as per Section 4(1) petitioner has a statutory right to receive gratuity from his employer save and except in the circumstances provided under Sub-section (6) of Section 4. We have already indicated that none of the circumstances provided in Sub-section (6) is applicable in the present case and, therefore, we do not find any justifiable cause on the part of the respondents in withholding the gratuity. Mere pendency of a criminal case lodged by CBI shall not disentitle the petitioner from receiving gratuity nor shall entitle the respondents to not to release the gratuity to the petitioner as petitioner’s services came to an end on his attaining superannuation simpliciter. We may note here that Rule 45 of the RCF Employees (Conduct, Discipline and Appeal) Rules, 1993 does provide for departmental action against retired employees. Clause (iii) of Rule 45 provides that in case of an officer who had already retired on superannuation before instituting any departmental proceedings and who has received all retiral benefits, as far as possible only criminal prosecution can be recommended against him. Even under Clause (ii) of Rule 45, it appears that now no departmental action can be initiated against the present petitioner as it provides that if departmental proceedings had not been instituted while the officer was in service, proceedings under Rule 38 for imposition of major penalties can be initiated only by or sanction of the Board of Directors and in respect of a cause of action which arose or in respect of an offence which took place not earlier than four years before the institution of the-proceedings. The petitioner was superannuated in the year 1994: the criminal case was registered against him in the year 1993 before his superannuation but till date i.e. more than seven years of his superannuation, no departmental action has been initiated and, therefore, such action has become beyond time provided in clause (ii) of Rule 45 of the RCF Employees (Conduct, Discipline and Appeal) Rules, 1993.
6. For all these reasons, we are satisfied that the decision taken by respondents to not to release payment of gratuity to the petitioner cannot be sustained.
7. In the result, we allow the Writ Petition and quash the communication dated 10th May 1994. We are informed that petitioner has already been paid the due amount of gratuity under the order of this Court and that petitioner has furnished Bank Guarantee for restitution in the event of dismissal of the Petition. As the due amount of gratuity has been paid to the petitioner to which he was entitled, we discharge the Bank Guarantee furnished by the petitioner.
No costs.

8. Writ petition allowed.