Allahabad High Court
Arun Kumar Das vs State Of U.P.Through Prin. Secy. Deptt. ... on 13 February, 2020
Author: Saurabh Lavania
Bench: Saurabh Lavania
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 21 Case :- SERVICE BENCH No. - 994 of 2011 Petitioner :- Arun Kumar Das Respondent :- State Of U.P.Through Prin. Secy. Deptt. Of Dairy Devp. And Counsel for Petitioner :- Sanjay Kumar Counsel for Respondent :- C.S.C.,Hari Prasad Gupta,Lalit Shukla,Shanker Lal Hon'ble Saurabh Lavania,J.
Heard Sri Sanjay Kumar, learned Counsel for the petitioner and Sri Lalit Shukla, learned Counsel for the respondents.
By means of the present petition a challenge has been made to the orders dated 30.09.2009 and 23.12.2010 (Annexure Nos. 21 and 27 to the writ petition), passed by officers of respondent no. 2 i.e. Chairman, Administration Committee and Managing Director, respectively, of Pradeshik Cooperative Dairy Federation Limited, Lucknow whereby the concerned authorities have directed to recover Rs. 9,195/- and Rs. 31,132.99/-, respectively, from the petitioner.
The brief facts of the case are that in Pradeshik Cooperative Dairy Federation Ltd.(in short "PCDF"), the petitioner was initially appointed on 26.07.1985 as Manager Grade-II (Marketing) and continued on the said post till 21.02.2006. The services of the petitioner came to an end on account of resignation submitted by him. The resignation submitted by the petitioner while working on the post of Manager Grade-II (Marketing) accepted by order dated 21.02.2006 (Annexure No. 2 to the writ petition). The relevant portion of the order dated 21.02.2006 reads as under:-
" vkns'k v/;{k ¼iz'kklfud lfefr½ ds vkns'k fnukad 21-2-2006 ds dze esa Jh ,0ds0nkl] izca/kd xzsM&2 ¼foi.ku½@izHkkjh] nqX/k la?k] tkSuiqj dk R;kx i= fnukad 20-2-2006 ds vijkUg ls Lohd`r fd;k tkrk gSA Jh nkl ,d ekg dh uksfVl ds cnys ,d ekg dk osru ,oa vns;rk izek.k i= nqX/k la?k] tkSuiqj esa tek djus ds mijkar dk;ZeqDr fd;s tk;saxsA Jh nkl nqX/k la?k] tkSuiqj esa dk;Zjr ofj"Bre vf/kdkjh dks dk;ZHkkj lkSaidj dk;ZeqDr gksaxsA Jh nkl dk muds iwoZ rSukrh LFkkuksa ls vns;rk izek.k i= izkIr gksus ds i'pkr gh muds ns;dksa ;Fkk% xszP;qVh] vftZRk vodk'k uxnhdj.k] th0,l0,y0vkbZ0 vkfn dk Hkqxrku fu;ekuqlkj fd;k tk;sxkA"
After the acceptance of resignation vide order dated 21.02.2006, the petitioner moved several representation for releasing of certain amounts as mentioned in paragraph no. 1 of the writ petition, the same on the production reads as under:-
"(i) Payment of gratuity amount of about Rs. 3,50,000/- alongwith interest at the rate of 12% in view of Payment of Gratuity Act, 1965;
(ii) Payment of arrear of salary due to revision of pay scale with effect from 01.09.1996 till 31.07.1998;
(iii) Payment of pending salaries at the last place of posting Jaunpur with effect from 12.11.05 to 20.2.06;
(iv) Payment of arrear of salary due to revision of pay scale with effect from 01.01.1996 for the period from 13.6.97 to 31.3.98 for posting at U.P. Milk Board, Jawahar Bhawan, Lucknow;
(v) Payment of encashment of Earned Leave for 218.4 days at the rate of Rs. 26,548/- per month basic Rs. 15,525 + D.A. Rs. 11,023 =Rs. 26,548/-) Total amount is Rs. 1,93, 269/-;
(vi) Arrear of payment of all the dues in view of the implementation of 6th Pay Commission Report with effect from 1.1.06; and
(vii) Payment of interest upon all the dues with effect from it become due till the date of actual payment at the rate which this Hon'ble Court may deem fit and proper in the circumstances of the case."
After several efforts made by the petitioner, the due amount was not released in favour of the petitioner. After preferring the representation dated 01.11.2017, the Chief General Manager informed the petitioner about the audit objections related to the period w.e.f. 06.05.2003 to 30.09.2003 and the financial year 1996-97, it was of the period when the petitioner was posted at Kanpur Unit. The petitioner replied to the same and in response thereof General Manager (Administration and Personnel) informed the petitioner regarding another audit objection with respect to Kanpur Dugdha Sangh, related to financial year 2003-04, to which petitioner replied on 24.05.2008. Thereafter, the respondent no. 2 i.e. Managing Director, Pradeshik Cooperative Dairy Federation Limited, Lucknow, issued the order dated 30.09.2009, whereby directed to recover the amount to the tune of Rs. 9,165/- from the gratuity of the petitioner. Aggrieved by the order dated 30.09.2009, petitioner preferred another representation and in response to the same the Manager (Administration) of PCDF vide letter dated 09.12.2009 informed the petitioner about another audit objection related to financial year 2004-2005. The communication dated 09.12.2009 was also replied by the petitioner vide representation dated 10.11.2010. After the representation dated 10.11.2010 the General Manager of PCDF vide order dated 01.12.2010 informed the petitioner that on account of his resignation he is not entitled for earned leave. Thereafter, vide impugned order dated 23.12.2010, Managing Director of PCDF directed to recover an amount to the tune of Rs. 31,132.99/-, which relates to the audit objection for the year 2004-2005.
In the aforesaid factual background, the petitioner has approached this Court, challenging the orders dated 30.09.2009 and 23.12.2010 with consequential reliefs.
Assailing the impugned orders and for consequential reliefs sought, Sri Sanjay Kumar, learned Counsel for the petitioner submitted that prior to passing of the impugned orders, no opportunity of hearing was provided neither any disciplinary proceedings was conducted. It is also settled law that after acceptance of resignation, even no enquiry could be proceeded against the petitioner in view of the Regulation 84 of U.P. Cooperative Employees Service Regulation 1975. It has also been submitted that any punishment imposed, after the acceptance of resignation, is meaningless and would not effect the right of the petitioner to get the benefits from the respondents, for which he is legally entitled. In regard to the denial of amount towards earned leave communicated by order dated 01.12.2010, learned Counsel for the petitioner submitted that amount of earned leave is a property of an employee and the same could not be denied. Sri Sanjay Kumar, learned Counsel for the petitioner, further stated that in the similar facts and circumstances this Court interfered in the matter and directed the respondents to pay the amount due with interest vide judgment and order dated 10.10.2011 passed in the Writ Petition No. 1593(SB) of 2011 (Subodh Nath Gupta Versus Chairman, Administration Committee, U.P. Cooperative Dairy Federation and Milk Union Centralized Services, Lucknow), upheld by the Hon'ble Apex Court vide judgment dated 23.01.2012.
In regard to the entitlement of petitioner for the amount towards earned leave the Counsel for the petitioner on the basis of observations made by the Hon'ble Apex Court judgment passed in the case of State of Jharkhand Vs. Jitendra Kumar Srivastava, (2013) 12 SCC 210, submitted that the denial of same is unsustainable in the eye of law.
Per contra, Sri Lalit Shukla, learned Counsel for the respondent nos. 2 to 5 submitted that so far as the orders of recovery is concerned, the same are based on audit objection and the amount can be recovered in view of the specific condition mentioned in the order of resignation.
Sri Lalit Shukla, learned Counsel for the respondent nos. 2 to 5 submitted that in regard to the amount towards earned leave, the competent authority after taking into account the relevant provisions has denied the same. However, before this Court, provisions with regard to denial of earned leave has not been placed nor pleaded. Learned Counsel for the respondents could not dispute the legal position, as settled by this Court, on which reliance has been placed by the learned Counsel for the petitioner.
Heard learned Counsel for the parties and perused the records.
From the pleading on record and arguments raised by the learned Counsel for the respective parties it not in dispute that till date the due amount has not been paid to the petitioner on account of audit objections and impugned orders for recovery of amount from petitioner are based only on audit objections.
It is also not in dispute that impugned orders dated 30.09.2009 and 23.12.2010 were passed after accepting the resignation of the petitioner on 21.02.2006.
It is also not in dispute that impugned orders are affecting the rights of the petitioner and involves civil and consequence and were passed without following the principle of natural justice and holding the proper enquiry, which, in absence of provision to hold enquiry against the person who is not in service, could not be held in the instant case.
In the judgment passed in the case of Subodh Nath Gupta(Supra) the Division Bench of this Court observed as under:-
"We take up the first issue first, namely, whether in view of the recitals made in the order accepting resignation of the petitioner dated 22.12.2006 that the departmental enquiry shall continue, his payments could have been made dependent upon the outcome of the enquiry, and whether his participation in the enquiry would debar the petitioner from challenging the continuance of disciplinary proceedings and his participation in the enquiry without protest would mean acquiescence, which will again disentitle him to challenge the orders passed in such enquiry.
Learned counsel for the respondents could not dispute and rather admits that there is no regulation under the service rules, which permits either initiation of disciplinary enquiry or continuance thereof, after the employee belonging to centralized services under the PCDF either retires or resigns.
That being so, the question would be whether by writing in the order of acceptance of resignation that the enquiry would continue even after acceptance of resignation would confer authority upon the PCDF and its officers to continue with the enquiry, when the regulations do not permit.
In the case of Bhagirathi Jena v. Board of Directors, OSFC, 1999 (3) SCC 666, the apex court held that ''in view of the absence of such provision in the abovesaid regulations, it must be held that the Corporation had no legal authority to make any reduction in the retiral benefits of the appellant. There is also no provision for conducting a disciplinary enquiry after retirement of the appellant nor any provision stating that in case misconduct is established, a deduction could be made from retiral benefits. Once the appellant had retired from service on 30.6.95, there was no authority vested in the Corporation for continuing the departmental enquiry even for the purpose of imposing any reduction in the retiral benefits payable to the appellant. In the absence of such authority, it must be held that the enquiry had lapsed and the appellant was entitled to full retiral benefits on retirement.' In the case of Jaswant Singh Gill v. Bharat Coking Coal Ltd., (2007) 1 SCC 663, the Supreme Court considering the effect of Rule 27 of Coal India Executives' Conduct, Discipline and Appeal Rules, 1978, which provides for recovery from gratuity only to the extent of loss caused to the Company by negligence or breach of orders or trust, and also the provisions of Payment of Gratuity Act and in particular Clause 4 including sub-clause (6), held that the rules have to give way to the statutory provision in the Act. It was also observed that the penalties, as provided under Rule 27 must be imposed so long an employee remains in service and not thereafter. Even the punishment of deduction of retiral dues could not be awarded.
In a Division Bench Judgment of this Court in the case of U.P. State Ware Housing Corporation, Lucknow v. Sri Brish Bhan Singh, 2011 (29) LCD 1348, it has been held that continuance of disciplinary enquiry after superannuation of the charged employee would not be possible, unless service rules or regulations so provide.
In another Division Bench judgement of the this Court in the case of P.P. Pandey v. State of U.P. (Writ Petition No. 989 of 2010), decided on 5.7.2011, in which one of us (Pradeep Kant, J.) was a member, the same view was reiterated that in the absence of any statutory provision or rule, disciplinary enquiry can neither be initiated nor continued nor any punishment can be inflicted after an employee retires.
Here, in the instant case, the services of the petitioner was governed by the U.P. Cooperative Societies Employees Service Regulation, 1975, which dealt with all the situations arising out of misconduct of an employee during the course of his service. It provides for award of major punishment as well as minor punishment under Regulation 84.
Regulation 84 sub-clause (d) provides for recovery from pay or security deposit to compensate in whole or in part for any pecuniary loss caused to the cooperative society by the employee's conduct.
Thus, if any loss because of the negligence of the petitioner was caused, there was a clear provision under the service regulations to hold an enquiry and recover the loss, but this could have been done only till he was in service. The moment the petitioner's resignation was accepted, the relationship of master and servant ceased and in the absence of any service regulations, permitting the continuance of disciplinary enquiry, neither the disciplinary enquiry could have been continued nor any order of recovery could have been passed.
The petitioner was not directed to be continued in service and rather to the contrary, the resignation was specifically accepted with effect from a back date i.e. 24.8.2006, making it very clear that he cannot be treated to be in service from the said date, which was a conscious decision taken by the PCDF and, therefore, it leaves no doubt that the moment the resignation was accepted, the relationship of master and servant ceased.
Merely because in the acceptance letter it was stated that the pending enquiry shall continue and the dues of the petitioner would depend upon the outcome of the enquiry, it would not confer any jurisdiction or authority upon the PCDF to continue with the enquiry and to award punishment. There cannot be any estoppal against law. The relationship of master and servant having come to an end by operation of law, namely, on the factum of acceptance of resignation of the petitioner, the recital made therein for continuance of enquiry would be of no avail nor the respondents could have acquired any jurisdiction to continue with the same.
For the aforesaid reasons, we are of the considered opinion that after the acceptance of resignation of the petitioner, neither the disciplinary enquiry could have been continued nor any punishment could have been awarded, for the reason of cessation of relationship of master and servant and also for the reason that for such loss, may be because of the alleged negligence of the petitioner, the punishment could have been awarded only under Regulation 84, when he was in service, but no recovery could have been ordered from his retiral dues.
On the next plea of the respondents that in view of sub-clause (6) of Section 4 of the Payment of Gratuity Act, the gratuity can be withheld for the reason that it has been established that the petitioner had caused financial loss to the PCDF because of his negligence, suffice would be to mention that the punishment for loss because of negligence of the petitioner (PCDF employee) could have been awarded only under Regulation 84(d), when he was in service, whereas sub-clause (6) of Section 4 of the Payment of Gratuity Act, carves out an exception to the extent that payment of gratuity only in those cases where service has been terminated due to wilful omission or negligence, which has caused 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.
The argument of Sri Lalit Shukla that the gratuity can be withheld for any act, wilful omission or negligence causing any damage or loss to the employer, even if the services of the employee have not been terminated, does not flow from the aforesaid provisions of Payment of Gratuity Act nor is in conformity with the service regulations.
Clause (a) of sub-clause (6) of Section 4 makes it very clear that 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, meaning thereby that there has to be an order of termination of service and such termination should be for the reason that he has caused damage or loss to the employer.
In the case of Jaswant Singh Gill (supra), the apex court while considering the aforesaid provisions of the Payment of Gratuity Act, in Para-13 of the report, observed that the provisions contained therein must, therefore, be scrupulously observed. Clause (a) of sub-section (6) of Section 4 of the Act speaks of termination of service of an employee for any act, wilful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of damage or loss caused.
This again makes it clear that if the reason for termination is negligence, causing loss or damage etc. to the employer, then of course, the gratuity to the extent of such loss can be forfeited, but unless the services are terminated for any such reason, no recovery can be made nor any order for recovery can be passed against the employee, who is no more in service, either because of retirement or because of resignation being accepted.
A Division Bench of this Court, in which one of us (Pradeep Kant, J.) was a member, had an occasion to consider the aforesaid plea in the case of Mahesh Bal Bhardwaj v. U.P. Cooperative Federation Ltd., (2008) 1 UPLBEC 45, wherein the Court held that the gratuity cannot be withheld, unless either of the conditions, as mentioned in sub-clause (6) of Section 4 of the Act are present.
In another judgment of a Division Bench of this Court, in which one of us (Pradeep Kant, J.) was a member in Writ Petition No. 1519 (SB) of 2002, Kanti Prasad Sharma v. U.P. Cooperative Dairy Federation and Milk Union Centralises Services, decided on 26.4.2004, the Court had an occasion to consider the provisions of the aforesaid Section 4 of Payment of Gratuity Act and the Court found that if none of the conditions, as given in Section 4, sub-clause (6) exists, the gratuity cannot be withheld.
The aforesaid provision gives authority to the employer to withhold the gratuity only in case of termination of service, that too for the reason given in the aforesaid provisions.
For the aforesaid reasons, since in the instant case, neither the respondents were having any authority or jurisdiction to continue with the enquiry after the resignation of the petitioner was accepted nor the gratuity could have been withheld for making up the alleged loss, in terms of the orders passed in the enquiry, we set aside the orders dated 7.7.2011, 6.8.2009, 22.10.2007 and 5.4.2007, contained in Annexure Nos. 1, 2, 3 and 4 respectively to the writ petition.
We further issue a writ of mandamus directing the respondents to release all the payments towards gratuity and other dues, which have been withheld on account of aforesaid disciplinary proceedings.
Since the petitioner has been denied the benefit of gratuity for the last couple of years, we direct that the petitioner shall also be entitled to the statutory interest under the Payment of Gratuity Act.
The payment shall be made within a maximum period of six weeks from the date of receipt of a certified copy of this order.
The writ petition is allowed. No order as to costs."
In the case of Ram Sewak Gupta vs State Of U.P. and Others reported in 2015(33)LCD 940, this Court observed as under:-
"16. The question, thus, is as to whether without holding any departmental inquiry and without determining the responsibility of the petitioner for the alleged loss, solely on the basis of audit report, can any recovery from the petitioner be made.
17. It is well established that audit report cannot be used as substantive evidence of the genuineness or bonafide nature of the transactions referred to in the accounts. As has been held by this Court in the case of Dilip Singh Rana vs State of U.P. reported in 1993 (7) SLR 706, audit is only official examination of the accounts in order to make sure that the accounts have been properly maintained according to prescribed mode and further that audit report is a statement of facts pertaining to the maintenance of accounts coupled with the opinion of the auditor and thus it can only give rise to reasonable suspicion of commission of a wrong. Merely on the basis of said audit report without the charge of causing loss being established in a full-fledged departmental inquiry, no recovery of alleged loss caused to the State Exchequer can be made.
18. In similar circumstances, recovery sought to be made from the gratuity of a retired government employee on the basis of some audit report was not approved by a Division Bench of this Court in the case of Radhey Shyam Dixit vs State of U.P. and others, reported in 2006 (110) FLR 101."
It is settled principle that even administrative order which involve civil consequences must be passed after following the principle of natural justice and providing opportunity of hearing and the orders which have been passed against settled principle and are unsustainable. The basic idea of observing principles of natural justice is to secure justice or to put in another way to prevent miscarriage of justice.
Further any order either passed by court/tribunal or authority, which leads to civil consequences must be passed after giving an opportunity of hearing and the procedure adopted must be just, fair, reasonable, unarbitrary and impartial.
A seven-Judges' Bench of the Hon'ble Apex Court in the case of Maneka Gandhi v. Union of India, (1978) 1 SCC 248 : (AIR 1978 SC 597) has held that the substantive and procedural laws and action taken under them will have to pass the test under Article 14 of the Constitution. The test of reasons and justice cannot be abstract. They cannot be divorced from the needs of the nation. The tests have to be pragmatic, otherwise they would cease to be reasonable. The procedure prescribed must be just fair and reasonable, even though there is no specific provision in a statute or rules, made thereunder, for showing cause against action proposed to be taken against an individual, which affects the right of that individual. The duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action. Even executive authorities which take administrative action in-volving any deprivation of or restriction on inherent fundamental rights of citizens, must take care to see that justice is not only done hut manifestly appears to be done. They have a duty to proceed in a way which is free from even the appearance of arbitrariness, unreasonableness or unfairness. They have to act in a manner which is patently impartial and meets the requirement of the natural justice.
In Mohinder Singh Gill v. Chief Election Commissioner, (1978) 1 SCC 405 : (AIR 1978 SC 851), the Apex Court reiterated the same view.
In the case of D.K. Yadav v. J.M.A. Industries Ltd., (1993) 3 SCC 259, the Apex Court observed that an order which involves civil consequences, must be just, fair, reasonable, unarbitrary and impartial and meet the principles of natural justice. Same view has been reiterated in the cases of Canara Bank v. V.K. Awasthy, (2005) 6 SCC 321 : (AIR 2005 SC 2090); Bidhannagar (Salt Lake) Welfare Assn. v. Central Valuation Board, (2007) 6 SCC 668 : (AIR 2007 SC 2276); and Devdutt v. Union of India, 2008 (3) ESC 433 (SC) : ((2008) 8 SCC 725 : AIR 2008 SC 2513). In the case of Erusian Equipment and Chemicals Ltd. v. State of West Bengal and another A.I.R. 1975 SC 266; Raghunath Thakur v. State of Bihar and others A.I.R. 1989 SC 620; and Gronsons Pharmaceuticals (P) Ltd. v. State of Uttar Pradesh and others A.I.R. 2001 SC 3707 and the decisions of the Division Bench of this Court in Smt Rajni Chauhan v. State of U.P and others 2010 (6) AWC 5762 (All.) also it has been held that an order which leads to civil consequences cannot be passed without affording an opportunity of hearing and the same must be passed in conformity of principles of natural justice.
Hon'ble Supreme Court in State of Jharkhand Vs. Jitendra Kumar Srivastava [(2013) 12 SCC 210] has made it abundantly clear that leave encashment cannot be taken away without any statutory provision. In short, 'earned leave' which is created by statute, partakes the character of an emolument protected as a right to property of the concerned Government Servant under Article 300-A of the Constitution.
Taking into account the undisputed facts of the case and settled legal preposition, referred above, I am of the view that impugned orders dated 30.09.2009 and 23.04.2010 are liable to be interfered by this Court.
Accordingly, the impugned orders dated 30.09.2009 and 23.12.2010 are hereby quashed. The respondents are directed to pay the due amount to the petitioner keeping in view the aforesaid, within three months from the date of receipt of certified copy of this judgment. On due amount the petitioner shall be entitled to simple interest @ 6% per annum except on the amount of gratuity, on which the petitioner shall be entitled to the interest provided under the Payment of Gratuity Act.
The writ petition is allowed in above terms.
No order as to costs.
Order Date :- 13.02.2020 Jyoti/-