Madras High Court
D.Kalaichelvan vs Union Of India on 25 July, 2012
Author: Vinod K.Sharma
Bench: Vinod K.Sharma
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 25.07.2012
CORAM:
THE HONOURABLE MR. JUSTICE VINOD K.SHARMA
W.P.No.27311 of 2010 and M.P.No.1 of 2010
D.Kalaichelvan ... Petitioner
Vs.
1 Union of India
Rep. By its Executive Director (Appellate Authority),
Industrial Relations Division, Central Office,
Union Bank Bhavan, 239, Vidhan Bhavan,
Mumbai 400 021.
2 The General Manager (P), Disciplinary Authority,
Union Bank of India,
Industrial Relations Division,
239, Vidhan Bhavan, Narimanpoint,
Mumbai 400 021. ... Respondents
Writ petition filed under Article 226 of the Constitution of India, praying for the issuance of a Writ in the nature of Certiorari, to quash the impugned order passed by the second respondent dated 14.12.2009 bearing CO:IRD:6499:09 and the order of the first respondent dated 09.09.2010 bearing CO:IRD:4630-2010 and consequently directly the respondents to pay all the benefits as if the petitioner retired on 31.10.2009 with all the terminal benefits of Gratuity, Privilege leave encashment etc.,with interest at the rate of 18% per annum from the date when the amount became payable.
For Petitioner : Mr.Balan Haridas
For Respondents : Mr.Karthick for
M/s.T.S.Gopalan & Co.
*****
O R D E R
The petitioner has approached this Court with the prayer for issuance of writ in the nature of Certiorari, to quash the impugned order of the second respondent dated 14.12.2009 vide which punishment of compulsory retirement has been imposed on the petitioner with consequential prayer in the nature of mandamus, directing respondents to pay the petitioner retiral benefits of gratuity, leave encashment with interest at the rate of 18% per annum from the date when the amount became due till the date of payment.
2 The petitioner joined the second respondent Bank as Agricultural Field Officer in Scale I level in the year 1997. The petitioner during his tenure was promoted upto the level of Scale IV. The petitioner has put in 32 years of service with the respondent Bank.
3 On 31.01.2008, the petitioner was served with a charge memo alleging serious misconduct. The charges related to the account of M/s.Kannya Electronics Private Limited. The explanation submitted by the petitioner to the charge memo was not accepted, therefore, enquiry officer was appointed to enquire into the charges levelled against the petitioner.
4 It is not disputed that the enquiry officer conducted enquiry as per the service regulation and on appreciation of evidence, the enquiry officer held the petitioner guilty of the charges. The enquiry officer however held that misconduct of the petitioner was not motivated for personal gain, but it was the outcome of lack of diligence. It may be noticed here that similar allegations were levelled against the higher officers who had accepted the proposal of the petitioner regarding to M/s.Kannya Electronics Private Ltd. It is also not disputed that copy of the enquiry report was submitted to the petitioner and objections were invited from him. The competent authority after considering the objections of the petitioner, agreed with the findings of the enquiry officer and imposed the punishment of compulsory retirement.
5 Appeal filed by the petitioner against the order of compulsory retirement was dismissed on 09.09.2010.
6 The learned counsel for the petitioner challenged the order of compulsory retirement only on the ground that other officers who were charged along with the petitioner were not awarded any penalty which proves that the petitioner was discriminated by the respondents in imposing the punishment of compulsory retirement.
7 In support of this contention, the learned counsel for the petitioner placed reliance on the judgment of the Hon'ble Supreme Court in Man Singh vs State of Haryana and others [(2008)12 SCC 331] wherein the Hon'ble Supreme Court was pleased to lay down, that it is not open to the employer to discriminate between the employees charged with the same allegation regarding punishment.
8 The reliance on this judgment by the learned counsel for the petitioner is misplaced, admittedly, the charge against the alleged superior officer was not identical to that of the petitioner. Even otherwise, the learned counsel for the respondents stated at the bar that proceedings were held against all the officers responsible for misconduct and depending on the charges proved, punishment was imposed against them. The petitioner therefore, cannot challenge the order of punishment on the ground of discrimination, in absence of any material on record showing that the petitioner as well as other officers were similarly placed and were proceeded against on the same and identical charges.
9 This contention of the learned counsel for the petitioner therefore, deserves to be rejected.
10 The learned counsel for the petitioner however, vehemently contended, that the action of the respondents in not disbursing the encashment of accumulated privilege leave of 240 days in terms of Regulation 38 of Union Bank of India (Officers') Service Regulations 1979 (hereinafter referred to as regulation) and gratuity under Regulation 46 is violative of Article 14 of the Constitution of India.
11 Regulation 38 and 46 read as under:
"38. LAPSE OF LEAVE:
Save as provided below, all leave to the credit of an Officer shall lapse on resignation, retirement, death, discharge, dismissal or termination: Provided that where an Officer retires from the Bank's service, he shall be eligible to be paid a sum equivalent to the emoluments of any period, not exceeding 240 days of Privilege Leave he had accumulated. Provided, further that where an Officer dies while in service, there shall be payable to his lega representatives, a sum equivalent to the emoluments for the period, not exceeding 240 days of Privilege Leave to his credit as on the date of his death."
"46. GRATUITY:
(1) Every Officer, shall be eligible for gratuity on:
(a) Retirement
(b) Death (c ) disablement rendering him unfit for further service as certified by a medical officer approved by the Bank
(d) resignation after completing ten years of continuous service; or
(e) termination of service in any other way except by way of punishment after completion of 10 years of service. (2) The amount of gratuity payable to an Officer shall be one month's pay for every completed years of service, subject to a maximum of 15 months' pay.
Provided that where an Officer has completed more than 30 years, he shall be eligible by way of gratuity for an additional amount at the rate of one half of a month's pay for each completed year of service beyond 30 years.
Provided furhter that pay for the purpose of Gratuity for an Officer who ceased to be in service during the period 1.7.1993 to 31.10.1994 shall be with regard to scale of pay as specified in sub regulation (1) of Regulation 4.
Provided also that pay for the purpose of Gratuity of an officer who ceased to be in service during the period 1.4.1998 to 31.10.1999 shall be with regard to scale of pay as specified in sub-regulation (2) of Regulation 4.
Note: If the fraction of service beyond completed years of service is 6 months or more, gratuity will be paid pro rata for the period.
The Payment of Gratuity Act 1972 was amended w.e.f. 24.05.2010 as per Government Notification and IBA Circular No.HR & IR/CIR/76G(iii) 417 dated 28.05.2010.
In terms of this amendment, the ceiling on the amount of gratuity payable under Section 4 of Payment of Gratuity Act, 1972 was raised from Rs.3,50,000/- to Rs.10,00,000/- w.e.f. 24.05.2010. Accordingly, Central Board of Direct Taxes on 11.06.2010, approved notification of Rs.10.00 lakh (Rupees ten lakhs only) as the maximum amount of Gratuity entitled to exemption under sub-clause (iii) of clause (10) of section 10 of the Income Tax Act, 1961. (Staff Circular No.5680 dated 07.07.2010)."
12 The contention of the learned counsel for the petitioner is that reading of this Regulation shows, that the benefit of encashment of accumulated privilege leave and gratuity cannot be denied to the persons who is compulsorily retired by way of punishment.
13 The compulsory retirement falls within the definition of retirement, as held by the Hon'ble Supreme Court in the case of R.N.Rajanna (DR) vs. State of Karnataka and another (2004(1) SCC 249). The Hon'ble Supreme Court in this case was pleased to lay down as under:
"6. The submissions on either side have been carefully considered in the light of the relevant government orders, rules and decisions of Court, but they do not deserve countenance in this appeal for according any relief In favour of the appellant, as prayed for. A careful perusal of the three Government orders would belie the claim of the appellant and the view taken by the authorities below and the High Court that the appellant cannot take umbrage under those orders and that the orders dated 19.1.1994 was not made to govern the claims of all pensioners as a policy decision but those who were concerned in the case filed before the Tribunal who were granted relief by the Tribunal in Application No. 509 of 1987 and Application No. 1803 of 1990, only and that too subject to the orders that may be ultimately passed by this Court on the appeal said to have been filed against those orders, seem to be quite in accordance with law and does not call for interference. Though, the word 'retirement' may take within its fold all or any kinds of retirement when the same is used in the context of 'superannuation' or retirement by way of superannuation, in service parlance the well settled meaning it already acquired and even in the normal course to be assigned is that it has relevance and relates to discharge from a post on account of the age fixed for such retirement, uniformly for all or particular class or category of service holders. The plea to the contrary cannot be justified and all the more so in this case, in the context of the specific language as well as the purpose of the orders made by the government on 19.1.1994."
14 Though this judgment does not deal with compulsory retirement, but at the same time, the object of compulsory retirement by way of punishment is that an employee who has served the institution for sufficient period, should not lose the benefits which accrue to him for long service rendered by him.
15 In support of the contention that compulsory retirement cannot be equated with the resignation, dismissal, or termination by way of punishment, the learned counsel for the petitioner placed reliance on the judgment of the Hon'ble Division Bench of Punjab & Haryana High Court in UCO Bank and others vs Ashwani Kumar Sharma (LPA No.191 of 2006(O&M) decided on 01.02.2010) wherein while interpreting provisions of Regulation 38 and 46 of UCO Bank which are identical to that of regulation of respondent Bank was pleased to lay down as under:
"6. Learned counsel for the appellants submits that Regulations 46 and 38 had not been correctly appreciated by learned Single Judge and the said regulations justified withholding of gratuity and leave encashment.
7. We do not find any merit in this submission.
The regulations in question are as under:-
46(1) Every Officer, shall be eligible for gratuity on:- a) retirement b) death
c) disablement rendering him unfit for further service as certified by a medical officer approved by the Bank
d) resignation after completing ten years of continuous service; or e) termination of service in any other way except by way of punishment after completion of 10 years of service. 38. Lapse of Leave. Save as provided below, all the leave to the credit of an officer shall lapse on resignation, retirement, death,discharge, dismissal or termination;
Provided that where an officer retires from the banks service he shall be eligible to be paid a sum equivalent to the emoluments of any period, not exceeding 240 days, of privilege leave that he had accumulated.
Provided further that where an officer dies while in service, there shall be payable to his legal representatives, a sum equivalent to the emoluments for the period, not exceeding 240 days, of privilege leave to his credit as on the date of his death.
8. A perusal of above shows that Clause (e) of Regulation 46 above which has been relied upon by learned counsel for the appellants cannot apply to the case of compulsory retirement Similarly, First Proviso to Regulation 38 clearly shows that on retirement, an officer is entitled to leave encashment. There is no provision for withholding gratuity and leave encashment in the case of compulsory retirement."
16 The learned counsel for the respondents on the other hand, opposed this writ petition by vehemently contending that the stand of the petitioner that the other officers who were charged on the same allegation were not proceeded with is not correct, as all the offences found guilty were also imposed punishment for the proved lapse.
17 The main challenge of the learned counsel for the respondents, to the claim of encashment of accumulated privilege leave and gratuity is that the petitioner was imposed a punishment of compulsory retirement on account of misconduct which resulted in huge loss to the bank, which debars the petitioners to encashment of privilage leave and gratuity.
18 The learned counsel for the respondents referred to Regulation 20(3) to contend that the officer against whom disciplinary proceedings have been initiated, cannot claim retirement benefits though he may retire on superannuation, till the proceedings are completed and final order is passed, thereon except to claim contribution towards CPF.
19 Regulation 20(3) of Union Bank of India (Officers') Service Regulations, 1979 reads as under:
"20(3)(i) An Officer against whom disciplinary proceedings are pending shall not leave/discontinue or resign from his service in the Bank without the prior approval in writing of Competent Authority and any notice or resignation given by such an Officer before or during the disciplinary proceedings shall not take effect unless it is accepted by the Competent Authority.
(ii) Disciplinary proceedings shall be deemed to be pending against any employee for the purpose of this regulation if he has been placed under suspension or any notice has been issued tohim to show cause why disciplinary proceedings shall not be instituted against him and wil be deemed to be pending until final orders are passed by the Competent Authority.
(iii) The Officer against whom disciplinary proceedings have been initiated will cease to be in service on the date of superannuation but the disciplinary proceedings will continue as if he was in service until the proceedings are concluded and final order is passed in respect thereof. The concerned Officer will not receive any pay and/or allowance, after the date of superannuation. He will also not be entitled for the payments of retirement benefits till the proceedings are completed and final order is passed thereon except his own contribution to CPF."
20 This contention of the learned counsel for the respondents only deseves to be noticed to be rejected, as the petitioner is not claiming retiral benefits pending departmental proceedings, as admittedly, the petitioner was imposed a penalty of compulsory retirement.
21 The learned counsel for the respondent vehemently contends, that the interpretation sought to be given by the learned counsel for the petitioner cannot be accepted, as reading of the regulation shows that leave to the credit of the officer lapses on resignation, retirement, death, discharge, dismissal or termination from service. The word 'termination' would include compulsory retirement, and therefore, petitioner is not entitled to encashment of accumulated privilege leave.
22 This contention of the learned counsel for the respondent cannot be accepted. The termination can be by two modes, i.e. simple termination in terms of contract and service without attaching any stigma, the employee can also be terminated for misconduct with stigma, but by no stretch of imagination termination can cover compulsory retirement.
23 The very object of imposing punishment of compulsory retirement for misconduct, is that an employee should not lose benefit which accrued to him for the service rendered till the date of compulsory retirement. The Regulation 38 being beneficial piece of legislation has to be interpreted to advance the object and not to defeat it and in case two views are possible one favouring the employee is to be accepted. In this case, no other view than the one that employee imposed with punishment of compulsory retirement is entitled to encashment of privilege leave can be formed.
24 The learned counsel for the respondents, also vehemently contended, that under the gratuity Act, person responsible for the loss caused to the employer, which results in order of punishment, is not entitled to benefit of gratuity. Therefore, provisions of gratuity Act when read with Regulation 46 leaves no manner of doubt that the petitioner is not entitled payment of gratuity.
25 This contention of the learned counsel is again misconceived. The regulation making authority clearly stipulated that an employee on retirement is entitled to payment of gratuity. The word 'retirement' would include compulsory retirement, therefore, the case of the petitioner is covered under regulation 46. The compulsory retirement cannot be treated as termination by way of punishment, as the termination is one of the punishment under the regulations. If the regulation making authority had any intention to deny gratuity to employee imposed with punishment of compulsory retirement, it could have been provided under the regulations. It is not open to the Court to add words to statutory provisions, when these do not suffer from any ambiguity.
26 Reliance by the learned counsel for the respondents on the gratuity act is also misplaced. Section 4(6A) of Gratuity Act also stipulates denial of gratuity to an employee who is terminated for any act of wilful omission or negligence, causing damage or loss or destruction of the property belonging to the employer and does not cover compulsory retirement 27 As already observed above, the petitioner was not terminated but imposed a punishment of compulsory retirement, therefore Section 4(6A) of Gratuity Act also has no application.
28 For the reasons stated hereinabove, while finding no force in the contention of the learned counsel for the petitioner in challenging the order of compulsory retirement, it is held that the petitioner is entitled to encashment of accumulated privilege leave and gratuity under regulation.
29 Consequently, this writ petition is partly allowed. While upholding the order of compulsory retirement, a writ in the nature of mandamus is issued, directing the respondents to release the benefit of encashment of accumulated privilege leave upto 240 days and Gratuity due to the petitioner. The petitioner shall also be entitled to interest at the rate of 9% p.a. on the amount of encashment of accumulated privilege leave and gratuity from the due date till the date of payment.
30 The needful be done within six weeks of the receipt of certified copy of this order.
Connected miscellaneous petition is closed.
No cost.
vaan 1 Union of India Rep. By its Executive Director (Appellate Authority), Industrial Relations Division, Central Office, Union Bank Bhavan, 239, Vidhan Bhavan, Mumbai 400 021.
2 The General Manager (P), Disciplinary Authority, Union Bank of India, Industrial Relations Division, 239, Vidhan Bhavan, Narimanpoint, Mumbai 400 021