Arun Kumar Jha vs State Of Jharkhand & Ors on 4 October, 2017

[Cites 7, Cited by 1]

Jharkhand High Court

Arun Kumar Jha vs State Of Jharkhand & Ors on 4 October, 2017

Bench: Rajesh Shankar

                               1



   IN THE HIGH COURT OF JHARKHAND AT RANCHI

                      W.P.(L) No.- 4370 of 2010
     Arun Kumar Jha
     Son of late C.S. Jha, resident of 92H-6 Straight mile Road,
     PO & PS- Sakchi, Jamshedpur, District- East Singhbhum
                                                            ...Petitioner
                        -V e r s u s-
     1. The State of Jharkhand
     2. The Labour Commissioner-cum-Appellate Authority, under
        Payment of Gratuity Act, Jharkhand, Ranchi
     3. M/s. TISCO Ltd. Jamshedpur, PO & PS- Bistupur, Jamshedpur,
        District- East Singhbhum
                                                   .... Respondents
          CORAM: - HON'BLE MR. JUSTICE RAJESH SHANKAR
     For the Petitioner      :- Mr. Peeyush Krishna Choudhary, Advocate
     For the Respondent-State:- Ms. C.Prabha , JC to SC- IV
                                Mr. Vishal Kumar Rai, JC to SC- IV
     For TISCO                :- Mr. G.M. Mishra, Advocate
Order No.-07                                  Dated: 04.10.2017

          Heard learned counsel for the parties.
     2.   The present writ petition has been filed for quashing the
     order dated 14.02.2005 passed by the Labour Commissioner-
     cum-Appellate Authority under the Payment of Gratuity Act,
     1972 (in short "the Act, 1972") in Appeal Case No. P.G.-01 of
     2003 whereby the order of the Deputy Labour Commissioner,
     Jamshedpur-cum-Controlling Authority has been reversed with
     a direction to recover the amount of gratuity of Rs.8,139/- paid
     to the petitioner pursuant to the order of the Deputy Labour
     Commissioner, Jamshedpur- cum- Controlling Authority.

     3.   The factual background of this case is that the petitioner
     was employed in the establishment of Respondent No. 3 since
     30.03.1981

and separated from the service on 31.12.1999 after completion of 18 years and nine months. After retirement, the petitioner made representation to the respondent-company and vide letter dated 04.04.2000 the respondent-company also admitted that the petitioner was entitled to the gratuity amount 2 of Rs. 1,18,819/- but only a sum of Rs.1,10,680/- was paid. The petitioner filed a case before the Controlling Authority-cum- Deputy Labour Commissioner, Jamshedpur for recovery of the dues amount of Rs. 8,139/- which was decided vide order dated 12.06.2003 directing the respondent-company to make payment of Rs.8,139/- to the petitioner, which was complied by the respondent-company by making the said payment. However, the respondent-company also filed appeal before the Labour Commissioner-cum-Appellate Authority under the Act, 1972 being P.G Case No. 01 of 2003 , which was allowed by the impugned order dated 14.02.2005 directing the Deputy Labour Commissioner-cum-Controlling Authority, Jamshedpur under the Act, 1972 to recover the amount paid by the respondent- company and refund it to the respondent-company.

4. The learned counsel for the petitioner submits that the impugned order has been passed without affording any opportunity of hearing to the petitioner as required under Rule 18(6) of the Payment of Gratuity (Central) Rules, 1972. It is further submitted that the respondent-company had no right to withhold the payment of gratuity and as such the Deputy Labour Commissioner, Jamshedpur had rightly directed the respondent-company to pay the same. It is further submitted that the appeal preferred by the respondent-company before the Labour Commissioner-cum-Appellate Authority, Jamshedpur was not maintainable as no document was filed before the appellate authority to show that the company was competent and duly authorized to file the said appeal, however, the aforesaid appeal was entertained by the respondent no. 2- Labour Commissioner with erroneous finding as contained in the impugned order dated 14.02.2005.

5. Per Contra, the learned counsel appearing on behalf of the respondent-State and respondent no. 3 submit that the respondent no. 2 has passed the order in the capacity of an appellate authority as prescribed under Sub-Section (7) of Section 7 of the Act, 1972 and as such the same is within jurisdiction. It is further submitted that the petitioner had received excess amount of Rs.8,139/- at the time of receiving retirement benefits and therefore, the same is liable to be deducted from the amount payable to him. The learned counsel further put reliance on the judgment of Hon'ble Supreme Court rendered in the case of Secretary, ONGC and Another Vs. V.U Worrier reported in (2005) 5 SCC 245 and submits that dues of an employee can be recovered from the gratuity amount.

6. Heard the learned counsel for the parties and perused the materials on record. It is an admitted fact that the petitioner was paid the gratuity after deducting an amount of Rs. 8,139/-. The claim of the respondent-company is that the petitioner had taken an advance of Rs. 6,000/- for purchase of a refrigerator and at the time of separation from service i.e on 31.12.1999, there was an outstanding due of Rs. 8,139/- against the petitioner and as such the same was deducted from his gratuity amount. The respondent no. 2 allowed the appeal of the respondent-company by the impugned order dated 14.02.2005 on the sole ground that section 4(6) of the Act, 1972 provides that if the employee has caused loss to the employer, the latter is entitled to forfeit the gratuity partly or fully and since the advance taken by the petitioner was not returned, it amounts to causing loss to the employer and as such the employer has the right to forfeit the gratuity to the extent of said loss.

7. Sub-Section (6) of Section 4 of the Payment of Gratuity Act, 1972 reads as follows:-

Notwithstanding anything contained in sub-section (1),-

(a) the gratuity of an employee, whose services have been terminated for any act, willful 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 in committed by him in the course of his employment.

8. On perusal of the aforesaid provisions, it would appear that if an employee is terminated from service on the ground of any act, willful omission or negligence which caused damage to the employer's property, the gratuity payable to an employee is liable to be forfeited to the extent of loss or damage so caused. The gratuity of an employee may also be forfeited in the cases of his/her termination for disorderly conduct or for committing any offence involving moral turpitude. In the present writ petition, it is not the case of the respondent no.3 that the petitioner was terminated from the service for any act mentioned in Clauses (a) and (b) of Sub-Section (6) of Section 4 of the Act, 1972, rather the case of the respondent-company is that the petitioner had taken advance for purchase of refrigerator and an amount of Rs.8,139/- was outstanding toward principal and interest. The respondent no. 2 appears to have completely misconstrued the provisions of section 4(6) of the Act, 1972 while passing the impugned order dated 14.02.2005.

9. The Hon'ble Supreme Court in Jaswant Singh Gill Vs. Bharat Coking Coal Ltd. & Ors. reported in (2007) 1 SCC 663 in para 13 and 14 held as under:-

13. The Act provides for a closely neat scheme providing for payment of gratuity. It is a complete code containing detailed provisions covering the essential provisions of a scheme for a gratuity. It not only creates a right to payment of gratuity but also lays down the principles for quantification thereof as also the conditions on which he may be denied therefrom. As noticed hereinbefore, sub-section (6) of Section 4 of the Act contains a non-obstante clause vis-a-vis sub-section (1) thereof. As by reason thereof, an accrued or vested right is sought to be taken away, the conditions laid down thereunder must be fulfilled. 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, willful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of damage or loss caused.

The disciplinary authority has not quantified the loss or damage. It was not found that the damages or loss caused to Respondent No. 1 was more than the amount of gratuity payable to the appellant. Clause (b) of Sub- section (6) of Section 4 of the Act also provides for forfeiture of the whole amount of gratuity or part in the event his services had been terminated for his riotous or disorderly conduct or any other act of violence on his part or if he has been convicted for an offence involving moral turpitude. Conditions laid down therein are also not satisfied.

14. Termination of services for any of the causes enumerated in Sub-section (6) of Section 4 of the Act, therefore, is imperative.

10. In the aforesaid judgment, the Hon'ble Supreme Court held that sub-section (6) of section 4 of the Act, 1972 contains a non-obstante clause and before forfeiting gratuity, the conditions mentioned in section 4(6) of the Act, 1972 must be fulfilled. The termination of service for any of the causes enumerated in sub-section (6) of section 4 is a condition precedent for forfeiture of gratuity. Since in the present case, the forfeiture of an amount of Rs.8,139/- was not on the ground of termination of the petitioner for any of the conditions enumerated in sub-section (6) of Section 4 of the Act, the forfeiture cannot be said to be justified.

11. I have also perused the judgment of Hon'ble Supreme Court rendered in the case of Secretary, ONGC (Supra.) cited by the learned counsel for the respondents. In the said case, the matter was related to the recovery of penal rent from the gratuity for unauthorized occupation of the quarter. The Hon'ble Supreme Court took into consideration the regulation 5 of Oil and Natural Gas Commission (Death, Retirement and Terminal Gratuity, Regulations, 1969 which provided for recovery of dues of the ONGC. As per the said Regulation, the appointing authority or any other authority empowered by the ONGC in this behalf was conferred with the power to make recovery of dues of the ONGC before the payment of the death- cum-retirement gratuity dues in respect of an officer even without obtaining his consent. In view of the said provision, the Hon'ble Supreme Court held the recovery of penal rent from the gratuity amount of the employee as justified. However, the ratio of the said case is not applicable in the present case as the respondent-company has failed to show any such rules/regulation legally framed which entitles it to recover any dues from the gratuity amount of the employee.

12. Considering the aforesaid facts and circumstances, the order dated 14.02.2005 passed by the Labour Commissioner-cum-Appellate Authority under the Payment of Gratuity Act, 1972 in Appeal Case No. P.G.-01 of 2003 cannot be sustained in law and the same is, accordingly, quashed and set aside.

13. The writ petition is, accordingly, allowed with aforesaid observation.

(Rajesh Shankar, J.) Ritesh/A.F.R.

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