Telangana High Court
Andhra Bank, Rep.By Chairman, ... vs The Govt.Of India, Rep.By Controlling ... on 26 April, 2024
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
1
THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITION No.28208 of 2011
ORDER:
This writ petition is filed seeking a writ of Certiorari, to call for records pertaining to the Order made in Application No.48/4/2010-E2 dated 30 Nov 2010 and consequential order in Application No.48/2/2011-E2 dated 30 June 2011 rendered by 1st respondent to law, and consequently to quash the same as being illegal and contrary to law.
2. Heard Dr.K. Lakshmi Narasimha, learned counsel for the petitioner, and Sri Gadi Praveen Kumar, Deputy Solicitor General of India.
3. Brief facts of the case are that the 2nd respondent joined the service of petitioner-bank on 09.08.1973 in clerical cadre and superannuated on 28.02.2010 as Senior Manager in Middle Management Grade Scale III. He is a pension optee. On the date of his retirement a CBI case was pending against him on the file of Special Judge for CBI Cases, at Visakhapatnam, which is pending even as on date. On his retirement, all benefits were paid except gratuity. This is because of special regulations prevailing in the bank, called Andhra Bank (Employees') Pension Regulations 1995. Accepting all other benefits, the petitioner retired from the bank. While so, after retirement and after receiving all other terminal benefits, the 2nd respondent has made an application on 16.06.2010 to the 1st respondent 2 complaining against the bank that he was not paid the gratuity either as per the Payment of Gratuity Act or as per the Service Regulations of the bank. On being given notice, the petitioner-bank has resisted the claim on several grounds, namely, that in view of the bar contained in Regulation 46(2) of the Regulations, 1995, his claim for gratuity was premature. The 1st respondent rejected all the defence of the petitioner-bank and by orders dated 30.11.2010 allowed the application of 2nd respondent directing the petitioner-bank to pay him Rs.3.50 lakhs as payable under the Payment of Gratuity Act together with interest @ 10% per annum from the date of retirement of 2nd respondent till payment. It was held by the 1st respondent that since there is no provision incorporated in the Act for withholding the gratuity payable to an employee on his exit from service on the ground of pendency of departmental / judicial proceedings, the gratuity should not have been withheld by the petitioner-bank. The petitioner-bank has paid the amount of Rs.3.50 lacs together with interest to the 2nd respondent in view of the said order. After receipt of the amount as per the said order, the 2nd respondent has filed another application on 26.3.2011 under Section 4 of the Payment of Gratuity Act seeking a direction for payment of difference of gratuity as payable as per Service Regulations of the bank and the amount paid as per the orders dated 30.11.2010 of the 1st respondent plus interest thereon from the date of his retirement till payment. The bank has resisted the claim but 3 the 1st respondent without considering any of the grounds urged by the petitioner-bank has passed a consequential order on 30.06.2011 directing the bank to pay the differential amount. Aggrieved by both these orders, the present writ petition is filed.
4. Learned counsel for the petitioner contends that the 1st respondent has failed to appreciate the full import of the Regulations, 1995 whereunder there is a prohibition against payment of gratuity when any departmental / judicial proceedings are pending against an employee. In the present case, admittedly, a CBI case is pending against 2nd respondent and hence in view of the Regulations, he is not entitled for gratuity. It is the case of petitioner that the 1st respondent erred in allowing the applications of 2nd respondents by overlooking the statutory regulations of the bank. It is also contended that the amount payable under the Payment of Gratuity Act to the 2nd respondent on the date of his retirement would be Rs.3.50 lakhs only and the 1st respondent has passed orders on 30.11.2010 directing the petitioner bank to pay the said amount, and in compliance of the orders passed, without prejudice to challenge the notice, the bank paid the said amount of Rs.3.50 lakhs together with interest on 11.01.2011. The 2nd respondent has duly received the said amount and after receipt of the same has filed the second application seeking payment of differential amount, i.e., the amount determined under the Act and the amount payable as per the 4 Service Regulations of the bank. It is further contended that the retirement of 2nd respondent was prior to the enhancement of ceiling limit of gratuity from Rs.3.5 lakhs to Rs.10 lakhs under the Act. The impugned order directing payment of gratuity as per the Service Regulations of the bank regulations is beyond the powers and jurisdiction of the 1st respondent and hence the impugned order is bad in law. It is also contended that as per Service Regulations of the bank, the gratuity amount payable is higher than the one stipulated under the Payment of Gratuity Act and if higher amount is to be paid, then the Regulations have to be followed strictly. In that case, by virtue of Regulations, no gratuity could be ordered to be paid to the 2nd respondent. In the alternative, if the employee is governed by the Act, then as per Act the eligible amount will have to be computed and paid, in which case a lesser amount will have to be paid rather than the higher amount as was directed to be paid in the present case. It is the further contention of learned counsel for the petitioner-bank that the 1st respondent has taken cognizance of the Service Regulations of the bank in so far as they pertain to computation of gratuity, but very strangely, has fallen back upon the Payment of Gratuity Act, in ordering payment of differential amount to the 2nd respondent. Either of the two must only be applied, i.e., either the Payment of Gratuity Act, or the Service Regulations of the Bank; and therefore it is contended that the 1st respondent has misdirected itself in 5 ordering payment of Gratuity in terms of the Service Regulations of the Bank and at the same time ignoring the prohibition contained in the said Regulations and therefore the impugned order deserves to be quashed.
5. A counter affidavit has been filed by respondent No.2 stating that the 2nd respondent was appointed as Clerk in the petitioner Bank on 09.08.1973, and thereafter promoted as Junior Management I in 1977, Middle Management II in 1983, and Middle Management III / Senior Manager in 1991, and the 2nd respondent retired from the service of bank on 28.02.2010 after rendering about 37 years of service. It is averred in the counter that with regard to payment of gratuity, the 2nd respondent made an application on 16.06.2010 before the 1st respondent who happens to be the Controlling Authority under the Act. The Controlling Authority after hearing all the parties has passed the orders dated 30.11.2010 directing the petitioner Bank to pay gratuity of Rs.3,50,000/- along with interest of Rs.23,333/- within 30 days from the date of receipt of the order. The 1st respondent Controlling Authority further directed that interest @ 10% to be paid on the said amount from the date of order till the date of payment. In pursuance of the said order, the petitioner Bank paid an amount of Rs.3,50,000/- towards gratuity and a sum of Rs.23,333/- towards interest, however, it failed to pay interest @ 10% from the date of order till the date of payment as directed by the 1st respondent. It is also averred that the 1st respondent Controlling 6 Authority has arrived at the amount of Rs.3,50,000/- basing upon Sub Sections 2 and 3 of Section 4 of the Act according to which for a completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned. However, as per Regulation 46 of the Andhra Bank (Office) Service Regulations, 1982, the amount of gratuity payable to an officer shall be one month's pay for every completed year of service subject to a maximum of 15 months pay and if an officer has completed more than 30 years of service 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 and as per Sub Section 5 of Section 4 of the Act, nothing in the said Section shall affect the right of employee to receive better terms of gratuity under any award or agreement or contract with the employer, and in view of the said provisions, the 2nd respondent filed an application dated 26.03.2011 before the 1st respondent claiming the differential amount of gratuity along with interest thereon and also interest from the order dated 30.11.2010 till the date of payment of amount. The 1st respondent Controlling Authority taking into consideration the contentions raised by all the parties concerned passed orders dated 30.06.2011 directing the petitioner Bank to pay the differential amount of gratuity along with interest as claimed in the 2nd 7 respondent's application dated 26.03.2011. It is also averred in the counter that the main contention of petitioner Bank before the 1st respondent Controlling Authority was that a CBI case was pending against me before the Court of Special Judge for CBI cases at Visakhapatnam, that as per Regulation 46(2) of the Andhra Bank (Employees) Pension Regulations, 1995, gratuity cannot be paid to an employee against whom Departmental / Judicial proceedings are instituted. It is also averred that the petitioner bank has accepted the order dated 30.11.2010 made by 1st respondent Controlling Authority and paid the amount stipulated in the said order, and having accepted the said order, it is not open for the petitioner-bank to raise the contention that the petitioner is not entitled to payment of gratuity. It is also averred that the writ petition is not maintainable inasmuch as there is a statutory appeal provided to the appropriate Government under Sub Section 7 of Section 7 of the Payment of Gratuity Act, 1972, against the order of the 1st respondent Controlling Authority, and therefore the writ petition is liable to be dismissed.
6. In V. Balakrishna v. General Manager, MTH Division, HMT Ltd., Balanagar, Hyderabad 1, it is observed as under:
"4. The respondent-company raised a preliminary objection as to the maintainability of the writ petition. It is stated that the petitioners have to 1 MANU/AP/0076/1999 8 get their claims adjudicated under the provisions of the Act and the Rules framed thereunder. The Act provides for adjudication of the claims by the Controlling Authority. An appeal is provided against an order passed by the Controlling Authority. The Payment of Gratuity Act is a self contained code and all the claims / disputes arising under the said Act have to be adjudicated before the Authority constituted for the purpose."
7. It is required to notice that in none of the said decisions the question relating to the maintainability of a writ petition was gone into. The said plea was not raised and, therefore, there is no decision touching upon that aspect of the matter.
8. The Payment of Gratuity Act enacts a complete code containing detailed provisions covering all the essential features of a scheme for payment of gratuity. It creates the right to payment of gratuity, indicates when such right will accrue, and also further provides for quantification of the gratuity. The Act, itself, provides the mode and method of recovery of the amount. It contains an especial provision for payment of interest, if the gratuity amount is not paid by the employer within the specified time and such interest not exceeding the rate notified by the Central Government from time to time for repayment of long term deposits. The Act, itself, provides for appointment of Controlling Authority, who is entrusted with the task of administering the Act. An order passed by the Controlling Authority can be corrected in appeal by the appellate authority, particularly constituted under the act. It is, thus, clear that the Parliament intended that the proceedings for payment of gratuity due under the Payment of Gratuity Act must be taken under that Act."
11. "........It would amount to this Court substituting its own opinion for that of the Controlling Authority. Such a course is not permissible. This Court, in appropriate cases, may judicially review the order of the Controlling Authority even in the matter of awarding interest. But it would not be possible for this Court to decide and quantify the rate of interest by itself."
9
7. In R. Nagaraju v. Managing Director, Andhra Pradesh State Warehousing Corporation, Hyderabad 2, it is held as under:
"6. Sub-section (5) of S.4 of the Act reads as follows:
(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer, for better terms of gratuity.
10. There appears to be some justification in the contention. But the explanation put forward may be true or may not. However, the petitioner cannot be denied the benefit that was conferred by virtue of Sub-sec(5) of S.4 of the Act read with Sub-sec(3). It is not the case of the respondent that the regulations are invalid. It is not denied that for the payment of gratuity the regulations are being followed. Regulation 7 also indicates that the gratuity has to be paid under these regulations and such payment is final.
12. A plain reading of regulation 4 shows that the Corporation granted better terms of gratuity to the employee. The petitioner is, therefore, entitled to be paid in accordance with regulation 4."
8. In view of the foregoing discussion, this Court deems it appropriate to relegate the petitioner to avail the statutory remedy available as per law.
9. Accordingly, the writ petition is disposed of, directing the petitioner to approach appropriate authority under Sub-Section 7 of Section 7 of the Payment of Gratuity Act, 1972. Needless to state that it shall be open to the parties to raise all the contentions sought to be raised before this 2 1998 (4) LLN 137 10 Court in this writ petition. It is also made clear that the time consumed in pursuing this writ petition by the petitioner before this Court shall be discounted while calculating the aspect of limitation by the appropriate forum. No costs. Miscellaneous petitions, if any pending, shall stand closed.
_____________________________ Justice Nagesh Bheemapaka April, 2024 ksm 11 THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION No.28208 of 2011 April, 2024 ksm