Andhra HC (Pre-Telangana)
D.K. Savitramma vs Anantapur District Co-Operative ... on 14 March, 1989
Equivalent citations: (1991)IILLJ350AP
ORDER
1. The petitioner filed an application under Section 33-C(2) of the Industrial Disputes Act against the responded herein for payment of gratuity, bonus and reimbursement of medical bills. The Tribunal found that the petitioner is entitled to receive the gratuity and bonus payable to her husband and the legal representatives are entitled to approach the competent authority for payment of gratuity. Having found like that, the Tribunal found that the respondent shall give notice to the petitioner and hold an enquiry with regard to the amounts said to have been mis-appropriated by late D. K. Narayana Rao, the husband of the petitioner. The petitioner was also advised to raise all pleas available to her in the said enquiry and the management shall pay the amounts due towards gratuity and bonus or a part thereof to the petitioner in the event it was found in the enquiry that no amount is due to the bank from D. K. Narayana Rao or less amount is due to the bank. The Tribunal held that if it is finally found that the amount is more than the gratuity and bonus payable to the petitioner is payable by late D. K. Narayana Rao to the bank, the bank need not pay the amount to the petitioner as it can appropriate the gratuity under Section 4(6) of the Payment of Gratuity Act. It is against the direction to hold an enquiry and pay the amount after deducting the same in the event of finding that some amounts are due to the bank, the petitioner, wife of late D. K. Narayana Rao, filed the present writ petition to quash the portion of the order of the Tribunal.
2. The main contention that has been advanced is that it is in the event of termination of service only, the question of appropriating the gratuity under Section 4(6) of the Payment of Gratuity Act arises.
3. It must be noted here that no provision has been made in the Payment of Gratuity Act the in the event of death of an employee the amount found to have been misappropriated during the course of employment can or cannot be recovered. Enquiry has been initiated in the year 1980 on the basis of audit report. The petitioner's husband D. K. Narayana Rao, though received notice about enquiry, has not submitted any explanation. It is only after the death of Narayana Rao when the legal representatives claimed the amount, the enquiry has been completed. The enquiry report that has been made, as is found from the order of the Tribunal, is only after the death of Narayana Rao, though the enquiry has been initiated while the employee was alive. The services of D. K. Narayana Rao were not terminated, but his services were automatically terminated on account of his death which is an act of God (vis major). It is only when the Asst. Labour Commissioner's order has not been implemented, the petitioner approached the Labour Court by filing an application under Section 33C(2) of the Industrial Disputes Act. Normally the petitioner has to approach the officer designated under the Payment of Gratuity Act for recovery of gratuity and cannot approach the Labour Court for payment of gratuity. In State of Punjab v. Labour Court, Jullendhar (1981-I-LLJ-354), the Supreme Court held that the proceedings for payment of gratuity due under the Payment of Gratuity Act must be taken under that Act and the application filed by the employees under Section 33C(2) of the I.D. Act did not lie. The Supreme Court further held that the Labour Court has no jurisdiction to entertain and dispose of such applications. The learned Judges gave a direction to the opposite party in the said case to pay the amount without driving the same employee to a separate proceeding. In Hindustan Petroleum Corporation, Bombay v. S. A. Bilgrami, (1984 Lab IC 1718) it was held that the employee can approach the proper forum under A.P. Shops and Establishment Act, 1966, for payment of gratuity. However, as the proceedings are pending since a long time and as no proper enquiry has been conducted by the authorities in the presence of the legal representatives after the death of the employee, the Tribunal thought it fit to give a direction to pay the amount of gratuity and bonus after the disposal of the matter with regard to misappropriation alleged to have been committed by the employee while he was in service. Certain offences committed by an employee will automatically be dissolved on account of his death. But certain offences alleged to have been committed by the employee during his service will not absolve him of the liability on account of his death. For instance in case of a conductor who was removed from service on account of embezzlement of funds and in the event of that conductor being dismissed from service and being dead during pendency of the proceedings, the legal representatives are entitled to continue the same to the extent of the claim with regard to backwages, though they are not entitled to claim reinstatement, as the plea of reinstatement has been dissolved on account of his death. Similarly, if a bank employee misappropriates funds of the bank and faces an enquiry and dies during pendency of the enquiry, the legal representatives are entitled to defend the case that case that has been set up by him. In the event if it is found that any amount is due from the employee, the bank is entitled to recover the same from the estate left by the deceased employee. For instance, an employee misappropriates one crore of rupees and acquires wealth and commits suicide, can it be said that the bank is not in a position to proceed against the properties acquired by the deceased employee ?
3A. In this case, the allegation originally started with irregularities committed by the deceased for a period of five years, ultimately resulted in making an allegation that he has misappropriated to a tune of Rs. 50,000/-. The petitioner herein also appears to have filed an application before the authorities to the effect that her husband has not committed any irregularity, nor misappropriated the funds. When the petitioner herself was in a position to defend the case and has got knowledge, she ought to have contested the enquiry and she should not have resorted to protract the matter. The petitioner cannot be allowed to blow hot and cold. At one stage she wanted to take away the amounts of gratuity and bonus and does not like to pay any amount due, alleged to have been misappropriated by her husband. We should not drive the bank to file a separate suit for recovery of the amount due on account of misappropriation committed by the deceased employee. Each case has to be considered on its own facts and circumstances. In 1980 the alleged fraud has been brought to the notice of the employee and the employee has not filed any explanation while he was alive and the legal representatives of the deceased employee wanted to take advantage of not paying any amount as the deceased died. The petitioner approached the Labour Court in the year 1986 : In April, 1986, the Labour Court disposed of the matter with a direction. Had she co-operated with the respondent in completing the enquiry by this time, the amount said to have been misappropriated would have been determined. The petitioner herself was responsible for the delay in settling the claim atleast from April, 1986. The petitioner cannot take advantage of the observation made by the Supreme Court where the Supreme Court found that for years together the management has not paid the amounts of gratuity, provident fund etc, and where they have driven the legal representatives of the deceased to move from pillar to post for realisation of the gratuity amount. When the petitioner herself was responsible for the delay, she cannot be permitted to take advantage of the observation of the Supreme Court in connection with the delay in payment.
4. H. S. Nanjundiah v. State of M. P. (1986-II-LLJ-76) is a case where action has been initiated after the retirement of the Government Servant. Rule 65 of M.P. Civil Service Pension Rules has been considered. The reasoning given therein will not apply to the facts of the present case.
5. Smt. Shanti Sidhu v. State of Punjab, is a case where departmental enquiry has been initiated and even before the submission of the explanation to the second show-cause notice given against the proposed punishment, the public servant died. The Punjab High Court considered Rule 8 of the Punjab Civil Services Punishment and Appeal) Rules and Rule 2(2) of the New Pension Rules. The following decisions relied upon by the petitioner in Garment Cleaning Works v. Its Workmen, (1961-I-LLJ-513); Hindustan Times Ltd. v. Their Workmen (1963-I-LLJ-120); Deokinandan Prasad v. State of Bihar (1984-I-LLJ-237); Harish Chandra Gupta v. State of M. P. (1985) I Serv LR 512 (M.P.) and Jaswant Singh Suller v. State of Punjab (1987) 1Serv LR 74 (Punjab & Haryana) have no relevance to the facts of the present case.
6. While considering the claim with regard to payment in connection with a dismissed employee for misconduct, the Supreme Court had an occasion to consider the same in Hindustan Times Ltd. case (supra). The Supreme Court was of the opinion that having regard to the nature of the gratuity, it will not be proper to deprive an employee of the gratuity earned by him because of his dismissal for misconduct and proper provision to make in this connection is that where an employee is dismissed for misconduct which has resulted in financial loss to the employer, the amount lost should be deducted from the amount of gratuity due. The portion of the order of the Tribunal which has been challenged by the petitioner is clearly in conformity with the view that has been expressed by the Supreme Court as early as in the year 1963. Gratuity is not paid to the employee gratuitously or merely as a matter of boon. It is paid to him for the service rendered by him to the employer, and when it is once earned, it is difficult to understand why it should necessarily be denied to him whatever may be the nature of misconduct for his dismissal. If the misconduct for which the service of an employee is terminated has caused financial loss to the works, then before gratuity could be paid to the employee he is called upon to compensate the employer for the whole of the financial loss caused by his misconduct; after this compensation is paid to the employer, if any balance from gratuity claimable by the employee remains, that is paid to him. What is the effect of the proceedings initiated after the retirement or dismissal of an employee is different from the proceedings that have been initiated for misconduct during the lifetime of the employee before his retirement. Since the proceedings have already been commenced in this case before the death of the employee while he was in service, the bank is at liberty to conduct enquiry after issuing notice to the legal representatives and complete the enquiry in the presence of the legal representatives. In the event of giving a direction to pay the gratuity and pension immediately, the possibility of recovering the amount found to have been misappropriated by the employee would be nil, as the petitioner has no other property. By virtue of the death of the employee, the court is not expected to convert the misfortune into one of windfall and the court has to strike equitable balance, so that either party may not suffer. But at the same time, the court must see that the gratuity and pension amount be paid at the earliest possible. Simply because the employee died during pendency of the charges, we cannot lay down a principle that the bank or the employer has no authority to continue the proceedings. The proceedings with regard to misappropriation have to be completed in the presence of the affected persons, so that they may not claim, in the event of finding any amount due, that the action of the employer is arbitrary, capricious and behind their back. In the event of the death or termination of an employee and if the charges of misconduct have been proved, the employer is entitled to deduct the whole of the financial loss caused by his misconduct from out of the gratuity claimable and that the employee or his legal representatives are entitled only for the remaining amount. If the amount due on account of gratuity as per rules has to be payable immediately without settling the amount misappropriated, it amounts to causing prejudice to the employer in recovering the amount found to have been misappropriated. The finding given by the Tribunal is correct and it does not warrant any interference by this court while exercising the jurisdiction under Art. 226 of the Constitution of India.
7. In the result; the writ petition is dismissed. No costs.