Gujarat High Court
Amratbhai Shamalbhai Patel vs Bank Of Baroda on 25 March, 2022
Author: Biren Vaishnav
Bench: Biren Vaishnav
C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO.15055 of 2019
With
R/SPECIAL CIVIL APPLICATION NO.3569 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV Sd/-
================================================================
1 Whether Reporters of Local Papers may be allowed No to see the judgment ?
2 To be referred to the Reporter or not ? No 3 Whether their Lordships wish to see the fair copy No of the judgment ?
4 Whether this case involves a substantial question No of law as to the interpretation of the Constitution of India or any order made thereunder ?
================================================================ AMRATBHAI SHAMALBHAI PATEL Versus BANK OF BARODA ================================================================ Appearance:
MR UT MISHRA(3605) for the Petitioner(s) No. 1MR DARSHAN M PARIKH(572) for the Respondent(s) No. 1 ================================================================ CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV Date : 25/03/2022 COMMON CAV JUDGMENT
1. SCA No.3569 of 2018 has been filed by Bank of Baroda, the employer challenging the orders of the Controlling Authority under the Payment of Gratuity Act, 1972 dated 3.5.2017 and the order of the appellate authority dated 27.12.2017 confirming the order of the Controlling Authority by which the Controlling Authority Page 1 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 directed the petitioner - Bank to pay gratuity of Rs.10,00,000/-
alongwith simple interest at 10% p.a. from the date of entitlement of gratuity to actual date of payment to the respondent employee.
2. SCA No.15055 of 2019 has been filed by the employee challenging the order of dismissal dated 12.2.2016 by which the employee petitioner was dismissed from the services of the Bank. He has also challenged the communication dated 23.6.2016 by which his application for compassionate allowance was rejected.
3. Since both the petitions, that of the employer Bank and that of the employee who challenged the order of dismissal are to be heard together and the facts are overlapping, they are considered as under:
3.1. The employee Shri Amrathbhai Patel was appointed as a Clerk with the Bank on 1.4.1978. He was thereafter promoted as Senior Manager and reached the age of superannuation on 31.5.2015. Before the petitioner reached the age of superannuation, the Bank issued a letter dated 13.5.2015 informing the employee that they were invoking Regulation 20(3)(iii) of Bank of Baroda Officers' Service Regulations, 1979, inasmuch as, since the Page 2 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 petitioner employee was reaching superannuation on 31.5.2015, and since disciplinary proceedings have been initiated against him by virtue of a charge-sheet dated 27.1.2015, as per Regulation 20(3)(iii) though the employee would retire on 31.5.2015, the disciplinary proceedings will continue as if the employee was in service until the proceedings are concluded and a final order is passed in respect thereof. The communication dated 13.5.2015 further stated that the employee shall not be entitled to the payment of retirement benefits except his own contribution to the provident fund till the conclusion of the proceedings and the final decision being communicated to him. The employee therefore retired on superannuation with the inquiry continuing in accordance with Regulation 20(3) of the Regulations.
3.2. On 12.2.2016, the departmental inquiry was concluded based on the charge-sheet dated 7.1.2015 and on 12.2.2016 a penalty of dismissal was imposed on the employee. The order of 12.2.2016 indicated that the employee was dismissed from the Bank services which shall ordinary be a disqualification for future employment.
The period of suspension shall also be treated as period not spent on duty. Since the employee was dismissed from service, the provisional pension that was being paid to him had been stopped in Page 3 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 view of the order of dismissal. On 23.6.2016, the employee requested for compassionate allowance under Regulation 31 of the Bank of Baroda Employees (Pension) Regulations, 1995. That request for compassionate allowance was rejected on 23.2.2016 by the Bank. The employee approached the Controlling Authority under the Payment of Gratuity Act by filing an appropriate form under the Payment of Gratuity Rules on 1.8.2016. In the application so filed and the Annextures thereto it was stated that the employee had retired on superannuation on 31.5.2015. The Bank filed its reply before the Controlling Authority on 17.10.2016 and 15.2.2017. The Controlling Authority by an order of 3.5.2017 held that the employee was entitled to being paid the amount of gratuity holding that provisions of the Gratuity Act particularly Section 4(6)(a) thereof entitled the employer to forbid gratuity in case the employee was terminated from the services. The Controlling Authority held that the employee had superannuated from the services and therefore it was not possible for the employer Bank to invoke Section 4(6) of the Act and since the employee was allowed to retire on superannuation, he was entitled to the payment of gratuity. Reliance was also placed on the provisions of Sec.14 of the Act. That order of the Controlling Authority was challenged by the Bank before the appellate authority by filing an appeal on Page 4 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 13.7.2017. The Bank deposited an amount of Rs.12,30,137/- while filing an appeal before the authority. The appellate authority by an order dated 7.12.2017 dismissed the appeal and confirmed the order of the Controlling Authority. That gave rise to filing of a petition by Bank being SCA No.3569 of 2018.
4. The employee being aggrieved by the order of dismissal dated 12.2.2016 and also by the order dated 23.6.2016 by which his application for compassionate allowance was rejected filed SCA No.15055 of 2019, on 5.9.2019 challenging the order of dismissal of 12.2.2016 and the communication dated 23.6.2016. The challenge to the order in the petition was that of dismissal on the ground that the order was bad on several counts and in violation of principles of natural justice and it was a case of no evidence.
5. Mr. Darshan Parikh, learned advocate appearing for the Bank in both the petitions submitted as under:
5.1. That the Payment of Gratuity Authority as far as the order under challenge in the petition of the Bank could not have gone into the question whether the Bank had authority to pass the order of dismissal after the employee had reached the age of Page 5 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 superannuation nor could the authority opine on the correctness or otherwise of the order of dismissal.
5.2. Mr. Parikh would submit that assuming for the sake of argument that there was jurisdiction with the Controlling Authority to go into the question of validity, Regulation 20(3)(iii) was required to be given effect to in accordance with the decision of the Supreme Court in the case of Ramesh Chandra Sharma v. Punjab National Bank reported in 2007(9) SCC 15. Assailing the orders of the Controlling Authority before the Appellate Authority, Mr. Parikh would submit that the application filed by the employee before the Gratuity Authority was a misstatement made that he had retired on superannuation on 31.5.2015. The employee was dismissed on 12.2.2016 and in the application filed before the authority, he had not stated that he had been dismissed from service. His application for compassionate allowance was rejected.
The Bank in the charge-sheet issued to the petitioner on 27.5.2015 had categorically pointed out that while the petitioner was posted as Senior Branch Manager, there were serious acts of omission and commission in sanctioning, disbursement and monitoring of various credit facilities by virtue of which the accounts had become non performing assets and there was a loss caused to the Bank of Page 6 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 Rs.19.84 crores as a result of the petitioner. It was based on this charge-sheet that the Inquiry Officer held that the charges were proved and order of dismissal was issued on 12.2.2016. Thereafter, the Bank had issued a notice on 15.3.2016 asking the petitioner to show cause as to why the gratuity of the employee should not be forfeited in view of the loss suffered by the Bank. By an order 7/17-6-2016 after considering the reply filed by the employee on 25.4.2016, the Bank had forfeited the amount of gratuity.
5.3. Mr. Parikh would submit that now the issue was no longer res-integra inasmuch as the Supreme Court in the case of Mahanandi Coalfields Limited v. Rabindranath Choubey reported in 2020(18) SCC 71 had overruled the decision of the Supreme Court in the case of Jaswant Singh Gill v. Bharat Coking Coal Limited reported in 2007(1) SCC 663 and held that even after superannuation it is open for the employer to impose a penalty of dismissal because it was permitted under the Rules of the employer which was based on recovery of pecuniary loss caused to the employer. Hon'ble Supreme Court held that withholding of gratuity after superannuation was permissible. Mr. Parikh in support of his submissions as far as the order of the appellate authority is concerned would also rely on the decision Page 7 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 rendered by this Court in SCA No.11869 of 2005 in the case of Pravinchandra Venilal Sopariwala dated 10.2.2020 which was confirmed in appeal namely; LPA No.48 of 2021 on 11.8.2021.
6. As far as the petition by the employee is concerned, Mr. U.T. Mishra, learned counsel appearing for the employee would support the orders of the Controlling Authority and submit that in view of the decision of the Supreme Court in the case of Uco Bank and others v. Rajendra Shankar Shukla in Civil Appeal No.2693 of 2013 dated 15.2.2018, it was not open for the Bank to rely on the Regulations and withhold the amount of gratuity.
7. In support of his submissions while assailing the order of dismissal in SCA No.15055 of 2019, Mr. Mishra would submit, that vide the order of dismissal dated 12.2.2016, the employees' dismissal was bad. Relying on Regulation Nos.5 and 6 of the Bank, Mr. Mishra would submit that Regulation 6 specifically provides that in case of holding departmental inquiry, the disciplinary authority shall frame definite and distinct charges and the statement of allegations will be supplied with the list of documents and witnesses in writing to the employee. He would submit that the Bank has not followed this procedure. Inviting attention of the Court to the inquiry officer's Page 8 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 report, Mr. Mishra would submit that the Bank has not examined any witness to establish the charges levelled against the employees but has proceeded entirely on assumption and presumption. No documentary evidence is supplied to the employee. No witness has been examined by the Bank. The inquiry has proceeded in super sonic speed and on the basis of statement of the Presenting Officer, the allegations are established on the principle of preponderance of probability. No evidence is produced by the Bank to show as to how it suffered a loss.
7.1. Mr. Mishra would submit that in fact the Bank has not suffered any loss inasmuch as by filing suits under the Act, more than an amount of Rs.11,55,00,000/- was recovered.
7.2. Mr. Mishra would submit that the order of dismissal therefore was in gross violation of principles of natural justice and, therefore, deserves to be quashed and set aside. He extensively relied on the affidavit filed by the employee in the petition that the employer had challenged the order of the gratuity authority. He would submit that though detailed reply was submitted before the inquiry officer, giving explanation about each charge levelled against the petitioner, the inquiry officer proceeded with super Page 9 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 sonic speed and completed the inquiry. Inviting the attention to the averments to the affidavit in reply to each chart, he would explain that the Bank had filed more than 135 suits before the Debts Recovery Tribunal from the persons who had obtained loans and the recovery was accordingly made and, therefore there was no financial loss suffered to the Bank. Mr. Mishra would therefore submit that not only the orders of the Controlling Authority and the Gratuity Authority were just and proper, inasmuch as, it was not open for the Bank to pass an order of dismissal after the employee had retired on superannuation as held by the decision of the Supreme Court in the case of Rajendra Shukla (Supra) but even otherwise the order of dismissal was clearly bad.
8. Mr. Parikh for the employer - Bank in the petition would submit that the petition of the employee challenging the order of dismissal was clearly an after thought. After the orders of the Appellate Authority of the Gratuity Act were challenged by the Bank in filing SCA No.3569 of 2018, when the Bank filed the petition and the Court issued notice on 6.3.2018 in those petitions and granted stay against the withdrawal of gratuity and the employee was served with the notice of the Court on 7.3.2018. The employee approached the Gratuity Authorities and withdrew the entire Page 10 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 amount. He transferred an amount of Rs.10,00,000/- to another account and withdrew Rs.2,40,000/- in cash. The employee on 12 th March withdrew another amount of Rs.2,00,000/-. On 7.8.2019 while admitting the petition of the Bank which challenged the order of the Gratuity Authority, the court passed an extensive order while admitting the petition and directed the employee to deposit the amount which was invested by the Bank on the conditions as referred in the order. It was only after the petition of the Bank challenging the orders of the Controlling Authority were admitted that on 20.8.2019, the petitioner affirmed the petition challenging the order of dismissal which was filed on 6.9.2019 which clearly was an after thought.
9. As far as the validity to the orders of the dismissal are concerned, Mr. Parikh learned counsel for the Bank would rely on the judgments rendered by this Court in the case of Union of India and others v. P. Gunashekhran reported in AIR 2015 Supreme Court, 545 and Syndicate Bank and others v. Venktesh Gururao Khurati reported in 2006(3) SCC 150, the decision in the case of Disciplinary Authority, Regional Manager and others v. Nikunj Bihari Patnaik reported in 1996(9) SCC 69 which decisions were referred to by this Court in its judgment dated 10.2.2020 in the Page 11 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 case of Sopariwala (Supra) holding that it is not open for the High Court to disturb the findings of evidence of the inquiry authority, particularly, when from nature of charges it was evident that the employee had caused the loss to the Bank to tune of Rs.19.84 crores.
10. Considering the submissions made by the learned counsel for the respective parties, and on perusal of the orders of the Controlling Authority and the Appellate Authority, what appears is that both the authorities under the Gratuity Act considering the provisions of Section 4 under the Payment of Gratuity Act, 1972 of the issue before it that whether it was permissible for the employers under the Rules concerned to withhold gratuity after superannuation on the grounds of pendency of disciplinary proceedings and whether in a departmental inquiry initiated against an employee, can the employer impose an order of punishment of dismissal after the employee attained the age of superannuation opined that it was not open for the Bank to do so. Considering the decision of Jaswant Singh Gill (Supra), the authorities held so.
11. That issue is no longer now a matter of debate in view of the recent decision of the Hon'ble Supreme Court in the case of Page 12 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 Rabindranath Choubey (Supra) where these two questions were considered by the Hon'ble Supreme Court extensively by referring to the various decisions and the Supreme Court held that it was open for the authorities to impose a penalty of dismissal even after superannuation in terms of the Rules of the employer and withhold the amount of gratuity under the Payment of Gratuity Act.
Considering the decision of the Supreme Court in the case of Ramesh Chandra Sharma (Supra), decision in the case of State Bank of India v. Ramanlal Bhaskar, the Hon'ble Supreme Court held as under: Para 28 to 34.7, 35, 36, 37, 38, 40, 41 and 42 are reproduced hereunder:
"28. The reliance placed on the provision contained in section 4(6) of the Payment of Gratuity Act, 1972, is devoid of substance. The Act is to provide for a scheme for payment of gratuity to the employees. Section 2(A) of the Act specifies the continuous service and what would amount to interruption and exclusion therefrom. An employee in continuous service, within the meaning of section 2(A)(1), for one year or six months, as provided, shall be deemed to be in continuous service. Section 3 deals with the appointment of the Controlling Authority.
29. Section 4 deals with the payment of gratuity. Section 4(1) provides that gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, on his superannuation, or retirement or resignation, or his death or disablement due to accident or disease. Five years of continuous service shall not be necessary in case a person ceased to be in service due to death or disability. Section 4(2) provides for entitlement of gratuity for every completed year of service or part thereof, in excess of six months, the employer shall pay gratuity at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned. Section 4(5) provides that 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. What is ensured under the Act is the minimum amount of gratuity.Page 13 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022
C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022
29. Section 4 provides for payment of gratuity. Section 4(6) contains a non-obstante clause to sub-section 1. In case of service of the employee have been terminated for wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, gratuity shall be forfeited to the extent of the damage or loss so caused as provided under section 4(6)(a). Even in the absence of loss or damage, gratuity can be wholly or partially forfeited under the provisions of section 4(6)(b), in case termination of services was based upon disorderly conduct or act of violence on his part or offence involving moral turpitude committed during the course of employment. Thus, it is apparent that not only damage or loss can be recovered, but gratuity can be wholly or partially withheld in case services are terminated for the reasons specified in section 4(6)(b).
30. The Payment of Gratuity Act, 1972, makes no provision with respect to departmental inquiries. Since no statutory provisions of the Payment of Gratuity Act, 1972 come in the way of the CDA Rules to continue the inquiry after superannuation of the employee in case it was instituted while he was in service and his deemed continuance in service; thus, no fetter is caused upon operation of Rule 34.2 providing for a continuation of the inquiry and deemed continuation of the employee in service after the age of superannuation.
31. The provisions of Section 4(6) of the Act of 1972 prevail over Section 4(1) as provisions of Section 4(6) contain non obstante clause as to Section 4(1). It would prevail over the provisions made in Section 4(1) and gratuity would not become payable mandatorily as provided in Section 4(1). The provisions of Section 4(6) provide recovery or forfeiture where services of employee have been terminated for the reasons prescribed in Section 4(6)(a) and 4(6)(b). Section 4(6)(a) and (b) both provide for recovery of loss caused or forfeiture wholly or partially in the case of termination of services. In case after superannuation of employee there cannot be any dismissal i.e., termination of services as contemplated in Section 4(6), then there can be no recovery of pecuniary loss caused by employee or forfeiture of gratuity wholly or partially as that can only be done in the event of termination of services on charges found established. Such an interpretation would render continuance of inquiry otiose and would defeat the public policy and the provisions of Act of 1972. The recovery of loss or forfeiture is one of the punishments which depends on exigency of termination by way of dismissal as mandated by Section 4(6). To give effect to the provisions of the Act, the punishment of dismissal can be imposed in view of Rule 34.2, otherwise it would defeat the intendment of provisions contained in Section 4(6)(a) and 4(6)(b) of the Act of 1972. 10.20 Section 4(1) used the expression 'termination of employment after five years by way of superannuation, retirement or resignation or on his death or disablement due to accident or disease' that is in a normal course. It does not deal with a situation where departmental inquiry is instituted and continued and completed after the age of superannuation and termination of employment had not taken place on completion of the age of superannuation as there is a deemed continuation of the employment for the purpose of holding an inquiry and passing the appropriate punishment order after the Page 14 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 conclusion of the departmental inquiry on the basis of misconduct if any found established. Provisions of section 4(1) do not impinge upon the continuation of inquiry. Section 4(6) prevails on it. The Payment of Gratuity Act, 1972, can govern the conditions concerning payment of gratuity. It cannot control and provide with respect to an employer's right to hold a departmental inquiry after retirement, and there is no provision prescribing what kind of punishment can be imposed in the departmental inquiry if it is continued after attaining the age of superannuation. The relevant rules would govern such matters. In case the Payment of Gratuity Act, 1972, is interpreted to interdict the departmental inquiry after the age of superannuation and to deal with the nature of punishment to be imposed, it would be taken as a case of over- inclusion in the Act which deals exclusively with the payment of gratuity.
33. In view of the various decisions of this Court and exconsidering the provisions in rules in question, it is apparent that the punishment which is prescribed under Rule 27 of the CDA Rules, minor as well as major, both can be imposed. Apart from that, recovery can also be made of the pecuniary loss caused as provided in Rule 34.3 of the CDA Rules, which takes care of the provision under subsection (6) of Section 4 of the Payment of Gratuity Act, 1972. The recovery is in addition to a punishment that can be imposed after attaining the age of superannuation. The legal fiction provided in Rules 34.2 of the CDA Rules of deemed continuation in service has to be given full effect.
34. The expression used in section 4(1) "termination" does not include "dismissal." The Constitution Bench considered the difference between the termination and dismissal in M. Ramanatha Pillai v. The State of Kerala & Ors. (1973) 2 SCC 650 wherein the following observations were made as to the distinction between the terms dismissal and termination considering the provisions of Article 311 of the Constitution. It was observed:
"19. When Article 311 states that no person shall be dismissed, removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him it affords a protection and security of government service. Article 311 applies to all government servants holding permanent, temporary or officiating post. The protection afforded by Article 311 is however limited to the imposition of three major penalties. These are dismissal, removal or reduction in rank. The words "dismissed", "removed" and "reduced in rank" are technical words. Both in the case of removal or dismissal there is a stigma. It also involves loss of benefit. There may also be an element of personal blame worthiness of the government servant. Reduction in rank is also a punishment. The expression "rank" in Article 311(2) has reference to a person's classification and not to his particular place in the same cadre in the hierarchy of the service to which he belongs. Merely sending back a servant to his substantive post has been held not to be a reduction in rank as a punishment since he had no legal right to continue in officiating post. The striking out of a name from the panel has been held to affect future rights of promotion and to be a reduction in rank."Page 15 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022
C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 34.1 Dismissal by way of punishment, termination of employment by means of exigencies provided in section 240 of the Government of India Act was considered in Jagdish Mitter v.Union of India AIR 1964 SC 449. It was held:
8. Having regard to the legislative history of the provisions contained in Article 311, the words "dismissed", "removed" and "reduced in rank" as used in Article 311(1), have attained the significance of terms of Article. As has been observed by Das, C.J. in Parshotam Lal Dhingra v. Union of India 21, "both at the date of the commencement of the 1935 Act and of our Constitution the words 'dismissed', 'removed' and 'reduced in rank' as used in the service rules, were well understood as signifying or denoting the three major punishments which could be inflicted on government servants. The protection given by the rules to the Government servants against dismissal, removal or reduction in rank, which could not be enforced by action, was incorporated in subsection (1) and (2) of Section 240 to give them a statutory protection by indicating a procedure which had to be followed before the punishments of dismissal, removal or reduction in rank could be imposed on them and which could be enforced in law.
These protections have now been incorporated in Article 311 of our Constitution". It is thus clear that every order terminating the services of a public servant who is either a temporary servant, or a probationer, will not amount to dismissal or removal from service within the meaning of Article 311. It is only when the termination of the public servant's services can be shown to have been ordered by way of punishment that it can be characterised either as dismissal or removal from service.
34.2. Similarly, in P. Balakotaiah v. Union of India, AIR 1958 SC 232 the provisions of Article 311 came up for consideration, the distinction between the dismissal and termination was discussed thus: 21 1958 SCR 828 at pp.856-857 "(18)(IIc) It is then contended that the procedure prescribed by the Security Rules for the hearing of the charges does not satisfy the requirements of Article 311, and that they are, in consequence, void. But Article 311 has application only when there is an order of dismissal or removal, and the question is whether an order terminating the services of the employees under Rule 3 can be said to be an order dismissing or removing them. Now, this Court has held in a series of decisions that it is not every termination of the services of an employee that falls within the operation of Article 311, and that it is only when the order is by way of punishment that it is one of dismissal or removal under that Article. Vide Satish Chandra Anand v. Union of India 22, Shyam Lal v. State of Uttar Pradesh and the Union of India) 23, State of Bombay v. Saubhagchand M. Doshi 24 and Parshotam Lal Dhingra v. Union of India25. The question as to what would amount to punishment for purposes of Article 311 was also fully considered in Parshotam Lal Dhingra case. It was therein held that if a person had a right to continue in office either under the service rules or under a special agreement, a premature termination of his services would be a Page 16 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 punishment. And, likewise, if the order would result in loss of benefits already earned and accrued, that would also be punishment. In the present case, the terms of employment provide for the services being terminated on a proper notice, and so, no question of premature termination arises. Rule 7 of the Security Rules preserves the rights of the employee to all the benefits of pension, gratuities and the like, to which they would be entitled under the rules. Thus, there is no forfeiture of benefits already acquired. It was stated for the appellants that a person who was discharged under the rules was not eligible for reemployment, and that that was punishment. But the appellants are unable to point to any rule imposing that disability. The order terminating the services under Rule 3 of the Security Rules stands on the same footing as an order of discharge under Rule 148, and it is neither one of dismissal nor of removal within the meaning of Article
311." (emphasis supplied) 34.3 In Shyam Lal v. State of Uttar Pradesh & Ors., AIR 1954 SC 369, it was held that every termination is not dismissal or removal. In Ravindra Kumar Misra v. UP State Handloom Corpn. 22 (1953) SCR 655 23 (1955) 1 SCR 26 Ltd. & Anr. 1987 Supp. SCC 739, the distinction between termination simpliciter and punitive dismissal was considered, and it was observed:
"6. As we have already observed, though the provisions of Article 311(2) of the Constitution do not apply, the Service Rules which are almost at par make the decisions of this Court relevant in disposing of the present appeal. In several authoritative pronouncements of this Court, the concept of "motive" and "foundation" has been brought in for finding out the effect of the order of termination. If the delinquency of the officer in temporary service is taken as the operating motive in terminating the service, the order is not considered as punitive while if the order of termination is founded upon it, the termination is considered to be a punitive action. This is so on account of the fact that it is necessary for every employer to assess the service of the temporary incumbent in order to find out as for whether he should be confirmed in his appointment or his services should be terminated. It may also be necessary to find out whether the officer should be tried for some more time on temporary basis. Since both in regard to a temporary employee or an officiating employee in a higher post such an assessment would be necessary merely because the appropriate authority proceeds to make an assessment and leaves a record of its views the same would not be available to be utilised to make the order of termination following such assessment punitive in character. In a large democracy as ours, administration is bound to be impersonal and in regard to public officers whether in government or public corporations, assessments have got to be in writing for purposes of record. We do not think there is any justification in the contention of the appellant that once such an assessment is recorded, the order of termination made soon thereafter must take the punitive character."Page 17 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022
C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 34.4. In Registrar General, High Court of Gujarat & Anr. v. Jayshree Chamanlal Buddhbhatti (2013) 16 SCC 59, termination was held to be dismissal. The relevant portion is extracted hereunder:
"25. The respondent relied upon the law laid down from Parshotam Lal Dhingra v. Union of India onwards. In that case it was held by the Constitution Bench that: (AIR p. 49, para 28) "28. ... if the Government has, by contract or under the rules, the right to terminate the employment without going through the procedure prescribed for inflicting the punishment of dismissal or removal or reduction in rank, the Government may, nevertheless, choose to punish the servant and if the termination of service is sought to be founded on misconduct, negligence, inefficiency or other disqualification, then it is a punishment and the requirements of Article 311 must be complied with."
26. The next judgment cited is one of three Judges of this Court in State of Bihar v. Shiva Bhikshuk Mishra6 wherein it was observed as follows: (SCC p. 875, para 5) "5. ... So far as we are aware no such rigid principle has ever been laid down by this Court that one has only to look to the order and if it does not contain any imputation of misconduct or words attaching a stigma to the character or reputation of a government officer it must be held to have been made in the ordinary course of administrative routine and the court is debarred from looking at all the attendant circumstances to discover whether the order had been made by way of punishment."
27. These judgments have been followed by a Bench of seven Judges in Samsher Singh v. State of Punjab, where this Court was concerned with the termination of the services of a probationary judicial officer on the basis of a vigilance inquiry, which was conducted by the State Government on the request of the High Court. The Court held the termination to be bad, and while doing so laid down the law in this behalf in no uncertain terms in paras 63 to 66 (of the SCC report) which read as follows: (SCC pp. 85152) "63. No abstract proposition can be laid down that where the services of a probationer are terminated without saying anything more in the order of termination than that the services are terminated it can never amount to a punishment in the facts and circumstances of the case. If a probationer is Page 18 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 discharged on the ground of misconduct, or inefficiency or for similar reason without a proper enquiry and without his getting a reasonable opportunity of showing cause against his discharge it may in a given case amount to removal from service within the meaning of Article 311(2) of the Constitution.
64. Before a probationer is confirmed the authority concerned is under an obligation to consider whether the work of the probationer is satisfactory or whether he is suitable for the post. In the absence of any rules governing a probationer in this respect the authority may come to the conclusion that on account of inadequacy for the job or for any temperamental or other object not involving moral turpitude the probationer is unsuitable for the job and hence must be discharged. No punishment is involved in this. The authority may in some cases be of the view that the conduct of the probationer may result in dismissal or removal on an inquiry. But in those cases the authority may not hold an inquiry and may simply discharge the probationer with a view to giving him a chance to make good in other walks of life without a stigma at the time of termination of probation. If, on the other hand, the probationer is faced with an enquiry on charges of misconduct or inefficiency or corruption, and if his services are terminated without following the provisions of Article 311(2) he can claim protection. In State of Bihar v. Gopi Kishore Prasad8 it was said that if the Government proceeded against the probationer in the direct way without casting any aspersion on his honesty or competence, his discharge would not have the effect of removal by way of punishment. Instead of taking the easy course, the Government chose the more difficult one of starting proceedings against him and branding him as a dishonest and incompetent officer.
65. The fact of holding an enquiry is not always conclusive. What is decisive is whether the order is really by way of punishment (see State of Orissa v. Ram Narayan Das9). If there is an enquiry the facts and circumstances of the case will be looked into in order to find out whether the order is one of dismissal in substance (see Madan Gopal v. State of Punjab10). In R.C. Lacy v. State of Bihar11 it was held that an order of reversion passed following an enquiry into the conduct of the probationer in the circumstances of that case was in the nature of preliminary inquiry to enable the Government to decide whether disciplinary action should be taken. A probationer whose terms of service Page 19 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 provided that it could be terminated without any notice and without any cause being assigned could not claim the protection of Article 311(2) (see Ranendra Chandra Banerjee v. Union of India12). A preliminary inquiry to satisfy that there was reason to dispense with the services of a temporary employee has been held not to attract Article 311 (see Champaklal Chimanlal Shah v. Union of India13). On the other hand, a statement in the order of termination that the temporary servant is undesirable has been held to import an element of punishment (see Jagdish Mitter v. Union of India14).
66. If the facts and circumstances of the case indicate that the substance of the order is that the termination is by way of punishment then a probationer is entitled to attract Article 311. The substance of the order and not the form would be decisive (see K.H. Phadnis v. State of Maharashtra15)."
34.5. In Dinesh Chandra Sangma v. State of Assam and Ors., (1977) 4 SCC 441, it was held that compulsory retirement is not a dismissal or removal. In Workers Employed in Hirakud Dam v. State of Orissa & Ors. (1971) 1 SCC 583, it was held:
"15. The question that arises for consideration is about the connotation of the expression "dismissed" used in para 11. The contention of Mr Ramamurthy that the expression "dismissed" has reference only to termination of the services of an employee as and by way of punishment is largely based upon the provisions contained in the Government of India Act and in Article 311 of the Constitution. Based upon those provisions Mr Ramamurthy claims that the expression "dismissal" is a technical word used in cases in which a person's services are terminated by way of punishment. Quite naturally he relied upon the Service Rules where the word "dismissal" has been used to denote a major punishment inflicted upon an employee for misconduct. Mr Ramamurthy, no doubt, is wellfounded in his contention that the word "dismissal" used in the Government of India Act as also in the Constitution and the Service Rules has been interpreted to mean termination of a person's service by way of punishment."
34.6. In Satish Chandra Anand v. Union of India AIR 1953 SCC 250 it was held that termination by notice is not dismissal or removal. It was held:
"7. Taking Article 14 first, it must be shown that the petitioner has been discriminated against in the exercise or enjoyment of some legal right which is open to others who are similarly situated. The rights which he says have been infringed are those conferred by Article 311. He says he has either been Page 20 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 dismissed or removed from service without the safeguards which that Article confers. In our opinion, Article 311 has no application because this is neither a dismissal nor a removal from service, nor is it a reduction in rank. It is an ordinary case of a contract being terminated by notice under one of its clauses."
34.7 Similarly, in State Bank of India v. The Workmen of State Bank of India & Ors. (1991) 1 SCC 13 retrenchment under section 25F was held not to be dismissal.
35 It is a settled proposition of law that in case of termination of service there is a distinction as to whether it is a simpliciter termination or a punitive dismissal and this court can lift the veil and find out the real nature of termination whether it is simpliciter termination or punitive dismissal as held in B.T. Krishnamurthy v. Sri Basaveswara Education Society (2013) 4 SCC 490, Paramjit Singh v. Director of Schools (Public Instructions), (2010) 14 SCC 416, State of U.P. v. Ram Vinai Sinha, (2010) 15 SCC 305, Jaswantsingh Pratapsingh Jadeja v. Rajkot Municipal Corpn. (2007) 10 SCC 71, the State of Punjab v. Rajesh Kumar (2006) 12 SCC 418, Jai Singh v. Union of India (2006) 9 SCC 717.
36. In the case of dismissal by way of punishment, gratuity is not payable because of special provisions made in the Working Journalists Act was held by this Court in P. Rajan Sandhi v. Union of India & Anr. (2010) 10 SCC 338. The relevant portion is extracted hereunder:
"11. It may be seen that there is a difference between the provisions for denial of gratuity in the Payment of Gratuity Act and in the Working Journalists Act. Under the Working Journalists Act gratuity can be denied if the service is terminated as a punishment inflicted by way of disciplinary act, as has been done in the instant case. We are of the opinion that Section 5 of the Working Journalists Act being a special law will prevail over Section 4(6) of the Payment of Gratuity Act which is a general law. Section 5 of the Working Journalists Act is only for working journalists, whereas the Payment of Gratuity Act is available to all employees who are covered by that Act and is not limited to working journalists. Hence, the Working Journalists Act is a special law, whereas the Payment of Gratuity Act is a general law. It is well settled that special law will prevail over the general law, vide G.P. Singh's Principles of Statutory Interpretation, 9th Edn., 2004, pp. 133 and 134.Page 21 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022
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12. The special law i.e. Section 5(1)(a)(i) of the Working Journalists Act, does not require any allegation or proof of any damage or loss to, or destruction of, property, etc. as is required under the general law i.e. the Payment of Gratuity Act. All that is required under the Working Journalists Act is that the termination should be as a punishment inflicted by way of disciplinary action, which is the position in the case at hand. Thus, if the service of an employee has been terminated by way of disciplinary action under the Working Journalists Act, he is not entitled to gratuity."
37. Section 4(1) deals with normal superannuation and does not cover the cases where the departmental inquiry is pending, or dismissal had been ordered. It did not interdict the departmental inquiry if it was initiated while the employee was in service and continued after superannuation as if the employee continued in service. Section 4 of the Payment of Gratuity Act, 1972 contains no bar, and purposive construction has to be made of the provisions contained in section 4(1). Section 4(6) provides where particular misconduct is found established, how gratuity to be dealt with, but provisions cause no fetter on the power of an employer to impose a punishment of dismissal. It makes no provision in particular with respect to the departmental inquiry but rather buttresses the power of an employer to forfeit gratuity wholly or partially or to recover loss provided in Section 4(6). Neither the provisions in section 4(1) nor section 4(6) of the Payment of Gratuity Act create embargo on the departmental inquiry and its continuance after superannuation. Thus, provisions of Rule 34.2 of the CDA Rules would prevail. Even the executive instruction can hold the field in the absence of statutory rules and are equally binding as laid down in State of Madhya Pradesh and Anr. v. Kumari Nivedita Jain and Ors., (1981) 4 SCC 296, State of Andhra Pradesh and Anr. v. Lavu Narendranath and Ors. etc., AIR 1971 SC 2560, Distt. Registrar, Palghat and Ors. v. M.B. Koyakutty and Ors., (1979) 2 SCC 150, Union of India and Anr. v. Tulsiram Patel, AIR 1985 SC 1416. This Court held that only when statutory provision is otherwise, executive instructions cannot prevail. In our opinion, no dint is caused by the Payment of Gratuity Act, 1972, and the efficacy of Rules is not adversely affected on the proper interpretation of Section 4(1) and 4(6) of the Act of 1972.
38. In UCO Bank & Ors. v. Rajendra Shankar Shukla, (2018) 14 SCC 92 this court did not interfere on the ground that there was an enormous delay of about seven years in issuing a charge sheet. Efficiency bar was permitted to be crossed during that period, and the employee was not paid the subsistence allowance or pension during the pendency of the disciplinary inquiry. It was observed that the employee was entitled to subsistence allowance during the inquiry. The decision of UCO Bank & Ors. v. Prabhakar Sadashiv Karvade (2018) 14 SCC 98 was referred. An observation was made that punishment of dismissal could not have been imposed after Page 22 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 superannuation, but the same could not be said to be the ratio of the decision. It was mainly for the reasons mentioned by this court concerning delay, nonpayment of subsistence allowance and the employee was deprived of meaningful participation under the departmental inquiry. After giving the aforesaid findings, it was not necessary to go into the aforesaid question. Thus, the opinion expressed as to the punishment of dismissal could not be said to be the ratio of the decision. The reliance was placed on UCO Bank & Ors. v. Prabhakar Sadashiv Karvade (supra). Though the decision of UCO Bank v. Rajinder Lal Capoor (supra) was referred to by this court, but it did not consider the effect of deeming fiction of continuance of inquiry and continuance of the employee in the service as pointed out above in the various decisions and it relied upon Regulation 48 providing for pecuniary loss caused to the bank. Whereas in Ramesh Chandra Sharma v. Punjab National Bank & Anr. (supra) it was held to the contrary that once the inquiry is initiated under Regulation 4 of the (Discipline & Appeal) Regulations, Regulation 48 of the Pension Regulations had no application, and order of dismissal was upheld. The decision in Ramesh Chandra Sharma v. Punjab National Bank & Anr. (supra) and other decisions which were binding upon the Division Bench were not considered. In the absence of consideration of the said decision and other decisions mentioned above in which it was held that legal fiction of deemed continuation has to be taken to a logical conclusion consequently, the observation made that after superannuation punishment of dismissal cannot be imposed in UCO Bank & Ors. v. Rajendra Shankar Shukla (supra), was not the ratio of decision, and the opinion expressed on the strength of the said decision in UCO Bank v. Prabhakar Sadashiv Karvade (supra) suffers from infirmity and cannot prevail.
40. We find it difficult to agree with the said decision as Rules hold the field and are not repugnant to provisions of the Payment of Gratuity Act, 1972. This Court held that Rules could not hold the field as they were not statutory; thus, the effect of the rule providing of deeming legal fiction as if he had continued in the service notwithstanding crossing the age of superannuation was not considered. Apart from that, the validity of Rules 34.2 or 34.3 could not have been decided as it was not in question in the said case. The Controlling Authority and the Appellate Authority ordered the payment of gratuity. The main ground employed was that in the order passed by the departmental authority, the quantum of damage or loss caused was not indicated, and it was not the case covered by Section 4(6) (a) and 4(6)(b). A writ petition filed by the employer was dismissed. However, the Intra Court Appeal was allowed, and it was opined that the Controlling Authority could not have gone into the validity of the dismissal order and forfeiture of the gratuity since it was not an appellate authority of disciplinary authority imposing the punishment of dismissal. Thus, the jurisdictional scope in the Jaswant Singh Gill case (supra) was limited.
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41.We are unable to agree with the decision rendered in Jaswant Singh Gill case (supra) inter alia for the following reasons:
41.1 The order of termination was not questioned, nor the authority under the Payment of Gratuity Act, 1972, had jurisdiction to deal with it.
41.2 The validity or enforceability and vires of service Rules 34.2 and 34.3 were not questioned.
41.3 The Controlling Authority under the Payment of Gratuity Act, 1972, had no jurisdiction to go into the legality of order of the disciplinary authority.
41.4 The scope of the case before this Court was confined to validity of order of Controlling Authority and to questions which could have been dealt with by Controlling Authority.
41.5 No fetter is caused on the efficacy of the Rules by Section 4(1) and 4(6) of the Payment of Gratuity Act, 1972. The Rules need not be statutory to have efficacy as they are not repugnant to the Payment of Gratuity Act, 1972. This Court did not consider the scope of provisions of the Gratuity Act and provisions of Rule 34.2, providing legal fiction of employee deemed to be in service even after superannuation.
41.6 The Controlling Authority had no jurisdiction to deal with Rules 34.2 and 34.3 or to pronounce upon validity thereof or of dismissal. Thus, the observations made, traveling beyond the scope of the proceedings, cannot be said to be binding and cannot constitute the ratio with respect to continuance of departmental inquiry after superannuation and what kind of punishment can be imposed by an employer. The jurisdiction of authority was only to consider payment of gratuity under Section 4(6) of the Payment of Gratuity Act, 1972.
42. Thus, we overrule the decision in Jaswant Singh Gill (supra)."
12. Distinguishing the case of Rajendra Shankar Shukla (Supra), the Hon'ble Supreme Court held that in that case the Supreme Court had interfered only on the ground of delay of seven years in issuance of the charge-sheet. Accordingly, the law on the issue is now settled by the Supreme Court in the case of Rabindranath Page 24 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 Choubey (Supra) as aforesaid.
13. A coordinate Bench of this Court recently by judgment in the case of Pravinchandra Venilal Sopariwala (Supra) in context of the identical issue and regulation 20(3) of the Bank Regulations which were in consideration even before the Court then and while considering the decision in the case of Rabindranath Choubey (Supra) held as under:
"9. At this stage, it would be apposite to incorporate the provisions of Regulation 20(3)(iii) of the BOBOSR:
"Regulation 20 Termination of Service:
3(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 payment of retirement benefits till the proceedings are completed and final order is passed thereon except his own contributions to CPF."
10. A mere glance of the Regulation 20(3)(iii) of the BOBOSR reveals that the disciplinary proceedings against an employee can continue even after the date of superannuation and the disciplinary proceedings will continue as if he was in service until the proceedings are concluded and final order is passed in respect thereof. Thus, a plain and simple reading of the Regulation stipulates that the officer against whom the disciplinary proceedings are continued and he retires, he is deemed to be in service until the proceedings are concluded.
11. At this stage, it would be apposite to further incorporate the observations of the Supreme Court in the case of Ramesh Chandra Sharma (Supra), wherein the Supreme Court, while dealing with the para materia provision on an identical issue has sustained the order of dismissal of a bank employee after he reached the age of superannuation. The facts as recorded by the Supreme Court in the said case as well as the legal proposition Page 25 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 are produced hereinabove:
"5. Aggrieved by and dissatisfied therewith the appellant filed a writ petition before the High Court of Judicature of Allahabad. One of the contentions in the writ petition was that the appellant having allowed to superannuate on his reaching the age of superannuation on 31.1.1997, continuation of the disciplinary proceedings was bad in law. The High Court negatived the said contention. In its judgment, reliance, inter alia, was placed on a decision of this Court in Disciplinary Authority-cum-Regional Manager and others vs. Nikunja Bihari Patnaik [1996 (9) SCC 69]. .....
..... 11. The question as to whether a departmental proceeding can continue despite the delinquent officer's reaching the age of superannuation would depend upon the applicability of the extant rules. It may be true that the question of imposition of dismissal of the delinquent officer from service when he has already reached the age of superannuation would not ordinarily arise. However, as the consequences of such an order is provided for in the service rule, in our opinion, it would not be correct to contend that imposition of such a punishment would be wholly impermissible in law. .....
..... The question, thus, as to whether continuation of a disciplinary proceeding would be permissible or the employer will have to take recourse only to the pension rules, in our opinion, would depend upon the terms and conditions of the services of the employee and the power of the disciplinary authority conferred by reason of a statute or statutory rules. We have noticed hereinbefore that the Bank have made Regulations which are statutory in nature. Regulation 20(3)(iii) of the said Regulations reads thus:
"20 (3)(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 payment of retirement benefits till the proceedings are completed and final order is passed thereon except his own contribution to CPF."
The said Regulation clearly envisages continuation of a disciplinary proceeding despite the officer ceasing to be in service on the date of superannuation. For the said purpose a legal fiction has been created providing that the delinquent officer would be deemed to be in service until the proceedings are concluded and final order is passed thereon.
Page 26 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 The said Regulation being statutory in nature should be given full effect. .....
..... We are, therefore, of the opinion that it was permissible for the Bank to continue with the disciplinary proceedings relying on or on the basis of Regulation 20(3)(iii) of the Punjab National Bank (Officers') Service Regulations, 1979.
15. It is true that the Disciplinary Authority in its order while imposing punishment observed that the terminal dues of the appellant were to be settled. It was merely an observation to take case of a contingency which might arise. No positive direction was issued in that behalf and, thus, no legal right thereby was created in favour of the appellant to obtain the retiral benefits. What it meant thereby was that the law would take its own course.
16. We may also at this juncture notice the relevant provisions of the Punjab National Bank Employees'(Pensions) Regulations, 1995. Regulation 22 of the said Regulation reads as under:
"22 (i)- Resignation or dismissal or removal or termination of an employee from the services of the Bank shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits."
Indisputably as a consequence of the order imposing the punishment of dismissal from service the appellant would not have qualified for the pensionary benefits. Our attention, however, has been drawn by Mr. Saxena to Regulations 43 and 48 to contend that even for the purpose of withholding pension, a specific order in that behalf by a competent authority was required to be passed. Pension Regulation is meant to be applicable where pension is required to be paid. It also provides for recovery of pecuniary loss caused to the Bank from the pensionary benefits of the employee. .....
..... 17. Where a proceeding is initiated for withholding or withdrawal of pension, Regulation 43 of the Pension Regulations would be attracted. But provisions of the said Regulation if read in its entirety clearly go to show that an officer would not qualify for pensinary benefits, if inter alia, he is dismissed from services.
Regulation 48 empowers the Bank to recover pecuniary loss caused to it from the pensionary benefits. Regulation 20(3)(iii) of the Discipline and Appeal Regulations must be read in conjunction with the Pension Regulations. Where the employees are pension optees, Regulation 48(1) shall apply. In any event, if Page 27 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 an officer is removed or dismissed from service under Regulation 4 of the (Discipline & Appeal) Regulations, the Bank need not take recourse to Regulation 48 of the Pension Regulations as Regulation 22 thereof would be attracted. We are, therefore, of the opinion that the High Court committed a manifest error in passing the impugned judgment. .....
..... Once the employer has lost the confidence in the employee and the bona fide loss of confidence is affirmed, the order of punishment must be considered to be immune from challenge, for the reason that discharging the office of trust and confidence requires absolute integrity. A necessary implication which must be en-grafted on the contract of service is that the servant must undertake to serve his master with good faith and fidelity. In a case of loss of confidence, reinstatement cannot be directed. Granting such an employee the relief of reinstatement would be "an act of misplaced sympathy which can find no foundation in law or in equity." (Vide Air India Corporation Bombay Vs. V.A. Ravellow, AIR 1972 SC 1343; The Binny Ltd. Vs. Their Workmen, AIR 1973 SC 1403; Kamal Kishore Lakshman Vs. Management of M/s. Pan American World Airways Inc & Ors., AIR 1987 SC 229; Francis Kalein & Co. Pvt. Ltd. Vs. Their Workmen, AIR 1971 SC 2414; Regional Manager, Rajasthan SRTC Vs. Sohan Lal, (2004) 8 SCC 218; and Bharat Heavy Electricals Ltd. Vs. M. Chandrashekhar Reddy & Ors., 2005 AIR SCW 1232). In Kanhaiyalal Agrawal & Ors. Vs. Factory Manager, Gwaliar Sugar Co. Ltd., (2001) 9 SCC 609, the Hon'ble Supreme Court laid down the test for loss of confidence to find out as to whether there was bona fide loss of confidence in the employee, observing that,
(i) the workman is holding the position of trust and confidence;
(ii) by abusing such position, he commits act which results in forfeiting the same; and (iii) to continue him in service/establishment would be embarrassing and inconvenient to the employer, or would be detrimental to the discipline or security of the establishment. Loss of confidence cannot be subjective, based upon the mind of the management. Objective facts which would lead to a definite inference of apprehension in the mind of the management, regarding trustworthiness or reliability of the employee, must be alleged and proved." .....
..... 21. The High Court, however, in our opinion, posed unto itself a wrong question of law that despite applicability of Regulation 20(3)(iii) of the Punjab National Bank Officer Employees' (Discipline and Appeal) Regulations, 1977, the Bank exceeded its jurisdiction in continuing the disciplinary proceedings after 31.1.1997 on Page 28 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 which date the appellant reached the age of superannuation."
12. Thus, while appreciating the pari materia Regulations, the Supreme Court has confirmed the action of the bank in dismissing the officer of the bank after he retired from service. The Supreme Court has also refused to grant pension since such an employee, who has been imposed a major punishment, will not be entitled to any pension under the Pension Regulation. The similar Regulation 20(3)(iii) of the Punjab National Bank Officer Employees' (Discipline and Appeal) Regulations, 1977, which also envisages the continuation of disciplinary proceedings despite the officer ceasing to be in service on the date of superannuation, is considered and the Supreme Court has held that for the said purpose, a legal fiction has been created providing that a delinquent officer would be deemed to be in service until the proceedings are concluded and final order is passed thereon and the said Regulation, being statutory in nature should be given full effect.
13. The Supreme Court has also held that it is permissible for the bank to continue with the disciplinary proceedings relying on such Regulation and it is true that the disciplinary authority in its order while imposing punishment observed that the terminal dues of the appellant were to be settled. It was merely an observation to take of a contingency which might arise and no positive direction was issued in that behalf and, thus, no legal right was created in favour of the appellant to obtain retiral benefits.
14. In view of the aforesaid observation, this Court cannot express any contrary view since similar issue and Regulations are already considered and dealt with by the Apex Court. Thus, the primary contention of the petitioner is hereby rejected.
15. The punishment, which is imposed upon the petitioner cannot be said to be disproportionate to prove the misconduct. As per the observations made by the Apex Court in the case of Nikunja Bihari Patnaik (Supra), it is not necessary that the Bank should suffer actual loss because of the irregularities committed by its Officers/employees and if any officer/employee has acted beyond his authority in allowing the over drafts and it has become sticky to recover such amount, then such action of the officer/employee is liable to the departmental inquiry. The Apex Court has observed thus:
"It is not a single act; it is a course of action spreading over a sufficiently long period and involving a large number of transactions. In the case of a Bank - for that matter, in the case Page 29 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 of any other organization - every officer / employee is supposed to act within the limits of his authority. If each officer/ employee is allowed to act beyond his authority, the discipline of the organisation/bank will disappear; the functioning of the Bank would become chaotic and unmanageable. Each officer of the Bank cannot be allowed to carve out his own little empire wherein he dispenses favours and largesse. No organization, more particularly, a Bank can function properly and effectively if its officers and employees do not observe the prescribed norms and discipline. Such indiscipline cannot be condoned on the specious ground that it was not actuated by ulterior motives or by extraneous considerations. The very act of acting beyond authority - that too a course of conduct spread over a sufficiently long period and involving innumerable instances - is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses. Such adventures are not given to the employees of Banks which deal with public funds. If what we hear about the reasons for the collapse of Barings Bank is true, it is attributable to the acts of one of its employees, Nick Leeson, a minor officer stationed at Singapore, who was allowed by his superiors to act far beyond his authority. As mentioned hereinbefore, the very discipline of an organization and more particularly, a Bank is dependent upon each of its employees and officers acting and operating within their allotted sphere. Acting beyond one's authority is by itself a breach of discipline and a breach of Regulation 3. It constitutes misconduct within the meaning of Regulation 24. No further proof of loss is really necessary though as a matter of fact, in this case there are findings that several advances and over-drawals allowed by the respondent beyond his authority have become sticky and irrecoverable. Just because, similar acts have fetched some profit - huge profit, as the High Court characterizes it - they are no less blameworthy. It is wrong to characterize them as errors of judgment. It is not suggested that the respondent being a Class-I officer was not aware of the limits of his authority or of his powers. Indeed, Charge No.9, which has been held established in full is to the effect that inspite of instructions by the Regional Office to stop such practice, the respondent continued to indulge in such acts. The Enquiry Officer has recorded a clear finding that the respondent did flout the said instructions and has thereby committed an act of disobedience of lawful orders. Similarly, Charge No.8, which has also been established in full is to the effect that inspite of reminders, the respondent did not submit "Control Returns" to the Regional Office. We fail to understand how could all this be characterized as errors of judgment and not as misconduct as defined by the regulations. We are of the opinion that the High Court has committed a clear error in holding that the aforesaid conduct of the respondent does not amount to misconduct or that it does not constitute violation of Regulations 3 and 24."Page 30 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022
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16. The Apex Court in the irregularities committed by the officers of the Bank has observed that just because the similar acts have fetched some profit or huge profit, it is wrong to characterize them as errors of judgment. It is held that very act of going beyond the authority that too a course of conduct spread over a sufficiently long period and involving innumerable instances, is by itself a misconduct. Such acts, if permitted, may bring in profit in some cases but they may also lead to huge losses and such adventures are not given to the employees of the Banks, which deal with the public funds. The facts are almost similar to the facts of the present case. It is the case of the petitioner that huge amount of FDR's are disbursed by him, which resulted into huge profit to the Bank at the relevant time.
17. The Apex Court in the case of P. Gunasekaran (Supra) has laid down the parameters with regard to the re-appreciation of the evidence and interference in the punishment order imposed by the Disciplinary Authority. The Apex Court has held thus:
"12. Despite the well-settled position, it is painfully disturbing to note that the High Court has acted as an appellate authority in the disciplinary proceedings, re-appreciating even the evidence before the enquiry officer. The finding on Charge no. I was accepted by the disciplinary authority and was also endorsed by the Central Administrative Tribunal. In disciplinary proceedings, the High Court is not and cannot act as a second court of first appeal. The High Court, in exercise of its powers under Article 226 /227 of the Constitution of India, shall not venture into re-appreciation of the evidence. The High Court can only see whether:
(a) the enquiry is held by a competent authority;
(b) the enquiry is held according to the procedure prescribed in that behalf;
(c) there is violation of the principles of natural justice in conducting the proceedings;
(d) the authorities have disabled themselves from reaching a fair conclusion by some considerations extraneous to the evidence and merits of the case;
(e) the authorities have allowed themselves to be influenced by irrelevant or extraneous considerations;
(f) the conclusion, on the very face of it, is so wholly Page 31 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 arbitrary and capricious that no reasonable person could ever have arrived at such conclusion;
(g) the disciplinary authority had erroneously failed to admit the admissible and material evidence;
(h) the disciplinary authority had erroneously admitted inadmissible evidence which influenced the finding;
(i) the finding of fact is based on no evidence.
13. Under Article 226 /227 of the Constitution of India, the High Court shall not:
(i) re-appreciate the evidence;
(ii) interfere with the conclusions in the enquiry, in case the same has been conducted in accordance with law;
(iii) go into the adequacy of the evidence;
(iv) go into the reliability of the evidence;
(v) interfere, if there be some legal evidence on which
findings can be based.
(vi) correct the error of fact however grave it may appear to
be;
(vii) go into the proportionality of punishment unless it shocks its conscience."
18. It is specifically held by the Apex Court that under Articles 226 and 227 of the Constitution of India, the High Court shall not re-appreciate the evidence and interfere with the conclusions of the inquiry and cannot go into the adequacy of the evidence or reliability of the evidence and interfere with the legal evidence on which findings can be based and correct the error of fact however grave it may appear to be, and the High Court cannot go into proportionality of punishment unless it shocks its conscience."
14. In the case of Ramanbhai Mathurbhai Tadvi v. Daxin Gujarat Vij Company Limited in SCA No.6835 of 2019, the coordinate Bench of this Court on 3.2.2022 considered the decision once again whether it was open for the employer to withhold the amount of gratuity on coming to the conclusion that there was any loss, Page 32 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 considering the case of Rabindranath Choubey (Supra) the Coordinate Bench held as under:
"5. Heard the learned advocates for the respective parties and also perused the documents as pointed out by them.
6. At the outset, the respondent-Company has raised a specific objection with regard to maintainability of the writ petition before this Court in wake of availability of alternative efficacious remedy of raising industrial dispute by filing appropriate proceedings before the Labour Court.
7. As noted hereinabove, the writ petition is filed directly before this Court without resorting to the remedies under the I.D.Act, 1947 alleging that the action of the respondentCompany is without authority of law and against the provisions of section 4 of the Payment of Gratuity Act. The petitioner has not disputed that the provisions of the I.D.Act are not applicable to him. In the considered opinion of this Court, the petitioner has to approach the Labour Court in order to challenge the action of the respondent-Company and to seek a declaration as to whether the impugned order forfeiting his gratuity and amount of leave enchashment is premised on an illegal and invalid inquiry. If the petitioner succeeds in establishing that he has been a victim of the illegal action of the respondent-Company, he will get his gratuity and the amount of leave encashemnt. The Labour Court is vested with ample power to examine the entire dispute. It is well settled proposition of law, that in case of a defective enquiry, the Labour Court can grant an opportunity to lead evidence before it. (Vide : Workmen of Firestone Tyre & Rubber Co. of India (P) Ltd. v. The Management of Firestone Tyre & Rubber Co. of India (P) Ltd and Others., (1973) 1 SCC 813). Thus, the remedy before the Labour Court is a statutory and efficacious, wherein all the facts with regard to holding the departmental inquiry, including issuance of charge- sheet and imposition of the punishment, which is impugned before this Court, can be examined threadbare. Hence, the petitioner has an efficacious statutory remedy under the provisions of I.D.Act, 1947.
8. Before deciding the issue with regard to the exercise of powers by the respondent in forfeiting the amount of gratuity and leave encashment, this Court had pointed out to the learned advocate Mr.Jadeja that any observations made in this regard may affect his case before the Labour Court. However, he has insisted that the issue may be decided since it only pertains to examining the exercise of powers by the respondent under the Payment of Gratuity Act and the Regulations.
9. In order to appreciate the challenge of the impugned order dated 30.03.2017 on the ground that the same is without authority of law and in violation of provision of section 4 of the Payment of Gratuity Act, the examination of the following facts would be necessary.
10. The petitioner was served with a charge-sheet on 24.05.2012 for Page 33 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 holding a departmental inquiry. During pendency of the departmental proceedings, he reached the age of superannuation on 30.06.2014 and by an Officer Order dated 27.06.2014, the petitioner was permitted to retire from service by observing thus:
"This office order bearing No.ANK/O&M/HR/14/3343 Dtd.06.06.2014 issued for Stands relieved from the company's service w.e.f. 30.06.2014 on account of attaining of superannuation of Age which is unchanged and further addition with the order to read as under:
The disciplinary actions are pending against charge sheet issued to Shri R.M.Tadvi Surveyor vide Charge sheet No. ANK/DGVCL/HR/RMT/12/34 Dtd. 24.05.2012, shall be continued up to till the final out come of same the terminal benefits i.e. gratuity and leave encashment as per amendment of SR. No.72 issued vide circular No. DGVCL/HR/SR - 24/SR - 72/SR - 236/07/6423 Dtd. 13.09.2007, shall be withheld and shall be dealt with the final order of finalization of disciplinary action proceedings."
11. A scrutiny of the Office Order reveals that it stipulates that the gratuity and leave encashment shall be withheld and dealt as per the final order passed in the disciplinary proceedings and Service Regulation No.72 issued vide circular dated 13.09.2007. After the departmental proceedings were held, the charges were proved against the petitioner and ultimately, the impugned order dated 30.03.2017 has been passed forfeiting the amount of gratuity and leave encashment. Thus, the petitioner was allowed to retire from service subject to final order passed in the departmental proceedings.
12. It is not in dispute that the aforesaid amount is withheld/forfeited by exercising power under Service Regulation No.72 of the Respondent-Company. The same reads as under:
"Existing provision under SR-72 Notwithstanding any thing contained in the forgoing provisions, an employee against whom disciplinary proceedings is contemplated or has been initiated or has been charge sheeted irrespective of whether employee is under suspension or not, shall be allowed to retire on attaining the age of superannuation and the employer shall have the right to initiate or continue the disciplinary proceedings. However such proceedings shall not be initiated or continued beyond four years after the date of retirement. The payment of Gratuity and other terminal benefits shall be withheld during the pendency of such proceedings and the same shall be dealt with in accordance with the final order that shall be issued on completion of the proceedings."
13. A close reading of the Service Regulation No.72 will indicate that the same empowers the respondent-Company to continue the departmental proceedings initiated against the employee even after his retirement and it is specifically prescribed that the amount of gratuity and other terminal benefits shall be withheld pending such proceedings and the same shall be dealt with in accordance with the Page 34 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 final order issued on completion of the proceedings. Thus, Service Regulation No.72 empowers the respondent to deal with the amount of gratuity and terminal benefits in accordance with the final order that shall be passed in completion of the departmental proceedings. The power of forfeiting the gratuity and terminal benefit is integral and intrinsic of Service Regulation No.72, otherwise the same will become redundant and will have no deterrent effect. The said Regulation is not challenged by the writ petitioner.
14. The entire case of the petitioner is premised on Section 4 of the Payment of the Gratuity Act. The same reads as under:
"(6) Notwithstanding anything contained in subsection (1),--(a) 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;
(b) the gratuity payable to an employee 17 [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 is committed by him in the course of his employment."
15. It is the case of the petitioner and vehemently contended by the learned advocate Mr.Jadeja that such order could not have been passed, without there being any order of termination of service as stipulated in clause(a) of section 6, since the petitioner had retired from service. It is contended that after reaching the age of superannuation, the impugned order could not have been passed forfeiting the amount of gratuity and leave encashment in absence of any termination.
16. At this stage, it would be apposite to refer to the decision of the Apex Court in the case of Rabindranath Choubey (supra). The Apex Court, while examining the provision of Section 4 of the Payment of Gratuity Act, has held thus:
"10.19 The provisions of Section 4(6) of the Act of 1972 prevail over Section 4(1) as provisions of Section 4(6) contain non obstante clause as to Section 4(1). It would prevail over the provisions made in Section 4(1) and gratuity would not become payable mandatorily as provided in Section 4(1). The provisions of Section 4(6) provide recovery or forfeiture where services of employee have been terminated for the reasons prescribed in Section 4(6)(a) and 4(6)(b). Section 4(6)(a) and (b) both provide for recovery of loss caused or forfeiture wholly or partially in the case of termination of services. In case after superannuation of employee there cannot be any dismissal Page 35 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 i.e., termination of services as contemplated in Section 4(6), then there can be no recovery of pecuniary loss caused by employee or forfeiture of gratuity wholly or partially as that can only be done in the event of termination of services on charges found established. Such an interpretation would render continuance of inquiry otiose and would defeat the public policy and the provisions of Act of 1972. The recovery of loss or forfeiture is one of the punishments which depends on exigency of termination by way of dismissal as mandated by Section 4(6). To give effect to the provisions of the Act, the punishment of dismissal can be imposed in view of Rule 34.2, otherwise it would defeat the intendment of provisions contained in Section 4(6)(a) and 4(6)(b) of the Act of 1972.
32. Section 4(1) used the expression 'termination of employment after five years by way of superannuation, retirement or resignation or on his death or disablement due to accident or disease' that is in a normal course. It does not deal with a situation where departmental inquiry is instituted and continued and completed after the age of superannuation and termination of employment had not taken place on completion of the age of superannuation as there is a deemed continuation of the employment for the purpose of holding an inquiry and passing the appropriate punishment order after the conclusion of the departmental inquiry on the basis of misconduct if any found established. Provisions of section 4(1) do not impinge upon the continuation of inquiry. Section 4(6) prevails on it. The Payment of Gratuity Act, 1972, can govern the conditions concerning payment of gratuity. It cannot control and provide with respect to an employer's right to hold a departmental inquiry after retirement, and there is no provision prescribing what kind of punishment can be imposed in the departmental inquiry if it is continued after attaining the age of superannuation. The relevant rules would govern such matters. In case the Payment of Gratuity Act, 1972, is interpreted to interdict the departmental inquiry after the age of superannuation and to deal with the nature of punishment to be imposed, it would be taken as a case of overinclusion in the Act which deals exclusively with the payment of gratuity."
17. As observed hereinabove, the Service Regulation No.72 of the respondent-Company permits the forfeiture of the gratuity and terminal benefits after the retirement. The Supreme Court has held that it is not only for pecuniary loss caused the proceedings can continue after the date of superannuation, but an employee can be proceeded against for a grave misconduct. The Apex Court has expressed disapproval of the interpretation of Section 4(6) of the Act in the manner as contended by the petitioner, which suggests that "in case after superannuation of the employee, there cannot be any dismissal i.e. termination of service as contemplated in Section 4(6) of the Act, and hence, there can be no recovery of pecuniary loss caused by employee or forfeiture of gratuity wholly or partially as that can only to be done in the event of termination of services on charges found established."
18. Thus, a conjoint reading of the observations made by the Apex Court and Service Regulation No.72 justifies the action of the Page 36 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 respondent authorities in forfeiting the amount of leave encashment and gratuity of the petitioner as it empowers the respondent-Company to forfeit the same in case of proved misconduct against the employee, after holding the departmental proceedings. There is no requirement of passing actual order of termination since the Apex Court has observed that such order of termination of service of the employee could not be passed after retirement of the employee. Thus, merely because the petitioner has reached the age of superannuation and no termination order is passed; the same will not dilute the powers of the respondent-Company of forfeiting the amount of gratuity and leave encashment under its Regulation.
19. So far as validity of the inquiry proceedings is concerned, which is impugned in the present writ petition, this Court has not expressed any opinion at this stage, since any such observations will directly affect the proceedings before the Labour Court, it the same are intiated by the petitioner.
20. So far as the reliance placed by the learned advocate Mr.Jadeja on the judgement of the Apex Court in the case of C.G. Ajay Babu (supra) is concerned, the same will not rescue the petitioner since the judgement of the Apex Court is premised on the law enunciated in the case of Jaswant Singh Gill (supra), which is subsequently overruled by the recent decision of the Apex Court in the case of Rabindranath Choubey (supra).
21. In light of the foregoing reasons, in the considered opinion of the Court, the writ petition deserves to be rejected in view of the availability of the alternate efficacious remedy under the provision of the I.D. Act. This Court has only expressed its opinion with regard to the powers exercised forfeiting the by the amount respondent-Company of gratuity and in leave encashment. It goes without saying that in case the petitioner succeeds before the Labour Court in establishing that the disciplinary proceedings are illegal and void; he is bound to get the amount of leave encashment and gratuity.
22. The writ petition is dismissed. Rule is discharged."
15. It is obviously clear on reading the aforesaid decisions in context of the facts that a charge-sheet was issued to the employee on 27.1.2015 leveling serious imputations, 29 in number, opining that by virtue of his omission, the Bank had incurred a loss of Rs.19.84 crores. By invoking regulation 20(3)(iii) of the Regulations, the Page 37 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 departmental proceedings were continued by a communication dated 13.5.2015 even when the employee retired on superannuation w.e.f. 31.5.2015. A penalty of dismissal was imposed on 12.2.2016 and his request for compassionate allowance was rejected on 23.6.2016. When the appellate authority of the Gratuity Act passed an order on 3.5.2017 which was challenged by the employer by filing SCA No.3569 of 2018, the Court on 6.3.2018 issued notice. The notice of the petition was served on the employee on 7.3.2018. The employee appeared before this Court in the petition of the employer challenging the order of the Controlling Authority and the Appellate Authority in March, 2018.
This Court extensively considering the matter on merits on 7.8.2019 in SCA No.3569 of 2018 passed the following order.
"1. Heard Mr.Darshan Parikh, learned advocate for the petitioner.
2. Learned advocate for the petitioner submitted that the petitioner- bank has forfeited the gratuity of the respondent no.1 under the provisions of Section 4(6) of the Payment of Gratuity Act, 1972, and therefore, the Controlling Authority and Appellate Authority could not have compelled the bank to make payment of gratuity to the respondent no.1.
3. On the other hand, Mr.U.T.Mishra, learned advocate for the respondent no.1 submitted that the order of termination and the consequential order of forfeiture of gratuity is not legal and valid, as the same are passed by the petitionerbank after the retirement of the respondent no.1 on attaining the age of superannuation.
4. Learned advocate for the respondent no.1 submitted that before the order dated 06.03.2018 passed by this Court restraining the respondent from withdrawal of the amount deposited by the petitioner was served, the amount deposited by the petitioner amounting of Rs.12,30,137/ was already transferred to the bank account of respondent Page 38 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 no.1 by RTGS by the competent authority.
5. As per the additional affidavit filed by the petitioner an amount of Rs.10,00,000/ was transferred by the petitioner to his another account and Rs.2,40,000/ was withdrawn in cash on 08.03.2018 and 12.03.2018, respectively. Thereafter, on 12.03.2018, another Rs.2,00,000/ was withdrawn by the respondent no.1. Copies of statement of withdrawal of amount by the respondent no.1 is produced at Page No.118 and 119 of the petition.
6. Learned advocate for the respondent no.1 submitted that he has already deposited sum of Rs.4,40,000/ in the Registry of this Court as per undertaking filed by him on 21.03.2018. He further submitted that the petitioner has freezed the bank account of the respondent no.1 with Kathvada Branch, Bank of Baroda, wherein an amount of Rs.8,00,000/ is still lying.
7. ISSUE RULE returnable on 18.09.2019.
8. By way of interimrelief, the Registry is directed to hand over amount of Rs.4,40,000/ to the petitionerbank. Further, it is directed that Rs.7,90,137/ (Rs.12,30,137 - Rs.4,40,000/) is to be transferred from saving bank account of the respondent no.1 in Kathvada Branch of the petitionerbank to the petitionerbank.
9. The petitionerBank is directed to invest Rs.12,30,137/ in cumulative fixed deposit in the name of respondent no.1 initially for a period of three years to be renewed from time to time till final disposal of the petition. The respondent no.1 shall not be allowed premature withdrawal thereof or to raise any borrowings on the basis of such investment without permission of this Court. Original of the fixed deposit receipt be retained in the custody of the petitionerbank.
10. Learned advocate for the respondent no.1, at this juncture, prays that periodical interest on fixed deposit amount be ordered to be paid to the respondent no.1, however, looking to the controversy involved in the matter, prayer is declined. "
16. It is only after this order was passed that the employee thought of challenging the order of dismissal dated 12.2.2016 by filing petition being SCA No.15055 of 2019 challenging the order of the dismissal of the year 2016.
17. There is merit in the submission of learned counsel Mr. Parikh that Page 39 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 but for a challenge to the order of the Appellate Authority under the Gratuity Act and the Court admitting the petition, the employee would not have approached the Court challenging the order of dismissal. Even otherwise, in view of the decisions rendered by the Supreme Court in context of the jurisdiction of the High Court in exercise of powers under Article 226 of the Constitution of India to interfere in matters of departmental proceedings which have been extensively referred by a coordinate Bench of this Court in the case of Sopariwala (Supra), on perusal of the charge-sheet indicates that the petitioner had caused a loss to the Bank of Rs.19.84 crores by acts of omissions and commissions extensively listed in the charge-sheet. The petitioner participated in the departmental proceeding and on conclusion thereof, made an application for compassionate allowance in the year 2016, which was rejected on 23.6.2016. The order of dismissal was not challenged by the petitioner for a period of over three years but it was only when the employer came forth before this Court by filing SCA No.3569 of 2018 and when the employee appeared in that petition in March, 2018. Nothing was done by the employee and more than one and half years after the initiation of the proceedings by the employer against the employee while assailing the order of the gratuity authorities did the petitioner approach this Court challenging the Page 40 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022 C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 orders of dismissal which were passed way back in the year 2016 i.e. not only three years after the orders of dismissal but more than one and half years after the Bank approached the Court challenging the orders of the gratuity authorities. This, in the opinion of this Court even if considered in light of the submissions made by the learned advocates for the employee as to the validity of the order of dismissal would indicate that it was an after thought and counter blast to the petition by the Bank.
18. Regulations of the Bank of Baroda Employees (Pension) Regulations, 1995 have been placed on record which indicate that it is open for the Bank under Regulation 48 to recover the pecuniary loss to the Bank. Perusal of the charges and the inquiry officer's report and the findings would indicate that the employee was responsible inasmuch as the Bank has suffered a loss and the accounts had become NPA to the extent of Rs.19.84 crores.
19. In view of the decision of the Supreme Court in the case of Rabindranath Choubey (Supra) and the decision in the case of Sopariwala (Supra) rendered by a Coordinate Bench of this Court which considered the decision of Rabindranath Choubey (Supra) and the jurisdiction of the Court in matters of disciplinary proceedings, the Court holds as under:
Page 41 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022C/SCA/15055/2019 CAV JUDGMENT DATED: 25/03/2022 19.1. In SCA No.3569 of 2018 filed by the Bank wherein the challenge is to the orders of the appellate authority under the payment of Gratuity Act dated 27.12.2017 and that of the Controlling Authority dated 3.5.2017, the orders of the Gratuity Authority are quashed and set aside. The petition is allowed. The action of the Bank in withholding the gratuity of Rs.12,30,137/- is held to be valid and proper. The interim relief granted by the Court on 7.8.2019 which obliged the Bank to invest that amount in Fixed Deposit in the name of the respondent No.1 shall no longer operate in view of the petition being allowed. The amount shall be appropriated by the Bank alongwith the interest. Rule is made absolute to that extent. Direct Service is permitted. No costs.
19.2. SCA No.15055 of 2019 stands dismissed. Rule / Notice, if any, stands discharged. No costs.
Sd/-
(BIREN VAISHNAV, J) VATSAL S. KOTECHA Page 42 of 42 Downloaded on : Mon Mar 28 21:32:30 IST 2022