Madras High Court
The Area Manager vs S.Sundaram on 27 August, 2019
Author: S.Vaidyanathan
Bench: S.Vaidyanathan
W.P.No.37816 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 27.08.2019
CORAM:
THE HONOURABLE MR. JUSTICE S.VAIDYANATHAN
W.P.No.37816 of 2015
1. The Area Manager,
Food Corporation of India,
District Office,
No.1, Bharathi Road,
Cuddalore.
2. The General Manager,
Food Corporation of India,
Regional Office,
No.8, Mayor Sathyamurthy Road,
Chetpet, Chennai 600 031.
3. The Executive Director,
Food Corporation of India,
Zonal Office,
No.3, Haddows Road,
Chennai 600 006. ... Petitioners
vs.
1. S.Sundaram
2. The Appellate Authority,
Under the Payment of Gratuity Act and
Deputy Chief Labour Commissioner (Central),
No.26, Haddows Road, Shastri Bhavan,
Chennai 600 006.
3. The Assistant Labour Commissioner (Central),
DA2, BSNL Staff Quarters,
Jaya Nagar,
Reddiar Palayam (PO),
Puducherry 605 010. ... Respondents
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W.P.No.37816 of 2015
Writ Petition filed under Article 226 of the Constitution of India seeking
issuance of a writ of Certiorari, calling for the records of the 2nd Respondent
relating to the order dated 04.11.2015 made in Gratuity Appeal No.113 of
2015, confirming the order of the 3rd Respondent, dated 17.12.2014 made in
G.A.No.56 of 2014 and to quash the same.
For Petitioners : Mr.M.Imthias
For 1st Respondent : Mr.Balan Haridoss
For Respondents 2 & 3 : Mr.A.K.Manoj Kumar
ORDER
Food Corporation of India has come up with the present Writ Petition challenging the order dated 04.11.2015 passed by the 2nd Respondent in Gratuity Appeal No.113 of 2015, confirming the order dated 17.12.2014 passed by the 3rd Respondent in G.A.No.56 of 2014.
2. According to the Food Corporation of India (hereinafter referred to as 'Management'), the 1st Respondent was employed in their Management and retired as Assistant General Manager (Quality Control). The Management initiated Disciplinary Proceedings against the 1st Respondent and issued Charge Sheet under Regulation 58 of Food Corporation of India (Staff) Regulations, 1971 and the same was served on him on 28.06.2013. Charges framed against the 1st Respondent/employee is that while he was working as Area Manager, Food Corporation of India, Cuddalore, a random physical verification of the food grains was conducted at T.V.Koil Depot by a squad http://www.judis.nic.in 2/23 W.P.No.37816 of 2015 from Head Quarters, New Delhi from 10.06.2013 to 12.06.2013 and it was found that there was shortage of bags containing food grains valued to the tune of Rs.91,96,140/-.
3. Consequent to the same, the 1st Respondent/employee was called upon to submit his explanation to the Charge Memo on the charges framed against him and he submitted his explanation. As the explanation was not satisfactory, an inquiry was held in terms of the FCI (Staff) Regulations, 1971 and the Inquiry Officer submitted his Report holding that the charges framed against the 1st Respondent/employee are proved on account of ineffective supervision over depot personnel and its operations, leading to misappropriation and thereby becoming responsible for causing huge loss to the Management to the tune of the said amount.
4. The Inquiry Report was served on the 1st Respondent/employee on 06.06.2014 for his comments and he submitted his explanation on the inquiry findings on 09.06.2014. The 1st Respondent/employee agreed with the findings of the Inquiry Officer with regard to the nomination of physically challenged for conducting physical verification and that the physical verification of Headquarters team was also not disputed. However, the 1st Respondent/employee denied that there was no shortage of bags containing food grains.
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5. The Disciplinary Authority, on perusing the findings of the Inquiry Officer and the explanation of the 1st Respondent/employee, found that the 1st Respondent/employee failed to have effective supervision and control over the depot operation under his jurisdiction and to ensure maintenance of bags of each stack as per entries in the record. In view of the same, the Disciplinary Authority, vide order dated 24.06.2014, held that the 1st Respondent/employee is guilty of charges and imposed penalty of Compulsory Retirement along with forfeiture of 50% of gratuity payable to the 1st Respondent/employee.
6. Pursuant to the said order of the Disciplinary Authority, the Management forfeited a sum of Rs.5,00,000/-, being the 50% of the gratuity amount due to the 1st Respondent/employee and paid the balance Gratuity amount of Rs.5,00,000/- to him on 07.08.2014.
7. Aggrieved by the deprivation of 50% gratuity, the 1st Respondent/employee preferred Gratuity Application No.56/2014 before the Controlling Authority under the Payment of Gratuity Act, 1972, i.e. the Assistant Labour Commissioner (Central), Puducherry, the 3rd Respondent herein. The Controlling Authority, after hearing both sides, ultimately http://www.judis.nic.in 4/23 W.P.No.37816 of 2015 allowed the Application vide order dated 17.12.2014 and held that the 1st Respondent/employee is entitled to payment of Rs.5,00,000/- towards gratuity as per the provisions of the Act and interest thereon at 10% per annum on the said gratuity, besides the payment made to him for the period from 01.08.2013 to 07.08.2014 till the date of the order.
8. Challenging the said order, the Management preferred Gratuity Appeal No.113 of 2015 before the Appellate Authority under the Payment of Gratuity Act, i.e. the Deputy Chief Labour Commissioner (Central), Chennai, who is the 2nd Respondent herein and vide order dated 04.11.2015, the Appellate Authority upheld the order dated 17.12.2014 passed by the 3rd Respondent and directed the 3rd Respondent to initiate further action for payment of gratuity amount to the 1st Respondent/employee in accordance with the provisions of the Payment of Gratuity Act, 1972. Aggrieved by the order of the Appellate Authority, the Management has come up with the present Writ Petition.
9. It is the contention of the learned counsel for the Management that the order of the Disciplinary Authority is completely in violation of the provisions contemplated under the Payment of Gratuity Act, 1972 and that both the Controlling Authority and the Appellate Authority have wrongly interpreted the provisions of Section 4(6) of the Payment of Gratuity Act, and http://www.judis.nic.in 5/23 W.P.No.37816 of 2015 held that gratuity cannot be forfeited. According to him, both the authorities have failed to consider that the Departmental Disciplinary proceedings initiated against the 1st Respondent/employee were in accordance with the terms of the FCI (Staff) Regulations, 1971, and penalty was imposed on him only after giving him an opportunity of hearing. He pointed out that the 1st Respondent/employee has not challenged the findings of the proceedings before the appropriate Appellate Authority and thus, he did not exhaust the appeal remedy available in the departmental proceedings as per FCI (Staff) Regulation, 1971.
10. It is the further contention of the learned counsel for the Management that the 2nd Respondent/Appellate Authority failed to note in the impugned order that the term 'termination' and 'Compulsory Retirement' are synonymous and 'Compulsory Retirement' is a major penalty under Regulation 54 of the FCI (Staff) Regulation, 1971. He also contended that Circular 32 of 2005, dated 03/07-06-2005 issued in this regard was also not considered by the 2nd Respondent in a proper perspective.
11. Learned counsel for the Management went on to contend that both the 2nd and 3rd Respondents have misconceived the provisions of the Payment of Gratuity Act, i.e. Section 4(6) a, b and Section 13 and negated the rights of the Management to forfeit gratuity payable to their employees and http://www.judis.nic.in 6/23 W.P.No.37816 of 2015 the same will not stand the scrutiny of law.
12. Though counter affidavit has not been filed by the 1st Respondent/employee, learned counsel appearing on his behalf submitted that a detailed order has been passed by the Controlling Authority taking into account the blemishless service of 37 years rendered by the 1st Respondent in the Food Corporation of India. He pointed out that the maximum gratuity payable to an employee as per the provisions of the Payment of Gratuity Act, 1972 is Rs.10,00,000/- (Rupees Ten Lakhs only) at that relevant point of time and hence, the 1st Respondent/employee filed Gratuity Application No.56 of 2014 before the Controlling Authority as regards his entitlement of the remaining 50% of the Gratuity amount.
13. Learned counsel for the 1st Respondent/employee went on to state that though major punishment is provided under the FCI (Staff) Regulation, 1971, issuance of the order of 'Compulsory Retirement' to the 1st Respondent/employee would make it very clear that the Management wanted to have a golden handshake with the employee without curtailing any gratuity. However, the second portion of the order pertaining to the forfeiture of 50% gratuity payable to the employee is bad, as it is not contemplated under the FCI (Staff) Regulation, 1971. It is his contention that the Disciplinary Authority could have passed a separate order for forfeiture of http://www.judis.nic.in 7/23 W.P.No.37816 of 2015 gratuity, instead of passing a combined order of punishment and deprival of 50% gratuity, as it is not permissible under the Regulation.
14. According to the learned counsel appearing for the 1st Respondent/employee, Payment of Gratuity Act, 1972 will have overriding effect to the provisions of the FCI (Staff) Regulation, 1971 and that the Act will prevail over the Regulation, 1971. He further submitted that Regulation 54 deals with penalties, which has got two portions, viz. Minor and Major penalties and nowhere in the Regulation, there is reference to forfeiture of gratuity.
15. In support of his stand, learned counsel appearing for the 1st Respondent/employee has relied on a decision in the case of D.Kalaichelvan vs. Union of India (vide order dated 25.07.2012 in W.P.No.27311 of 2010), relevant portion of which, reads as under:
“24. The learned counsel for the respondents, also vehemently contended, that under the Gratuity Act, person responsible for the loss caused to the employer, which results in order of punishment, is not entitled to benefit of gratuity. Therefore, provisions of Gratuity Act when read with Regulation 46 leaves no manner of doubt that the petitioner is not entitled payment of gratuity.
25. This contention of the learned counsel is again misconceived. The regulation making authority clearly stipulated that an employee on retirement is entitled to payment of http://www.judis.nic.in 8/23 W.P.No.37816 of 2015 gratuity. The word 'retirement' would include compulsory retirement, therefore, the case of the petitioner is covered under Regulation 46. The compulsory retirement cannot be treated as termination by way of punishment, as the termination is one of the punishment under the Regulations. If the Regulation making authority had any intention to deny gratuity to employee imposed with punishment of compulsory retirement, it could have been provided under the regulations. It is not open to the Court to add words to statutory provisions, when these do not suffer from any ambiguity.”
16. In yet another decision rendered by this Court in the case of P.Rajasubramaniam vs. The Indian Overseas Bank (vide order dated 03.06.2014 in W.A.No.744 of 2012), it was observed as under:
“9. The Division Bench of this Court in W.A.No.2768 of 2002 dated 10.12.2009 held that fixing the cut-off date to sanction and pay pension to such of those persons who were compulsorily retired as punishment on or after 01.11.1993 is irrational and arbitrary. The operative portion of the Division Bench order reads as follows:
“ ...
29. We therefore hold that an Officer/employee, who is compulsorily retired by way of punishment would also fall within the category of premature retirement and consequently, it cannot be said that he would fall outside the pension regulations in order to exclude him from being eligible to claim pension under the pension regulations in particular regulation 33(1) ..
17. In reply, learned counsel for the Petitioner/Management http://www.judis.nic.in 9/23 W.P.No.37816 of 2015 submitted that it is not necessary that a separate order should be passed for forfeiture of gratuity, as, it is the discretion of the employer. He vehemently contended that the Controlling Authority, without taking note of the fact that the 1st Respondent/employee has caused loss to the Management and without properly scrutinizing the order passed by the Disciplinary Authority, has held that the charges against the 1st Respondent/employee are not established.
According to him, the Controlling Authority has traversed beyond what is required to be adjudicated or determined about the misconduct of the 1st Respondent/employee and the Appellate Authority has mechanically confirmed the same, without even referring to Circular 32, which was specifically brought to the notice of the Controlling Authority and the Appellate Authority.
18. Heard the learned counsel on either side and carefully gone through the material documents available on record.
19. It is not in dispute that the 1st Respondent/employee has rendered many years of service in the Food Corporation of India. On finding that the charges framed against the 1st Respondent/employee are proved, the Disciplinary Authority, in exercise of powers conferred under Regulation 56 of FCI (Staff) Regulations, 1971, imposed a penalty of “Compulsory Retirement along with forfeiture of 50% of gratuity payable to him”. Pursuant thereto, http://www.judis.nic.in 10/23 W.P.No.37816 of 2015 the 1st Respondent/employee has filed Gratuity Application No.56 of 2014 before the Controlling Authority, only questioning the forfeiture of 50% of the gratuity amount payable to him by the Management.
20. Now, the issue for consideration is whether the 2nd Respondent is right in confirming the order of the 3rd Respondent as to the payment of remaining 50% gratuity, i.e. Rs.5,00,000/- payable to the 1st Respondent/employee.
21. For the sake of convenience, Regulation 54 of the Food Corporation of India (Staff) Regulation, 1971 is extracted hereunder:
“54. Penalties:
Notwithstanding anything contained in any other regulation, and without prejudice to such action to which an employee may become liable under any other regulation or law for the time being in force, the following penalties may (for good and sufficient reasons and as hereinafter provided) be imposed on any employee of the Corporation.
Minor Penalties:
(i) censure;
(ii) withholding of his promotion;
(iii) recovery from; his pay of the whole or part of any pecuniary loss caused by him to the Corporation by negligence or breach of orders;
(iii)(a) Reduction to a lower stage in the time of scale of pay for a period not exceeding three years without cumulative effect and not adversely affecting his pension.
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(iv) withholding of increments of pay.
Major Penalties:
(v) save as provided for in Regulation (iii)(a) above, reduction to a lower stage in the time scale of pay for a specified period, with further directions as to whether or not the employee of the Corporation will earn increments of pay during the period of such reduction and whether on the expiry of such period, the reduction will or will not have the effect of postponing the future increments of his pay;
(vi) reduction to a lower time-scale of pay or post which shall ordinarily be a bar to the promotion of the employee to the time-scale of pay or post from which he was reduced, with or without further directions regarding conditions of restoration to the post from which the employee of the Corporation was reduced and his seniority and pay on such restoration to that post;
(vii) compulsory retirement;
(viii) removal from service which shall not be disqualification for future employment under the Corporation;
Explanation:
The following shall not constitute a penalty within the meaning of this Regulation.
(a) discharge of an employee for failure to pass any examination or test or a medical test prescribed for fresh appointment to any category of post;
compulsory retirement of an employee in accordance with the provision relating to superannuation or retirement;
(b) compulsory retirement of an employee in accordance with the provision relating to superannuation or retirement;
(c) termination of service or reversion to a lower category or post of an employee appointed or promoted on probation either during or at the end of the http://www.judis.nic.in 12/23 W.P.No.37816 of 2015 period of probation:
(d) discharge of an employee under Regulation 19 or as a measure of retrenchment for want of vacancy;
(e) termination of service of an employee employed under a contract or agreement in accordance with the terms of such contract or agreement or in the case of an employee appointed for a specific period, at the end of such period;
(f) reversion of an employee promoted from a lower post to a higher post to such lower post for want of vacancy.
(g) on-promotion of an employee after consideration of his case for promotion; whether on a regular or on ad-hoc basis to a post to which he is eligible for being considered;
(h) replacement of the services of an employee whose services had been borrowed at the disposal of his parent organization.
22. On a perusal of Regulation 54, it is seen that for the misconduct which is major in nature, no penalty of 'compulsory retirement' is mentioned. Merely because the punishment of 'compulsory retirement' has been imposed, it does not mean that the employee has not caused loss to the Organization. For the loss caused, the Management is entitled to recover the money from the employee in terms of Section 4(6) of the Payment of Gratuity Act.
23. In the case on hand, after detailed enquiry, the Disciplinary Authority came to the conclusion that the 1st Respondent/employee has http://www.judis.nic.in 13/23 W.P.No.37816 of 2015 caused loss to the Organization. Having caused loss to the Organization, on technicalities, the 1st Respondent/employee cannot wriggle out of the situation on payment of 50% of the gratuity amount.
24. 'Compulsory Retirement' does not cause much stigma. But, causing loss or damage to the property is entirely different, for which, the employer is entitled to recover the loss. Assuming that an employee causes loss or damage to the property or person at the fag end of his service and the damage is assumed to be much more than his monthly salary, in that event, the employee cannot contend that the loss can be deducted only from his monthly wages and not from any other benefits. The provisions of Payment of Gratuity Act, 1972 is to ensure that the loss caused by the employee is recovered by the Management.
25. Punishment of “Compulsory Retirement” is only a golden handshake and the contention of the 1st Respondent/employee that there is no reference in Regulation 54 of the FCI (Staff) Regulations, 1971 as to the forfeiture of gratuity payable to the employee, cannot be accepted. In the case on hand, the punishment imposed is as per the Regulation, and recovery of 50% gratuity is as per the Payment of Gratuity Act, 1972. 'Compulsory Retirement' may either be a punishment or a Golden Handshake. The Management of the Food Corporation of India has to adhere to the internal http://www.judis.nic.in 14/23 W.P.No.37816 of 2015 instructions and their Head Office has specifically issued guidelines in Circular 32/2005 that a specific mention as to the forfeiture of gratuity wholly or partially has to be made in the penalty order of Dismissal or Removal from service or Compulsory Retirement, according to the amount of loss ordered to be recovered by the Disciplinary Authority.
26. For better understanding, clauses 4, 5 and 6 of Circular No.32/2005 are extracted hereunder:
“4. It is necessary to make specific mention in the penalty order of Dismissal or Removal from service or compulsory retirement for forfeiture of gratuity wholly or partially according to the amount of loss ordered to be recovered by the Disciplinary Authority.
5. Where no orders for forfeiting gratuity, wholly or partially have been passed in the penalty order of Dismissal or Removal from service or compulsory retirement, no subsequent orders to this effect can be passed, as the same would amount to review of its own order by the Disciplinary Authority, which is not permissible.
6. The cases in which a decision has already been taken by the Disciplinary Authority for imposition of the major penalty of 'Dismissal' and the requisite orders have been passed without any mention about the forfeiture of gratuity, partially or wholly, in terms of Section 4(6) of the Payment of Gratuity Act, 1972, need not be reopened.” http://www.judis.nic.in 15/23 W.P.No.37816 of 2015
27. When the Disciplinary Authority is supposed to adhere to the guidelines issued by the Food Corporation of India in Circular No.32/2005 as regards forfeiture of gratuity, forfeiture of 50% of the gratuity payable to the 1st Respondent/employee imposed by the Management is only towards the loss caused by him to the Organization and the same cannot be faulted with.
28. The 1st Respondent/employee is trying to make out a case based on the words 'along with' mentioned in the punishment order. However, he has accepted the punishment and not at all challenged the same. It is seen that though Circular No.32 was referred to in the Grounds of Appeal by the Management, there is no whisper about the same in the order passed by the Appellate Authority.
29. The Controlling Authority ought to have gone through the entire material records, before interfering with the order of the Disciplinary Authority and he should have confined his role only to the extent of relief sought under the Payment of Gratuity Act. Instead, he has observed that the charge and the entire disciplinary process is ab-initio void. Be it the Controlling Authority or the Appellate Authority, they are the authorities appointed for the purpose of industrial adjudication/deciding disputes under the Payment of Gratuity Act, 1972, and they should confine their role in terms http://www.judis.nic.in 16/23 W.P.No.37816 of 2015 of the provisions of the Act contemplated and not traverse beyond their scope, touching upon the punishment imposed/procedure adopted by the Management.
30. Payment of Gratuity Act nowhere deals with the nature of punishment to be imposed. But, it specifies that gratuity is payable on account of termination of service. 'Termination' may be on account of resignation, retirement, death or dismissal. The purpose of referring to these terms is that the employee who has rendered not less than five years of service, would be entitled to gratuity on account of cessation of employer- employee relationship. The cessation could be either dismissal or termination without stigma, or compulsory retirement.
31. The punishment imposed by the employer is independent of the forfeiture of gratuity clause, i.e. any punishment imposed could enable the employer to forfeit the gratuity, if there is any loss or damage caused to the property or on account of moral turpitude. It is no doubt true that the Act will prevail over the Regulation. But, there is no provision under the Payment of Gratuity Act for the purpose of imposing punishment on the employee for the disciplinary proceedings initiated under FCI (Staff) Regulation, 1971. Only if the employee is found guilty of the charges and in case, it attracts Section 4(6) of the Payment of Gratuity Act, the employer, necessarily will have to http://www.judis.nic.in 17/23 W.P.No.37816 of 2015 invoke the said provision for recovering the entire loss or proportionate loss caused by the employee.
32. Firstly, it is seen that 'Compulsory Retirement' is contemplated under the Regulation. Secondly, the word used in Payment of Gratuity Act is 'termination', which could be read as cessation of employee-employer relationship. Thirdly, the contention of the 1st Respondent/employee that the Act will prevail over the Regulation, must be understood that the punishment is contemplated under the Regulation and the recovery is contemplated under the Act. Hence, the Management has imposed punishment of compulsory retirement as per the Regulation; and payment of 50% of Gratuity has been forfeited in terms of Section 4(6) of the Payment of Gratuity Act.
33. In view of the above, the order of the Disciplinary Authority viz.
"compulsory retirement along with 50% forfeiture of gratuity” necessarily will have to be truncated. The intention of the legislature is different from the order of punishment imposed. Gratuity is payable for the services rendered and if on technical grounds, gratuity is going to be disbursed, certainly it will create chaos, and the person, who has committed any offence or mistake falling under Section 4(6) would try to get gratuity on technical grounds. The Controlling Authority ought not to have analyzed the order of the compulsory retirement, as he has no powers and the Appellate Authority ought not to http://www.judis.nic.in 18/23 W.P.No.37816 of 2015 have confirmed the findings of the Disciplinary Authority. In such view of the matter, the decision rendered by this Court in D.Kalaichelvan's case referred to supra, may not be applicable to the facts of this case, as it is not one under Payment of Gratuity Act, but dealing with Regulation 46 of the Union Bank of India Regulations.
34. It has been represented that a sum of Rs.5,00,000/- towards 50% gratuity has been paid to the 1st Respondent/employee and the balance sum of Rs.5,00,000/- is lying in deposit. In the decision relied on by the learned counsel appearing for the 1st Respondent/employee in the case of Vijay Singh vs. State of Uttar Pradesh reported in 2012 (5) SCC 242, the Apex Court has held that Rules do not empower the disciplinary authority to impose “any other” major or minor punishment. For better appreciation, relevant portion of the said decision reads as under:
“11. Admittedly, the punishment imposed upon the appellant is not provided for under Rule 4 of the 1991 Rules. Integrity of a person can be withheld for sufficient reasons at the time of filling up the annual confidential report. However, if the statutory rules so prescribe, it can also be withheld as a punishment. The order passed by the disciplinary authority withholding the integrity certificate as a punishment for delinquency is without jurisdiction, not being provided under the 1991 Rules, since the same could not be termed as punishment under the Rules. The Rules do not empower the disciplinary authority to impose “any other” major or minor punishment. It is a settled proposition of law that punishment not prescribed http://www.judis.nic.in 19/23 W.P.No.37816 of 2015 under the Rules as a result of disciplinary proceedings cannot be awarded.”
35. In this case, what is awarded by the Disciplinary Authority is two- fold. As stated supra, firstly, compulsory retirement and secondly, forfeiture of gratuity under the Payment of Gratuity Act, 1972. As the words 'along with' are mentioned in the punishment order, the intention of the Petitioner/Management cannot be found fault with.
36. The punishment of 'Compulsory Retirement' is prescribed under the FCI (Staff) Regulations, 1971. So also, forfeiture of gratuity is prescribed under the Payment of Gratuity Act, 1972. The Disciplinary Authority has intended to impose 'Compulsory Retirement' for the misconduct and to withhold 50% of gratuity as per Section 4(6) of the Act, for the loss caused. The said situation has not arisen in Vijay Singh's case (cited supra). Merely because, the words 'along with' are mentioned in the order of punishment, neither the Controlling Authority nor the Appellate Authority have powers to give a different interpretation to the proceedings conducted in the Departmental Enquiry, when the punishment imposed has been accepted by the 1st Respondent/employee, without questioning the same. If the Rules do not empower the Disciplinary Authority to impose any other punishment contemplated under the Regulation, then the punishment imposed by the Disciplinary Authority cannot be disputed.
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37. The integrity of the person is foremost important and public money cannot be allowed to go to a person, who has caused loss to the Organization to the tune of of Rs.92 lakhs. It is seen that before preferring the Appeal, a sum of Rs.6,28,613/- together with interest has been deposited before the Controlling Authority. The 1st Respondent/employee must feel lucky that the Petitioner/Management has not invoked a major punishment contemplated under Regulation 54 of the FCI (Staff) Regulation, 1971.
38. 'Compulsory Retirement' is a punishment contemplated under FCI (Staff) Regulation, 1971. Even assuming that 'Compulsory Retirement' has to be taken as 'Golden Handshake also, the intention of the employer for imposing Compulsory Retirement has to be seen, as to whether it is by means of a punishment or merely a Golden Handshake. If it is merely a Golden Handshake, the Writ Petition needs to fail. But, if it is a case of 'punishment', then forfeiture of Gratuity is permissible.
39. In the present case on hand, the employer has imposed 'Compulsory Retirement' by way of penalty, and not by means of Golden Handshake, as the employee has caused loss to the Petitioner/Management to the tune of Rs.92 lakhs. Hence, the decision of the employer to deprive 50% of Gratuity to the 1st Respondent/employee, is perfectly valid in law, as http://www.judis.nic.in 21/23 W.P.No.37816 of 2015 'Compulsory Retirement' is imposed on the employee only as a punishment, and the same has become final and it has not been questioned either in the Department Appeal or by way of any other proceedings before any forum.
40. In view of the foregoing, this Court accepts the contention of the Petitioner/Management and the order dated 04.11.2015 passed by the 2nd Respondent in Gratuity Appeal No.113 of 2015, confirming the order dated 17.12.2014 passed by the 3rd Respondent in Gratuity Application No.56 of 2014, is quashed. The Controlling Authority with whom, a sum of Rs.6,28,613/- is lying in deposit together with accrued interest, shall be refunded to the Petitioner/Management within 45 days from the date of receipt of a copy of this order.
In fine, the Writ Petition is allowed with the above direction. No costs.
27.08.2019
Index : Yes
Speaking Order : Yes
(aeb)
To:
1. The Appellate Authority,
Under the Payment of Gratuity Act and
Deputy Chief Labour Commissioner (Central), No.26, Haddows Road, Shastri Bhavan, Chennai 600 006.
2. The Assistant Labour Commissioner (Central), DA2, BSNL Staff Quarters, http://www.judis.nic.in 22/23 W.P.No.37816 of 2015 Jaya Nagar, Reddiar Palayam (PO), Puducherry 605 010.
S.VAIDYANATHAN,J.
(aeb) http://www.judis.nic.in 23/23 W.P.No.37816 of 2015 W.P.No.37816 of 2015 27.08.2019 http://www.judis.nic.in 24/23