Central Administrative Tribunal - Kolkata
Adhip Ch Chaudhuri vs Income Tax on 25 July, 2022
OD 1 0.A. 350.01706.2016 $ CENTRAL ADMINISTRATIVE TRIBUNAL KOLKATA BENCH, KOLKATA No. 0.A. 350/01706/2016 Date of order: AS: t:22- Present: Hon ble Ms. Bidisha Banerjee, Judicial Member . Hon'ble Dr. Nandita Chatterjee, Administrative Member Sri Adhip Chandra Chaudhuri, Son of late Narayan Chaudhuri, Residing at Block-AC-149, Salt Lake City, P.S. Bidhannagar North, Kolkata - 700 064. Working as Commissioner of Income Tax (retired), Office of the Chief Commissioner of Income Tax, Kolkata -- 700 069. seeeen Applicants. . -Versus- 1. Union of India ZZ, Through the Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi - 110001. 2. The Chairman, Central Board of Direct Taxes, North Block, _New Delhi - 110001. 3. Principal Chief Commissioner of Income Tax , Aayakar Bhawan, . P-7, Chowringhee Square, Kolkata -- 700 069. 4. Principal Chief Controller of Accounts, . Central Board of Direct Taxes, Zonal Accounts Office, 20-B, Abdul Hamid Street, 4th Floor, Kolkata -- 700 069. 5. Income Tax Officer, Headquarters (Administration) - I, Kolkata -- 700 069. ... Respondents For the Applicant : Mr. B.R. Das, Counsel - Mr. K.K. Ghosh, Counsel For the Respondents : Mr. S. Paul, Counsel : 2 0.A. 350.01706.2016 ORDER
Per Ms. Bidisha Banerjee, Judicial Member:
Ld. Counsels for both sides are heard.
In.this O.A., the applicant has sought for the following reliefs:-
"i) Pay and interest at the rate of 10% on the entire amount of leave salary Rs. 2,62,023/- from date of retirement on 30.09.2004 to date of payment on
- 29.08.2016, with yearly rests.
ii) Pay further interests at the same rate till payment of the amount as stated in (i) above.
AND
iii) Certify that transmit the entire records and papers pertaining to the applicant's case so that after the causes shown thereof conscionable justice may be done unto the applicant by way of grant of reliefs as prayed for in (i) and
(ii), above. ;
iv) Pass such other order/orders and/or direction /directions as deemed fit and proper.
v) Costs."
In CPC arising out of O.A. No. 350/01590/2014 on 1.6.2016 this Tribunal had passed the following order:-
4.
"3. We are of the opinion that least possible time as given by the court, is over and no instinct has been shown by the respondents to comply with the order. Hence, we are of the view that notice should be issued to the respondent authority concerned to show cause as to why the order of this Tribunal has not been complied with though about 10 months have already elapsed after passing of the order.
4. Accordingly notice be issued to Respondent No. 2, Mr. Anil Kumar Singh, Principal CCIT, West Bengal and Sikkim, P-7, Chowringhee Square, Ayakar Bhavan, 1st Floor, Kolkata - 700 069, asking him to appear in person or through pleader before this court and explain as to why he should not be punished for willful disobedience of the order of this Tribunal passed in O.A. No. 350/01590/2014. List on 07.07.2016."
Pursuant thereto on 24.8.2016, the following order was issued from the office of Principal Chief Commissioner of Income Tax, WB & Sikkim:
"Order No. A/cs. 6023/Pr. CCIT Dated: 24.8.2016 IP/6/2003-04 In terms of Rule 39(2)(a) of CCS (Leave) Rules, 1972, sanction is hereby accorded in favour of Shri Adhip Chandra Chaudhuri, Ex. CIT, retired on superannuation on 30.9.2004, for cash payment equivalent to leave salary for 231 (Two Hundred Thirty One) days of unutilized Earned Leave at his credit as on the date of his retirement on superannuation.
3 0.A. 350.01706.2016 The cash equivalent of Leave Salary will include Pay & Allowances as admissible on the Leave Salary at the rate in force on the date of retirement.
Sd/-
(Anil Kumar Singh):
Pr. Chief Commissioner of Income Tax, WB & Sikkim"
The applicant is aggrieved as interest on delayed payment of leave salary for the period 1.10.2004 (date of retirement being 30.9.2004) till payment on 29.8.2016 has not been allowed. The respondents have taken the plea that the applicant had been pleaded withholding of the payment of leave encashment in the O.A. 1590/2014 and DoPT as clarified in its O.M. dated 2.8.1999 that there is no provision under ccs (Leave) Rules for payment of interest or on fixing responsibility. Further, that encashment of leave is a benefit granted under leave rules and not a pensionary benefit.
5. Respondents have further indicated that a vigilance clearance was withheld as prosecution has a criminal charge was pending against the officer as on 31.12.2015. Respondents would refer to Rule 39 of Leave Rules that provides the following:-
"(3) The authority competent to grant leave may withhold whole or part of cash equivalent of earned leave in the case of a Government servant who retires from service on attaining the age of retirement while under suspension or while disciplinary or criminal proceedings are pending against him. If in the view of such authority there is a possibility of some money becoming recoverable from him on conclusion of the proceedings against him. On conclusion of the proceedings, he will become eligible to the amount so withheld after adjustment of Government dues, if any."
6. It is stated that out of the proceedings that was pending, a penalty of withholding of fifty percent of the monthly pension otherwise admissible to Shri Adhip Chandra Chaudhary (the CO) on a permanent basis along with withholding of gratuity admissible to him by an order dated 29.6.2015, as contained in Annexure R-3. Further, it is evident that by an order dated 30.6.2016, leave encashment was directed to be released, subject to outcome of appeal by the department, filed in higher Bes) 4 0.A. 350.01706.2016 courts and subject to procedure. Rule 68(f) of the CCS (Pension) Rules is explicit that:-
"(f} In the matter of delayed payment of leave encashment, the Department of Personnel and Training in their note, dated 2.8.1999 has clarified that there is no provision under CCS (Leave) Rules for payment of interest or for fixing responsibility. Moreover, encashment of leave is a benefit granted under the leave rules and not a pensionary benefit."
7. The applicant, by way of written arguments, have submitted that the applicant was hauled up in a criminal proceeding initiated in 1997. He was suspended w.e.f. 11.6.1997 which culminated in a disciplinary proceeding initiated vide chargememo dated 23.9.2004. He retired on superannuation on 30.9.2004, and, was allowed provisional pension w.e.f. 1.10.2004. His gratuity as well as leave salary of 231 days was withheld. This Tribunal in O.A. No. 1590/2014 by an order dated 19.6.2015 directed payment of leave salary to be released at the least possible time.
8. Respondents finally came out with the payment of Rs. 2,62,023 /-
on 29.8.2016. According to the applicant, such withholding for long twelve years had no plausible reason to be furnished even in terms of Rule 39(3) of CCS (Leave) Rules.
9. The applicant in terms of Ministry of Finance, Department of Revenue order dated 18.1.2011 would contend that rule as in its true | import categorises that the leave salary could only be withheld whole or in part if in the view of the authority there is a possibility of some money being recoverable from meetings on conclusion of the proceeding, as for example, on account of embezzlement of government funds or loss of public money. The lone charge leveled against the applicant was that he eschewed enquiry and searches by the Income Tax Department to unearth the ill-gotten and unaccounted assets of scamsters" in the Bihar Animal Husbandry Department scam (Fodder Scam).
5 0.A. 350.01706.2016 That the Fodder Scam in Bihar namely Husbandry Department was unearth by the CBI between 28.2.1992 to 2.4.1992 and about 2 years before the petitioner took charge as Commissioner of Income Tax for the - State of Jharkhand in May, 1994, and, that, he was dragged in Bihar State Government scandal for reasons best known to the Investigation Agency. There were no reasons that by all reasonableness and prudence, the respondents have no reason to withhold the substantial amount of Rs. 2,62,023/- for a long period of twelve years. |
10. The respondents, per contra, by way of written arguments would contend that this Tribunal while issuing its order dated 19.6.2015 had a already noticed that there is a delay of 11 years from the date of retirement in release of leave encashment, yet no order for payment interest on which delayed payment was made. Citing Rule 39(2) of the CCS (Leave) Rules, 1972, the respondents have defended their action in not paying leave salary for 12 years. Further, the respondents have cited a decision in Arvind Kumar Singh -vs.- State of Bihar (CWJS No. 153286 of 2016 dated 2.5.2018) where the Hon'ble High Court observed that when an employee facing a criminal case or a departmental proceeding at the time of his retirement, the Governmentis _ well within its power in withholding leave encashment. The respondents have banked upon an FAQ released on leave entitlement which is as under:-
Leave Encashment on Suspension/ Dismissal /Removal Sl. No. _Frequently asked Questions Answer
1. | Whether leave encashment can be | Leave encashment may be allowed in sanctioned to a Govt. servant on his | such cases. However, Rule 39(3) of superannuation while under | CCS (Leave) Rules, 1972 allows suspension? withholding of leave encashment in the case of a Govt. servant who retires from service on attaining the age of superannuation while under suspension or while disciplinary or criminal proceedings are pending against him, if in view of the authority there is a possibility of some money becoming recoverable from him on conclusion of the proceedings against him. On |.
ae, rune' Cony, ® 6 0.A. 350.01706.2016 conclusion of the proceedings he/she will become eligible to the amount so withheld after adjustment of Government dues, if any. ;
2. Whether leave encashment can be|A government servant, who is sanctioned to a Govt. servant on his | dismissed/removed from service, dismissal/removal, from service? cases to have any claim to leave at his credit from the date of such dismissal, as per rule 9(1). Hence he is not entitled to any leave encashment.
11. Rival contentions were noted and records perused.
12. The issue that has cropped up for determination in the present matter is whether the applicant is entitled to claim interest on delayed payment of leave encashment. Rule 39(3) of the CCS (Leave) Rules provides that leave encashment can be withheld due to pendency of proceedings. Rule 68 of CCS (Pension) Rules envisages that, "There is no provision for payment of interest due to delayed payment of | leave encashment." |
13. However, no formal order seems to have been issued in regard to withholding of leave encashment pending conclusion of departmental proceedings/judicial proceedings initiated against the applicant. It was only in the year 2012, that the applicant was communicated of an order of the opinion of DGIT Vigilance, New Delhi dated 03.07.2008 that, "in the present case there is no final decision about the penalty to be imposed, therefore, till the conclusion of the DP it may not be practicable to grant clearance from the vigilance angle for the purpose of payment of cash equivalent of Leave Salary."
14. The applicant has brought to the fore an instruction from the CBEC Department of Revenue, Ministry of Finance dated 18.1.2011 addressed to All Director Generals and Chief Commissioners of Customs, Central Excise & Service Tax Zones etc. about release of Leave Encashment under Rule 39(3) of CCS (Leave) Rules to retiring employees that reads as under:-
7 0.A, 350.01706.2016 " F.No.C-14019/202819-4 Government of India Ministry of Finance Department Revenue Central Board of Excise & Custom (Ad. Y Section) 6Floor, C-Wing, Hudco Vishala Bldg., Bhikaji Cama Place, New Delhi.
Date the 18 January, 2013.
To All Director Generals, All Chief Commissioners of Customs, Central Excise & Service Tax Zones The Narcotics Commissioner Directorate of Publicity & Public Relations Sub: Release of leave encashment under Rule 39(3) of CCS (Leave) Rules to retiring employer-reg.
Sir/ Madam, The Board has received references from field formations seeking advice regarding release of withheld leave encashment in respect of retired officers against whom disciplinary proceedings under CCS(CCA)Rules, 1965 are pending.
2. The matter has been considered, Rule 39(3) of CCS(Leave) Rules, 1972 provides as below:
"The authority competent to grant leave may withhold whole or part of cash equivalent of earned leave in the case of a Government servant who retires from service on attaining the age of retirement while under suspension or while disciplin or criminal proceedings are pending against him, if in the view of such authority there is a possibility of some money becoming recoverable from him_on conclusion of the proceedings against him. On conclusion of the proceedings, he will become eligible to the amount so withheld after adjustment of Government dues, if any."
2. On a reference made by the Department, the DOPT has clarified the scope of the said Rule 39(3) as under:
"Rule 39(3) of CCS (Leave) Rules, 1972 makes provision for withholding whole or part of the payment due on account of encashment of leave temporarily so that if some money is to be recovered as a result of disciplinary/ criminal proceedings, it could easily be adjustable against the amount due to the Govt. servant. However, the final withholding of the amount as a measure of punishment would not be justified under the leave encashment rules as the various forms of punishment that could be given to an individual held guilty as a result of disciplinary proceedings are specified in the relevant rules and they do not cover this type a punishment. Further withholding of leave encashment should be resorted _to only in those cases where there is a likelihood of some money becoming due, for instance, where the proceedings are on account of embezzlement of Govt. funds or loss of public money etc. Each case should be examined at the time of retirement to see whether withholding of amount is necessary keeping in view the nature of charges against the individual and the amount of possible recoveries form the individual should only be withheld and not necessarily the entire amount of encashment."
8 0.A. 350.01706.2016 3 It is clear from the provisions of Rule 39(3) of CCS(Leave) Rules, 1972 as further clarified by DoPT, that leave encashment should not be withheld in respect of a retiring employee because of pendency of departmental proceeding etc. as a matter of course. The charges against the officer should be carefully considered before deciding whether withholding of the amount of leave encashment due to the employee is necessary keeping in view the nature of charges against the individual. Such charges should refer to or imply a specific loss to the public money because of embezzlement or other acts of misconduct of the officer. Further, where it is proposed.to withhold the leave encashment at the time of retirement till the pending proceedings are finalized, the amount of leave encashment to be withheld should not exceed the amount of possible recoveries from the charged retiring officer on finalization of the proceedings.
4 All cases where the leave encashment has already been withheld but where the proceedings at the time of retirement have not been finalized so far should be reviewed in the light of the above clarification and where there is no justification for withholding the same, the amount should be released immediately.
Yours faithfully (Vijay Kumar) Deputy Secretary to the Government of India"
The order supra explicates that withholding of leave encashment should not be resorted to in normal course, and it is imperative that a decision to the effect is taken by competent disciplinary authority. As "already noted, no formal order was issued by the disciplinary authority proposing withholding of leave encashment of the applicant due to pendency of the departmental proceedings. As such, withholding of leave encashment on the advice of DCIT having not been translated into any formal order, was bad. The authorities have evidently not acted in terms of laid down rules.
15. Accordingly, the matter is referred back to the disciplinary for issuing a reasoned and speaking order in regard to justifiability of withholding of leave encashment for 12 years and a decision to fix responsibility upon the person, who was responsible for withholding the payable leave encashment for long 12 years against a pensioner and/or release of interest at statutory rates or costs or compensation in lieu of interest for such arbitrary withholding for such a long period.
O . 9 --_0.A.350.01706.2016 An appropriate order be issued by three months, failing which an interest @ 6% p.a. shall be payable to the applicant on the delayed release of leave encashment.
16. The O.A. is disposed of accordingly. No costs.
| | o ' re (Dr. Nandita Chatterjee) (Bidisha Banerjee) Administrative Member Judicial Member | SP