Allahabad High Court
Onkar Singh Verma vs State Of U.P. And 2 Ors. on 9 January, 2018
Author: Siddharth
Bench: Siddharth
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Court No. - 28 Case :- WRIT - A No. - 54686 of 2016 Petitioner :- Onkar Singh Verma Respondent :- State Of U.P. And 2 Ors. Counsel for Petitioner :- Ashok Kumar Lal Counsel for Respondent :- C.S.C.,Shiv Nath Singh Hon'ble Siddharth,J.
Heard Sri Ashok Kumar Lal, learned Counsel for the petitioner and Sri Shiv Nath Singh, learned Counsel for the respondents.
The petitioner has filed the above noted writ petition, praying for the quashing of the order dated 21.09.1996, passed by respondent no.2, Secretary/General Manager, District Co-operative Bank Ltd., Etah, whereby, recovery of certain amounts have been directed against the petitioner from his gratuity, after his retirement from service. A further prayer has been made to direct the respondent no.2 to release the amount of gratuity of the petitioner, by applying new pay scale, along with interest for inordinate delay in making payment of the same to the petitioner.
The brief facts of the case of that the petitioner was initially appointed as Junior Branch Manager in District Cooperative Bank Ltd., Etah, on 14.12.1979, as per U.P. Cooperative Employees Service Regulations, 1975, framed under the provisions of U.P. Cooperative Societies Act, 1965. He retired as Senior Branch Manager of the Bank on 30.06.2013. After retirement his provident fund amount of Rs.19,29,002/- was paid and arrears of new pay scale along with leave encashment and group insurance amounts were paid, but the amount of gratuity and security amount were withheld. The respondents calculated the amount of Rs.8,86,910/- as due gratuity, to which the petitioner objected on the ground that it was not calculated on the basis of his revised last drawn on pay. However, without considering his objections an amount of Rs.6,12,336/- was paid to the petitioner towards gratuity without any interest on 28.03.2014. The petitioner repeatedly represented for payment of arrears of gratuity with interest and the amount of security to be paid to him, but in vain. Hence he filed the Writ-A No.32175/2016, praying for direction to the respondent no.2 to make balance amount of gratuity applying new pay scale alongwith interest, which was disposed off by the order dated 18.07.2016, directing the respondent no.2 to consider the grievance of the petitioner. The petitioner supplied the copy of the order dated 18.07.2016 of this Court along with representation dated 25.07.2016 and by the order dated 21.09.2016, instead of making payment of the amount of gratuity due to the petitioner, the respondent no.2 has directed that the petitioner is responsible for sanctioning some bad loans in favour of borrowers and this has resulted into loss to the Bank. The amount which is not being recovered from such borrowers is required to be adjusted from his gratuity and thereafter, the balance amount shall be paid to the petitioner. Against this order, the petitioner has filed this writ petition.
The respondent nos.2 and 3 have filed their Counter Affidavit stating that the petitioner had sanctioned loan to one Shri Veerendra Kumar, son of Shri Ganga Dayal, under the Scheme known as Pandit Deen Dayal Upadhyaya Cooperative Self Employment Scheme for the sale and purchase of golden jewellery which was against the provision of the said scheme. There were manifold irregularities committed by the petitioner while recommending the loan in as much as the shop of NAGAR PALIKA was shown to be existing on the name of loanee, Shri Veerendrra Kumar, whereas the shop was not allotted in the name of Shri Veerendra Kumar. Further both the guarantors of the loan did not have the requisite amount in their savings bank account. Apart from above, the appraisal report and documents submitted along with the loan application form were found to be inappropriate. Inspite of multiple notice, the loan could not be recovered amounting to the tune of Rs.3,75,000.00 for which the petitioner was responsible and as such no dues certificate was denied by the Branch Manager of Kasganj Branch. Further, the petitioner had himself taken guarantee of consumer loan granted to Shri Vinod Kumar Dubey, retired supervisor, but did not take steps to facilitate the recovery of the loan which amounted to Rs.29,696.00 as on 31.03.2015. The petitioner had also granted loans to 3 persons whose names and addresses were found to be fictitious and as such the recovery of the loans could not materialize, thereby causing financial loss to the bank of large amount and as such the acts and omissions of the petitioner were found to be very dubious. Hence the Branch Manager, Main Branch did not issue no dues certificate in favour of the petitioner. The amount of gratuity payable to the petitioner has been recalculated as per the new pay scale and the amended claim form has been duly forwarded to the Life Insurance Corporation for the payment of additional amount of Rs.1,13,032.00 and as and when it is received and the petitioner takes suitable steps to obtain the no dues certificate, the same shall be paid to him. It is also pertinent to submit that the office of Commissioner and Registrar, Cooperative, Lucknow has taken a policy decision on 09.06.2016 that arrears of the revised pay scales pertaining to the period 01.04.2011 to 31.03.2013 would not be paid hence although the payment of the petitioner has been revised but the arrears of the salary of aforesaid period could not be paid. All the retiral dues have been paid to the petitioner except the amount of gratuity to the tune of Rs.2,74,544.00, which has been withheld for incurring loss to the bank while negligently and deliberately granting irregular and unauthorized loans against the laid down procedure of the bank which is just, proper and justified. It is on record that loss of amount of Rs.5,76,165.00 has been incurred to the bank by the petitioner hence the amount withheld is wholly in accordance with law and do not warrants any interference by this Hon'ble Court.
Rejoinder Affidavit has been filed on behalf of the petitioner, stating that the averments of the respondents regarding documentation and sanctioning of loan was never questioned prior to the retirement of petitioner by way of any show cause notice whatsoever. The petitioner retired on 30.06.2013 and the respondent woke up in 21.09.2016 and that too after the order dated 18.07.2016 passed by the Hon'ble Court in the writ petition no.32175/2016 of the petitioner. The averments of obtaining no dues certificate and wrong documentation, recovery, etc., has nothing to do with the payment of retiral dues of the petitioner, rather the same has been alleged just to evade the responsibility and liability of payment of balance retiral dues of the petitioner, who has expired on 14.03.2017. He was in no way under obligation to recover the outstanding loan sanctioned during his period of service and further for the no dues certificate. The balance amount of gratuity and arrears of revised pay scale is due upon the respondents which has been illegally detained by them on the pretext of causing loss to the Bank by the petitioner in most arbitrary manner. No loss has been incurred by the Bank, due to the conduct of the petitioner. Bank in order to circumvent and evade the liability of the payment of the balance retiral dues is making such bald and lame excuses without there being any legal provisions to recover the loss if any, from the petitioner. The order dated 21.09.2016 has been passed without application of mind and without any legal provisions enshrined under the service rules. The order dated 21.09.2016 has been passed just to circumvent and bypass the judgment and order of the Hon'ble Court dated 18.07.2016 and to punish the petitioner by delaying the payment of his retiral dues. A bare perusal of the impugned order dated 21.09.2016, clearly discloses the illegal motive of respondent no.2, in as much as, he has directed recovery of the amount of loan amounting to Rs.3,75,000/- and further amount of Rs.1,71,099/- to be deducted from the balance gratuity of the petitioner, in grossly illegal and arbitrary manner. The respondent no.2 has acted beyond his jurisdiction as under the Act and Rules and also under the Service Regulations, he is not empowered to recover such amount from the petitioner after the retirement. For the first time he has come up with the specific case that certain amounts are to be recovered from the petitioner and that too after 3 years of the retirement of petitioner. The respondent no.2 has acted in malafide manner and with the ulterior motive and in an anguish has passed the impugned order dated 21.09.2016 as petitioner has filed the writ petition without his permission and without obliging him. It is reiterated that services of the petitioner are governed by U.P. Cooperative Employees Service Regulations, 1975 and in the Service Regulations there is no provision regarding continuation of enquiry after the retirement and stoppage of retiral benefits of the employee and in the case of petitioner there was no pending enquiry nor any punitive order prior to his retirement. Hon'ble Apex Court in the case of Dev Prakash Tiwari versus U.P. Cooperative Institutional Service Board, Lucknow and others, 2014 (7) SCC 260, has examined that the U.P. Cooperative Employees Service Regulations, 1975, which does not contains any provision regarding conducting a disciplinary enquiry after retirement of the appellant, nor any provision stating that in case misconduct is established, a deduction could be made from retiral benefits. Once the appellant had retired from service on 30.06.2013, there was no authority vested in the Co-operative Bank for conducting the departmental enquiry against the petitioner, even for the purpose of making any deduction in the post retiral benefits payable to the petitioner. In the absence of such an authority, it must be held that the right to hold enquiry had lapsed and the petitioner is entitled to full retiral benefits on retirement.
In the case of Dev Prakash Tiwari (supra), the Apex Court held, "We have carefully considered the rival submissions. The facts are not in dispute. The High Court while quashing the earlier disciplinary proceedings on the ground of violation of principles of natural justice in its order dated 10.1.2006 granted liberty to initiate the fresh inquiry in accordance with the Regulations. The appellant who was reinstated in service on 26.04.2006 and fresh disciplinary proceeding was initiated on 7.7.2006 and while that was pending, the appellant attained the age of superannuation and retired on 31.03.2009. There is no provision in the Uttar Pradesh Co-operative Employees Service Regulations, 1975, for initiation or continuation of disciplinary proceeding after retirement of the appellant nor there is any provision stating that in case misconduct is established a deduction could be made from his retiral benefits. As occasion came before this Court to consider the continuance of disciplinary inquiry in similar circumstances in Bhagirathi Jena Vs. Board of Directors, O.S.F.C & others, (1993, 3 SCC 666) and it was laid down as follows:
"5. Learned Senior Counsel for the respondents also relied upon Clause (3) (c) of Regulation-44 of the Orissa State Financial Corporation Staff Regulations, 1975, it reads thus:
"When the employee who has been dismissed, removed or suspended is reinstated, the Board shall consider and make a specific order:-
(i). Regarding the pay and allowances to be paid to the employee for the period of his absence from duty, and
(ii). Whether or not the said period shall be treated as a period on duty."
6. It will be noticed from the abovesaid regulations that no specific provision was made for deducting any amount from the provident fund consequent to any misconduct determined in the departmental enquiry nor was any provision made for continuance of the departmental enquiry after superannuation.
7. In view of the absence of such a provision in the above said regulations, it must be held that the Corporation had no legal authority to make any reduction in the retiral benefits of the appellant. There is also no provision for conducting a disciplinary enquiry after retirement of the appellant and nor any provision stating that in case misconduct is established, a deduction could be made from retiral benefits. Once the appellant had retired from service on 30.06.95 there was no authority vested in the Corporation for continuing the departmental enquiry even for the purpose of imposing any reduction in the retiral benefits payable to the appellant. In the absence of such an authority, it must be held that the enquiry had lapsed and the appellant was entitled to full retiral benefits on retirement.
7. In the subsequent decision of this Court in U.P. Coop. Federation Ltd., & others Vs. L.P.Rai, (2007) 7 SCC 81, case on facts, the disciplinary proceeding against employee was quashed by the High Court since no opportunity of hearing was given to him in the inquiry and the management in its appeal before this Court sought for grant of liberty to hold a fresh inquiry and this Court held that charges leveled against the employee were not minor in nature, and therefore, it would not be proper to foreclose the right of the employer to hold a fresh inquiry only on the ground that the employee has since retired from the service and accordingly granted the liberty sought for by the management.
8. While dealing with the above case, the earlier decision in Bhagirathi Jena's case as not brought to the notice of this Court and no contention was raised pertaining to the provisions under which the disciplinary proceeding was initiated and as such no ratio came to be laid down. In our view the said decision can not held the respondents herein.
9. Once the appellant had retired from service on 31.03.2009, there was no authority vested with the respondents for continuing the disciplinary proceeding even for the purpose of imposing any reduction in the retiral benefits payable to the appellant. In the absence of such an authority it must be held that the enquiry had lapsed and the appellant was entitled to get full retiral benefits."
The petitioner has died during the pendency of the writ petition on 14.03.2017 and his legal heirs have already been substituted by the order dated 09.11.2017 in the writ petition, in his place.
Therefore, after the consideration of the entire facts and the legal issues involved in the case, it is clear that the petitioner retired from service on 30.06.2013 and prior to or after his retirement, the respondent no.2 never made any allegation of any misconduct against the petitioner. It was only after the direction dated 18.07.2016, passed in Writ-A No.32175 of 2016; that the respondent no.2 has passed the impugned order dated 21.09.2016 making certain allegations, regarding the loss caused by him, due to sanctioning of certain loans to ineligible borrowers. It has been further alleged that the loan amount which was sanctioned to such borrowers, is not being recovered and therefore, it is required to be deducted from the balance amount of the gratuity of the petitioner.
The petitioner has claimed interest on the delayed amount of payment, relying upon the Apex Court's Judge in the case of S.K.Dua Vs.State of Haryana & another, (2008) 3 SCC 44, where it has been held as follows, " In the circumstance, prima- facie, we are of the view that the grievance voiced by the appellant appears to be well founded that he would be entitled to interest on such benefits. If there are statutory rules occupying the field, the appellant could claim payment of interest relying on such rules. If there are administrative instructions, guidelines or norms prescribed for the purpose, the appellant may claim benefit of interest on that basis. But even in absence of statutory rules, administrative instructions or guidelines, an employee can claim interest under Part III of the Constitution relying on Articles 14, 19 and 21 of the Constitution."
It is clear from the material on record that the petitioner, neither prior to retirement nor after retirement nor after the filing of the Writ-A No.32175 of 2016 nor upto the passing of the impugned order dated 21.09.2016 was ever given any notice to show cause against the allegations made against him in the impugned order dated 21.09.2016 and he has died on 14.03.2017. Therefore, it is crystal clear that the petitioner has been condemned unheard by the impugned order dated 21.09.2016, which is in gross violation of Article 14 of the Constitution of India. Secondly, there was no power vested in the respondent no.2 to initiate disciplinary enquiry against the petitioner under U.P. Co-operative Employees Service Regulation, 1975, after his superannuation as held by the Apex Court in the case of Dev Prakash Tiwari (supra). Finally, the petitioner has died on 14.03.2017, during the pendency of this writ petition and therefore, even if, there had been any power in the rules vested in respondent no.2 to conduct enquiry against the petitioner after superannuation, now it would not have been possible for him to conduct any enquiry. Therefore, the impugned order dated 21.09.2016, passed by respondent no.2, Secretary/General Manager, District Co-operative Bank Ltd., Etah, whereby, recovery of certain amounts have been directed against the petitioner from his gratuity, after his retirement from service is hereby quashed. The respondent no.2 is directed to release the amount of gratuity of the petitioner, by applying new pay scale, along with 7% simple interest for inordinate delay in making payment of the same to the petitioner from the date of his superannuation on 30.06.2013.
The writ petition is allowed. No order as to costs.
Order Date :- 09.01.2018 Ruchi Agrahari