Orissa High Court
Rabindranath Choubey vs Chairman-Cum-Managing Director on 17 July, 2013
Author: Pradip Mohanty
Bench: C. Nagappan, Pradip Mohanty
THE HIGH COURT OF ORISSA : CUTTACK.
W.A. No. 115 of 2012
In the matter of an appeal against the order dated 21.03.2012 passed by the
learned Single Judge in W.P.(C) Nos. 24835 of 2011.
___________
Rabindranath Choubey ...... Appellant
-Versus-
Chairman-cum-Managing Director,
Mahahadi Coalfields Ltd., Jagruti Vihar,
Burla, Sambalpur & Another. ...... Respondents.
For appellant :
M/s. C. Ananda Rao,
S.K. Behera, A.K. Rath & G.B. Panda.
For respondent No.1 : M/s. Debraj Mohanty & Sujit Mohanty.
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PRESENT ;
THE HONOURABLE CHIEF JUSTICE MR C. NAGAPPAN
AND
THE HONOURABLE MR. JUSTICE PRADIP MOHANTY
_______________________________________________________________________
Date of judgment - 17-07-2013
_______________________________________________________________________
C. Nagappan, C.J. This writ appeal is preferred challenging the order dated
21.03.2012 passed by the learned Single Judge in W.P.(C) No. 24835 of
2011. The writ petitioner is the appellant herein.
2. The brief facts of the case leading to filing of this writ
appeal are as follows.
The appellant/writ petitioner was working as Chief General
Manager (Production) since 17.02.2006 at Rajmahal Area under
Mahanadi Coalfields Ltd., Burla, Sambalpur in the State of Odisha. A
memo containing articles of charge was issued to him on 01.10.2007
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alleging that there was shortage of stock of coal in Rajmahal Group of
Mines which was under his management and enquiry was proposed to be
conducted under Rule 29 of the Conduct, Discipline & Appeal Rules,
1978 of Coal India Ltd. However, during the pendency of the
departmental proceeding, the appellant/writ petitioner was allowed to
retire on 31.07.2010 (AN) on attaining the age of superannuation. He
submitted an application on 21.09.2010 to the Director (Personnel),
Mahanadi Coalfields Ltd. for payment of gratuity. On the same date he
also submitted an application before the Controlling Authority under
Payment of Gratuity Act, 1972 -cum- Regional Labour Commissioner
(Central) Rourkela-respondent No.2 for payment of gratuity. The said
application was taken on file as application No. 36 (3)/2010 RKL by the
respondent No.2. Thereafter, notice was issued on 15.11.2010 by the
respondent No.2 calling upon the respondent No.1-Chairman-cum-
Managing Director, MCL, Burla to appear on 01.12.2010 for enquiry.
Accordingly respondent No.1 submitted reply on 13.12.2010 stating that
the payment of gratuity of the appellant has been withheld due to reason
that disciplinary case is pending against him. The respondent No.2,
after hearing both the parties, in its order dated 15.04.2011 held that the
claim of the appellant for payment of gratuity is pre-mature as the
disciplinary proceeding is yet to be concluded by the management.
The appellant sought for quashing of the said order of the
respondent No.2 by filing W.P.(C) No. 24835 of 2011 stating that the said
order was passed by the respondent No.2-Regional Labour Commissioner
(Central) Rourkela without proper application of mind and in violation of
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the relevant provisions of the Act and Rules and also contrary to the
judgment of the Supreme Court in the case of Jaswant Singh Gill Vs.
Bharat Cooking Coal Ltd. Further, the case involves interpretation of the
relevant provisions of the Act and Rules, and therefore, finding no other
alternative and efficacious remedy he has filed the writ petition under
Articles 226 & 227 of the Constitution of India.
Learned Single Judge while disposing of the writ petition,
vide impugned order dated 21.03.2012 held that in view of the existence
of an appellate forum against the order passed by the respondent No.2,
the writ petition is not maintainable; however, the writ petitioner may file
an appeal before the appellate authority within 21 days from the date of
passing of the impugned order and in such event the appellate authority
shall dispose of the same within a period of three months therefrom.
Being aggrieved by the same, the writ petitioner has
preferred the present writ appeal.
3. The first contention of the learned counsel for the appellant
is that the Payment of Gratuity Act, 1972 and Rules made thereunder
provides that any person aggrieved by an order of the "Controlling
Authority" may within 60 days of the order, prefer an appeal to the
Regional Labour Commissioner (Central) who has been appointed as
appellate authority and since the impugned order was passed by the
Controlling Authority-cum-Regional Labour Commissioner (Central)
Rourkela, to avoid confusion and ambiguity, the appellant challenged the
order by filing the writ petition. Further, there are no disputed facts
involved and the issue involved being purely question of law, directly
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covered by the decision of the Supreme Court in the case of Jaswant
Singh Gill Vs. Bharat Cooking Coal Ltd., reported in (2007) 1 SCC 663,
the impugned order of the learned Single Judge directing the appellant to
approach the appellate authority is erroneous and liable to be set aside.
4. Learned counsel for the appellant further contended that
the Rules framed by the Coal India Ltd. are not statutory rules and they
have been made by the holding company of the respondent No.1.
Though the disciplinary enquiry against the appellant has been
completed as back as on 25.03.2009, no further notice has been issued
by the respondent No.1 company till date and the statutory right to
receive gratuity accrued to the appellant cannot be impaired by reason of
Rules framed by the Coal India Ltd. and the action of withholding the
gratuity even after allowing the appellant to retire from service is illegal
and the order dated 15.04.2011 passed by the respondent No.2 terming
the claim of the appellant as premature is contrary to law and liable to
be quashed.
5. Per contra, learned counsel appearing for respondent No.1
submitted that the writ petition is not maintainable in view of the
statutory remedy of appeal available under Sub-section (7) of Section 7 of
the Payment of Gratuity Act, 1972 which is an efficacious remedy in
itself and the order of the learned Single Judge directing the appellant to
pursue the remedy of appeal is sustainable in law. It is further
contended that the disciplinary proceedings could not be completed on
account of the non-cooperation of the appellant. The disciplinary
proceedings commenced while the appellant was in service and shall be
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deemed to be proceeding and be continued even after his retirement in
the same manner as if he is continuing in service and accordingly the
disciplinary authority may withhold the payment of gratuity for ordering
the recovery from the gratuity towards loss caused to the company if the
appellant is found guilty of misconduct and hence withholding of the
gratuity amount till the completion of the disciplinary proceedings is
legal. In support of his submissions, learned counsel for the respondent
No.1 cited some decisions.
6. The original impugned order dated 15.04.2011 holding that
the claim of the appellant for payment of gratuity is premature was
passed by the respondent No.2, namely, Controlling Authority under
Payment of Gratuity Act, 1972 -cum- Regional Labour Commissioner
(Central) Rourkela after conducting enquiry under Sub-section (4) of
Section 7 of the Payment of Gratuity Act, 1972 (in short 'the Act') and
against the said order appeal is provided to the appellate authority under
Sub-section (7) of Section 7 of the Act. Rule 18 of the Payment of
Gratuity (Central) Rules, 1972 (in short 'the Rules') stipulates the
procedure for preferring the appeal. Clause 10 of the Form-'U' (Abstract
of the Act and Rules) published and inserted by G.S.R. 2868 dated 22nd
November, 1975 to the Rules stipulates that any person aggrieved by an
order of the controlling authority may, within sixty days from the date of
receipt of the order, prefer an appeal to the Regional Labour
Commissioner (Central) of the area who has been appointed as the
appellate authority by the Central Government. Clause 11 thereof
stipulates that all Assistant Labour Commissioners (Central) have been
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appointed as Controlling Authorities and all the Regional Labour
Commissioners (Central) as Appellate Authorities.
7. As already seen, the original impugned order dated
15.04.2011 was passed by the Controlling Authority and the Regional
Labour Commissioner (Central) Rourkela and, according to the
appellant, there was confusion and ambiguity with regard to the
appellate authority and hence he has filed the writ petition. Learned
Single Judge in the impugned order has referred to a Notification issued
by the Ministry of Labour and Employment dated 04.01.2006, which
specified the Regional Labour Commissioner (Central), Bhubaneswar as
the appellate authority for the State of Orissa. Admittedly the
respondent No.2 as well as the appellate authority as specified in the
above notification are the Regional Labour Commissioner (Central) and
therefore the contention of the appellant that there was confusion and
ambiguity is to be countenanced. Further, there are no disputed
question of facts involved in the present case and the issue is purely
question of law. It is settled law that exclusion of writ jurisdiction on
the ground of availability of alternative remedy is a rule of discretion and
not a rule of compulsion and in appropriate case this Court may still
exercise its writ jurisdiction and therefore, we are of the considered view
that the present case warrants such an exercise to be done and hence
the order of the learned Single Judge is liable to be set aside. We also
deem it fit to deal with the merits of the case.
8. It is an undisputed fact that the appellant was governed by
Coal India Executives Conduct, Discipline and Appeal Rules, 1978 (in
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short 'the Rules, 1978'). Rule 27(1)(i) thereof provides for 'minor
penalties' like withholding increment, withholding promotion, and
recovering from pay; and Rule 27(1)(iii) provides for 'major penalties' like
reduction to a lower grade, compulsory retirement, removal from service,
and dismissal. By Office Memo dated 23.11.2005 issued by the Coal
India Ltd., recovery from gratuity stipulated as a minor penalty under
the Rule 27(1)(i)(d) of the Rules, 1978 has been deleted. Rule 34 of the
Rules, 1978 provides for 'special procedure in certain cases'. Rules 34.2
and 34.3 thereof are relevant to be extracted, which reads thus :
" 34.2 Disciplinary proceeding, if instituted while
the employee was in service whether before his retirement
or during his re-employment shall, after the final retirement
of the employee, be deemed to be proceeding and shall be
continued and concluded by the authority by which it was
commenced in the same manner as if the employee had
continued in service.
34.3 During the pendency of the disciplinary
proceedings, the Disciplinary Authority may withhold
payment of gratuity, for ordering the recovery from gratuity
of the whole or part of any pecuniary loss caused to the
company if have been guilty of offences/misconduct as
mentioned in Sub-Section (6) of Section 4 of the Payment of
Gratuity Act 1972 or to have caused pecuniary loss to the
company by misconduct or negligence, during his service
including service rendered on deputation or on re-
employment after retirement. However, the provisions of
Section 7(3) and 7(3A) of the Payment of Gratuity Act 1972
should be kept in view in the event of delayed payment in
the case the employee is fully exonerated."
9. The Payment of Gratuity Act, 1972 is a complete code
containing detailed provisions and it not only creates a right to payment
of gratuity but also laid down principles of quantification thereof.
Further, sub-section (6) of Section 4 contains a non-obstante clause vis-
à-vis sub-section (1) thereof. By reason thereof when an accrued or vested
right is sought to be taken away, the conditions laid down thereunder
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must be fulfilled. Clause (a) of sub-section (6) of Section 4 of the Act
speaks of the gratuity of an employee, whose services have been
terminated for any act, willful 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.
10. The Rules have been made by the holding company viz.
Coal India Ltd. and they are not statutory rules. Their Lordships in the
decisions in the case of Jaswant Singh Gill (referred to supra) considered
the very same Rules framed by the Coal India Ltd. vis-à-vis the claim of
gratuity of the employee and clearly held thus:
"9. The Rules framed by the Coal India Limited are not
statutory rules. They have been made by the holding
company of Respondent 1.
10. The provisions of the Act, therefore, must prevail over
the Rules. Rule 27 of the Rules provides for recovery from
gratuity only to the extent of loss caused to the Company by
negligence or breach of orders or trust. Penalties, however,
must be imposed so long an employee remains in service.
Even if a disciplinary proceeding was initiated prior to the
attaining of the age of superannuation, in the event the
employee retires from service, the question of imposing a
major penalty by removal or dismissal from service would not
arise. Rule 34.2 no doubt provides for continuation of a
disciplinary proceeding despite retirement of employee if the
same was initiated before his retirement but the same would
not mean that although he was permitted to retire and his
services had not been extended for the said purpose, a major
penalty in terms of Rule 27 can be imposed.
11. Power to withhold penalty (sic gratuity) contained in
Rule 34.3 of the Rules must be subject to the provisions of
the Act. Gratuity becomes payable as soon as the employee
retires. The only condition therefor is rendition of five years'
continuous service.
12. A statutory right accrued, thus, cannot be impaired by
reason of a rule which does not have the force of a statute. It
will bear repetition to state that the Rules framed by
Respondent 1 or its holding company are not statutory in
nature. The Rules in any event do not provide for withholding
of retiral benefits or gratuity."
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11. In the present case, though the disciplinary proceedings
against the appellant was initiated prior to attaining the age of
superannuation, he retired from service on superannuation and hence the
question of imposing a major penalty of removal or dismissal from service
would not arise as per the dictum of the Supreme Court in the above
decision. In the same way power to withhold payment of gratuity as
contained in Rule 34(3) of the Rules, 1978 shall be subject to the provisions
of the Payment of Gratuity Act. The statutory right accrued to the appellant
to get gratuity thus cannot be impaired by reason of the Rules framed by the
Coal India Ltd. which do not have the force of a statute. The above decision
of the Supreme Court squarely applies to the facts of the present case. If
that be so, respondent No.1 cannot withhold the payment of gratuity to the
appellant citing the pendency of the disciplinary proceedings.
12. Learned counsel for the respondent No.1 cited the decision of
the Supreme Court in the case of Umesh Kumar Sinha Vs. State of Bihar &
Ors., reported in (2010) 6 SCC 718. In the said decision Rules 27 and 43(b)
of Bihar Pension Rules, which provide that pension includes gratuity and
the power of the State Government to withhold or withdraw whole or any
part of it including forfeiture of gratuity by way of punishment, was
considered and penalty imposed was upheld. The said decision is not
applicable to the facts of the present case. In the same way other two
decisions in the case of Secretary, Forest Department & Ors. Vs. Abdur
Rasul Chowdhury, (2009) 7 SCC 305 and State Bank of India Vs. Ram Lal
Bhaskar & Anr., 2011 AIR SCW 6577 upon which reliance has been placed
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by the learned counsel for the respondent No.1 are not applicable to the fact
situation of the case in hand.
13. As discussed earlier, the provisions of Payment of Gratuity
Act and Rules framed thereunder shall prevail over the Rules framed by the
Coal India Ltd, the holding company of respondent No.1. Withholding
payment of gratuity of the appellant during the pendency of the disciplinary
proceedings by the respondent No.1 is obviously illegal and accordingly the
original impugned order dated 15.04.2011 passed by the respondent No.2,
rejecting the application for payment of gratuity to the appellant on the
ground that it is premature, cannot be sustained in the eye of law and liable
to be quashed.
14. In the result, the writ appeal is allowed and the impugned
order of the learned Single Judge is set aside and the order dated
15.04.2011 under Annexure-9 to the writ petition, passed by the Controlling
Authority and Regional Labour Commissioner (Central) Rourkela-
respondent No.2, is hereby quashed. The appellant/petitioner shall be paid
the gratuity amount as claimed in his application under Annexure-2 series.
No costs.
.............................
Chief Justice
Pradip Mohanty, J.I agree.
................................ Judge Orissa High Court, Cuttack The 17th day of July, 2013/A. Dash