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3. During 1981-1982, when the appellant was posted as Manager at the Sector 19, Chandigarh Branch of the PNB, he was accused of having entered into a conspiracy with R.L. Vaid, the then Regional Manager of the PNB, Chandigarh, and Dr. A.K. Sinha, IAS, the then Secretary, Department of Town and Country Planning, Haryana and thereby, of fraudulently having sanctioned a loan of Rs.2,70,000/- to Mrs. Rama Sinha (wife of Dr. A.K. Sinha, aforementioned). The said loan was granted to Mrs.Rama Sinha, for construction of a building on a plot in Sector 6, Panchkula. The said building, after its construction, was leased to the PNB, at an allegedly exorbitant rent of Rs.4,985/- per month. The loan amount, was to be adjusted out of the rent account. The PNB was allegedly, not in the need of the said building, because it was already housed in a building in Sector 17, Chandigarh, at a nominal rent of Rs.1,650/- per month. The building rented from Mrs. Rama Sinha was said to have remained unoccupied from 1.5.1982 to 21.1.1987. This factual position, it was alleged, was sufficient to infer, that the PNB was not in need of the building taken on rent from Mrs.Rama Sinha. Based on the aforesaid factual position, it was felt, that the action of the conspirators caused a pecuniary loss of Rs.2,70,000/- to the PNB. It was also sought to be assumed, that the aforesaid loan and lease were favours extended to Dr. A.K. Sinha, IAS, through his wife Mrs. Rama Sinha. Based on the aforesaid allegations, the appellant Y.K. Singla, the aforesaid R.L. Vaid and Dr. A.K. Sinha, IAS, were charged under Section 120B of the Indian Penal Code and Section 5(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.

6. As already noticed above, the appellant was acquitted of the charges framed against him, by the Special Judge, CBI Court, Chandigarh, on 31.10.2009. Based on his aforesaid acquittal, the appellant addressed a letter dated 26.11.2009 to the Executive Director of the PNB seeking release of his gratuity, encashment of privileged leave balance and commutation of permissible portion of pension. Additionally, he claimed interest, from the date the aforesaid retiral benefits became due to him, till the actual payment thereof. It will also be relevant to mention, that by this time, the appellant was over 73 years old. In its reply dated 5.2.2010, the PNB informed the appellant, that it had released leave encashment of Rs.1,28,716.24 on that day itself i.e., on 5.2.2010 itself. The appellant was also informed through the aforesaid communication, that a duly sanctioned gratuity proposal had been sent to the Provident Fund and Pension Department of the PNB, for disbursement of gratuity. Thereupon, the appellant actually received the gratuity payable to him, on 12.2.2010.

7. Having received encashment of privileged leave balance, as also, gratuity in February, 2010, the appellant reiterated his claim for interest, on account of delayed payment of the aforesaid amounts, through another letter dated 17.2.2010. In the instant letter, the appellant pointed out, that he had retired on attaining the age of superannuation on 31.10.1996, and as such, the PNB had withheld the aforesaid monetary benefits due to him for a period of more than 13 years up to February, 2010. The appellant’s request for interest on the aforesaid delayed payments, was responded to by the PNB through a letter dated 12.3.2010. The appellant was informed, that he was entitled to interest on account of withholding of his retiral benefits, only with effect from the date of culmination of the proceedings pending against him. Having found the appellant entitled to interest with effect from 31.10.2009 i.e., when the Special Judge, CBI Court, Chandigarh acquitted him, the PNB released a sum of Rs.1,881/- as interest towards delayed payment of leave encashment, and another sum of Rs.3,336/- as interest on account of having withheld his gratuity. The aforesaid interest, the appellant was informed, had been calculated at the rate of 5.5%.

19. The most important question which arises for our consideration is, whether the provisions of the Gratuity Act can be extended to the appellant, so as to award him interest under sub-Section (3A) of Section 7 of the Gratuity Act. Insofar as the instant aspect of the matter is concerned, it was the vehement contention of the learned counsel appearing on behalf of the appellant, that the provisions of the Gratuity Act are extendable to the appellant, and as such, he would be entitled to disbursement of interest under Section 7(3A) thereof. The plea at the behest of the PNB, however, was to the contrary. The contention of the learned counsel representing the PNB was, that the PNB having adopted the 1995, Regulations, the claim of the appellant could only be determined under the provisions of the said Regulations. It was pointed out, that denial of payment of gratuity in the present case, was valid and justified under Regulation 46(2) of the 1995 Regulations. Furthermore, it was pointed out, that the 1995 Regulations, did not make any provision for the award of interest in case of delayed payment of gratuity. Therefore, since gratuity had legitimately been withheld, under the provisions of the 1995, Regulations, and the payment of gratuity to the appellant is not regulated under the Gratuity Act, there was no question of payment of interest to the appellant. It was submitted that the appellant’s gratuity had been withheld during the pendency of criminal proceedings initiated against him, his entitlement to gratuity stood extended to such time as the said criminal proceedings were eventually disposed of. Thus viewed, the entitlement to gratuity stood extended to 31.10.2009 (i.e., the date of the disposal of the proceedings pending against him). In this behalf, it was also pointed out, that as soon as the criminal proceedings pending against the appellant, concluded in his favour, the PNB released all the appellant’s retiral benefits, including gratuity. The documents available on the record of the case reveal, that gratuity was released to the appellant on 12.2.2010. As such, the delay in release of gratuity, if at all, was only from 31.10.2009 to 12.2.2010. For the aforesaid delayed payment of gratuity, the appellant was admittedly awarded interest quantified at Rs.3,336/- (calculated at the rate of 5.5%).