@JUDGMENTTAG-ORDER
R. S. Chauhan, J. - The petitioner, Mr. Pai, has challenged the legality of the order dated 3.12.2014, passed by the Controlling Authority under the Payment of Gratuity Act, 1972 and Assistant Labour Commissioner (Central), whereby, the learned Controlling Authority has dismissed the petitioner''s application under Section 7(4) of the Payment of Gratuity Act, 1972 (for short ''the Act'').
2. Briefly, the facts of the case are that the petitioner had joined the service of Vijaya Bank, respondent No.1 on 6.12.1971 as a Clerk. Due to his hard work and honesty, he was promoted from time to time In November 1999 he was last promoted in the cadre of Senior Manager in Middle Management Scale-Ill. However, while working in the regional office of the Bank at Hubli on 13.5.2008, the petitioner was served with a charge-sheet, wherein certain allegations were made regarding irregularities committed by him while he was working as Senior Branch Manager at Bijapur Branch of the Bank. After holding a departmental enquiry, by an order dated 4.5.2009, the petitioner was dismissed from the service. Aggrieved by the said dismissal order, the petitioner preferred a departmental appeal. However, by an order dated 22.9.2010, the appellate authority of the Bank dismissed the appeal. Therefore, the petitioner filed a writ petition challenging both the dismissal order dated 4.5.2009, and the order dated 22.9.2010 before this Court, namely W.P. No.16150/2011. The writ petition is presently pending before this Court.
3. After the petitioner was dismissed from his service, the petitioner has not been paid his gratuity amount. Therefore the petitioner filed an application under Section 7 of the Act before the Controlling Authority. The petitioner claimed that he is entitled to the gratuity amount of Rs.4,53,953/- along with interest at the rate of 12% p.a. However, by an order dated 24.5.2012, the Controlling Authority dismissed the said application mainly on the ground that the petitioner''s claim for gratuity was premature as he had challenged his dismissal order before this Court by filing the aforementioned writ petition.
4. Meanwhile, the petitioner crossed the age of superannuation. With the changed circumstances, as he has crossed the age of superannuation, the petitioner filed fresh application under Section 7 of the Act before the Controlling Authority. However, even this application was dismissed by the Controlling Authority by the order dated 3.12.2014. Hence, the present petition before this Court.
5. The learned Counsel for the respondent No 1 Mr. P Udayshankar Rai, has raised a preliminary objection before this Court, namely that under Section 7(7) of the Act, an alternative remedy has been provided to a person who is aggrieved by any order passed by the Controlling Authority under Section 7(4) of the Act. Since the petitioner is aggrieved by an order passed by the Controlling Authority under Section 7(4) of the Act, the petitioner should have availed the alternative remedy by filing an appeal before the Appellate Authority, but he has failed to do so. Therefore, the present writ petition is not maintainable before this Court because of the availability of efficacious and alternative remedy.
6. On the other hand, Mr. S. Vittal Shetty, the learned Counsel for the petitioner, has relied on the case of T. Prashanth Shetty v. The Chairman and Managing Director, Vijaya Bank and Another (WP No.9461/2015 decided by this Court on 7.6.2016) and has pleaded that in similar situation as of the present writ petition, the same preliminary objection had been raised by the Counsel for Vijaya Bank. In the said writ petition, this Court had clearly opined that the bar to maintainability of writ jurisdiction in a writ petition is a self imposed restriction upon the power of High Court under Article 226 of the Constitution of India. Moreover, this Court had rejected the contention and had entertained the writ petition. Therefore, the preliminary objection deserves to be dismissed by this Court.
7. Heard the learned Counsel for the parties on the preliminary objection.
8. In the case of Harbanslal Sahnia and another v. Indian Oil Corporation Ltd and Others (2003) 2 SCC 107], the Hon''ble Supreme Court has pointed out the circumstances in which the availability of alternative remedy would not be a bar to the maintainability of a writ petition. According to the Apex Court, "In an appropriate case, in spite of availability of alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies:-
(i) where the writ petition seeks enforcement of any of the fundamental rights;
(ii) where there is failure of principles of natural justice; or
(iii) where the orders of proceedings are wholly without jurisdiction or the vires of an Act and is challenged."
9. In the present case, the petitioner has pleaded that under Section 4 of the Act, he has a right to receive his gratuity from the date of his retirement. The right to receive the said amount is a part of right to life and is thus part of Article 21 of the Constitution of India. Therefore, by filing the writ petition, the petitioner pleads that his fundamental right to receive the gratuity amount is being violated and that too, in total disregard to the procedure established by law. Since the petitioner has come before this Court for protection of his fundamental and statutory right, naturally; the writ petition is maintainable despite the availability of alternative remedy under Section 7(7) of the Act. Hence, the preliminary objection raised by the learned Counsel for the respondent is unacceptable.
10. The learned Counsel for the petitioner has pleaded that the Controlling Authority has rejected the application on untenable grounds that since the writ petition challenging dismissal order and the order passed by the Appellate Authority is still pending before this Court, therefore, gratuity cannot be paid. Secondly, that even if the bank has a right to withhold the gratuity under the Regulation issued by the bank, this regulation will have to be in consonance with the Act.
Relying on the case of Jaswant Singh Gill v. Bharat Coking Coal Ltd., and Others (2007) 1 SCC 663), the learned Counsel has pleaded that the Regulation framed by the bank cannot over ride the provisions of the Act. Since the Act is paramount, and since Section 4(6) of the Act does not debar the payment of gratuity due to pendency of judicial proceedings, the Regulation cannot prevent the payment of gratuity due to the pendency of judicial proceedings. Furthermore, the bank is unjustified in withholding the gratuity amount without quantifying the alleged loss suffered by the bank. The bank would be justified in adjudicating the gratuity under Section 4(6) of the Act, only after the loss suffered by the bank is duly quantified, but the same has not been done so far.
Lastly, that the Controlling Authority was unjustified in dismissing the petitioner''s application only because the writ petition is pending before this Court.
11. On the other hand, the learned Counsel for the respondent, Mr. P. Udayashankar Rai, has vehemently pleaded that due to the misconduct committed by the petitioner, the bank has suffered huge losses. Therefore, the petitioner was dismissed from the service. The dismissal order is still sub-judice. Therefore, till this Court were to decide the legality of the dismissal order, the bank is justified in withholding the payment of gratuity. Secondly, the case of Jaswant Singh''s is distinguishable on factual matrix. Therefore, the said case does not support the case of petitioner. Therefore the learned Counsel has supported the impugned order.
12. Section 2(q) of the Act defines the word "retirement" as meaning "termination of the service of an employee otherwise than on superannuation". Section 2(r) of the Act defines the word "superannuation" in relation to an employee, "means the attainment by the employee of such age as is fixed in contract or conditions of service as the age on the attainment of which the employer shall vacate the employment". Thus the act makes a distinction between "retirement" and "superannuation". The retirement is termination of the service, whereas superannuation is cessation of service after the employee has reached the age of superannuation.
13. A conjoint reading of the provisions of Sections 4 and 7 would reveal that Section 4(1) bestows a statutory right upon the employee to be paid his gratuity on the termination of his service provided, he has rendered continuous service for not less than 5 years. The termination of his services may be due to his superannuation or his retirement or. resignation or on his death or disablement due to accident or disease. Since section 4(1) uses the work "retirement", naturally the termination of service could be for any other reason other than superannuation. Thus, even the termination of service on the basis of dismissal order would still bestow the right upon the employee to receive the gratuity amount from the date of his dismissal.
14. Section 7(3) of the Act further lays down that the gratuity has to be paid within thirty days from the date it becomes payable to the person to whom the gratuity is payable. Moreover, Section 7(3A) of the Act even imposes a liability upon the employer to pay interest, in case, there is a delay in payment of gratuity amount. Thus, the payment of gratuity is a statutory right bestowed upon the employee.
15. Of course, Section 4(6) of the Act carves out an exception and begins with a non-obstante clause, the gratuity can be forfeited to the extent of damage or loss caused to the employer by any act, wilful omission or negligence causing any damage or loss to, destruction of, property belonging to the employer. Section 4(6)(b) of the Act further lays down that the gratuity may be wholly or partially forfeited, in case, the service of employee has been terminated for his riotous or disorderly conduct or any other act of violence on his part. Moreover, it may be wholly or partially forfeited if the service of employee has been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by the employee in the course of his employment. But before, the gratuity could be forfeited wholly or partially the loss suffered by the employer has to be quantified.
16. In case of Jaswant Singh (supra), the issue arose before the Apex Court, whether the payment of gratuity could be withheld under the Regulations, despite the clear provisions of Section 4 of the Act. The Apex Court opined as under:
13. The Act provides for a close-knit scheme providing for payment of gratuity. It is a complete code containing detailed provisions covering the essential provisions of a scheme for a gratuity. It not only creates a right to payment of gratuity but also lays down the principles for quantification, thereof as also the conditions on which he may be denied therefrom. As noticed hereinbefore, sub-section (6) of Section 4 of the Act contains a non obstante clause vis-a-vis sub section (1) thereof, as by reason thereof, an accrued or vested right is sought to be taken away, the conditions laid down thereunder must be fulfilled. The provisions contained therein must therefore, be scrupulously observed. Clause(a) of sub section (6) of Section 4 of the Act speaks of termination of service of an employee for any act, wilful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of damage or loss caused. The disciplinary authority has not quantified the loss or damage. It was not found that the damages or loss caused to Respondent No.1 was more than the amount of gratuity payable to the appellant. Clause (b) of subsection (6) of Section 4 of the Act also provides for forfeiture of the whole amount of gratuity or part in the event his services had been terminated for his riotous or disorderly conduct or any other act of violence on his part or if he has been convicted for an offence involving moral turpitude. Conditions laid down therein are also not satisfied.
17. The Hon''ble Supreme Court further held that the provisions , of the Act, therefore must prevail over the Regulations. Furthermore, it was pointed out that the power to withhold the gratuity amount under the Rules or Regulation must be subject to the provisions of the Act. Thus, the contention raised by the learned Counsel for the respondent that according to the Regulation of the bank, the payment of gratuity could be deferred during the pendency of judicial proceedings, such a contention would not hold water in view of the law laid down by the Apex Court in Jaswant Singh (supra). Since Section 4(6) of the Act does not permit withholding of any gratuity during the pendency of judicial proceedings, the gratuity cannot be denied in the garb of a Rule cr Regulations.
18. Although the learned Controlling Authority has relied on the case of N. Dattathry v. State Bank of Mysore and another (ILR 2005 Karn. 2033), but the said reliance is highly misplaced considering the judgment of Supreme Court in Jaswant Singh (supra).
19. For the reasons stated above, the petition is hereby allowed. The impugned order dated 3.12.2014 is set aside, and the case is remanded back to the learned Controlling Authority with a direction to decide the petitioner''s application under Section 4 of the Act within a period of two months from the date of receipt of certified copy of this order.
