1. Heard the parties.
2. The writ petition was filed by the original petitioner-BCCL challenging the order of the Controlling Authority regarding the payment of gratuity amount to the petitioner.
3. The facts pleaded before the learned Single Judge is that a case vide RC 13(A)/06/00920006 A 0013 was registered by CBI against the respondent- employee and sanction for prosecution was granted on 08.08.2007 by the Chairman, Coal India Limited. On account of his involvement in the criminal case, the respondent-employee was suspended vide order dated 12.12.2006. Thereafter, a departmental proceeding under Rule 29 of the Coal India Executives' Conduct Discipline and Appeal Rules, 1978 (for short “the Rules, 1978”) was initiated vide order dated 28.09.2010 against the respondent-employee. While the criminal case as well as the departmental proceeding was pending, the respondent who was appointed as an Executive in BCCL, attained the age of superannuation on 31.12.2010. The original petitioner- M/s. Bharat Coking Coal Limited, however, deposited the gratuity amount of Rs.10 Lacs vide Cheque dated 09.02.2011 with the Controlling Authority under the Payment of Gratuity Act, 1972 with a request not to disburse the amount till finalization of the proceeding, which was initiated against the respondent-employee while he was in service. The respondent-employee submitted an application on 24.05.2011 in Form ‘N’ for release of gratuity amount, before the Controlling Authority, which was registered as P.G. Case No.36(46)/2011-E-6. The original petitioner submitted written statement on 19.07.2011 taking a plea that in view of Rules 34.2 and 34.3 of the Rules, 1978, the amount of gratuity be withheld till the disposal of the criminal/departmental proceeding. The respondent-employee examined himself and admitted the pendency of the criminal case and the departmental proceeding. However, the controlling authority vide order dated 21.12.2011 held that in view of Section 4(6) of the Payment of Gratuity Act, 1972, the amount of Gratuity cannot be withheld merely on account of pendency of the criminal case and directed the respondent-employee to apply in the prescribed proforma for payment of the gratuity amount. An appeal being P.G. Appeal No.21/2012 was preferred by the respondent-employee for payment of interest on the gratuity amount from 01.01.2011. The petitioner- M/s. Bharat Coking Coal Limited also preferred an appeal being, P.G. Appeal No. 20/2012. Both the appeals were heard together and vide order dated 19.10.2012, both the appeals have been dismissed by Appellate Authority.
4. Learned counsel for the original petitioner-BCCL placing heavy reliance on the plethora of judgments of Hon’ble Apex Court particularly the judgment rendered in the case of State Bank of India Vs. Ram Lal Bhaskar & Anr., reported in (2011) 10 SCC 249 and in case of Chairman-cum-Managing Director, Mahanadi Coalfields Ltd. Vs. Rabindranath Choubey, reported in (2020) 18 SCC 71, submitted before the Writ Court that in view of settled law the management of BCCL was empowered under Rules 34.2 and 34.3 of the Rules, 1978, to withhold the amount of gratuity during the pendency of the disciplinary proceeding and the Controlling Authority has erroneously ordered for payment of gratuity amount which was also affirmed by the Appellate Authority. Learned Single Judge was of the view that the payment of gratuity is no longer in the realm of charity of the statutory right provided in favour of the employees.
5. Relying on the judgment of Hon’ble Apex Court in the case of Balbir Kaur & Anr. Vs. Steel Authority of India Ltd. & Ors., reported in (2000) 6 SCC 493 and in the case of Sudhir Chandra Sarkar Vs. Tata Iron and Steel Co. Ltd. & Ors., reported in (1984) 3 SCC 369 and giving a detailed interpretation to the provisions of Rules 34.2 and 34.3 of the Rules, 1978, the learned Single Judge was of the view that power to withhold gratuity under Rule 34.3 of the Rules, 1978 must be subject to the provisions of Payment of Gratuity Act. Rule 27 of the Rules, 1978 provides for recovery from gratuity only to the extent of loss caused to the Company by negligence or breach of orders or trust, however, penalties must be imposed so long an employee remains in service. It was also observed that employees superannuated from service with effect from 31.12.2010, departmental proceeding initiated against the respondents employee continued after his retirement. Under Rule 34.2 of the Rules, 1978, there is a deeming provision for continuing the departmental proceeding initiated against a delinquent employee even after the employee retires from service, it was observed that even for the purpose of Rule 34.2 of the Rules, 1978, a formal order is required to be issued for continuing the departmental proceeding against the delinquent employee. Admittedly, in the present case no such order has been passed by the competent authority. Relying on the judgment of Hon’ble Apex Court in the case of Jarnail Singh Vs. Secretary, Ministry of Home Affairs, reported in (1993) 1 SCC 47 also affirms the view that in absence of a statutory provisions to withhold payment of gratuity, an employee cannot be deprived of his right to receive the amount of gratuity. In view of specific provision under the Central Civil Services (Pension) Rules, 1972, the amount of gratuity can be withheld by the employer and in absence of any specific provisions, the Management of BCCL was not empowered to withhold the gratuity amount. Thereafter, the writ petition was dismissed finding no infirmity in the order of controlling authority as well as the appellate authority.
6. The Management of BCCL aggrieved by the order of learned Single Judge has thrown challenge to the same by filing the present Letters Patent Appeal.
7. Learned counsel for the appellant emphatically argues that observation of the learned Single Judge to the extent of justifying the orders of controlling authority as well as the appellate authority is not tenable in the eyes of law. Further it has been argued that the judgment passed in the case of Jarnail Singh (supra) has been overruled by the Hon’ble Apex Court. Placing heavy reliance on the judgment of Hon’ble Apex Court in the case of Chairman-cum-Managing Director, Mahanadi Coalfields Ltd. Vs. Rabindranath Choubey, reported in (2020) 18 SCC 71 para-46 to 48. Learned counsel submits that it has been clearly held that the amount of gratuity can be withheld if there are statutory provision for the same and as such, the order of learned Single Judge is not in consonance with the legal provisions and is fit to be quashed and set aside and the Management of the BCCL be directed to proceed in accordance with law.
8. Learned counsel for the respondent at the very outset submits that this Letters Patent Appeal is not maintainable since amount of gratuity has already been received by the respondent much before filing of the Writ Petition and as such, there was no any cause of action to prefer the Writ Petition or the Letters Patent Appeal. However, learned counsel submits that the ratio laid down in the case of Chairman-cum-Managing Director, Mahanadi Coalfields Ltd. (supra), does not apply in the instant case. It has been argued that there is no specific order regarding forfeiture of gratuity.
9. Having heard the parties at length and upon perusal of the order passed by learned Single Judge, this Court is of the view that admittedly Payment of Gratuity is a statutory right provided in favour of the employees. Right which flows to an employee by way of a statute cannot be snatched merely by way of any enabling provisions. The Constitution has provided right to the employees to receive pension and gratuity which is their fundamental right after retirement. Long back in the case of Deokinandan Prasad v. State of Bihar, reported in (1971) 2 SCC 330 it has been held by the Hon’ble Apex Court that pension is not a bounty payable at the sweet will and pleasure of the Government and that, on the other hand, the right to pension is a valuable right vested in a government servant. There is no iota of doubt that pension includes gratuity. Similar to this provisions, Rule 43-B of Pension Rules talks of initiation of departmental proceeding after retirement. There also it has been specifically mentioned that if there is a huge loss to the State Exchequer and the employee is found guilty of gross misconduct then only Rule 43-B of Pension Rules is attracted.
10. In the instant case Rules 34.2 and 34.3 of the Rules, 1978 are same and similar to Rule 43-B of Jharkhand Pension Rules. For proper appreciation the Rules 34.2 and 34.3 is quoted herein below:
“Rule 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.
Rule 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 reemployment 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 even of delayed payment, in the case the employee is fully exonerated.”
11. From perusal of the aforesaid Rules it appears that when there is huge loss to the Company and Employer is found to be guilty of misconduct, then only the aforesaid Rules are attracted. Merely pendency of the departmental or criminal proceeding will not empower the Management to withhold the amount of gratuity. Learned Single Judge has rightly held that though the Management has right to withhold payment of gratuity in view of Central Civil Services (Pension) Rules, 1972 but in Coal India Executives’ Conduct, Discipline and Appeal Rules, 1978, there is no specific provisions empowering the Employer to withhold the amount of gratuity. In absence of any specific provision and also in view of the fact that amount of gratuity has already been withdrawn by the respondent, nothing remains to be adjudicated.
12. Accordingly, the order of learned Single Judge is hereby affirmed and the Letters Patent Appeal is dismissed.
