Bharat Coking Coal Limited Vs Vijay Prasad Singh

S. Chandrashekhar, J.@mdashSeeking quashing of order dated 21/24.08.2012 passed by the Controlling Authority under the Payment of Gratuity Act, 1972 and seeking quashing of order dated 15/17.01.2013 passed by the Regional Labour Commissioner (Central), Dhanbad-cum-Appellate Authority under the Payment of Gratuity Act, 1972, the petitioner- M/s. Bharat Coking Coal Limited has preferred the present writ petition.

2. The brief facts of the case are that, a case vide RC 4(A)/2009(D)(Vig/CBI/04/2009) was registered by CBI against the respondent- employee and sanction for prosecution was granted by the Chairman, Coal India Limited. The respondent, in the mean-time attained the age of superannuation on 31.07.2011. The petitioner- M/s. Bharat Coking Coal Limited however, deposited the gratuity amount of Rs. 10 Lacs vide Cheque dated 10.08.2011 with the Controlling Authority under the Payment of Gratuity Act, 1972 with a request not to disburse the amount till finalisation 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(98)/2011-E-4. The petitioner submitted written statement on 22.11.2011 taking a plea that in view of Rules 34.2 and 34.3 of the Conduct, Discipline and Appeal Rules, 1978, the amount of gratuity be withheld till the disposal of the criminal/departmental proceeding. The respondent examined himself and admitted the pendency of the criminal case and the departmental proceeding. However, the Controlling Authority vide order dated 21/24.08.2012 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 pro forma for payment of the gratuity amount. An appeal being P.G. Appeal No. 57/2012 was preferred by the respondent-employee. Vide order dated 19.10.2012 Appellate Authority upheld the findings recorded by the Controlling Authority.

3. Heard learned counsel appearing for the petitioner.

4. Mr. Anoop Kumar Mehta, the learned counsel appearing for the petitioner relying on judgment in State Bank of India Vs. Ram Lal Bhaskar and Another, and in Chairman-cum-Managing Director Mahanadi Coalfields Ltd. v. Rabindranath Choubey (Civil Appeal No. 9693 of 2013) submits that in an identical case, the Hon''ble Supreme Court affirmed the order withholding gratuity during pendency of the departmental proceeding and in view of the decision of a larger Bench of Hon''ble Supreme Court in Ram Lal Bhaskar''s case, the "Rabindranath Choubey" case has been referred to a larger Bench and thus, judgment in Ram Lal Bhaskar''s case holds the field today. It is further submitted that in view of the deeming provision under Rule 34.2, the departmental proceeding initiated against the respondent-employee has continued and since the disciplinary authority has power under Rule 34.3 of the Coal India Executives'' Conduct, Discipline and Appeal Rules, 1978 to withhold payment of gratuity during the pendency of the disciplinary proceeding, the Controlling Authority has erroneously ordered payment of gratuity amount and the said order has been affirmed by the Appellate Authority, ignoring the settled law in this behalf.

5. I have carefully considered the submission of the learned counsel for the petitioner and perused the documents on record.

6. Long back, it has been held that right to receive pension is a valuable right of government servant, of which, a government servant cannot be denied except in accordance with procedure laid down in law. Ordinarily, pension includes gratuity except when the term ''pension'' is used in contra-distinction to gratuity. In Balbir Kaur and Another Vs. Steel Authority of India Ltd. and Others, , it has been held that, "the payment of gratuity is no longer in the realm of charity but a statutory right provided in favour of the employee". In Sudhir Chandra Sarkar Vs. Tata Iron and Steel Co. Ltd. and Others, , the Hon''ble Supreme Court has observed as under,

17. "Can such social security measure be denuded of its efficacy and enforcement by so interpreting the relevant rules that the workman could be denied the same at the absolute discretion of the employer notwithstanding the fact that he or she has earned the same by long continuous service? If Rule 10 is interpreted as has been done by the High Court, such would be the stark albeit unpalatable outcome. It is therefore necessary to take a leaf out of history bearing on the question of retiral benefits like pension to which gratuity is equated. In Burhanpur Tapti Mills Ltd. v. Burhanpur Tapti Mills Mazdoor Sangh this Court observed that: "a scheme of gratuity and a scheme of pension have much in common. Gratuity is a lump sum payment while pension is a period payment of a stated sum". Undoubtedly both have to be earned by long and continuous service."

7. The learned counsel for the petitioner relied on Rules 34.2 and 34.3 of the Coal India Executives'' Conduct, Discipline and Appeal Rules, 1978, which are extracted 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 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 even of delayed payment, in the case the employee is fully exonerated."

8. In Jaswant Singh Gill Vs. Bharat Coking Coal Ltd. and Others, , Rules 27 and 34 of the Coal India Executives'' Conduct, Discipline and Appeal Rules, 1978 have been considered by the Hon''ble Supreme Court and it has been held that power to withhold gratuity under Rule 34.3 of the Rules must be subject to the provisions of the Payment of Gratuity Act. Rule 27 of the Coal India Executives'' Conduct, Discipline and Appeal 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. The Hon''ble Supreme Court has held thus:

"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.

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-�-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........"

9. Referring to the decision in Chairman-cum-Managing Director Mahanadi Coalfields Ltd. v. Rabindranath Choubey, it is to be noted that the issue which has been referred for authoritative pronouncement by a larger Bench is, whether after superannuation, a major penalty of dismissal can be imposed upon the delinquent employee or not. In the said case, the Hon''ble Supreme Court has observed as under,

23. "The issue which confronts us in the instant appeal is as to whether gratuity can be withheld in the wake of Rule 34 of CDA Rules when examined in juxtaposition with the provisions of the Gratuity Act, gratuity has to be necessarily released to the concerned employee on his retirement even if department proceedings are pending against him. We find that Jaswant Singh Gill''s case directly answers this question, that too in the context of these very CDA Rules. However, it is because of the reason that the said judgment proceeds on the basis that after the retirement of an employee, penalty of dismissal cannot be imposed upon the retired employee. If this view is not correct and the imposition of penalty of dismissal is still permissible, employer will get the right to forfeit the gratuity of such an employee in the eventualities provided under Sections 4(1) & 4(6) of the Payment of Gratuity Act....."

10. Coming to the facts of the case, I find that though the respondent-employee superannuated from service before conclusion of the departmental proceeding and under Rule 34.2, there is a deeming provision for continuing the departmental proceeding initiated against a delinquent employee even after the employee retires from service however, I am of the opinion that even for the purpose of Rule 34.2 of the Coal India Executives'' Conduct Discipline and Appeal Rules, 1978, a formal order is required to be issued for continuing the departmental proceeding against the delinquent employee. The deeming provision is only an enabling provision. Admittedly, in the present case, no order for continuance of the departmental proceeding has been passed by the competent authority. A distinction between sanction for continuing a departmental proceeding after superannuation of the delinquent employee and a formal order in terms of Rule 34.2 of the Rules, is of some significance. Leaving aside this aspect of the matter, I find that it is not in dispute that the departmental proceeding and the criminal case registered against the respondent-employee are still pending. It is also an admitted position that there is no statutory provision for withholding the retiral benefits or gratuity of a retired employee. It is interesting to note the plea taken by the petitioner which suggests that in anticipation of the charges against the delinquent employee found proved and consequently, the delinquent employee dismissed from service or that the delinquent employee would be convicted in the criminal case, the amount of gratuity must be withheld. Such a plea does not appeal to reason and atleast it cannot be said to be a just and fair procedure. In Allahabad Bank and Another Vs. All India Allahabad Bank Retired Emps. Assn., , it has been held that gratuity being a statutory right cannot be taken away except, in accordance with the provisions of the Act. The decision in Jarnail Singh Vs. The Secretary, Ministry of Home Affairs and others, also affirms the view that in absence of a statutory provision to withhold payment of gratuity, an employee cannot be deprived of his right to receive the amount of gratuity. In the said case, in view of specific provision under the Central Civil Services (Pension) Rules, 1972, it was held that the employer had the right to withhold payment of gratuity to the employee. As noticed above, in the Coal India Executives'' Conduct, Discipline and Appeal Rules, 1978, there is no specific provision empowering the employers to withhold the gratuity. I do not find any infirmity in the impugned orders.

11. In view of the above discussions, I find no merit and accordingly, the writ petition is dismissed.