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2013 DIGILAW 214 (ORI)

Rabindranath Choubey v. Chairman-cum-Managing Director, Mahahadi Coalfields Ltd. , Jagruti Vihar, Burla, Sambalpur

2013-07-17

C.NAGAPPAN, PRADIP MOHANTY

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JUDGMENT 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 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 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 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. 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 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 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 short ‘the Rules, 1978’). 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 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 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 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 must be fulfilled. 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 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. 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.” 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. 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 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) Rourkelarespondent 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. Pradip Mohanty, J. I agree. Appeal allowed.