Central Coalfields Ltd. v. Regional Labour Commissioner (Central), Dhanbad
2020-09-07
S.N.PATHAK
body2020
DigiLaw.ai
JUDGMENT : S.N. PATHAK, J. 1. In view of outbreak of COVID-19 pandemic, case has been taken up through Video Conferencing. Concerned lawyers have no objection with regard to the proceeding, which has been held through Video Conferencing today at 10:30 A.M. onwards. They have no complaint in respect to the audio and video clarity and quality. 2. Petitioner has approached this Court with a prayer for quashing the order dated 29.05.2002, passed by respondent No. 1, in P.G. Appeal No. 112 of 2001, whereby it has been observed that respondent No. 3 is entitled to receive Rs. 3.50 lakhs as gratuity and Rs. 1,38,930/- as interest. Petitioner has further prayed for quashing the order dated 29.10.2001, passed by respondent No. 1, whereby the petitioner has been directed to pay Rs. 3.50 lakhs as gratuity along with simple interest of 10% per annum on the above amount to respondent No. 3. 3. As per factual matrix, the respondent No. 3 was serving under petitioner-Company as General Manager of B&K Area. During his service period, a disciplinary proceeding was initiated against the respondent No. 3 and the same is still pending. The above disciplinary proceeding was initiated on the advice of Central Bureau of Investigation, Dhanbad. Subsequently, respondent No. 3 superannuated on 30.09.1997 and on 23.03.2001, the respondent No. 3 filed an application before the Controlling Authority for computation and payment of the gratuity amount. Thereafter, the learned Controlling Authority initiated a proceeding under Payment of Gratuity Act without condoning the delay in filing the application by the respondent No. 3. On 11.07.2001, the petitioner filed written statement before the Controlling Authority stating the aforesaid facts. Thereafter, on 20.08.2001, respondent No. 3 filed reply to the written statement and on 20.08.2001, petitioner also filed supplementary written statement. Thereafter, respondent No. 2, after hearing the parties and perusing the documents, by order dated 17.10.2001, held that respondent No. 3 is entitled to receive the gratuity amount of Rs. 3.50 lakh along with interest for the period of delay @ 10% per annum. The petitioner, being aggrieved by the said order, preferred an appeal being PG. Appeal No. 112 of 2001 before the respondent No. 1, in which the respondent No. 3 appeared and filed his reply.
3.50 lakh along with interest for the period of delay @ 10% per annum. The petitioner, being aggrieved by the said order, preferred an appeal being PG. Appeal No. 112 of 2001 before the respondent No. 1, in which the respondent No. 3 appeared and filed his reply. Thereafter, respondent No. 1 vide its order dated 29.05.2002, uphold the order dated 17.10.2001 and directed the petitioner to pay the respondent No. 3 gratuity amount of Rs. 3.50 lakhs along with interest which comes to Rs. 1,38,930/-. Aggrieved by the aforesaid orders, the petitioner has knocked the door of this Court. 4. Mr. Amit Kumar Das, learned counsel appearing for the petitioner submits that orders passed by respondent Nos. 1 and 2 are not maintainable either in law or on facts as the same are premature. As per para-34.2 of the Conduct, Discipline and Appeal Rules, 1978, a disciplinary proceeding can be continued and concluded even after superannuation of an employee. Further, as per para-34.3 of the said Rules, the gratuity of the delinquent may be withheld and taking shelter of aforesaid Rules, gratuity of respondent No. 3 was withheld. Learned counsel further argues that the respondent Nos. 1 and 2 had failed to take into consideration that respondent No. 3 is involved in a criminal offence which amounts to moral turpitude and as such, provisions of Conduct, Discipline and Appeal Rules, 1978 are applicable in case of respondent No. 3. Learned counsel further argues that Section 4 (6) of Payment of Gratuity Act permits the employee to forfeit the gratuity of an employee if the employee has committed gross misconduct and the said provision can be invoked even after retirement of the delinquent. Learned counsel further argues that the respondent Nos. 1 and 2 being the creature of the statute are bound to act within the four corner of the statute. Learned counsel further argues that issue regarding withholding of gratuity in case of pendency of a departmental proceeding, went up to Hon’ble Apex Court in case of Chairman-cum-Managing Director, Mahanadi Coalfields Ltd. vs. Rabindranath Choubey, (2013) 16 SCC 411 and the matter was referred to the larger Bench with the following observations: “23..........As a corollary one can safely say that the employer has right to withhold the gratuity pending departmental inquiry.
However, as explained above, this course of action is available only if disciplinary authority has necessary powers to impose the penalty of dismissal upon the respondent even after his retirement.” It has been further argued that the issue is now no more res-integra as larger bench of the Hon’ble Apex Court has decided the said issue and has held that authority has power to withhold the amount of gratuity, if it is permissible under the Rules. 5. Per contra counter-affidavit has been filed on behalf of respondent No. 3. Learned counsel appearing for respondent No. 3 argues that the respondent No. 3 was punished for the charges, which were not there in the charge-sheet issued to him, neither any disciplinary proceeding was initiated for the same charges nor was he given an opportunity to explain the same and as such, it is liable to be set aside on this ground alone. Learned counsel further argues that the punishment imposed upon him is totally disproportionate to the charges leveled against the respondent No. 3. The respondent No. 3 was imposed with a penalty of recovery of Rs. 4.50 lakh from his terminal benefits but it has not been made clear as to how and under what circumstances, the petitioner-Management has suffered a loss of Rs. 4.50 lakhs which has to be recovered from the respondent No. 3. 6. Be that as it may, having heard the rival submissions of the parties and upon perusal of the records, this Court is of the considered view that issue involved in the present writ petition is now no more res-integra. 7. The Larger Bench of Hon’ble Apex Court in case of Chairman-cum-Managing Director, Mahanadi Coalfields Ltd. vs. Rabindranath Choubey, (2020) SCC Online SC 470, has decided the issue as to whether it is permissible in law for the employer to withhold the payment of gratuity of the employee, even after his superannuation from service, because of the pendency of the disciplinary proceeding against him, wherein it has been held that authority has power to withhold the amount of gratuity, if it is permissible under the Rules. The relevant paragraphs of the said judgments is reproduced herein-below: “25.
The relevant paragraphs of the said judgments is reproduced herein-below: “25. While considering the issues involved in the present appeal, the relevant provisions of the CDA Rules and Section 4 of the Payment of Gratuity Act are required to be referred to and considered, which are as under: “34.2 Disciplinary proceeding, if instituted while the employee was in service whether before his retirement or during his reemployment 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 recovering 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.” Section 4 Payment of gratuity: (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years: (a) on his superannuation. (b) on his retirement or resignation. (c) on his death or disablement due to accident or disease: Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement: Provided further that in the case of death of the employee, gratuity payable to hi m shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
Explanation - For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement. (6) Notwithstanding anything contained in sub-section (1): (a) the gratuity of an employee, whose services have been terminated for any act, wilful 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. (b) the gratuity payable to an employee may be wholly or partially forfeited: (i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part. (ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.” 26. Indisputably, the respondent was governed by the CDA Rules. Therefore, Rules 34.2 and 34.3 of the CDA Rules shall be applicable and the respondent-employee shall be governed by the said provisions. Rule 34 permits the management to withhold the gratuity during the pendency of the disciplinary proceedings. Rule 34.2 permits the disciplinary proceedings to be continued and concluded even after the employee has attained the age of superannuation, provided the disciplinary proceedings are instituted while the employee was in service. It also further provides that such disciplinary proceedings shall be deemed to be the proceedings 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. Therefore, as such, on a fair reading of Rule 34.2 of the CDA Rules, an employee shall be deemed to be continued in service, after he attains the age of superannuation/retired, for the limited purpose of continuing and concluding the disciplinary proceedings which were instituted while the employee was in service. Therefore, at the conclusion of such disciplinary proceedings any of the penalty provided under Rule 27 of the CDA Rules can be imposed by the authority including the order of dismissal.
Therefore, at the conclusion of such disciplinary proceedings any of the penalty provided under Rule 27 of the CDA Rules can be imposed by the authority including the order of dismissal. If the submission on behalf of the employee that after the employee has attained the age of superannuation and/or he has retired from service, despite Rule 34.2, no order of penalty of dismissal can be passed is accepted, in that case, it will be frustrating permitting the authority to continue and conclude the disciplinary proceedings after retirement. If the order of dismissal cannot be passed after the employee has retired and/or has attained the age of superannuation in the disciplinary proceedings which were instituted while the employee was in service, in that case, there shall not be any fruitful purpose to continue and conclude the disciplinary proceedings in the same manner as if the employee had continued in service. 27. It is true that while considering the very provisions of the CDA Rules, namely, Rule 34.2 and Rule 34.3 of the CDA Rules, this Court in the case of Jaswant Singh Gill (supra) has observed and held that once the employee is permitted to retire on attaining the age of superannuation, thereafter no order of dismissal can be passed. However, for the reasons stated hereinabove, we are not in agreement with the view taken by this Court in the case of Jaswant Singh Gill (supra). As observed hereinabove, if no major penalty is permissible after retirement, even in a case where the disciplinary proceedings were instituted while the employee was in service, in that case, Rule 34.2 would become otiose and shall be meaningless. On the contrary, there is a decision of three Judge Bench of this Court in the case of Ram Lal Bhaskar (supra) taking just a contrary view. In the case of Ram Lal Bhaskar (supra), Rule 19(3) of the State Bank of India Officers Service Rules, 1992 came up for consideration which was pari materia with Rule 34.2 of the CDA Rules. The said Rule 19(3) of the State Bank of India Officers Service Rules, 1992 also permits the disciplinary proceedings to continue even after the retirement of an employee if those were instituted when the delinquent employee was in service. In that case, charge-sheet was served upon the respondent before his retirement.
The said Rule 19(3) of the State Bank of India Officers Service Rules, 1992 also permits the disciplinary proceedings to continue even after the retirement of an employee if those were instituted when the delinquent employee was in service. In that case, charge-sheet was served upon the respondent before his retirement. The proceedings continued after his retirement and were conducted in accordance with the relevant rules where charges were proved. Punishment of dismissal was imposed. The High Court allowed the petition and quashed the order of dismissal. This Court reversed the said decision of the High Court. In the said decision, it was specifically observed by this Court while considering the pari materia provisions that in case disciplinary proceedings under the relevant rules of service have been initiated against an officer before he ceased to be in the bank’s service by the operation of, or by virtue of, any of the rules or the provisions of the Rules, the disciplinary proceedings may, at the discretion of the Managing Director, be continued and concluded by the authority by whom the proceedings were initiated in the manner provided for in the Rules as if the officer continues to be in service, so however, that he shall be deemed to be in service only for the purpose of the continuance and conclusion of such proceedings. In the said decision, this Court also took note of another decision of this Court in the case of Rajinder Lal Capoor (supra) and it is observed even in the said decision that the UCO Bank Officer Employees’ Service Regulations, 1979 which were also pari materia to the SBI Rules as well as the CDA Rules, could be invoked only when the disciplinary proceedings had been initiated prior to the delinquent officer ceased to be in service. It is to be noted that Jaswant Singh Gill (supra) was a judgment delivered by a two Judge Bench and the judgment in the case of Ram Lal Bhaskar (supra) is a judgment delivered by a three Judge Bench. Under the circumstances and even otherwise for the reasons stated above and in view of Rule 34.2 of the CDA Rules, even a retired employee who was permitted to retire on attaining the age of superannuation can be subjected to major penalty, provided the disciplinary proceedings were initiated while the employee was in service. 28.
Under the circumstances and even otherwise for the reasons stated above and in view of Rule 34.2 of the CDA Rules, even a retired employee who was permitted to retire on attaining the age of superannuation can be subjected to major penalty, provided the disciplinary proceedings were initiated while the employee was in service. 28. Once it is held that a major penalty which includes the dismissal from service can be imposed, even after the employee has attained the age of superannuation and/or was permitted to retire on attaining the age of superannuation, provided the disciplinary proceedings were initiated while the employee was in service, sub-section 6 of Section 4 of the Payment of Gratuity Act shall be attracted and the amount of gratuity can be withheld till the disciplinary proceedings are concluded.” 8. On a bare reading of the aforesaid judgment, it is apparent that the Larger Bench of Hon’ble Apex Court has elaborately dealt with the issue regarding withholding of the payment of gratuity of the employee, even after his superannuation from service, because of the pendency of the disciplinary proceeding against him and has held that the employer is empowered to withhold the gratuity of a delinquent on the ground of pendency of the departmental proceeding. As such, in view of ratio laid down by the Hon’ble Apex Court, I do not find any illegality in withholding of the amount of gratuity by the petitioner- Management and the respondent Nos. 1 and 2 has failed to consider the provisions of CDA Rules, which empowers the Management/Employer to withhold the amount of gratuity even after superannuation of an employee on the ground of pendency of the departmental proceeding. 9. Further, from perusal of the charge-sheet it is apparent that the petitioner has been charge-sheeted for the following acts of misconduct: (i) Failed to maintain absolute integrity and devotion to duty. (ii) Committed act of dishonest in connection with the business or property of the Company. (iii) Acted in a manner prejudicial to the interest or image of the Company. (iv) Found negligent in performing of duty. (v) Committed such act which amounts to a criminal offence involving moral turpitude. 10. Looking into the gravity of misconduct and the relevant rules viz.
(iii) Acted in a manner prejudicial to the interest or image of the Company. (iv) Found negligent in performing of duty. (v) Committed such act which amounts to a criminal offence involving moral turpitude. 10. Looking into the gravity of misconduct and the relevant rules viz. Section 4 (6) of Payment of Gratuity Act, which permits the employer to forfeit the gratuity of an employee if the employee has committed gross misconduct and the said provision can be invoked even after retirement of the delinquent, I do not find any illegality or infirmity in withholding the amount of gratuity of the petitioner till the conclusion of the departmental proceeding, as has been held by the Hon’ble Apex Court in case of Chairman-cum- Managing Director, Mahanadi Coalfields Ltd. vs. Rabindranath Choubey (supra). The rules permit and as such, since the charges levelled against the workman are grave in nature, rightly the Management has proceeded for withholding the gratuity of the workman, taking into consideration the prevalent rules under Gratuity Act, as also in view of ratio laid down by the Hon’ble Apex Court in the aforesaid judgment and I also do not find any illegality in the action of the respondent. 11. As sequitur to the aforesaid observations, rules, guidelines, legal propositions and judicial pronouncements orders dated 29.05.2002 and 29.10.2001 are hereby quashed and set aside. However, I hereby direct the petitioner-Management to conclude the departmental proceeding pending against the respondent No. 3, at the earliest, preferably within a period of eight weeks from the date of receipt/production of a copy of this order. 12. Resultantly, writ petition stands allowed.