Terminal Benefits in case of CRS - Court Case Decision

IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA CWP No. 133 of 2001 Date of Decision: 21st October, 2010 Arun Kumar Sood .Petitioner. Versus The Chairman & M.D. UCO Bank & others .Respondents. Coram The Honble Mr. Justice Dev Darshan Sud, J. Whether approved for reporting?1 For the Petitioner: Mr. Ajay Sharma, Advocate For the Respondents: Mr. R.L. Sood, Sr. Advocate with

2. The brief facts of the case are that the petitioner was employed as an officer JMS-I with the respondent. Departmental proceedings were initiated against the petitioner for imposing major penalty of removal from service. These orders were challenged by the petitioner in CWP No. 438 of 1994 on 17.12.1998. This Court held:

13. In view of these guidelines it is true that in all disciplinary matters the punishment has to be moderated having regard to the nature of the charge proved, the total length of service and past record of the delinquent in the department. Once the charge is proved and if it is a charge which can validly attract a punishment provided by law, the quantum of punishment awarded by the Disciplinary Authority is not justifiable and it is not open to this Court in its extraordinary jurisdiction to substitute its own notion of what the punishment should be, except perhaps in a case where it is so patently harsh as to shock its sense of justice and reasonableness. In view of these guidelines, though the punishment of termination from bank service is not shockingly harsh in view of the nature of the misconduct proved against the petitioner, who is holding a responsible post of Manager in a nationalized bank, yet in the totality of facts and circumstances on record, more specifically, that the petitioner has faced, firstly, criminal charge and thereafter the departmental proceedings for the last about 10 years and has put in service of 28 years, the ends of justice will be duly served if the order of termination is converted into compulsory retirement with immediate effect in view of the fact that he continues to be in service as a result of stay of the order of termination by this Court. The writ petition is disposed of in these terms. There is no order as to costs.

3. After decision in that writ petition, the petitioner was compulsorily retired on 19.3.1999. The case of the petitioner is that he was not granted hisretirement benefits due. By Annexure P-1, dated 9th December, 1999, the petitioner was informed that the Head Office had informed that he was not entitled to get any gratuity. Accordingly, notice dated 21.10.2000 was issued for and on behalf of the petitioner calling upon the respondent to pay the entire benefits to the petitioner on retirement. In reply, the Bank by its letter dated 25th November 2000 Annexure P-3 responded that the entire benefits due have been paid to the petitioner in accordance with law. The petitioner relies upon the regulations of the Employees Gratuity Fund Rules of the Bank to urge that his compulsory retirement does not enable the Bank to deny gratuity to him. 4. The writ petition was resisted by the Bank. It is submitted that the petitioner has caused considerable financial loss to the Bank and therefore, he is not entitled to any pension as according to the rules relied upon by the petitioner, there is a clear stipulation that gratuity of an employee shall be wholly forfeited if the services have been terminated on account of any misconduct resulting in financial loss or damage to the Bank or shall be forfeited to the extent of the damage or loss so caused. The respondent relies upon the decision as conveyed to the petitioner with Annexure R-1. It is pleaded that he was charge sheeted on 14.2.1992 for having committed certain irregularities while posted as Manager at Darlaghat Branch and after compulsory retirement, he received his own contribution to the Provident Fund that was settled on 5.7.1999, So far as the settlement of his gratuity is concerned, the competent authority has declined to pay as it was a case of moral turpitude where removal from the banks service was ordered by the Disciplinary Authority. Reference was made to Regulation 33 of the Bank (Employees) Pension Regulations, 1995 to hold that 2/3rd pension was granted to him. 5. A number of submissions have been made by the learned counsel for the parties. Learned counsel appearing for the petitioner relies upon the decision of Punjab & Haryana High Court in UCO Bank & others vs. Ashwani Kumar Sharma, LPA No. 191 of 2006 (O&M) decided on 1st February, 2010 involving the case of compulsory retirement. A Division Bench of the Court relying upon the Regulation 46 of the Services Regulations of the Bank, held that there was no provision for withholding gratuity and leave encashment. The Court holds:

.This appeal has been preferred against order of learned Single Judge setting aside withholding of gratuity and leave encashment. Learned counsel for the appellants states that though 1/3rd cut in pension was also set aside by the learned Single Judge but liberty having been given to pass fresh order in that regard, such speaking order having been passed separately, the appellants have no grievance in this appeal in that regard. Thus, only surviving issue is validity of withholding of gratuity and leave encashment. At the time of admission of the appeal, 50% of the amount of gratuity and leave

encashment was ordered to be paid. Learned counsel for the appellants states that the amount has already been paid. 2. The respondent served the appellant respondent-Bank for about 28 years till the order of compulsory retirement was passed against him on 31.7.1997. Order of compulsory retirement was punitive order preceded by charge sheet and enquiry in which misconduct alleged against him was proved. This led to cut in pension and forfeiture of gratuity and leave encashment amount. The respondent filed writ petition challenging withholding of gratuity and leave encashment. 3. The bank contested the claim for gratuity and leave encashment by submitting that gratuity and leave encashment were not payable to the respondent in view of provisions of Services Regulations 1979 and Disciplinary and Appeal Regulations, 1976. 4. Learned Single Judge held that Regulation 46 under which gratuity was withheld, was not applicable. The said provision was applicable to punitive termination and not to punitive retirement. Similarly, Regulation 38 did not entitle the appellants to withhold leave encashment. 5. We have heard learned counsel for the appellants. 6. Learned counsel for the appellants submits that Regulations 46 and 38 had not been correctly appreciated by learned Single Judge and the said regulations justified withholding of gratuity and leave encashment. 7. We do not find any merit in this submission. The regulations in question are as under:46. (1) Every Officer, shall be eligible for gratuity on:a) retirement. b) Death c) Disablement rendering him unfit for further service as certified by a medical officer approved by the Bank; d) resignation after completing ten years of continuous service; or e) Termination of service in any other way except by way of punishment after completion of 10 years of service. 38. Lapse of Leave. Save as provided below, all the leave to the credit of an officer shall lapse on resignation, retirement, death, discharge, dismissal or termination; Provided that where an officer retires from the banks service he shall be eligible to be paid a sum equivalent to the emoluments of any period, not exceeding 240 days, of privilege leave that he had accumulated.

Provided further where an officer dies while in service, there shall be payable to his legal representatives, a sum equivalent to the emoluments for the period, not exceeding 240 days, of privilege leave to his credit as on the date of his death.

8. A perusal of above shows that Clause (e) of Regulation 46 above which has

been relied upon by learned counsel for the appellants cannot apply to the case of compulsory retirement. Similarly, First Proviso to Regulation 38 clearly shows that on retirement, an officer is entitled to leave encashment. There is no provision for withholding gratuity and leave encashment in the case of compulsory retirement. 9. We, thus, do not find any ground to interfere with the view taken by learned Single Judge. 10. The appeal is dismissed

6. No other law has been brought to my notice contrary to the judgment of the Punjab and Haryana High Court. In these circumstances, this writ petition is accepted. It is directed that the petitioner shall be entitled to the full amount of gratuity in accordance with the Services Regulations of the Bank. Writ petition stands disposed of. There shall be no order as to costs. (Dev Darshan Sud) Judge October 21st , 2010(ms)