ORDER
S. Abdul Nazeer, J.
1. The first petitioner is the widow of A.Y. Nayak, an Employee of first respondent-Bank and the second petitioner is their son. A.Y. Nayak died in harness on 9.8.1997. In this case, petitioners have questioned the validity of the order at Annexure 'A', dated 24.4.2003, whereby the representation filed by them seeking grant of monetary benefits and family pension to the first petitioner has been rejected by the Bank.
2. The brief facts of the case are as follows:
A.Y. Nayak was working as a Branch Manager, Bhartan Bazaar Branch, Moradabad, of the respondent-Bank in the year 1984-85. While he was working as such, a charge memo dated 25.8.1986 was served on him accusing him of violating Regulation 3(1) of the Syndicate Bank Officers Employees (Conduct Regulation) 1976 read with Section 24 of the Regulations. He filed the reply denying the allegations contained in the charge memo. The Disciplinary Authority not being satisfied with the explanation offered by the delinquent officer, appointed an enquiry officer to enquire into the allegations contained in the charge memo. On the first sitting of the enquiry proceedings, the delinquent officer requested the enquiry officer to direct the Presenting Officer or the Disciplinary Authority to furnish him certain documents. He had also informed the enquiry officer the relevancy of those documents. It was stated that those documents are required by him to defend himself effectively in the enquiry proceedings and also to cross-examine the witnesses of the management. The enquiry officer being satisfied with the relevancy of the documents the delinquent officer was requesting, directed the Presenting Officer to furnish those documents or atleast permit the delinquent officer to inspect the documents at the place and time to be notified by him. The Bank examined two witnesses in support of the allegations made in the charge memo. They marked documents Ex.Mx1 to Ex.Mx9. After the completion of the recording of the evidence of the management and cross-examination by the delinquent officer, the Presenting Officer produced before the enquiry officer 8 documents out of 13 documents requested by the delinquent officer. The delinquent officer had examined himself in the said proceedings. After the completion of the enquiry proceedings, the enquiry officer submitted his report dated 7.11.1988 to the disciplinary authority holding that the delinquent officer was guilty of two of the components out of the four components in the charge memo. On the basis of the report of the enquiry officer, the Disciplinary Authority passed an order dated 11.1.1990 dismissing the delinquent officer from the services of the Bank. The appeal and the review filed by the delinquent officer were also rejected by the authorities concerned. The delinquent officer filed a writ petition challenging the said order before this Court in W.P. No. 12955/1991. This Court after considering the rival contentions of the parties allowed the writ petition by its order dated 24.9.2001 (reported in 2002 (1) KLJ 85). Taking note of the fact that the delinquent officer had expired during the pendency of the writ petition, this Court held that his legal representatives are entitled to the monetary benefits and the Bank was directed to calculate the monetary benefits payable to the delinquent officer from the date of suspension till the date of payment in accordance with the Service Regulations of the Bank with interest at 12% from the date of the order. Feeling aggrieved by the said order, the Bank filed an appeal in W.A. No. 7004/2001. A Division Bench of this Court by its judgment dated 26.8.2002 upheld the order of the learned Single Judge. However, the award of interest by the learned Single Judge from the date of suspension till the date of payment has been set aside. Thereafter, the Bank had made payments of the salary of the delinquent officer to the petitioners from 10.12.1985 to 9.8.1997 as per Annexure 'E'. However, the Bank has failed to pay the other benefits such as increments in the salary of A.Y. Nayak, leave encashment benefits and gratuity. Therefore, petitioners have filed this writ petition not only to quash the impugned order at Annexure 'A' but also for a mandamus directing the Bank to pay all monetary benefits due to the deceased A.Y. Nayak in his post held by him as Manager during 1984-85 and subsequently in the elevated posts to which he would have been entitled had he continued in actual service until his death on 9.8.1997.
3. I have heard the learned Counsel for the parties.
4. Learned Counsel for the petitioners would contend that in W.P. No. 12955/1991 filed by A.Y. Nayak challenging the validity of the order dismissing him from service, this Court held that the enquiry held against him is opposed to the rules of natural justice. This Court allowed the writ petition on 24.9.2001 and quashed the orders of the Disciplinary Authority, the Appellate Authority and the Reviewing Authority dated 11.1.1990,20.3.1990 and 30.3.1991 respectively. Since A.Y. Nayak had expired by then, the Court directed the Bank to calculate the monetary benefits payable to him from the date of suspension till the date of payment with 12% interest per annum to his legal representatives. Therefore, petitioners are not only entitled for family pension but also the other monetary benefits such as leave encashment, death-cum-retirement gratuity, and increments in the salary of late A.Y. Nayak. It is further argued that the petitioners are also entitled for interest at 12% per annum on the amounts due to them by the Bank.
5. On the other hand, learned Counsel appearing for the Bank contends that a sum of Rs. 43,255.20 was paid to A.Y. Nayak on 26.3.1992 towards his self-contribution to employees' provident fund. A sum of Rs. 1,18,17.1/- has been paid to the petitioners being the employer's contribution towards employees provident fund, and a sum of Rs. 9,75,273.69 has been paid to the petitioners pursuant to the orders of this Court towards monetary benefits which includes the benefits of increments in salary of A.Y. Nayak. It is argued that A.Y. Nayak had not opted for family pension. Therefore, the petitioners are not entitled for the same. In so far as leave encashment benefit is concerned, it is submitted that since A.Y. Nayak being a dismissed employee is not eligible for any kind of leave right from the date of his dismissal till the date of his death. It is argued that as per the leave Rules, the privilege leave accrues to an employee at the rate of one day for each block of 11 days worked. Since A.Y. Nayak was not working in the Bank between 10.12.1985 to 9.8.1998, no leave is accrued to his account from 10.12.1985 till the date of his death. Therefore, he was not eligible for leave encashment benefits. It is further argued that the petitioners are not entitled for gratuity having regard to Sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972. In this connection, he has relied on the following decisions:
(i) Managing Director, ECIL, Hyderabad v. B. Karunakar : (1994)ILLJ162SC
(ii) Bharath Gold Mines Ltd. v. Regional Labour Commissioner : ILR1986KAR2755 and
(iii) J.B. Micheal D'souza v. Appellate Authority under Payment of Gratuity Act, Bangalore and Ors. 2001 (5) KLJ 200.
6. In the light of the arguments of the learned Counsel for the parties, the questions for consideration in this writ petition are whether petitioners are entitled for the following benefits.
(i) Gratuity,
(ii) Family pension,
(iii) Leave encashment benefit,
(iv) Increments in the salary of A.Y. Nayak,
(v) Interest, if any?
Reg. GRATUITY:
7. Payment of Gratuity Act, 1972, ('Gratuity Act' for short) is enacted for introducing a scheme for payment of gratuity for certain industrial and commercial establishments as a measure of social security. This Statute is a beneficent piece of social legislation expressly drafted in the interest of employees for payment of statutory gratuity to them. Gratuity is a retirement benefit for long and continuous service as a provision for old age. It is earned as a matter of right subject to fulfilling the conditions therefor. It is not the gratuitous payment depending upon the discretion or sweet will or fancy of the employer. Section 4 of the Gratuity Act prescribes the statutory liability of the employer to pay gratuity and the right of the employee to seek it whenever it becomes payable. It is only under Sub-section (6) of Section 4 of the Act that the gratuity can be withheld if the employee whose services come to an end due to termination, on account of damages or loss caused to the property of the employer and that the gratuity can be forfeited to the extent of damage or loss so caused. Sub-section (6) of Section 4 of the Act reads as under:
(6) Notwithstanding anything contained in Sub-section (1),
(a) 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;
(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, or
(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.
8. In the present case, the disciplinary proceedings were initiated against the delinquent officer on the ground that he has violated Regulation 3(1) of the Syndicate Bank Officer Employees (Conduct) Regulations, 1976 read with Regulation 24 of the Regulations. The imputations of misconduct were that he has abused his official position to cause derivation of undue pecuniary advantage by the parties concerned in detriment to the interest of the Bank and that he has failed to discharge his duties with utmost integrity, honesty, devotion to duty and diligence and exhibited conduct unbecoming of the status of a Bank Officer. In the charge memo, the Bank has not quantified the loss/damage suffered by it on account of the alleged misconduct of the delinquent officer. The delinquent officer has filed his reply denying the allegations made in the charge memo. The enquiry officer found that the delinquent officer was guilty of two of the components out of the four components in the charge memo. The disciplinary authority after concurring with the findings of the enquiry passed an order on 11.1.1990 dismissing the delinquent officer from the services of the Bank. The appeal and the review petition filed by the delinquent officer was dismissed by the authorities concerned. The delinquent officer challenged the said orders before this Court in W.P. No. 12955/1991. This Court after hearing the learned Counsel for the parties, set aside the order of dismissal on 24.9.2001. This Court at paragraph 24 of the order has observed that since non-supply of the documents which the delinquent officer had requested before the commencement of the enquiry proceedings has prejudiced his case effectively and usefully cross-examining the management witnesses in establishing his innocence, the decision making process is vitiated and consequently the order imposing punishment cannot be sustained. At paragraph 27 of the order, this Court has further observed that if the delinquent officer was furnished with the documents which he had sought for before the commencement of the recording of the evidence, he would have been in a better position to defend himself in the enquiry proceedings. Since that has not been done, the action of the Bank is not only arbitrary but in violation of the principles of natural justice. Consequently, this Court has passed the following order:
II. The impugned orders made by the disciplinary authority dated 11.1.1990, appellate authority dated 20.3.1990 and the reviewing authority dated 30.5.1991, respectively are set aside.
III. Since petitioner has expired, question of reinstating him into service would not arise and the legal representatives of the deceased petitioner are only entitled to monetary benefits. Therefore, respondent Bank is directed to calculate the monetary benefits payable to the deceased petitioner from the date of suspension till the date of payment in accordance with the Service Regulations of the respondent Bank with interest at 12% within three months from today and make payment within the time prescribed.
The writ appeal filed against the said order in W.A. No. 7004/2002 has been dismissed on 26.8.2002.
9. It is thus clear that the order of dismissal passed by the respondent-Bank against the delinquent officer has been set aside. This Court has observed that since the delinquent officer had expired by then, question of reinstating him into service would not arise. That is why this Court has directed the Bank to calculate the monetary benefits payable to the delinquent officer from the date of his suspension till the date of payment in accordance with law.
10. Learned Counsel for the respondent-Bank contends that having regard to Sub-section (6) of Section 4 of the Gratuity Act, petitioners are not entitled for gratuity because the delinquent officer was terminated from the services of the Bank for his negligence, causing damage/loss to the Bank. It is true that under Sub-section (6)(a) of Section 4 of the Gratuity Act, the gratuity can be withheld if the employee whose services come to an end due to termination, on account of the damages or loss caused to the property of the employer, and that gratuity can be forfeited to the extent of loss or damage. In this case, the order of termination of the delinquent officer for his alleged misconduct has been set aside by this Court. The finding of the disciplinary authority that the delinquent officer has committed the misconduct has been set aside. It is perhaps for this reason, the Bank has not passed an order of forfeiture of the gratuity. In the circumstances, the Bank is not justified in withholding the gratuity of the deceased A.Y. Nayak payable to the petitioners.
11. The decisions relied on by the respondent-Bank are not applicable to the facts of the case. The Apex Court in Managing Director, Ecil, Hyderabad v. B. Karunakar (Supra), has held that when the employee is dismissed or removed from service and enquiry is set aside because the report is not furnished to him, in some cases the non-furnishing of the report may have prejudiced him gravely while in other cases it may have made no difference to the ultimate punishment awarded to him. Hence, to direct reinstatement of the employee with backwages in all cases is to reduce the rules of justice to a mechanical ritual. The said decision is not applicable to the facts of this case, because while setting aside the order of dismissal, this Court has held that non-furnishing of the report has prejudiced the delinquent officer gravely, and the order of dismissal on the alleged misconduct has been set aside.
In Bharat Gold Mines case (supra), this Court has held that the employer has to take an independent decision after termination of service of an employee as to whether gratuity payable should at all be forfeited in cases which fall under Sub-clause (i) or (ii) and if so, to what extent. In the present case, the order of termination of the delinquent officer has been set aside by this Court. Therefore, the said decision has no application.
Similarly, in J.B. Micheal D'souza's case (supra), it has been held that the damage or loss caused by an employee has to be assessed. The said decision is also not applicable because the order of dismissal passed against the employee has been set aside by this Court.
Reg. FAMILY PENSION:
12. As noticed above, A.Y. Nayak was dismissed from service on 11.1.1990. He died on 9.8.1997. The order passed by the Bank dismissing him from service has been set aside by this Court in W.P. No. 12955/1991 disposed of on 24.9.2001 and the Bank was directed to pay the monetary benefits payable to A.Y. Nayak to the petitioners. The Bank contended that A.Y. Nayak had not exercised his option, while he had been alive, for him to be covered by the Pension Scheme of 1993 introduced by the Bank. The petitioners have produced the option exercised by A.Y. Nayak to have been covered by pension scheme 1993 as per Annexure 'G' dated 18.7.1994. At this stage, the learned Counsel for the Bank would contend that even if A.Y. Nayak had exercised the option to be covered by the Pension Scheme, the petitioners are not entitled for pension under the said scheme. Therefore, the question for consideration is whether petitioners are entitled for payment of pension?
13. In exercise of the powers conferred by Clause (4) of Sub-section (2) of Section 18 of the Banking Companies (Acquisition of Transfer of Undertakings) Act, 1970 (Act 5 of 1970), the Board of Directors of the respondent-Bank after consultation with the Reserve Bank of India and with the previous sanction of the Central Government have made the regulations, namely, Syndicate Bank (Employees') Pension Regulations, 1995 (for short 'the Regulations') which has come into force w.e.f. 29.9.1995. Regulation 3 of Chapter II of the Regulations provides for application and eligibility of the scheme to the employees of the Bank. A careful perusal of Sub-regulation (1) to (8) of Regulation 3 makes it clear that they are not applicable to the case on hand. Sub-regulation (9) of Regulation 3 has no application because the petitioners have accepted the employer's contribution towards employees provident fund in a sum of Rs. 1,18,171/- after the death of A.Y. Nayak. Sub-regulation (10) of Regulation 3 has also no application because the date of death of A.Y. Nayak is after the cut-off date i.e. 1.4.1995 provided in the Regulations. Therefore, the first petitioner is not entitled for family pension as per the Pension Scheme.
Reg. LEAVE ENCASHMENT BENEFITS.
14. Learned Counsel for the petitioners contends that this Court while setting aside the order of dismissal on 24.9.2001 has granted all monetary benefits allowed to a like employee who had continued in service in a like post. Therefore, petitioners are entitled for all benefits due to a like employee including leave encashment benefits, which has not been paid by the Bank. The contention urged on behalf of the Bank is that A.Y. Nayak was kept under suspension w.e.f. 10.11.1985 and thereafter, he was dismissed from the services of the Bank on 11.10.1990. As such, he was not attending duties during the said period. Therefore, as per the Leave Rules of the Bank, he is not entitled for encashment of privilege leave.
15. Chapter VII of the Syndicate Bank (Officers') Service Regulations, 1979, provides for grant of leave. Regulation 31 states that subject to the grant of leave being determined by the exigencies of service, an Officer shall be eligible for seven kinds of leave, viz., casual leave, privilege leave, sick leave, special sick leave, maternity leave, extraordinary leave on loss of pay, special casual leave and special leave. Regulation 33 deals with privilege leave, which is as under
33.(1) An Officer shall be eligible for privilege leave computed at one day for every 11 days of service on duty provided that at the commencement of service, no privilege leave may be availed of, before completion of 11 months of service on duty.
(2) An officer on privilege leave shall be entitled to full emoluments for the period of leave.
(3) The period of privilege leave to which an Officer is entitled at any time shall be period which he has earned, less the period of leave availed of.
(4) Privilege leave may be accumulated up to not more than 180 days except where leave has been applied for and it has been refused:
Provided that where an Officer was, under the terms and conditions of service applicable to him immediately before the date of coming into force of this regulation, eligible to accumulate privilege leave for a period longer than 180 days, he shall be eligible to accumulate leave for such longer period.
(5) An Officer desiring to avail of privilege leave shall ordinarily give not less than one month's notice of his intention to avail of such leave.
16. It is clear from the Regulations that privilege leave accrues to an employee at the rate of one day for every 11 days of service on duty. An Officer desiring to avail privilege leave shall ordinarily give not less than one month's notice of his intention to avail such leave. In this case, A.Y. Nayak was not working in the Bank from 10.11.1985 till the date of his death i.e. 9.8.1987. He was not on duty during the said period to avail the privilege leave. Hence, no leave is accrued to his account right from 10.12.1985 till 9.8.1987. Therefore, the claim of the petitioners towards leave encashment benefit is not acceptable.
Reg. INCREMENTS IN THE SALARY:
17. It is the case of the petitioners that though this Court has directed the Bank to calculate the monetary benefits payable to A.Y. Nayak, the respondents have restricted the payment of an amount to the salary alone which had been due to him. It is argued that the salary constituted only one element of the monetary benefits entitled to the deceased employee. The other monetary benefits from the date of suspension till the date of death of A.Y. Nayak such as increments have not been paid to the petitioners. Learned Counsel for the respondent Bank contends that while calculating the monetary benefits under Annexure 'E', the periodical increments have been included. A perusal of Annexure 'E' shows that the increments have been added periodically while calculating the salary payable to the deceased employee. There is no merit in the contention of the petitioners that periodical increments have not been included while calculating the salary under Annexure 'E'.
Reg. INTEREST:
18. Though the learned Single Judge had directed the Bank to calculate the monetary benefits payable to the deceased A.Y. Nayak from the date of suspension till the date of payment with interest at 12% per annum within three months, in the writ appeal, the Division Bench has modified the said order only in so far as payment of interest is concerned. The Division Bench has directed payment of the monetary benefits from the date of suspension till the date of payment within six months from the date of the said order i.e. 26.8.2002, failing which, interest at 12% per annum was payable from the date of the said order till the date of payment. The relevant portion of the said order is asunder:.accordingly, we direct that the monetary benefits payable to the deceased petitioner from the date of suspension till the date of payment in accordance with the Service Regulations of the Bank shall be paid to the respondents who are the legal representatives of the deceased petitioner within six months from today failing which they would be liable to pay interest at 12% p.a. from the date of this order to the date of payment.
(emphasis supplied by me)
19. I have held that the petitioners are entitled for the gratuity payable to the deceased employee. In terms of the order of the Division Bench, the Bank is liable to pay interest at 12% per annum from the date of the order of the Division Bench i.e. from 26.8.2002 till the date of payment.
CONCLUSION:
20. From the discussions made above, it is clear that the petitioners are entitled for gratuity payable to the deceased employee with interest at 12% per annum from 26.8.2002 till the date of payment. They are not entitled for any other amount from the Bank. The writ petition is accordingly allowed in part. The claim of the petitioners for payment of (i) family pension, (ii) increments in the salary of late Sri A.Y. Nayak and (iii) leave encashment benefit is hereby rejected. However, I direct the respondent-Bank to pay the gratuity to the petitioners with interest at 12% from 26.8.2002 till the date of payment within three months from the date of receipt of a copy of this order. No costs.