Judgment:
D.P. Mohapatra, J.
1. The disputes raised in these three cases are inter-linked and parties are the same. Therefore, with consent of learned counsel for the parties the cases were heard together and they are being disposed of by this common Judgment.
2. The controversy relates to payment of the dues of Jagannath Barik, a retired employee of Orissa Khadi and Village Industries Board. While OJC Nos. 2730/1990 and 2731/1990 have been filed by the President, Orissa Khadi and Village Industries Board against Jagannath Barik, OJC No. 2686/1990 has been tiled by Jagannath Barik against the Orissa Khadi and Village Industries Board. In OJC No. 2730 of 1990 the petitioner has prayed for quashing the order of the Labour Court, Bhubaneswar dated December 30, 1989 in Industrial Dispute Misc. Case No. 37 of 1988 (Annexure-l) computing the amount due to the applicant Jagannath Barik at Rs. 12,846 towards last month's pay and earned leave encashment. In OJC No. 2731/1990 the petitioner has prayed for quashing the order of the Controlling Authority under the Payment of Gratuity Act-cum -Assistant Labour Commissioner, Cuttack in P.O. Case No. 15 of 1988 (Annexure-2) declaring that the applicant Jagannath Barik is entitled to receive Rs. 29, 181 towards gratuity from the President, Orissa Khadi and Village Industries Board and the order of the Deputy Labour Commissioner-cum-Appellate Authority under the Payment of Gratuity Act in P.G. Appeal No. 1 of 1989 vide the order dated April 25, 1990 (Annexure-4) summarily dismissing the appeal filed by the President of the Board. In OJC No. 2686/1990 the petitioner has prayed for quashing the direction in the requisition sent by the Asst. Labour Commissioner-cum-Controlling Authority under the Payment of Gratuity Act to the Collector, Puri (Annexure-2) that the gratuity amount of Rs. 29, 181 will carry compound interest at the rate of 9 per cent per annum. According to the petitioner, the rate of interest should be 13 per cent per annum.
OJC No. 2730 of 1990.
3. The relevant facts necessary for appreciating the case of the parties may be stated thus:
The Orissa Khadi and Village Industries Board is constituted under the Orissa Khadi and Village Industries Act, 1955 with the purpose, inter alia, to organise, develop and regulate Khadi and Village Industries in the State of Orissa. Jagannath Barik was a Senior Assistant of the Board and was officiating as Manager of the Revised Saranjam Karyalaya of the Board where Ambar Charakha Looms, seen (sic) keeping boxes and other accessories were manufactured. He superannuated from service on October 31, 1987. Shortly before his superannuation a departmental proceeding was initiated against him on October 28, 1987; fourteen charges were framed in the proceeding and as a measure of punishment it was ordered by the then President of the Board that a sum of Rs. 19,669.38 was to be recovered from him. Despite attempts to serve notice personally on him and despite notice published in newspaper, the delinquent did not participate in the proceeding. On the application filed by him under Section 33C(2) of the Industrial Disputes Act, I.D. Misc. Case No. 27/ 888 was vitiated before the Labour Court, Bhubaneswar. In the said proceeding the applicant claimed Rs. 1920 as last month's pay Rs. 10,956 as encashment of earned leave of 180 days, Rs. 22,000 as employees provident fund dues and Rs. 30,000 as bonus. Therein the Board took the stand inter alia, that a sum of Rs. 19,669.38 which has been ordered to be recovered from the applicant should be taken into account while determining the sum due to the applicant. The Labour Court on consideration of the matter held that the applicant was entitled to receive Rs. 12,846 i.e. Rs. 1920 as last month's pay and Rs. 10,956 as earned leave encashment, from the Board. He refused to allow to set off of the amount due to the Board holding that it could not be recovered from the gratuity amount due to the applicant or by other procedure under law. The order of the Labour Court is assailed by the Board on the grounds, inter alia, that the amount ordered to be recovered from the delinquent Jagannath Barik is deductible from the amount of wages held to be due to him and. therefore the Labour Court was in error in refusing to allow to set off of the said amount.
OJC No. 2731 of 1990.
4. P.G. Case No. 15 of 1988 was initiated on the application filed by Jagannath Barik claiming gratuity from the Board. His case, shortly stated, was that he was'getting Rs. 1,686 per month at the time of his retirement, had put in 30 years of continuous service in the establishment and, therefore, was entitled to Rs. 28, 100 as gratuity. In the written statement the Board took the stand. inter alia, that the applicant was not entitled to gratuity since he was guilty of misappropriation of cash of Rs. 1.95 lakhs as per the internal auditreport and in the disciplinary proceeding it was ordered that a sum of Rs. 19,669.39 was to be recovered from him; therefore the Board had withheld payment of gratuity to the applicant. The applicant however denied the allegations made in the written statement and expressed his ignorance about any disciplinary proceeding or order passed therein. The Controlling Authority under the P.G. Act on consideration of the evidence placed before him and the arguements advanced on behalf of the parties held, inter alia, that the applicant was entitled to receive gratuity, that the amount of Rs. 19,669.39 could not be legally deducted from the gratuity due to the applicant and, therefore, there was no justification for withholding payment of gratuity. Challenge against the order of the Controlling Authority in appeal as per Annexure-2 failed vide the order of the appellate authority Annexure-4. The orders are assailed in the writ application.
OJC No. 2686/1990.
5. In this writ application the case of the petitioner is that the Asst. Labour Commissioner-cum-Controlling Authority under the P.G. Act ought to have advised the Collector, Puri to realise the gratuity amount of Rs. 29, 181 with compound interest at the rate of 18 per cent per annum as per Section 8 of the P.G. Act, 1972, as amended by the Payment of Gratuity (Amendment) Act, 1987. He has prayed for amending the requisition to that effect. In that regard the case of the Board is that the rate of interest has been correctly stated in the requisition letter of the Controlling Authority as per the provisions of the P.G. Act and does not call for any amendment.
6. On the case of the parties noted above, the moot question that arises for consideration is whether the sum of Rs. 19,669.39 which has been ordered to be recovered from Jagannath Barik can be deducted from the amount held to be due to him under Section 33C(2) of the I.D. Act or under the P.G. Act. The other question for consideration is the rate of interest payable on the gratuity amount due to the retired employee. In both the proceedings, under the I.D. Act and under the P.G. Act, the plea for deduction of the aforementioned amount was taken by the Board. As noted earlier, the Labour Court while disposing of the proceeding under Section 33C(2) of the I.D. Act declined to accept the plea of deduction holding that the said sum may be deducted from the gratuity amount to be paid to the employee. The Controlling Authority under the P.G. Act on the other hand held that the said amount is not deductible from the gratuity payable to the employee. It is evident from the discussions in the order that the Labour Court did not go into the question of deductibility of the amount as claimed by the Board. He has not referred to any statutory provision or law showing that the amount is not deductible from the last month's pay and encashment of earned leave (180 days). It is relevant to note here that Sections 7, 9, 10, 11, 12, 12A and 13 of the Payment of Wages Act contain provisions regarding deductions from wages. Section 7(2)(c) makes specific provision for deductions for damage to or loss of goods expressly entrusted to the employed person for custody, or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default. Undisputedly in the departmental proceeding initiated against Jagannath Barik the disciplinary authority had passed the order for recovery of Rs. 19,669.39. The said order was not challenged by the delinquent. As such, the amount is recoverable from the wages which as defined in Section 2(vi) of the Payment of Wages Act include all remuneration whether by way of salary, allowance or otherwise. Therefore the Labour Court was clearly in error in holding that the sum of Rs. 19,669.39 could not be set off from the amount due to the applicant as last month's pay and earned leave encashment.
7. Coming to the order passed by the Controlling Authority under the P.G. Act, the statute does not make any specific provision for deduction from the gratuity amount. In Section 4(1) it is declared that 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, or (b) on his retirement or resignation, or (c) on his death or disablement due to accident or disease. Sub-Section (6) of Section 4 lays down 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. Clause (b) thereof provides that 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. There is no dispute that no order for forfeiting either wholly or partially, the gratuity amount has been passed in the present case. Section 13 of the P.G. Act which affords protection of gratuity provides, inter alia, that no gratuity payable under the Act shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal Court. From the scheme of the statute and provisions thereof it is clear to us that no deduction can be made from the gratuity due to the employee except as provided in the statute. The matter may stand on a different footing if the employee agreed for deduction of any amount from the gratuity. Therefore, the Controlling Authority was right in holding that the sum of Rs. 19,669.39 could not be deducted from the gratuity payable to the retired employee under the statute.
8. Coming to the claim of the employee for interest at the enhanced rate of 18 per cent, we do not find any legal basis for the same. Concededly his entitlement in this regard is to be determined according to Section 8 of the Payment of Gratuity Act. The said Section, as it stood prior to the 1987 amendment laid down that if the amount of gratuity payable under the Act was not paid by the employer within the prescribed time, to the person entitled thereto, the controlling authority shall, on an application made to it, in this behalf of the aggrieved person issue a certificate for that amount to the Collector, who shall recover the same together with compound interest thereon at the rate of 9 per cent per annum, from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto. Heavy reliance was placed by Shri C.S. Rath appearing for the employee on the provision in Section 8 of the Payment of Gratuity (Amendment Act, 1987 (No. 22 of 1987) in which Section 8 of the principal Act has been amended in the following manner:
'8. Amendment of Section 8 - In Section 8 of the Principal Act.-
(a) for the words 'at the rate of nine per cent per annum', the words at such rate as the Central Government may, by notification specify shall be substituted:
(b) the following provisos shall be added at the end, namely:
Provided that the controlling authority shall, before issuing a certificate under this Section, give the employer a reasonable opportunity of showing cause against the issue of such certificate:
Provided further that the amount of interest payable under this Section shall, in no case exceed the amount of gratuity payable under this Act.'
In Section 1 of the Amendment Act it is provided that the Act shall come into force on the date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of the Act. No material has been produced before us to show that Section 8 of the Amendment Act has been enforced and if so the date from which it has been enforced. Nomaterial is also produced to show that the Central Government has issued any -notification specifying 18 per cent as the rate of interest' payable on the gratuity amount. In the circumstances the employee's claim of interest at the enhanced rate of 18 per cent annum is devoid of substance.
9. On the discussions in the foregoing paragraphs, OJC No. 2730/1990 is allowed and the order of the Labour Court, Bhubaneswar dated December 30, 1989 in I.D. Misc. Case No. 37/ 1988 (Annexure-I) is quashed - OJC Nos. 2731/1990 and 2686/1990 are dismissed. There will however be no order for cost.
S.K. Mohanry. J.
10. I agree.