Judgment:
K.M. Thaker, J.
1. The present petition has been filed against the order dated 16-9-2008 passed by the appellate authority directing the petitioner-Corporation to pay Rs. 1,79,633/- towards gratuity to the respondent. The appellate authority has directed that the payment be made with 10% interest in view of the delay caused by the petitioner-Corporation in making the payment. The said order is under challenge.
2. The factual backdrop which emerges from the record, is as follows:
2.1. At the relevant time, the respondent was working as 'Senior Clerk' with the petitioner-Corporation. He joined his service in the Corporation in 1976 and was allowed, in light of his request, to voluntarily retire with effect from 31st August, 2006.
2.2. It is pertinent that the respondent had made an application for voluntary retirement on 23-5-2006 which was granted and an order dated 21-8-2006 allowing the respondent to voluntarily retire, was passed. Pursuant to such order, the respondent voluntarily retired w.e.f. 31st August, 2006.
2.3. The petitioner-Corporation has claimed that it was only about 2 1/2 years, after his voluntary retirement that the petitioner-Corporation found that while securing employment, the respondent had mentioned incorrect date of birth and secured employment by producing incorrect or forged documents so as to conceal his correct age inasmuch as on the date of appointment, he was age-barred.
2.4. The respondent, has of course, denied such allegations and has also denied the petitioner's claim that the alleged details came to the knowledge of the petitioner-Corporation only 2 1/2 years after his retirement.
2.5. On the allegation and charge that the petitioner had secured employment by unfair means, the petitioner-Corporation issued a show cause notice/Charge-sheet on or around 6-3-2009 i.e. after lapse of about 30 months from his voluntary retirement. It is the claim of the Corporation that the proceedings in connection with the said charge-sheet are pending and the Corporation is in process of starting and conducting a departmental inquiry against the respondent, and that therefore, the respondent is not entitled for payment of gratuity and Corporation is justified in not paying the gratuity amount.
2.6. It comes out from the record that since the petitioner-Corporation did not make payment of gratuity to the respondent after he voluntarily retired, the respondent approached controlling authority under the provisions of Payments of Gratuity Act, 1972. The said application came to be allowed by the controlling authority.
2.7. The order of the controlling authority was challenged by the petitioner-Corporation before appellate authority. The appellate authority confirmed the order of controlling authority and directed the Corporation to make payment of Rs. 1,79,633/- with 10% interest from 30-4-2006 onwards.
2.8. In this factual background, the petitioner has preferred present petition.
3. Heard Mr. Avinash Thakkar, learned Advocate for Mr. J. R. Nanavati, learned Advocate for the petitioner and Mr. Rachh, learned Advocate for the respondent. Rule. At the request of and with consent of learned Advocates for the respective parties, the petition is taken up for final hearing and decision today. Mr. Rachh has waived service of Notice of Rule.
4. Mr. Thakkar, learned Advocate for the petitioner-Corporation submitted that the Corporation has right to withhold gratuity when a departmental inquiry is pending. In reply to Court's query about source of such a right/power to withhold gratuity, Mr. Thakkar sought to rely on provisions of B.C.S.R. and submitted that the petitioner-Corporation has adopted B.C.S.R., hence, the said Rules are applicable to the petitioner-Corporation and to substantiate his submission about applicability of B.C.S.R. to the petitioner-Corporation, Mr. Thakkar, learned Advocate for the petitioner produced a letter from legal department of petitioner-Corporation declaring that the petitioner-Corporation has adopted B.C.S.R. and the said Rules are applicable to the petitioner-Corporation and its employees. In light of the provisions of B.C.S.R., more particularly, Rule 189A., Mr. Thakkar learned Advocate for the petitioner-Corporation, submitted that the petitioner-Corporation is entitled to withhold the payment towards gratuity during the pendency of the departmental action which has been initiated, pursuant to the show cause notice/charge-sheet dated 6-3-2009, and is presently pending. He submitted that in view of Rule 189, order by controlling authority and order by appellate authority are unsustainable.
5. Mr. Rachh learned Advocate has appeared on behalf of the respondent and relied upon the provisions under Rule 189B of B.C.S.R. He submitted that, as such, after 30 years of service by respondent, the petitioner is not entitled to question respondent's entry in the Corporation, more particularly, when the petitioner has worked for 30 years, and has consequently, become entitled for gratuity. He submitted that there is no illegality in the order passed by the authorities under the Act. Mr. Rachh learned Advocate for the respondent also submitted that even if the contention of the petitioner-Corporation with regard to Rule 189A is to be accepted, of course only for the sake of testing the said contention and without prejudice to respondent's case, then also, in light of the provisions contained under Rule 189B, the respondent would be entitled to payment of at least 90% of the gratuity amount. Mr. Rachh learned Advocate for the respondent relied upon judgment of this Court in case between Dharmendra G. Mankad v. Slate of Gujarat reported in 2002 (1) GLH 542. He submitted that the respondent is entitled to receive at least 90% of the gratuity amount during the pendency of the proceedings and until any final orders are passed.
6. In present case, by application dated 23-5-2006, the petitioner sought voluntary retirement. Obviously, at the relevant time, necessary verifications must have been undertaken by the petitioner-Corporation before taking decision on the application. It deserves to be noted at this stage that the respondent joined the petitioner-Corporation in 1976 and by the time he sought voluntary retirement he had put in 30 years' service. During the said tenure of 30 years, the petitioner-Corporation did not make any allegation that the respondent secured service by misrepresenting facts or by submitting forged documents. Even during the verification process, pursuant to the application for voluntary retirement, also such allegation was not made and after due verification, the application came to be granted and the respondent was allowed to voluntarily retire.
7. Then, almost 2 1/2 years after the voluntary retirement, the petitioner-Corporation came out with the allegation that the respondent had secured employment by unfair means, and thereby, he worked for 6 years more than what would have been allowed to him. With such allegation, a charge-sheet came to be issued almost 30 months after the date on which the respondent was allowed to voluntarily retire. It is claimed by the petitioner that a supplementary charge-sheet has been issued on 15th April, 2009 whereby the respondent's conduct of securing employment by unfair means has also been covered as compared to earlier charge-sheet which was restricted to working for 6 more years than what the respondent would have been normally entitled to. It is also claimed by the petitioner that a departmental inquiry pursuant to said charge-sheets is contemplated and will be shortly commenced. The petitioner-Corporation also claims that in view of such facts the Corporation has, in exercise of Rule 189, withheld the gratuity amount.
8. Thus, at this stage, it is appropriate to take into account the provision under Rules 189A and 189B of the B.C.S.R.
189A. The Governor reserves the right of withholding or withdrawing a pension or any part of it, whether permanently or for a specified period and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to Government if in departmental or judicial proceedings, the pensioner is found guilty of grave misconduct or negligence during the period of his service, including services rendered upon re-employment after retirement.
Provided that:
(a) such departmental proceeding, if instituted while the Government servant was in service whether before his retirement or during his re-employment shall after the final retirement of the Government servant be deemed to be a proceeding under this rule and shall be continued and concluded by the authority by which it was commenced in the same manner as if the Government servant had continued in service:
(b) such departmental proceeding if not instituted while the Government servant was in service, whether before his retirement or during his re-employment.:
(i) shall not be instituted save with the sanction of the Governor.
(ii) shall not be in respect of any event which took place more than 4 years before such institution; and
(iii) shall be conducted by such authority and in such place as the Governor may direct and in accordance with the procedure applicable to departmental proceedings in such an order of dismissal from service could be made in relations to the Government servant during his service.
xxx xxx xxx
(d) the Gujarat Public Service Commission shall be consulted before final orders are passed.
Explanation : For the purpose of this rule:
(a) a departmental proceeding shall be deemed to be instituted on the date on which the statement of charges is issued to the Government servant or pensioner, or if the Government servant has been placed under suspension from an earlier date, on such date; and
(b) a judicial proceeding shall be deemed to be instituted.:
(i) in the case of a criminal proceeding on the date on which the complaint or report of the police officer on which the Magistrate takes cognizance, is made, and
(ii) in the case of a civil proceeding, on the date of presentation of the plaint in the Court.
189B. (1) Where any departmental or judicial proceeding is instituted under Rule 189A, or where a departmental proceeding is continued under Clause (a) of the proviso thereto against Government servant who has retired on attaining the age of compulsory retirement or otherwise, he shall be paid during the period commencing from the date of his retirement to the date on which upon conclusion of such proceeding final orders are passed, a provisional pension not exceeding the maximum pension which would have been admissible on the basis of his qualifying service up to the date of retirement or if he was under suspension on the date of retirement up to date immediately proceeding the date on which he was placed under suspension: but no gratuity or death-cum-retirement gratuity shall be paid to him until the conclusion of such proceeding and the issue of final orders thereon.
Provided that:
(a) if a charge-sheet is not issued or criminal prosecution is not launched, as the case may be, on or before the date of retirement, ninety percent death-cum-retirement gratuity shall be paid, retaining ten percent or rupees five thousand whichever is less : if the concerned department is of the opinion that some inquiry or prosecution is contemplated;
(b) if the Departmental Inquiry or Prosecution is launched (i.e. charge-sheet issued or First Information Report filed, as the case may be) prior to retirement, but the departmental inquiry or prosecution, is not concluded (i.e. the competent authority's order on the Inquiry Officer's report not issued or judgment of trial Court not delivered, as the case may be), within two years from the date of the retirement-ninety percent death-cum-retirement-gratuity shall be released, retaining ten percent or rupees five thousand whichever is less.
(2) Payment of provisional pension made under Clause (i) shall be adjusted against the final retirement benefits sanctioned to such recovery shall be made where the pension finally sanctioned is less than provisional pension or the pension is reduced or withheld either permanently or for a specified period.
9. Thus, what emerges from the conjoint reading of Rules 189A and 189B, is in nutshell, that if the departmental inquiry is launched prior to retirement, but inquiry could not be concluded within 2 years from the date of retirement then 90% of D.C.R.G. has to be released.
10. In present case, it is not in dispute that the alleged action took place before 30 years (and not 4 years as contemplated by Rule 189A) but the petitioner is taking refuge under the reasoning that such fact came to the knowledge only recently. Whether such defence is available and tenable or not, is not the question which this Court is required to decide in this case. Similarly, this Court is also not required to examine the issue as to whether any part of gratuity can be withheld under Rule 189B even if inquiry is not launched within 2 years. In view of the limited scope of the petition, this Court has not enmarked upon examining the said and such other connected issues and instead Court has proceeded on the premise that even if it is assumed that the petitioner's action is tenable under Rule 189A and/or 189B, then also the said provision does not admit and permit withholding of total gratuity amount. On the contrary, the provision postulate release of 90% of gratuity of amount.
11. At this stage, it is relevant to refer to the judgment of the Hon'ble Division Bench in the case between State of Gujarat v. A.S. Patel reported in : 1994 (1) GLR 625 wherein the Hon'ble Division Bench has held:
22. The provisions of Rule 189B are very clear and are free from any ambiguity. Sub-rule (1) clearly provides what is to happen in the event of departmental inquiry continuing against a Government servant who retires. The first part of Sub-rule (1) is in relation to pension, and not gratuity and it states in clear terms that such a Government servant 'shall be paid during the period commencing from the date of his retirement to the date on which upon conclusion of such proceedings final orders are passed, a provisional pension not exceeding the maximum pension which would have been admissible...'. A Government servant retired is, in a sense better off than a Government servant under suspension against whom disciplinary proceedings have been initiated. The use of the word shall in Rule 189B(1) shows the mandatory nature of the said sub-rule. A direction is contained therein requiring the Government to pay full amount of pension during the period when the departmental proceedings continue, after the retirement of the Government servant. While duty is cast on the Government to pay this amount, there is obviously, a corresponding right that the Government servant get to demand this amount of provisional pension. Rule 189B is a special provision which has been made with regard to payment of money to a Government servant against whom departmental proceedings are continuing after his superannuation.
23. With regard to gratuity, the latter portion of Sub-rule (1) of Rule 189B injuncts the Government from paying the same until the conclusion of the departmental proceedings and the issuance of final orders thereon. The said sub-rule in other words, prohibits the payment of gratuity or death-cum-gratuity until the conclusion of disciplinary proceedings. The vigor of this sub-rule has, however, now been relaxed with the amendment brought out in 1993, with the insertion of proviso to the said sub-rule. Where departmental proceedings continue after a period of more than two years after the retirement of the Government servant, 90% of the death-cum-retirement gratuity has to be released.
(Emphasis supplied)
It is, at this stage, also useful to refer to the judgment in the case between Dharmendra G. Mankad v. State of Gujarat (supra) wherein, this Hon'ble Court has held that,
In my view, the stand taken by the department is wholly untenable. It is required to be noted that so far as the provisions of Rule 189B of B.C.S.R. are concerned, the same are framed under Article 309 of the Constitution of India. The said Rule, therefore, is mandatory in nature and no option is available with the Department, but to follow the aforesaid rule. Even if there are other inconsistent Rules, like the one which is pressed into service in this case by the department, viz., the Gujarat Financial Rules, 1971, they cannot override the statutory Rules, which' are framed under Article 309 of the Constitution of India, and therefore, there was absolutely no justification on the part of the department to withhold the aforesaid amount of gratuity in view of the aforesaid clear-cut provisions contained in Rule 189B of the B.C.S.R. Mr. Hathi strongly submitted that there was no justification to refer the case of the petitioner to the Finance Department, as, according to him, in almost all such cases, after a period of two years from the date of retirement, 90% of gratuity amount is released in favour of the delinquent officer. The clear provisions of law are ignored by the concerned Officer. Therefore, the aforesaid action of the concerned officer, who is instrumental in withholding the just claim of the petitioner, is required to be deprecated. So far as the alleged ground about financial loss to the Government as highlighted in the reply is concerned, it is required to be noted that the alleged incident is of the period between 1982 and 1985 and the charge-sheet was issued after a period of about 12 years. If the department was really concerned with any such financial loss, prompt action could have been taken at the earliest without waiting for more than 12 years. After waiting for 12 years just for the purpose of issuance of charge-sheet and remaining silent for a period of more than five years after issuing the charge-sheet itself shows how a casual approach is exhibited by the department in the instani case. If really the State has suffered any loss, enquiry was required to be initiated against the concerned officer, who was instrumental in delaying the aforesaid proceedings for more than 12 years. It is also required to be noted that once a Government employee has retired from service and if departmental enquiry is required to be initiated against him, such departmental enquiry is required to be completed at the earliest so that he may not have to remain under the torture of departmental proceedings even after his retirement. Therefore, it is expected that, in such cases, enquiry is required to be completed within a period of two years from the date of retirement and if the department has failed to do anything within the aforesaid period of two years, then, naturally, as per the provisions of B.C.S.R., 90% gratuity amount is required to be paid to such employee. Therefore, in all such cases, it is expected that after retirement of a Government servant, within two years, enquiry should be completed. In the instant case, the impugned action of withholding gratuity amount, for the incident which had occurred as back as 1982-1985, therefore, clearly exhibits total non-application of mind on the part of the concerned Officer. It is a matter of regret that the incident in question had taken place as back as 1982-1985 and yet, the enquiry was initiated after such a long time. It is also required to be noted that even after serving the charge-sheet as back as in the year 1997, till today, nothing concrete has been done in the departmental proceedings and the Government has remained silent except appointing Enquiry Officer.
11A. Under the circumstances, there is no justification for denying payment of 90% of gratuity amount payable to the respondent. Hence, the petitioner's submission cannot be accepted and its action cannot be allowed to stand.
12. The petitioner-Corporation did not make payment of gratuity to the respondent for long time after his voluntary retirement. Therefore, somewhere in 2007 the petitioner approached the controlling authority appointed under the Payment of Gratuity Act, 1972 claiming payment of gratuity. As aforesaid the said application came to be allowed by order dated 8-2-2008 and when the petitioner-Corporation preferred appeal against the said order, the appeal also came to be rejected by order dated 16th September, 2008.
13. This Court is informed that while preferring the appeal, the petitioner-Corporation has deposited the amount decreed by the controlling authority i.e. Rs. 1,79,633/-. It is also informed that the said amount is the total gratuity amount as calculated by the controlling authority.
14. Mr. Thakkar submitted that if the Court is to hold that in light of the provisions under Rule 189B the respondent is entitled for gratuity at the rate of 90% during pendency of the proceedings of departmental inquiry then 90% of the said amount of Rs. 1,79,633/- may be directed to be paid but not the entire amount.
15. Mr. Rachh, on the other hand, raised the contention that before the controlling authority or the appellate authority, the petitioner-Corporation had not raised contention that the gratuity has not been paid in view of provisions under Rule 189B of B.C.S.R. and the said submission is made for the first time in response to the queries of this Court and the said contention or explanation is, originally not raised in the memo of petition also.
16. As noticed earlier, the provisions under Rule 189B(a) provides, inter alia, that if a charge-sheet is not issued or criminal prosecution is not launched on or before the date of retirement, then also 90% death-cum-retirement gratuity shall be paid if the department is of the opinion that some inquiry or prosecution is contemplated. Sub-rule (b) of Rule 189B provides that, even in cases where departmental inquiry or prosecution is launched prior to retirement, but not completed within 2 years, then also, 90% of gratuity amount is required to be released. Thus, even if the petitioner's contention about its right to withhold payment of gratuity until inquiry is concluded, were to be recognized, then also, the petitioner is not justified in not releasing 90% of the gratuity amount.
17. In the present petition, the Court is concerned with the order passed by the appellant authority under the Act. Apparently, the contention raised of Rule 189B was not raised before the controlling authority and/or before the appellate authority. The only contention which was raised before the said authorities was that the petitioner-Corporation has lodged F.I.R., and therefore, gratuity has been withheld. In light of the said contention, both the authorities have held that the action of withholding gratuity amount is not justified. It is not possible to find any fault with the said orders. The appellate authority is justified in passing the order for payment of gratuity in favour of the respondent, because the Act does not contemplate withholding of gratuity merely for the reason that F.I.R. is lodged. However, since during the hearing of present petition, the petitioner-Corporation made reference of Rule 189B, without entering into the question about its applicability in present case and justification on the part of the petitioner-Corporation to raise the said contention at this stage, this Court, considering the fact that the charge-sheet has been issued and the proceedings are pending, is inclined to give below mentioned directions. Hence, the following order is passed:
(a) 90% of the amount out of the amount deposited before the controlling authority i.e. 90% of Rs. 1,79,633/- shall be released in favour of the respondent during pendency of the inquiry proceedings and the said amount will be paid to the respondent within 2 weeks from the date of receipt of this order by the appellate authority.
(b) The balance 10% of the amount which would remain in account of controlling authority shall be invested in Fixed Deposit in a Nationalized Bank and shall not be released in favour of the petitioner-Corporation or in favour of the respondent without express orders by this Court or until final orders by the disciplinary authority, in the departmental inquiry.
(c) The respondent will give an undertaking along with a solvency certificate to the petitioner-Corporation that in the event, a decision in law is taken by the competent authority, on conclusion of inquiry to forfeit the gratuity or part of gratuity then, subject to his right to challenge such decision and the final outcome, he will repay the amount of gratuity to the petitioner-Corporation.
(d) So far as the respondent's claim of payment of gratuity amount with interest is concerned, it is clarified that this Court has not entered into or examined the said issue at this stage, and therefore, no direction for payment of interest component, while directing payment of 90% of the gratuity amount, is passed at this stage. However, this would not deprive the respondent from claiming interest in future, if and when the amount becomes payable to him. The petitioner-Corporation will not be allowed to take recourse of this order so as to dispute or deny interest for delay in payment of gratuity and/or so as to claim that the employee is not entitled for interest.
(e) Mr. Thakkar has stipulated that the petitioner-Corporation will, with all sincerity, try to complete the proceedings of departmental inquiry within period of 3 months and in any case, before 10th October, 2009. The respondent will not delay the proceedings with requests for undue and avoidable adjournments.
(f) As regards the respondent's request that petitioner-Corporation may be directed to pay interest also since the amount has not been paid for about 3 years since his retirement, it is directed that the appellate authority has already allowed interest in favour of the respondent and the said direction is not interfered with by this Court, and therefore, the respondent's right, independent of this petition, to claim interest is not affected, however, while directing appellate authority to release 90% of the principal amount, this Court, at this stage, does not consider it appropriate to include interest component and the respondent's claim on this count stands segregated and is not considered in this petition filed by the Corporation.
With the aforesaid clarification and directions, present petition is disposed of. Rule discharged. No costs.