These writ petitions are preferred under Article 226 of the Constitution of India praying for the issue of a writ of declaration declaring that Regulation 46(2) of the Indian Bank (Employees) Pension Regulations, 1995 as being inconsistent and in conflict with Sections 4(6), 13 and 14 of the Payment of Gratuity Act, 1972 and hence ultravires the Constitution of India and consequently strike down the same.
COMMON ORDER
1. Whether the Regulation framed by the Indian Bank in relation to postponement of payment of gratuity until the conclusion of the disciplinary action or criminal case as the case may be is constitutionally valid? and whether Regulation 46(2) of the Indian Bank (Employees) Pension Regulations, 1995 is ultravires of Section 4(6), 13 and 14 of the Payment of Gratuity Act, 1972? is the question that arise for consideration in this batch of writ petitions.
2. The petitioners in this batch of writ petitions are either workers in the clerical cadre or officer cadre and were reaching the age of superannuation on different dates. They were also facing serious criminal cases in various crime numbers before the Special Court constituted. Since they reached the age of superannuation pending disciplinary action, it was postponed due to the pendency of the criminal cases and were paid provisional pension under Regulation 46(1). But with reference to gratuity, they were not paid gratuity under the Indian Bank Employees Gratuity Fund.
3. The following table will show the number of the writ petition, name of the petitioner, their designation, the date of reaching the age of superannuation and the criminal court in which they are facing charges along with the case number, which are as follows:
Sl.No. W.P.No. and
Name of the petitioner
Designation and date of reaching the age of superannuation
Criminal cases pending before the court and case number
W.P.No.8450 of 2012
M.Azeez
Clerk 31.10.2006
VIII Additional Principal Special Judge for CBI Cases, Chennai in C.C.Nos.3/2001, 13/2001, 14/2001, 15/2001 and 81/2001
W.P.No.8451 of 2012
AR.Arunachalam
Clerk 31.10.2011
-do- C.C.No.1 of 2000
W.P.No.8452 of 2012
G.V.Srinivasan
Clerk 30.11.2007
-do- C.C.Nos.80 of 2001 and 15 of 2001
W.P.No.8453 of 2012
T.S.Venkateswaran
Clerk 31.01.2010
-do- C.C.No.71 of 2001
W.P.No.8454 of 2012
K.S.Elango
Officer 30.06.2011
-do- C.C.No.71 of 2001
W.P.No.8455 of 2012
K.Subramanian
Clerk 31.10.2005
-do- C.C.No.36 of 1998
W.P.No.8456 of 2012
V.Balakrishnan
Clerk 30.11.2009
IX Additional Principal Special Judge for CBI Cases, Chennai in C.C.No.26 of 2005
W.P.No.8457 of 2012
T.Navaneethan
Clerk 31.05.2006
Special Court for Trial of Offences Relating to Securities Transactions, Mumbai in C.C.No.1 of 1996
W.P.No.8458 of 2012
R.Rengaswami
Clerk 31.10.2008
VIII Additional Principal Special Judge for CBI Cases, Chennai in C.C.No.36 of 1998
W.P.No.8459 of 2012
K.Kubernathan
Clerk 30.04.2011
-do- C.C.No.64 of 2001
4. Since certain Regulations were under challenge in these writ petitions, it is necessary to extract the entire Regulations 46(1) and (2) for better appreciation of the issue involved, which are as follows:
"46(1)An employee who has retired on attaining the age of superannuation or otherwise and against whom any departmental or judicial proceedings are instituted or where departmental proceedings are continued, a provisional pension, equal to the maximum pension which would have been admissible to him, would be allowed subject to adjustment against final retirement benefits sanctioned to him, upon conclusion of the proceedings but no recovery shall be made where the pension finally sanctioned is less than the provisional pension or the pension is reduced or withheld etc., either permanently or for a specified period.
(2)In such cases the gratuity shall not be paid to such an employee until the conclusion of the proceedings against him. The gratuity shall be paid to him on conclusion of the proceedings subject to the decision of the proceedings. Any recoveries to be made from an employee shall be adjusted against the amount of gratuity payable.
Explanation In this chapter.
a)The expression 'serious crime' includes a crime involving an offence under the Official Secrets Act, 1923 (19 of 1923);
b)The expression 'grave misconduct' includes the communication or disclosure of any secret Official code or password or any sketch, plan, model, article, note, document or information, such as is mentioned in Section 5 of the Official Secrets Act, 1923 (19 of 1923) which was obtained, while holding office in the Bank so as to prejudicially affect the interest of the general public or the security of the State.
c)The expression 'fraudulently' shall have the meaning assigned to it under Section 25 Indian Penal Code, 1860 (45 of 1860);
d)The expression 'criminal breach of trust' shall have the meaning assigned to it Section 405 of the Indian Penal Code, 1860 (45 of 1860)
e)The expression 'forgery' shall have the meaning assigned to it under Section 463 of Penal Code, 1860 (45 of 1860)."
(Emphasis added)
5. As the petitioners relied upon Sections 4(6),13 and 14 of the Payment of Gratuity Act, 1972, it is necessary to extract those provisions for the sake of convenience which are as follows:
"Section 4(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, 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.
13. Protection of gratuity.-No gratuity payable under this Act [and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under section 5] shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal Court.
14. Act to override other enactments, etc.-The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act." (Emphasis added)
6. The grounds of attack made by the petitioners as argued before this court were that since the petitioners were allowed to retire, the contingency for payment of gratuity arose under Section 4 of the Payment of Gratuity Act, 1972. Therefore, the gratuity cannot be withheld on the ground that they were facing criminal cases. Secondly, Section 13 of the Act protects the gratuity being attached in satisfaction of any decree by any court. Section 14 of the Act, as noted above, as a non-obstance clause, that will override all contracts or law to the contrary.
7. Mr.N.Ramakrishnan, learned counsel for the petitioners placed reliance upon a judgment of the Supreme Court in Jaswant Singh Gill v. Bharat Coking Coal Ltd., reported in (2007) 1 SCC 663 and referred to the following passages found in paragraphs 13 and 18 to emphasis the significance of Section 4, which reads as follows:
"13.The Act provides for a close-knit scheme providing for payment of gratuity. It is a complete code containing detailed provisions covering the essential provisions of a scheme for a gratuity. It not only creates a right to payment of gratuity but also lays down the principles for quantification thereof as also the conditions on which he may be denied therefrom. As noticed hereinbefore, sub-section (6) of Section 4 of the Act contains a non obstante clause vis-`-vis sub-section (1) thereof. As by reason thereof, an accrued or vested right is sought to be taken away, the conditions laid down thereunder must be fulfilled. The provisions contained therein must, therefore, be scrupulously observed. Clause (a) of sub-section (6) of Section 4 of the Act speaks of termination of service of an employee for any act, wilful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of damage or loss caused. The disciplinary authority has not quantified the loss or damage. It was not found that the damages or loss caused to Respondent 1 was more than the amount of gratuity payable to the appellant. Clause (b) of sub-section (6) of Section 4 of the Act also provides for forfeiture of the whole amount of gratuity or part in the event his services had been terminated for his riotous or disorderly conduct or any other act of violence on his part or if he has been convicted for an offence involving moral turpitude. Conditions laid down therein are also not satisfied.
18.These aspects of the matter although have been considered by the authority under the Act as also the Appellate Authority wherewith the learned Single Judge agreed, the Division Bench posed unto itself a wrong question and, thus, misdirected itself while passing the impugned judgment. The controlling authority was exercising a power under a statute and, therefore, it having been authorised to administer the provisions of the Act was entitled to determine as to whether any case has been made out to deny the right of the appellant to obtain the amount of gratuity in accordance with the provisions thereof. He, thus, did not exceed his jurisdiction."(Emphasis added)
Hence he contended that the Gratuity Act being a complete code, they will apply to the case on hand. Hence the impugned regulation is invalid.
8. He also referred to an another judgment of the Supreme Court in Som Prakash Rekhi v. Union of India reported in (1981) 1 SCC 449 to contend that Section 14 will have an over ride effect for the scheme framed by the authority and referred to the following paragraphs found in paragraphs 61 and 67 which are as follows:
"61.The liability for the payment of full pension was that of Burmah Shell, but, by virtue of Sections 3 and 4 of the Act, all the assets and liabilities vested in the Central Government and thereafter, in the second respondent. Section 10 of the Act relates to provident fund, superannuation, welfare fund and the like. Section 10(3) is important:
10. (3) The Government company in which the undertakings of Burmah Shell in India are directed to be vested shall, as soon as may be after the date of vesting, constitute, in respect of the moneys and other assets which are transferred to and vested in it under this section, one or more trusts having objects as similar to the objects of the existing trusts as in the circumstances may be practicable, so, however, that the rights and interests of the beneficiaries of the trust referred to in sub-section (1) are not, in any way, prejudiced or diminished.
(emphasis added)
Follow-up steps were accordingly taken and there is no quarrel over it. It is clear, therefore, that the second respondent has made provision for the rights and interests of the beneficiaries of the Trust established by Burmah Shell for the benefit of the persons employed by it. Section 10(1) puts this matter beyond doubt. This obligation of the second respondent is a statutory one and having regard to the provisions of Section 11, it cannot be affected by any instrument or decree or order. The statutory continuation of a pre-existing liability to pay pension, provident fund or gratuity, cannot be avoided having regard to Section 10.
67. We must realise that the pension scheme came into existence prior to the two beneficial statutes and Parliament when enacting these legislations must have clearly intended extra benefits being conferred on employees. Such a consequence will follow only if over and above the normal pension, the benefits of provident fund and gratuity are enjoyed. On the other hand, if consequent on the receipt of these benefits there is a proportionate reduction in the pension, there is no real benefit to the employee because the Management takes away by the left hand what it seems to confer by the right, making the legislation itself left-handed. To hold that on receipt of gratuity and provident fund the pension of the employee may be reduced pro tanto is to frustrate the supplementary character of the benefits. Indeed, that is why by Sections 12 and 14 overriding effect is imparted and reduction in the retrial benefits on account of provident fund and gratuity derived by the employee is frowned upon. We, accordingly, hold that it is not open to the second respondent to deduct from the full pension any sum based upon Regulation 16 read with Regulation 13. If Regulation 16 which now has acquired statutory flavour, having been adapted and continued by statutory rules, operates contrary to the provisions of the PF Act and the Gratuity Act, it must fail as invalid. We uphold the contention of the petitioner."
9. The learned counsel thereafter referred to a judgment of this court in The Special Officer, The Management of R.1779 Srirangam Cooperative Urban Bank Ltd., Srirangam Vs. The Joint Commissioner of Labour (Appellate Authority under the Payment of Gratuity Act), Trichy and others reported in 2012 (1) CWC 171 regarding the application of the Payment of Gratuity Act in the absence of any law whether the gratuity can be withheld.
10. A reference was also made to a judgment of the Patna High Court in relation to Shambbu Sharan Singh Vs. The Chairman and Managing Director, UCO Bank and others reported in (2011) 1 LLJ 829 Pat wherein in an identical circumstance, a single bench of the Patna high Court held that in the absence of forfeiture of gratuity in terms of Section 4(6), an employee of the bank is entitled to get gratuity. In paragraph 10 of the order, it was held as follows;
"10....The petitioner was admittedly not terminated. As such, any of the requirement for forfeiting/withholding the gratuity in the aforesaid provision are not attracted in the case of the petitioner. There is an another aspect of the matter that under Section 13 of the Gratuity Act attachment of gratuity in any manner either forfeiting/withholding is not permissible even in execution of any decree or orders of civil, revenue or criminal Court and provision of Gratuity Act prevails and has overriding effect on any provisions contained in any enactment other than gratuity Act which are inconsistent in terms of Section 14...."
11. Further reference was made to a judgment of the Gujarat High Court in New India Assurance Co. Ltd. Vs. Ashwin Chimanlal Sheth and others reported in (2011) 1 LLJ 870 Guj regarding the forfeiture of gratuity under Section 4(6) if not done, then an employee is entitled for gratuity.
12. The learned counsel also referred to an unreported judgment of this court in W.P.Nos.18572 and 18575 of 1994 in Krishnaveni Textile Mills Vs. The Assistant Labour Commissioner (Central) (Controlling Authority under the Payment of Gratuity Act), Shastri Bhavan, Madras and others, dated 22.7.2002 for advancing the similar proposition.
13. Lastly, the learned counsel referred to a judgment of the Gujarat High Court in Gujarat State Road Transport Corporation Limited Vs. Devendrabhai Mulvantrai Vaidya reported in CDJ 2003 GHC 269 in relation to the transport corporation where once again the need to provide gratuity under Section 4(1) was emphasized in the absence of any forfeiture under Section 4(6).
14. However this court is not persuaded to entertain the writ petitions for more than one reason. The cases relied on by the petitioners were all relatable to forfeiture or deprivation of gratuity. The case on hand is different.
15. The judgment in Bharat Coking Coal Ltd.'s case (cited supra) arose out of the scheme framed where the pension scheme was framed including the components of gratuity will exclude the provisions of the Payment of Gratuity Act and where employees even after reaching the age of superannuation can be retained in service for the purpose of continuing the disciplinary action.
16. Similarly the judgment in Som Prakash Rekhi's case (cited supra) did not deal with the scheme framed before the nationalization of the petroleum company and taken over by the newly formed Government owned company and held that Sections 13 and 14 of the Payment of Gratuity Act will override the said scheme notwithstanding the scheme had attained statutory flavour after nationalization of the Petroleum companies.
17. The judgment relating to the Srirangam Cooperative Urban Bank Ltd. did not deal with the scope of any regulation validly framed under a law. The judgment of the Patna High Court relating to UCO Bank did not go into the larger question that if there is any statutory regulation, whether the non obstante clause under the Payment of Gratuity Act over rides those statutory regulations. Therefore, it is not of any assistance. Similar is the case of the New India Assurance Co. Ltd., Krishnaveni Textile Mills and Gujarat State Road Transport Corporation Limited, where those cases did not deal with the similar issue of going into the question of vires of any regulations.
18. On the other hand, it must be noted that the first two explanations under Regulation 46(2) is the reproduction of the explanation found in Rule 8 of the Pension Rules framed by both Central and State Governments. In the present case, the employees though were permitted to retire, they were paid pension which is not to be adjusted even if the outcome of the trial goes against an employee. What is postponed is the payment of gratuity till the outcome of the criminal cases. Section 4(6) also deals with such contingencies.
19. If a person's gratuity can be deprived if he had committed any offence involving the moral turpitude during the course of his employment, then the only emphasize should be whether the offence for which an employee is tried related to any moral turpitude and if it results in conviction it has no relevance to the age of superannuation. If the contention of the petitioners are to be accepted, then an employee who commits a grave offence on the last day of his superannuation, he can walk away with gratuity. Such an interpretation will lead to absurd results.
20. The Supreme Court has held that if a person claims gratuity under the Gratuity Act in the absence of any exemption under Section 5, then he is entitled to claim only gratuity. He cannot claim the benefit of pension vide judgment in Municipal Corpn. of Delhi v. Dharam Prakash Sharma reported in (1998) 7 SCC 221 and in paragraph 2, it was observed as follows:
"2..... The mere fact that the gratuity is provided for under the Pension Rules will not disentitle him to get the payment of gratuity under the Payment of Gratuity Act. In view of the overriding provisions contained in Section 14 of the Payment of Gratuity Act, the provision for gratuity under the Pension Rules will have no effect. Possibly for this reason, Section 5 of the Payment of Gratuity Act has conferred authority on the appropriate Government to exempt any establishment from the operation of the provisions of the Act, if in its opinion the employees of such establishment are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act. Admittedly MCD has not taken any steps to invoke the power of the Central Government under Section 5 of the Payment of Gratuity Act. In the aforesaid premises, we are of the considered opinion that the employees of the MCD would be entitled to the payment of gratuity under the Payment of Gratuity Act notwithstanding the fact that the provisions of the Pension Rules have been made applicable to them for the purpose of determining the pension. Needless to mention that the employees cannot claim gratuity available under the Pension Rules."(Emphasis added)
21. In the present case, all the petitioners are drawing pension in terms of Regulation 46(1). Therefore, having got the benefit under Regulation 46(1) and some of them are drawing pension for over five years, if they want to get gratuity in addition to the same, they will have to wait for the outcome of the criminal cases which are pending before the Special Court. In such a case, the Supreme Court has clearly held that they are not eligible for pension under the Pension Rules. Even otherwise, it must be noted that pension rules themselves applicable to the Government servant contain a clause for withholding of pension if any serious crime was committed by him even as a pensioner.
22. Further, a similar rule framed by the Maharashtra Government akin to Rule 8 of the Tamil Nadu Pension Rules, 1978, came up to be upheld by the Supreme Court vide judgment in State of Maharashtra v. M.H. Mazumdar, reported in (1988) 2 SCC 52, wherein in paragraphs 4 to 6 it was observed as follows:
"4.There is no dispute that the respondent had retired from service on attaining the age of superannuation on September 1, 1977 and charges were served on him on October 16, 1978 after about a year of his retirement. Indisputably the proceedings against the respondent were initiated after the respondent ceased to be in service of the State Government. The proceedings culminated in an order of the State Government reducing the respondent's pension by 50 per cent. The question is whether the State Government was competent to take action against the respondent by reducing his pension. Conditions for grant of pension to a government servant of the State of Maharashtra are regulated by the Bombay Civil Services Rules (hereinafter referred to as the Rules ). Rule 184 provides for grant of pension admissible under the rules to government servant who is borne on its establishment. Rules 188 and 189 relevant for our purpose are as under:
188. Government may make such reduction as it may think fit in the amount of the pension of a government servant whose service has not been thoroughly satisfactory.
189. Good conduct is an implied condition of every grant of pension. Government may withhold or withdraw a pension or any part of it if the pensioner be convicted of serious crime or be found to have been guilty of grave misconduct either during or after the completion of his service, provided that before any order to this effect is issued, the procedure referred to in Note I to Rule 33 of Bombay Civil Services Conduct, Discipline and Appeal Rules shall be followed.
5. The aforesaid two rules empower Government to reduce or withdraw a pension. Rule 189 contemplates withholding or withdrawing of a pension or any part of it if the pensioner is found guilty of grave misconduct while he was in service or after the completion of his service. Grant of pension and its continuance to a government servant depend upon the good conduct of the government servant. Rendering satisfactory service maintaining good conduct is a necessary condition for the grant and continuance of pension. Rule 189 expressly confers power on the Government to withhold or withdraw any part of the pension payable to a government servant for misconduct which he may have committed while in service. This rule further provides that before any order reducing or withdrawing any part of the pension is made by the competent authority the pensioner must be given opportunity of defence in accordance with the procedure specified in Note I to Rule 33 of the Bombay Civil Services Conduct, Discipline and Appeal Rules. The State Government's power to reduce or withhold pension by taking proceedings against a government servant even after his retirement is expressly preserved by the aforesaid rules. The validity of the rules was not challenged either before the High Court or before this Court. In this view, the Government has power to reduce the amount of pension payable to the respondent. In M. Narasimhachar v. State of Mysore2 and State of Uttar Pradesh v. Brahm Datt Sharma3 similar rules authorising the Government to withhold or reduce the pension granted to the government servant were interpreted and this Court held that merely because a government servant retired from service on attaining the age of superannuation he could not escape the liability for misconduct and negligence or financial irregularities which he may have committed during the period of his service and the Government was entitled to withhold or reduce the pension granted to a government servant.
6. The High Court in our view committed serious error in holding that the State Government had no authority to initiate any proceedings against the respondent. In B.J. Shelat v. State of Gujarat1 disciplinary proceedings had been initiated against the government servant for purposes of awarding punishment to him after he had retired from service. The ratio of that decision is not applicable to the instant case as in the present case the purpose of the enquiry was not to inflict any punishment; instead the proceedings were initiated for determining the respondent's pension. The proceedings were taken in accordance with Rules 188 and 189 of the Rules. It appears that the attention of the High Court was not drawn to these rules."(Emphasis added)
23. In Union of India Vs. B.Dev reported in (1998) 7 SCC 691, the Supreme Court while analysing Rule 9 of the Pension Rules, wherein the pension can be deprived for the loss caused to the State, has held in paragraphs 9 to 11 as follows:
"9.The relevant rule in the present case is Rule 9. Learned counsel for the respondent contended before us that Rule 9 can be invoked only if the government servant has caused any pecuniary loss to the Government. This contention is also unsustainable. Rule 9 as it stood at the relevant time was as follows:
9.Right of President to withhold or withdraw pension. The President reserves to himself the right to withholding or withdrawing a pension or part thereof, whether permanently or for a specified period, and of ordering recovery from a pension of the whole or part of any pecuniary loss caused to the Government if, in any departmental or judicial proceedings, the pensioner is found guilty of grave misconduct or negligence during the period of his service, including service rendered upon re-employment after retirement provided that the Union Public Service Commission shall be consulted before orders are passed.
10. Rule 3(1)(o) defines pension as including gratuity except when the term pension is used in contradiction to gratuity .
11. Rule 9 gives to the President the right of (1) withholding or withdrawing a pension or part thereof, (2) either permanently or for a specified period, and (3) ordering recovery from a pension of the whole or part of any pecuniary loss caused to the Government. This power can be exercised if, in any departmental or judicial proceedings, the pensioner is found guilty of grave misconduct or negligence during the period of his service. The power, therefore, can be exercised in all cases where the pensioner is found guilty of grave misconduct or negligence during the period of his service. One of the powers of the President is to recover from pension, in a case where any pecuniary loss is caused to the Government, that loss. This is an independent power in addition to the power of withdrawing or withholding pension. The contention of the respondent, therefore, that Rule 9 cannot be invoked even in cases of grave misconduct unless pecuniary loss is caused to the Government, is unsustainable."
24. The Supreme Court had an occasion to consider the subsequent Central law on gratuity prevailing over the existing law of gratuity vide its judgment in P. Rajan Sandhi v. Union of India reported in (2010) 10 SCC 338. In that case, the Supreme Court while analyzing the Payment of Gratuity Act and the Working Journalists Act held that the Working Journalists Act is the special law and therefore, it will override the provisions of the Payment of Gratuity Act which is considered to be the general law on the said subject. In that case, the Supreme Court held that if a working journalist is terminated by way of disciplinary action, then it is immaterial whether he causes any damage or loss or destruction of the property and for mere termination, he can be deprived of his gratuity. It is necessary to extract the following passages found in paragraphs 11 and 12 which are as follows:
"11.It may be seen that there is a difference between the provisions for denial of gratuity in the Payment of Gratuity Act and in the Working Journalists Act. Under the Working Journalists Act gratuity can be denied if the service is terminated as a punishment inflicted by way of disciplinary act, as has been done in the instant case. We are of the opinion that Section 5 of the Working Journalists Act being a special law will prevail over Section 4(6) of the Payment of Gratuity Act which is a general law. Section 5 of the Working Journalists Act is only for working journalists, whereas the Payment of Gratuity Act is available to all employees who are covered by that Act and is not limited to working journalists. Hence, the Working Journalists Act is a special law, whereas the Payment of Gratuity Act is a general law. It is well settled that special law will prevail over the general law, vide G.P. Singh's Principles of Statutory Interpretation, 9th Edn., 2004, pp. 133 and 134.
12. The special law i.e. Section 5(1)(a)(i) of the Working Journalists Act, does not require any allegation or proof of any damage or loss to, or destruction of, property, etc. as is required under the general law i.e. the Payment of Gratuity Act. All that is required under the Working Journalists Act is that the termination should be as a punishment inflicted by way of disciplinary action, which is the position in the case at hand. Thus, if the service of an employee has been terminated by way of disciplinary action under the Working Journalists Act, he is not entitled to gratuity." (Emphasis added)
25. Therefore, before deciding the application of the Gratuity Act, the status of the Regulation 46 will have to be considered. Regulation 46 has been framed by the Indian Bank by virtue of the power conferred on it under the Banking Companies Nationalization Act. The regulations framed by the Indian Bank in terms of the Nationalization Act is the law within the meaning of Article 13 of the Constitution. The Supreme Court in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi reported in (1975) 1 SCC 421 has held in paragraphs 30 and 33 as follows:
"30.....The regulations made under power conferred by the statute are subordinate legislation and have the force and effect, if validly made, as the Act passed by the competent legislature..............
33. There is no substantial difference between a rule and a regulation inasmuch as both are subordinate legislation under powers conferred by the statute."
26. If the Indian Bank is empowered to frame rules in terms of the law made by the Parliament, then it has to be seen whether the Regulation 46 is the subsequent special law which will override the provisions of the Payment of Gratuity Act, 1972. In this context, it is necessary to refer to a judgment of the Supreme Court in LIC v. D.J. Bahadur reported in (1981) 1 SCC 315, wherein the LIC Act was held to be the special law in certain respects and general law in certain other respects and in paragraphs 49 to 53, it was observed as follows:
"49.The next logical question then is as to whether the ID Act is a general legislation pushed out of its province because of the LIC Act, a special legislation in relation to the Corporation employees. Immediately, we are confronted with the question as to whether the LIC Act is a special legislation or a general legislation because the legal maxim generalia specialibus non derogant is ordinarily attracted where there is a conflict between a special and a general statute and an argument of implied repeal is raised. Craies states the law correctly:29
The general rule, that prior statutes are held to be repealed by implication by subsequent statutes if the two are repugnant, is said not to apply if the prior enactment is special and the subsequent enactment is general, the rule of law being, as stated by Lord Selbourne in Sewards v. Vera Cruz30, that where there are general words in a later Act capable of reasonable and sensible application without extending them to subjects specially dealt with by earlier legislation, you are not to hold that earlier and special legislation indirectly repealed, altered, or derogated from merely by force of such general words, without any indication of a particular intention to do so. There is a well-known rule which has application to this case, which is that a subsequent general Act does not affect a prior special Act by implication. That this is the law cannot be doubted, and the cases on the subject will be found collected in the third edition of Maxwell is generalia specialibus non derogant i.e. general provisions will not abrogate special provisions. When the legislature has given its attention to a separate subject and made provision for it, the presumption is that a subsequent general enactment is not intended to interfere with the special provision unless it manifests that intention very clearly. Each enactment must be construed in that respect according to its own subject-matter and its own terms.
50. The crucial question which demands an answer before we settle the issue is as to whether the LIC Act is a special statute and the ID Act a general statute so that the latter pro tanto repeals or prevails over the earlier one. What do we mean by a special statute and, in the scheme of the two enactments in question, which can we regard as the special Act and which the general? An implied repeal is the last judicial refuge and unless driven to that conclusion, is rarely resorted to. The decisive point is as to whether the ID Act can be displaced or dismissed as a general statute. If it can be and if the LIC Act is a special statute the proposition contended for by the appellant that the settlement depending for its sustenance on the ID Act cannot hold good against Section 11 and Section 49 of the LIC Act, read with Regulation 58 thereunder. This exercise constrains me to study the scheme of the two statutes in the context of the specific controversy I am dealing with.
51. There is no doubt that the LIC Act, as its long title suggests, is an Act to provide for the nationalisation of life insurance business in India by transferring all such business to a corporation established for the purpose and to provide for the regulation and control of the business of the Corporation and for matters connected therewith or incidental thereto. Its primary purpose was to nationalise private insurance business and to establish the Life Insurance Corporation of India. Inevitably, the enactment spelt out the functions of the Corporation, provided for the transfer of existing life insurance business to the Corporation and set out in detail how the management, finance, accounts and audit of the Corporation should be conducted. Incidentally, there was provision for transfer of service of existing employees of the insurers to the Corporation and, sub-incidentally, their conditions of service also had to be provided for. The power to make regulations covering all matters of management was also vested in appropriate authorities. It is plain and beyond dispute that so far as nationalisation of insurance business is concerned, the LIC Act is a special legislation, but equally indubitably, is the inference, from a bare perusal of the subject, scheme and sections and understanding of the anatomy of the Act, that it has nothing to do with the particular problem of disputes between employer and employees, or investigation and adjudication of such disputes. It does not deal with workmen and disputes between workmen and employers or with industrial disputes. The Corporation has an army of employees who are not workmen at all. For instance, the higher echelons and other types of employees do not fall within the scope of workmen as defined in Section 2(s) of the ID Act. Nor is the Corporation's main business investigation and adjudication of labour disputes any more than a motor manufacturer's chief business is spraying paints!
52. In determining whether a statute is a special or a general one, the focus must be on the principal subject-matter plus the particular perspective. For certain purposes, an Act may be general and for certain other purposes it may be special and we cannot blur distinctions when dealing with finer points of law. In law, we have a cosmos of relativity, not absolutes so too in life. The ID Act is a special statute devoted wholly to investigation and settlement of industrial disputes which provides definitionally for the nature of industrial disputes coming within its ambit. It creates an infrastructure for investigation into, solution of and adjudication upon industrial disputes. It also provides the necessary machinery for enforcement of awards and settlements. From alpha to omega the ID Act has one special mission the resolution of industrial disputes through specialised agencies according to specialised procedures and with special reference to the weaker categories of employees coming within the definition of workmen. Therefore, with reference to industrial disputes between employers and workmen, the ID Act is a special statute, and the LIC Act does not speak at all with specific reference to workmen. On the other hand, its powers relate to the general aspects of nationalisation, of management when private businesses are nationalised and a plurality of problems which, incidentally, involve transfer of service of existing employees of insurers. The workmen qua workmen and industrial disputes between workmen and the employer as such, are beyond the orbit of and have no specific or special place in the scheme of the LIC Act. And whenever there was a dispute between workmen and management the ID Act mechanism was resorted to.
53. What are we confronted with in the present case, so that I may determine as between the two enactments which is the special? The only subject which has led to this litigation and which is the bone of contention between the parties is an industrial dispute between the Corporation and its workmen qua workmen. If we refuse to be obfuscated by legal abracadabra and see plainly what is so obvious, the conclusion that flows, in the wake of the study I have made, is that vis-a-vis industrial disputes at the termination of the settlement as between the workmen and the Corporation, the ID Act is a special legislation and the LIC Act a general legislation. Likewise, when compensation on nationalisation is the question, the LIC Act is the special statute. An application of the generalia maxim as expounded by English textbooks and decisions leaves us in no doubt that the ID Act being special law, prevails over the LIC Act which is but general law."
27. If it is held that Regulation 46(2) is a Central Law specially made in relation to Indian Bank Employees, then the general law like the Payment of Gratuity Act cannot be pressed into service for impugning the subsequent Central law on the said subject. The same was the dictum laid in P.Rajan Sandhi's case (cited supra).
28. In view of the above discussion, the non obstante clause pressed into service under Sections 13 and 14 of the Payment of Gratuity Act will have no effect on the impugned regulations framed by the Indian Bank. If the contentions raised by the petitioners are accepted, then there will be no scope for the Bank to withhold the gratuity in terms of Section 4(6) of the Act and the petitioners who are facing criminal cases before the Special Court under various offences which arose out of their employment, will walk away with the substantial gratuity even if they are found guilty by the criminal court. Therefore, for giving a meaningful interpretation to Section 4(6) of the Payment of Gratuity Act, it has to be interpreted that in case of the bank employee faces criminal action, then his gratuity can be forfeited till the disposal of the criminal case.
29. Hence there is no merit in the writ petitions filed by the petitioners. The impugned regulation does not suffer from any constitutional vires. Accordingly, all writ petitions will stand dismissed. No costs.