Full Judgment
The applicant herein is aggrieved by the action of the Respondents in not releasing retirement benefits including leave salary, DCRG etc., by fixing his pay at Rs.7,600/- despite several representations.
2. The applicant joined Railways as Jr. Clerk in 1964 and rose to the post of Office Supdt., Gr. II (Depot Store Keeper). While he was working under the control of Respondent No.3, he was served with a charge memo dated 30.1.2003 alleging that he was involved in RPUP Act. He was subjected to departmental enquiry in which he participated. The enquiry officer held that the charges were not proved. His report was accepted by the respondents and the charge memo was dropped. The applicant retired on superannuation on 28.2.2003. In the meantime basing on an Audit objection, an amount of Rs.22,447/- was recovered from the applicant on the alleged ground of wrong fixation of pay at Rs.7,600/-. The applicant challenged it in this Tribunal in OA 345/2003 and the same was disposed of in his favour. The recovered amount was also refunded to him but his pay was not fixed at Rs.7,600/- and the pensionary benefits were not paid to him taking his pay as Rs.7,600/-. Though he made representations on 31.5.2005 and 17/20.1.2006, his grievance has not been redressed. The applicant issued legal notice to pay the difference of pensionary benefits by fixing his pay at Rs.7,600/- as also DCRG, leave salary and commutation of pension. Since there has been no response, he has filed this OA.
3. Respondents have filed a reply in which they have stated that the applicant's pay was erroneously fixed based on the option exercised by him for which he was not eligible. This was pointed out by the Audit who advised to recover overpayment. Overpayment worked out to Rs.22,447/- upto December, 2002. The applicant was informed of the proposed recovery vide letters dated 27.6.2002 and 16.10.2002. The applicant took the matter to the Tribunal and this Tribunal in its order dated 26.3.2004 in OA 345/2003 quashed the letters dated 27.6.2002 and 16.10.2002 and allowed the OA to the extent that the Respondents shall refund the amount recovered from the DCRG of the applicant but the Tribunal's order did not allow erroneous benefits to be extended beyond 31.12.2002. The orders of the Tribunal were specific about the non-recovery of the amount already paid and proposed to be recovered. Therefore, the applicant's contention that his pay should be fixed at Rs.7,600/- is not correct. The Respondents have further submitted that a charge sheet for major penalty in Standard Form No. H/CN/DAR/P.227/AS/DSK/MAO/2/03, dated 17.2.2003 issued by Dy. CE/CN/Hubli was served on the applicant on 17.2.2003 and after following the due procedure the disciplinary authority has recommended 5% cut in pension for six months. The same has been forwarded to Railway Board for clearance and for obtaining approval of the President of India. The reply is awaited from the Railway Board.
4. Respondents have also submitted that an amount of Rs.1,22,980/- towards shortage of materials during 1990-91 is to be recovered from the settlement dues of the applicant as OA Nos. 1699/98, 342/2001 and WP 1679/2003 filed by the applicant before the Tribunal / Hon'ble High Court were set aside. Further, in terms of AAO/CN/SWR/Hubli letter No. A/SV/CN/02/UBL dated 24.2.2003, an amount of Rs.22,12,528/- towards shortage of railway material due to non-finalization of stock sheet by the applicant for the years 2001-02 are to be withheld from his settlement dues.
5. Respondents have further submitted that the applicant while working as Dy. Store Keeper was involved in a criminal case. He was arrested for having sold railway property to an outsider and was remanded to Judicial custody and released on bail by court. The criminal case in which the applicant is accused No. 2 is still pending in the Court of JMFC/MAO. The Respondents have therefore stated that in view of the criminal case and the disciplinary case pending against the applicant, he is not entitled to the relief he has prayed for.
6. The applicant has filed the rejoinder reiterating the contentions made in the application. He has stated that the Criminal Court had already discharged the accused from the charge and the same Court cannot restore the case for trial.
7. Heard Sri J.M. Naidu, learned counsel for the applicant and Sri V. Rajeshwar Rao, learned standing counsel for the Respondents. Learned counsel for the applicant has cited the following case laws in support of his submissions :-
(i) 1985 (1) SLJ 100 (Jiwan Singh Vs. The Administrator, Union Territory of Delhi and others);
(ii) 1985 (1) SLJ 106 (The State of Kerala and Others Vs. M.Padmanabhan Nair);
(iii) 2002(1) LLJ 648 (R.K. Nangia Vs. Rashtriya Chemicals and Fertilizers Limited)
8. The issues that arise for consideration are (i) whether the applicant's pay should have been fixed at Rs.7,600/- for determination of his retirement benefits; (ii) whether the Respondents have committed any illegality in not releasing the applicant's retirement benefits including encashing of leave, DCRG and commutation of pension and (iii) to what relief is the applicant entitled.
9. Issue No. (i) : The learned counsel for the applicant contended thaat the applicant is entitled for re-fixation of pay on par with his juniors in view of the fact that the recovery of amount due to Audit objection which was made wrongly has been set aside by this Tribunal. Consequently he is entitled to retirement benefits taking into consideration his 10 months average pay on the date of superannuation by fixing the pay to which he is entitled to receive according to law. The learned counsel for the Respondents argued that it is a settled principle of law that wrong fixation can be rectified but recovery cannot be made. This is based on the principle enunciated by the Hon'ble Supreme Court in the case of Sahib Ram Vs. State of Haryana (1995 (1) SCT 668). The learned standing counsel for the Respondents submitted that this Tribunal had already gone into the question of fixation of pay of the applicant and had held that the applicant was in no way responsible for wrong fixation and therefore his case was squarely covered by the judgment of the Hon'ble Apex Court supra and consequently the impugned orders in OA 345/2003 were set aside. There was no dispute that the applicant's pay had been fixed wrongly. This Tribunal had specifically stated in its order that "the OA is allowed to the extent that the respondents shall refund the amount recovered from the DCRG of the applicant within a period of two months from the date of receipt of a copy of this order". Nowhere in the order was it stated that the fixation of the pay is correct or that the audit objection was incorrect. Therefore, the applicant is not entitled to fixation at Rs.7,600/-. After going through the material papers, I am in agreement with the contention made by the learned counsel for the Respondents. The applicant has not made out a case anywhere that he is eligible for fixation of pay at Rs.7,600/-. On the other hand, as pointed out by the learned standing counsel for the Respondents, this Tribunal had only ordered that the recovery made / proposed to be made from the applicant's pay and retirement benefits should be stopped and whatever recovery had been made should be refunded to him. Therefore, the first issue is decided against the applicant.
10. Issue No. (ii) : The learned counsel for the applicant argued vehemently that gratuity cannot be attached under any circumstances. He invited attention to proviso (g) to section 60 of Civil Procedure Code of 1908 which stated that "gratuity allowed to a pensioner is not liable to be attached or sold in execution of a decree". Referring to the judgment of the Hon'ble Supreme Court in the case of State of Kerala Vs. M. Padmanabha Nair reported in 1985(1) AISLJ 106 , the learned counsel argued that gratuity cannot be withheld. The Hon'ble Supreme Court in the judgment supra had observed as follows :-
"Pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment",
The learned counsel also invited attention to the fact that in the case of Jiwan Singh Vs. The Administrator, Union Territory of Delhi and Others, the Hon'ble Supreme Court had ordered that pension should be paid even to the dismissed employee. Learned counsel for the applicant further submitted that as per Rule-9 of Railway Services (Pension) Rules, only the President can reduce pension or gratuity. Even as per the Payment of Gratuity Act, gratuity cannot be attached or withheld. He added that the applicant's case is not covered by sub-section (6) of Section-4 of the Act. The learned counsel for the respondents argued that gratuity can be paid only for satisfactory service. That the applicant did not render satisfactory service is evident from the fact that there were two disciplinary cases earlier, a large amount has to be recovered from him and criminal proceedings are also pending. Learned counsel for the applicant countered by saying that recovery of Rs.1,22,980/- is not finalized and it is still at the stage of issuing show cause notice. Even if 5% cut in pension is proposed by the respondents as mentioned in the reply affidavit, the applicant is entitled to get 95% pension. At present he is getting only provisional pension which is 50% of the normal pension. The learned counsel for the applicant also submitted that there is no proposal to cut gratuity. Therefore the Respondents should release his gratuity amount and major portion of the pension immediately.
11. I have considered the arguments of both the sides carefully. There is no dispute that the Payment of Gratuity Act, 1972, is applicable to the petitioner. Section-4 of the Act provides for payment of gratuity amount to an employee. Sub-sections (1) and (6) of Section-4 are relevant for our purpose and these two sub-sections are re-produced herein :-
4. Payment of gratuity:- (1) 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;
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement.
Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heir, and where such nominee or heir is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefits of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
Explanation - For the purpose of this Section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.
(2) ...........
(3) ...........
(4) ...........
(5) ...........
(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."
12. It would be seen that sub-section (1) of Section 4 of the Payment of Gratuity Act, 1972 provides that gratuity shall be payable to an employee on termination of his employment after he has rendered continuous service for not less than five years. The termination of the employment may be on superannuation or on retirement or resignation or death or disablement due to accident or disease of the employee. Thus, an employee becomes entitled to payment of gratuity under the statute. Sub-section (6) is an exception to sub-section (1) and makes a provision of forfeiture of the gratuity wholly or partially in the circumstances mentioned therein. The learned counsel for the applicant submitted that according to sub-section (6), gratuity of an employee may be forfeited to the extent of damage or loss caused to the employer if service of that employee has been terminated for any act, wilful omission or negligence on that ground. The gratuity payable to an employee may also be forfeited wholly or partially if the service of such employee has been terminated for his riotous or disorderly conduct or any other act of violence on his part or service of such employee has been terminated for any act constituting an offence involving moral turpitude. Though a criminal case was registered against the Petitioner, the fact is petitioner's services have been terminated simpliciter on his superannuation and not for any of the grounds mentioned under sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972.
13. The learned counsel for the applicant has referred to the judgment of the Hon'ble High Court of Bombay in R.K. Nangia Vs. Rashtriya Chemicals and Fertilizers Limited (2002(1) LLJ 648), in which the petitioner challenged the decision of the authorities to withhold the gratuity payable to him on superannuation allegedly in view of the criminal case pending against him. The Hon'ble High Court observed that "the petitioners were not terminated due to any act, willful omission or negligence causing damage to the property of the employer, or due to his riotous or disorderly behaviour or due to an offence involving moral turpitude. The services of the petitioner come to an end simpliciter on his attaining age of 58 years". However, I notice from the facts of that case that 7 years after the applicant's superannuation no departmental action had been initiated in that case and in those circumstances, the Hon'ble High Court held that the impugned action of the Respondents not to release the gratuity payable to the petitioner was beyond time provided in Rule 45 of Rashtriya Chemicals and Fertilizers Limited Employees (Conduct, Discipline and Appeal) Rules, 1993, and could not be sustained. But the facts and circumstances of the present case are different. Disciplinary action has been initiated against the applicant and a cut in pension has been recommended. Moreover, there is provision in the Rules for withholding gratuity in the circumstances of the case.
14. As rightly pointed out by the learned counsel for the applicant, the President, as per Rule-9 of Railway Services (Pension) Rules, 1993, has the right of withholding or withdrawing a pension or gratuity, or both, either full or in part, whether permanently or for a specified period and of ordering recovery from a pension or gratuity of the whole or part of any pecuniary loss caused to the Railway, if, in any departmental or judicial proceedings, the pensioner is found guilty of grave misconduct or negligence during the period of his services". But the learned counsel for the Respondents pointed out that as per Clause (c) of sub-rule (1) of Rule-10, "no gratuity shall be paid to the railway servant until the conclusion of the departmental or judicial proceedings and issue of final orders thereon; provided that where departmental proceedings have been instituted under provisions of the Railway Servants (Discipline and Appeal) Rules, 1968, for imposing any of the penalties specified in clauses (i), (ii), (iii-a) and (iv) of Rule 6 of the said rules, the payment of gratuity shall be authorized to be paid to the railway servant". Clause (a) of Sub-rule (1) of Rule-10 also authorizes payment of provisional pension where departmental or judicial proceedings are pending. It is not disputed that in the present case both departmental and judicial proceedings are pending against the applicant. It is also not disputed that provisional pension has been paid to the applicant as per rules. The Respondents have stated in their reply that major penalty charge sheet has been issued to the applicant on 17.2.2003 and it has been proposed to impose a cut in his pension. Therefore, the penalty to be imposed is not one of those specified in clauses (i), (ii), (iii-a) and (iv) of Rule-6. Therefore, the Respondents' contention is not covered by the exemption clause in Rule-10 of the Railway Services (Pension) Rules, 1993. Since there is no provision as per Rule-9 as well as clause (c) of Sub-Rule (1) of Rule-10 of Railway Services (Pension) Rules, 1993, for withholding gratuity, I am of the considered view that the Respondents have not committed any illegality in withholding the applicant's gratuity. Therefore this point is also found against the applicant.
15. Issue No. (iii) : It is not disputed that the petitioner is facing disciplinary action. The argument of the learned counsel for the applicant that the recovery of Rs.1,22,980/- is still at show cause notice stage cannot be accepted as seen from the following portion in the order of the Hon'ble High Court of AP in WP 1679/2003 that :
"However, a shortfall of 11.18 metric tonnes of the material was detected and therefore the first respondent issued a proceeding dt. 20.8.1998 holding the petitioner was responsible for the shortage and accordingly proposed recovery of Rs.1,22,980/- from the salary of the petitioner. Aggrieved by the said proceeding, the petitioner herein filed O.A.No.1699 of 1998 before the Central Administrative Tribunal which was disposed of by an order dt. 22.12.1998 setting aside the proceeding dt. 20.8.1998 and directing the authorities to give an opportunity to the petitioner. Later, an enquiry was conducted and basing on the enquiry report the first respondent issued proceedings dt. 23.1.2001 instructing the second respondent to deduct 50% of the basic salary of the petitioner. Challenging the above action of the respondents, the petitioner herein filed O.ANo.342 of 2001 on the file of the Central Administrative Tribunal, Hyderabad, which was disposed of on 6.9.2002 observing that the O.A. is premature and reiterating the observations made in O.A.No.1699 of 1988".
This order of the Tribunal was challenged in WP No. 1679/2003 which was dismissed by the Hon'ble High Court. Therefore, it is not correct that the recovery of Rs.1,22,980/- is still at show cause notice stage. The applicant has been contesting the disciplinary action taken against him at every stage in different fora.
16. The Respondents have also referred to action taken against the applicant to withhold Rs.22,12,528/- towards shortage of railway material from the applicant's settlement dues. It is not clear from the reply whether any charge sheet has already been issued in this regard. If no charge sheet has been issued, I cannot see how this amount can be recovered since the applicant has retired on 28.2.2003 and nearly 6 years have elapsed since his retirement on superannuation. The Respondents in their reply have also referred to the major penalty charge sheet dated 17.2.2003 against the applicant in which the disciplinary authority, after due enquiry, has recommended 5% cut in pension, which was considered adequate by SGDM/V/SC vide letter No. G.265/38/e/064/ubl-017 dated 30.11.2004. This proposal is stated to be awaiting approval of the President of India. More than 4 years have elapsed since this recommendation was made. No doubt, disciplinary cases / recovery proceedings are pending against the applicant. But the Respondents have to act speedily in finalizing these cases. There is no justification for further delay in issuing final orders in disciplinary cases against a retired employee especially when 50% of his pension and the entire gratuity have been withheld. In this context a reference should be made to section-7 (3A) of the Payment of Gratuity Act, which states as follows :-
"(3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify:
Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground".
As per the notification issued under this section in SO 874/E published in Gazettee of India ext. Part-II dated 1.7.1981, simple interest at the rate of 10% p.a. is payable by the employer to his employee in cases where the gratuity is not paid within the specified period. The Respondents will have to take an early decision on the release of the pension, gratuity and other settlement benefits to the employee keeping this provision in mind. Though the applicant cannot claim immediate disbursement of his gratuity and pension in view of the provisions contained in Clause (c) of sub-section (1) of Rule-10 of Railway Services (Pension) Rules, 1993, he will be entitled to receive interest as and when a decision is taken in the case. This issue is decided accordingly.
17. It is seen that a criminal case is also pending against the applicant in a judicial forum. Considering the plight of the applicant, the Respondents should cooperate fully in the early completion of this proceeding.
18. In the result, the OA is disposed of on the following lines :-
(i) the applicant is not entitled to fixation of pay at Rs.7,600/- for the purpose of determination of his pensionary benefits;
(ii) the Respondents are directed to finalize the disciplinary case pending against the
applicant within a period of three months from the date of receipt of a copy of this order; and
(iii) the applicant will be entitled to payment of interest on the gratuity as payable to him, if any, as per the provisions contained in section 7(3A) of Payment of Gratuity Act.
19. No order as to costs.