NATIONAL FERTILIZERS LTD Vs. A K MAITRA

JUDGEMENT

(1.) The appeals impugn identical orders in W.P.(C) No. 8561/2010 & W.P.(C) No. 469/2011 preferred by the respondents and whereby the learned Single Judge has directed the appellant to release the amount due to each of the respondents towards Leave Encashment along with interest @ 8% per annum. The respondents superannuated from the employment with the appellant on 28 th February, 2009 and 31 st March, 2010 respectively. However their retiral dues on account of Gratuity and Leave Encashment were not released to them. The respondents approached the Controlling Authority under the Payment of Gratuity Act, 1972; the appellant in those proceedings took a stand that the gratuity amounts had been withheld due to pendency of judicial proceedings against the appellant and some of its officials including the respondents, for payment of advance monies to M/s Karsan Ltd., Ankara, Turkey for supply of urea without obtaining the approval of Reserve Bank of India. However, the Controlling Authority under the Gratuity Act held that since disciplinary proceedings also initiated against the respondents for the same reason were dropped on 13 th October, 2004 and 18 th February, 2005 respectively and the respondents exonerated and further since as on the date of superannuation, no disciplinary proceedings were pending against the respondents, the appellant was not entitled to withhold the gratuity. Accordingly, the Controlling Authority under the Gratuity Act directed the appellant to release the gratuity amounts to the respondents. The appeals preferred by the appellant before the Appellate Authority under the Gratuity Act were unsuccessful and the gratuity amounts released by the appellant to the respondents.

(2.) However, the appellant having still not released the amount towards Leave Encashment, the writ petitions from orders wherein these appeals have preferred, were filed by the respondents for a direction to the appellant to release the amount towards Leave Encashment.

(3.) The appellant contested the said writ petitions contending that the amounts towards Leave Encashment were withheld in accordance with the decision of the Board of Directors and which decision was in accordance with the Rules and Regulations of the appellant. It was pleaded that pursuant to authorization of Government of India to import urea, the appellant entered into a contract with M/s Karsan Ltd. aforesaid for supply of urea fertilizer in bagged form; the contract provided for 100% advance payment and an amount US $ 38 million was so paid; however neither was the urea received nor the advance refunded; that the respondents amongst other employees of the appellant had vetted the contract; that the Enforcement Directorate, Foreign Exchange Regulation Act, 1973 (FERA) initiated proceedings against the appellant and some of its employees including the respondents alleging that the clauses of the contract were in violation of FERA and Exchange Control Manual; that the said proceedings i.e. adjudication proceedings under Section 50 of FERA and criminal complaint under Section 56, FERA r/w Section 200 Cr.P.C. were still pending. It was thus contended that since there was a possibility of imposition of penalty under Section 50 of FERA on the respondents, the amount due to the respondents towards Leave Encashment was being withheld till culmination of those proceedings.