H JAYARAMA SHETTY Vs. SANGLI BANK LTD

JUDGEMENT

(1.) The Central Regional Labour Commissioner acting as Appellate Authority under the Payment of Gratuity Act, 1972, allowed an appeal against an order of the Controlling Authority. As a result of the decision of the Appellate Authority, the claim of the petitioner for the payment of gratuity stands dismissed. The Appellate Authority has held that (i) Inasmuch as the petitioner had been posted at Belgaum in the State of karanataka, prior to an order transferring him to Sangli, the Adjudicating authority in Maharashtra would have no jurisdiction; (ii) The claim for the payment of gratuity is barred by limitation; and (iii) Though the petitioner had resigned from service and there was no termination of his services for any misconduct causing damage or loss to, or the destruction of the property belonging to the employer, the forfeiture of gratuity was justified. For the reasons indicated in the judgment hereinafter, I have come to the conclusion that the order passed by the Appellate Authority is unsustainable and that the petition has to be allowed.

(2.) The petitioner joined the respondent which is a Scheduled Bank, on 28th May, 1991. On 3rd May, 1994, a notice to show cause was issued to the petitioner to explain certain irregularities which had taken place in the accounts of a constituent of the bank a decade earlier, in 1984 when the petitioner was working at the Bangalore Branch. The petitioner submitted his reply on 24th June, 1994. No charge-sheet was issued to the petitioner, nor was any disciplinary proceeding convened in respect of the subject-matter of the notice of the bank. On 12th May, 1995 the petitioner was transferred from the Branch of the Bank in Belgaum in the State of Karnataka to the head Office at Sangli. On 3rd June, 1995 the petitioner was relieved from the belgaum Branch. The petitioner tendered his resignation from service on 17th september, 1995 which was accepted by the bank. On 7th August, 1997 the respondent while responding to a request by the petitioner for the payment of his terminal benefits informed the petitioner that they had been adjusted against the dues allegedly payable by the petitioner to the bank. Of the amount of gratuity payable to the petitioner, an amount of Rs. 1,06,440/- was stated to have been adjusted on account of the recovery of dues in the account of a constituent of the bank in respect whereof, a show cause notice had been issued to the petitioner earlier on 3rd May, 1994. The petitioner addressed representations on 5th September, 1997, 29th January, 1998 and 21st November, 1998. These not having elicited any response, the petitioner moved the Controlling Authority under the Payment of Gratuity Act, 1972 on 15th february, 2002 for an order directing the respondent to pay the gratuity to which the petitioner was entitled upon the cessation of his service. The respondent filed a reply and contested the claim of the petitioner.

(3.) The application filed by the petitioner before the Controlling Authority at Pune, was, the Court is informed, transferred by that authority to its counterpart at Mumbai. By an order dated 31st October, 2003 the Controlling authority allowed the application and directed the respondent to pay an amount of Rs. 1,17,669/- together with the statutorily prescribed interest of 10% P. a. from 17th September, 1995 till the date of payment. The bank carried the matter in appeal. The Appellate Authority allowed the appeal on 27th September, 2004. The Appellate Authority held that (i) The Controlling Authority in the State of Maharashtra would have no jurisdiction to entertain the application since the cause of action had arisen at Belgaum in the State of Karnataka where the alleged loss is stated to have been caused; (ii) The application which was filed before the Controlling Authority on 15th February, 2002 was barred by limitation, the cause of action having arisen on 17th December, 1995 and though under Rule 7 the authority had the jurisdiction to condone the delay for sufficient reasons, there was no application for the condonation of delay; and (iii) On merits, the loss which has been suffered by the bank was quantified and communicated in the show cause notice issued by the respondent and if the petitioner had any grievance, he ought to have challenged the decision of the bank before the appropriate authority. The correctness of each of these grounds which have weighed with the Appellate Authority has been challenged on behalf of the petitioner whereas on behalf of the respondent submissions have been made to sustain the order of the Appellate Authority. The tenability of the submissions urged on either side, will fall for consideration when each of the three findings of the Appellate Authority is taken up for consideration seriatim.