NORTHERN COALFIELDS LIMITED Vs. M.K. GOEL

JUDGEMENT

(1.) CHALLENGING the order-dated 30.5.2011 passed by the appellate authority under the Payment of Gratuity Act, 1972 (hereinafter referred to as 'Act of 1972'), as contained in Annexure P/1, petitioners have filed this writ petition.

(2.) PETITIONER No.1/Company is a Public Sector Undertaking having its establishment in District Singrauli, Madhya Pradesh. They are engaged in the activity of extracting coal. Respondent No.1 Shri M.K. Goel was working in the establishment of the petitioners as Chief Engineer (Electrical & Mechanical). It is seen that he has retired on attaining the age of superannuation on 31.3.2010. However, just before his retirement, a charge-sheet was issued to him under the Conduct Discipline and Appeal Rules, 1978 (hereinafter referred to as 'Rules of 1978') applicable to the Executives of Coal India Limited vide memorandum ­ Annexure P/2 dated 25.2.2010. The inquiry into the said charge-sheet was pending when respondent No.1 retired. It was the case of the petitioners/management that even though a sum of Rs. 9,37,447/- is to be paid to respondent No.1 as gratuity, but because a departmental inquiry is pending, the gratuity was not paid to him by virtue of certain provisions contained in the Rules of 1978 and accordingly vide communication ­ Annexure P/4 dated 19.5.2010, the petitioners/company deposited the entire amount with the controlling authority under the Act of 1972, namely respondent No.3 ­ The Assistant Labour Commissioner, and submitted before him in the said communication that the gratuity be not paid till finalization of the departmental inquiry. It was stated in the communication made to the Assistant Labour Commissioner that under Clause 34.3 of the Rules of 1978, withholding of gratuity pending finalization of the departmental inquiry is permissible. It was also indicated in the letter that the total amount of gratuity payable is Rs. 10 Lacs, but the amount is being deposited after deduction of income-tax. Be that as it may, if the amount was so deposited before the controlling authority, the authority issued notice to respondent No.1, respondent No.1 raised various objections and claimed payment of gratuity on the ground that the gratuity amount could not be withheld and by placing reliance on the provisions of section 4(6) of the Act of 1972, emphasized that under the legislative provision as contemplated under section 4(6) of the Act of 1972, the amount has to be disbursed and pending departmental inquiry the amount cannot be withheld. The Assistant Labour Commissioner namely the disciplinary authority, adjudicated the question involved and passed an order on 17.8.2010, vide Annexure P/6, and held that merely because the departmental inquiry is pending, the amount of gratuity cannot be withheld. The ingredients necessary for withholding gratuity as contemplated under section 4, particularly sub-section (6) thereof, is not made out and by holding that the Rules of 1978 cannot over-ride the legislative provision as contained in the Act of 1972, directed for payment of the entire amount of gratuity alongwith interest of Rs. 38,082/- and further interest of Rs. 273.97 per day. The amount of Rs. 38,082/- as interest was calculated on the amount of gratuity at the rate of 10% simple interest per annum from the date of retirement of the employee till actual payment of gratuity.

(3.) I have heard learned counsel for the parties and perused the records.