EASTERN COALFIELDS LTD Vs. KRIPA SANKAR SOMANY

JUDGEMENT

(1.) The disciplinary proceeding was initiated against the respondent? writ petitioner levelling three charges. The first charge related to furnishing of false information regarding name, age and qualification for obtaining employment amounting to mis-representation, the second charge related to moral turpitude and the third charge related to breach of service rules. The Disciplinary Authority had found the writ petitioner guilty of the first charge and had found that the second and third charges were not proved. By the time the disciplinary proceeding was over, the writ petitioner had retired. In the circumstances, 15% of the gratuity payable to the writ petitioner was withheld as punishment on account of misconduct proved under the first charge. Learned single Judge in the judgment and order dated August 30, 2001 passed in W.P. No. 2248 of 1996 under appeal was pleased to hold that in view of sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972, no part of the gratuity could be withheld except in the circumstances contemplated in clauses (a) and (b) thereof. Admittedly, none of those clauses are satisfied in this case. Therefore, in our view, he had rightly held that the Authority could not withhold gratuity by way of punishment on the strength of adverse finding in respect of charge No.1.

(2.) Mr. Banerjee, learned counsel for the appellant, had contended that no other punishment could be imposed upon him since the employee had retired before the disciplinary proceeding could be over and at the same time the service regulation provides for withholding of gratuity and as such notwithstanding anything contained in the 1972 Act the punishment can be sustained. He relied on the decision in Union of India v. Ganayutham (dead) by LRs., AIR 1997 SC 3387 : 1997 (7) SCC 463 : 2000-II-LLJ- 648. Learned counsel for the respondent/writ petitioner, on the other hand, pointed out that such withholding can be effected only if it is consistent with the provision contained in sub- section (6) of Section 4 of the 1972 Act and not otherwise in view of the provision contained in Section 14 of the 1972 Act. Learned counsel for the respondent/writ petitioner also points out from the said decision cited by Mr. Banerjee that the relevant service rules permitting withholding of gratuity was held to be sustainable in law on the ground that there was a finding against the delinquent that the employer had suffered loss of revenue. Therefore, this was a case coming within the exception provided in sub-section (6) of Section 4, Thus, this decision does not help Mr. Banerjee.

(3.) Section 4 sub-section (6) of the 1972 Act prescribes the contingencies when the gratuity can be withheld. Under clause (a) of sub-section (6) on account of omission or negligence causing any damage or loss or destruction of the property belonging to the employer, the gratuity can be forfeited to the extent of damage or loss so caused. In the present case, admittedly, there was nothing in the finding that the employer had suffered loss or damage or there was any finding of the quantum of the loss or damage. Section 14 of 1972 Act gives an overriding effect to the provisions contained in the 1972 Act irrespective of anything inconsistent in any other enactment or any instrument or contract having effect by virtue of any enactment other than this Act. Therefore, unless the service regulation comes within the exception provided under sub-section (6) of Section 4 of 1972 Act by reason of Section 14, such regulation cannot be sustained for the purpose of withholding gratuity in a case outside the scope and ambit of the exception provided in sub-section (6). Service Regulation or Rules inconsistent with Section 4(6) cannot be sustained. It has to yield to the provision contained in Section 4(6) of the 1972 Act and shall stand superseded by reason of Section 14 thereof. The decision in the case of G. Ganayutham (supra) proceeds on the basis that the service regulation was applicable in a case where the employer had suffered loss of revenue. Therefore, it had come within the exception provided in clause (a) of sub-section (6) as rightly pointed out by the learned counsel for the respondent.