Eligibility to gratutity
A SRIDHAR
(Querist) 01 April 2017
This query is : Resolved
In cases of some employees of PSUs , gratuity is held up at the time of retirement due to some pending cases with outside agencies like CBI etc.,But it seems SC has held that an employee against whom some criminal or departmental inquiry is pending is entitled to receive gratuity up to the year of committing the offence immediately at the time of retirement and the balance after the proceedings are over and the employee is acquitted - Is it true?
Kumar Doab
(Expert) 01 April 2017
Pls post the link/copy of the said judgment.
A SRIDHAR
(Querist) 02 April 2017
Do not have that detail with me - can any one of you please advise the present rule position in the said situation
H.M.Patnaik
(Expert) 02 April 2017
Pl. refer the Judgement below in this context:
Central Administrative Tribunal - Chandigarh
Unknown vs Union Of India Through Secretary on 19 January, 2016
CENTRAL ADMINISTRATIVE TRIBUNAL
CHANDIGARH BENCH
O.A No.060/00112/2015 Date of decision : 19.01.2016
CORAM: HONBLE MR. SANJEEV KAUSHIK, MEMBER (J)
Krishan Sarup Sharma, S/o late Sh. Dwarka Nath Sharma, Superintendent Gr.I (Retd.), O/o Director Food & Supplies and Consumer Affairs, U.T. Chandigarh, resident of H.No.3210/2, Sector-44-D, Chandigarh.
APPLICANT
BY ADVOCATE: Sh. J.R. Syal
VERSUS
1. Union of India through Secretary, Ministry of Home Affairs, North Block, New Delhi-110 001.
2. Union Territory Chandigarh through Adviser to the Administrator, Union Territory, Chandigarh.
3. Secretary, Food & Supplies and Consumer Affairs, UT
Chandigarh, Sector-9, Chandigarh.
4. Director, Food & Supplies and Consumer Affairs, UT Chandigarh,
Sector-17, Chandigarh.
5. Accountant General (A&E), UT Chandigarh.
RESPONDENTS
BY ADVOCATES: Shri Ram Lal Gupta (R-1), Shri A.L. Nanda (R-2-4) and
Shri Barjesh Mittal (R-5)
O R D E R
Mr. Sanjeev Kaushik, Member (J):
The applicant has invoked the jurisdiction of this Tribunal under Section 19 of the Administrative Tribunals Act, 1985 against the action of the respondents in not releasing the pensionary benefits, i.e., gratuity, remaining part of pension, leave encashment, commutation, salary for the suspension period etc. He has further sought a direction from this Tribunal to the respondents to release the above benefits with interest @12% per annum from the due date till the amount in full is finally paid.
2. The facts, which led to the filing of the present Original Application, are that the applicant entered into service with the respondents as Clerk on 18.03.1974. Sometime in the year 1979 he was promoted as Head Clerk. He was designated as Superintendent Grade-I w.e.f. 6.2.1986. Unfortunately, an FIR No.08 dated 07.05.2008 was registered against him by the PS/Vigilance, UT Chandigarh and he was placed under suspension vide order dated 21.05.2008. Applicant retired on 31.08.2008 on attaining the age of superannuation pending aforesaid criminal case. Vide order dated 27.01.2011 he was sanctioned provisional pension in terms of Rule 9.9 and 9.14 of the Punjab Civil Services Rules Volume-II. Thereafter applicant moved a representation on 23.05.2013, requesting therein to release all pensionary benefits admissible to him on retirement. The earlier order, granting provisional pension was revised vide order dated 02.02.2011. Applicant submitted another representation on 03.09.2013 wherein he placed reliance upon a judgment passed by the Honble Supreme Court in the case State of Jharkhand & Ors. v. Jitendera Kumar Srivastava & Anr., Civil Appeal No.6770 of 2013 (arising out of Special Leave Petition (Civil) No.1427 of 2009). In the criminal case applicant was acquitted by the Special Judge, Chandigarh vide its judgment dated 26.02.2014. On acquittal he submitted another representation on 18.03.2014, requesting the respondents to release all his retiral benefits as now he has been acquitted by the criminal court of law but of no avail. Hence the Original Application.
3. The respondents contested the claim of applicant by filing a detailed written statement wherein they admitted this fact that he was arrested by the Vigilance department, UT Chandigarh on 07.05.2008 on the ground of having demanded and accepted a sum of Rs.40,000/- from one Shri Shiv Shambhu, Assistant Food and Supplies Officer and Consumer Affairs (retired), UT Chandigarh and an FIR no.08 dated 07.05.2008 was registered under Sections 7, 13 (2) of Prevention of Corruption Act, 1988. He was placed under suspension, which was subsequently revoked pending criminal case. He retired on attaining the age of superannuation on 31.08.2009. Subsequently he was acquitted by the Special Judge, Chandigarh vide judgment dated 26.02.2014. Not satisfied with the order of acquittal the Chandigarh Administration filed appeal before the Honble Punjab & Haryana High Court, i.e., CRM-27675 of 2014 in CRM-A 1443-MA-2014, in which the Honble High Court vide its order dated 15.10.2015 granted leave to appeal and matter stands admitted for final adjudication. Respondents have submitted that applicant was granted provisional pension @90%, pending criminal case and the other retiral benefits cannot be released in view of rule 2.2 (c) of the Punjab Civil Services Rules, Volume-II.
4. Applicant has filed rejoinder wherein, apart from contradicting the averments made in the written statement, it is submitted that once he has been acquitted by the criminal court of law, then mere pendency of appeal will not take away his right to receive pension, which was earlier withheld by the department.
5. I have heard Shri J.R. Syal, learned counsel for the applicant, Shri R.L. Gupta, learned counsel for respondent no.1, Shri K.L. Nanda, learned counsel for respondents 2-4 and Shri Barjesh Mittal, learned counsel for respondent no.5.
6. Shri Syal, learned counsel appearing for the applicant vehemently argued that the action of the respondents in not releasing retiral benefits and not granting 100% pension even when the applicant has been acquitted in the criminal case by the trial court is totally illegal, arbitrary and colourable exercise of power at the hands of the respondents. To elaborate his submission, he submitted that once the very basis of withholding his retiral benefits and granting provisional pension, i.e., criminal case has already been decided in favour of applicant, where he has been acquitted by the criminal court of law on merits, then mere filing of appeal at the hands of the CBI in the Honble High Court will not take away his right to receive retiral benefits. To buttress his submission, he placed reliance upon a judgment passed by the Honble jurisdictional High Court in the case of Faquir Chand v. State of Haryana and others, 2010 (1) RSJ 440 and the decision of the Honble Supreme Court in the case of State of Jharkhand & Ors. v. Jitendera Kumar Srivastava & Anr. (supra).
7. Per contra, Shri Nanda, representing the contesting respondent-Chandigarh Administration, vehemently opposed the prayer of the applicant for release of retiral benefits pending judicial proceedings before the Honble High Court. He submitted that though applicant has been acquitted by the Special Judge, CBI vide its judgment dated 26.02.2014 against which CBI had already filed a criminal appeal, therefore appeal being a continuous cause of action, the respondents are well within their right to withhold the retiral benefits in terms of Rule 2.2 (c) of the Punjab Civil Services Rules, Volume-II. He submitted that the respondents have already released 90% provisional pension to him pending appeal in terms of rule formation they cannot release more than that what had already been accorded in his favour. To buttress his submission he placed reliance upon a judgment of the Honble Supreme Court in the case of K. Karunakaran v. State of Kerala, Appeal (Crl.) 801 of 2013 decided on 06.12.2006 and also the judgment by the Honble High Court of Delhi in the case of Lakhminder Singh Brar v. Union of India & Ors., W.P. (C) no.13191/2009 decided on 16.09.2010.
8. Shri Barjesh Mittal, learned counsel appearing on behalf of respondent no.5 in addition to what has already been argued by Shri Nanda submitted that even a Full Bench of the Honble High Court of Punjab and Haryana in the matter of Punjab State Civil Supplied Corpn. Limited and others v. Pyare Lal, LPA no.113 of 2012 (O&M), decided on 11.08.2014, have held that if criminal proceedings are pending, then in terms of Punjab Civil Services Rules petitioners can withhold leave encashment and other retiral benefits to adjust the loss caused to the department.
9. I have given my thoughtful consideration to the entire matter and perused the pleadings available on record and the judgments cited thereupon with the able assistance of the learned counsels appearing for the parties.
10. From the conjunctive perusal of the pleadings two substantial questions of law arise for our consideration, viz.,
i) whether a criminal appeal is a continuing cause of action;
and
ii) whether the department can withhold the retiral benefits in terms of Punjab Civil Services Rules or not?
11. Section 389 of the Criminal Procedure Code deals with filing of criminal appeal against acquittal or conviction. It is held by the Honble supreme Court in the case of G. Veeraya v. N. Subhiah Choudhry, AIR 1957 SC 540, that even pendency of criminal appeal is pendency of judicial proceedings, which was subsequently followed by the Full Bench of Allahabad High Court in the case of Shyam Sunder Lal v. Shagun Chand, AIR 1967 (Allahabad) 214 and it was held as follows:
19. In our view, the decision in G. Veeraya v. Subbiah Choudhry, AIR 1957 SC 540 relied upon by Beg and Tandon, JJ. in Sharafat Ullah Khan's case. 1959 All LJ 644: (AIR 1959 All 416) was no authority for the view which they, in effect, expressed in that decision. In Veeraya's case, AIR 1957 SC 540 their Lordships clearly pointed out that "The legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding."
We are of the opinion that the aforequoted observation of their Lordships of the Supreme Court approves, without question, the view expressed, in regard to the position of an appeal qua a suit, by the Federal Court and this Court in the cases noticed above. We have, therefore, no hesitation in holding that the defendants in the instant case could take advantage of what was provided for by Section 15 of the U. P. (Temporary) Control of Rent and Eviction Act. 1947.
12. In the light of the above, Section 389 Cr. PC and the judicial pronouncements it can safely be held that the appeal is a continuing cause of action and accordingly the poser no. (i) is answered in the affirmative.
13. Now dealing with 2nd poser whether the department can withhold the retiral benefits in terms of Punjab Civil Services Rules. To answer the above poser, rule 2.2 (c) (1), 8.21 (aa) of the Punjab Civil Services Rules, are to be reproduced below as the same are applicable to the employees working under Chandigarh Administration:
Rule 2.2 (c) (i) of PCS Rules: (Pension & Gratuity) 2.2 (c) (1) Where any departmental or judicial proceeding is instituted under clause (b) of rule 2.2 or where a departmental proceeding is continued under clause (i) of the proviso thereto against an officer who has retired on attaining the age of compulsory retirement or otherwise, he shall be paid during the period commencing from the date of his retirement to the date on which , upon conclusion of such proceedings , final orders are passed , a provisional pension not exceeding the maximum pension which would have been admissible on the basis of his qualifying service up to the date of retirement or if he was under suspension on the date of retirement up to date immediately proceeding to the date on which he was placed under suspension; but no gratuity or DeathCumRetirement Gratuity shall be paid to him until the conclusion of such proceedings and of final orders thereon. The gratuity, if allowed to be drawn by the competent authority on the conclusion of the proceedings will be deemed to have fallen due on the date of issue of final orders by the competent authority.
[Provided that where Departmental proceedings have been instituted under rule 10 of the Punjab Civil Services (Punishment & Appeal) Rules 1970 for imposing any of the penalties specified in clauses (i), (ii) and (iv) of rule 5 of the said rules, the payment of gratuity or death-cum-retirement gratuity, as the case may be, shall not be withheld.] Rule 8.21 of PCS Rules (Leave Encashment) "8.21(a) Leave at the credit of a Government employee in his leave account shall lapse on the date of his retirement: Provided that the Government employee;-
xxx xxx xxx
(aa) Notwithstanding anything contained in sub-rule (a) the authority competent to grant leave may withhold whole or part of cash equivalent of earned leave in the case of Government employee who retires from service on superannuation while under suspension or while disciplinary or criminal proceedings are pending against him, if in the opinion of such authority, there is a possibility of some money becoming recoverable from him on conclusion of the proceedings against him and on conclusion of the proceedings, he will become eligible to the amount so withheld after adjustment of Government dues, if any."
(Emphasis Supplied)
14. Perusal of the above makes it clear that pending departmental or judicial proceedings the employer is well within their right to withhold the retiral benefits i.e. gratuity or DCRG and leave encashment. What is permissible is that pending above proceedings applicant is held to be entitled for provisional pension @100%. These aspects of the matter have been considered by the Honble jurisdictional High Court in the case of Harbhajan Singh Riar v. State of Punjab and others, 2009 (8) SLR 99 and by the two Full Benches of the Honble jurisdictional High Court in the case of B.S. Gupta v. Uttar Haryana Bijli Vitran Nigam Limited and others, 2006 (8) SLR 690 and earlier to that in the case of Dr. Ishar Singh v. State of Punjab & another, 1993 (3) PLR 999. There was a conflicting view by the various Benches of the Honble jurisdictional High Court and ultimately the matter was referred to the Full Bench in the case of Punjab State Civil Supplies Corpn. Limited and others (supra) wherein the Full Bench while approving the judgment in the case of Harbhajan Singh Riar (supra), which was based upon an earlier Full Bench decision in the case of Dr. Ishar Singh (supra), held that pending proceedings in terms of Rule 8.21 (aa) of Punjab Civil Services Volume-II, the department can withhold/postpone payment of leave encashment, but it has to release 100% provisional pension, pending above proceedings. Rule 2.2 (1) also talks of withholding of gratuity or death-cum-retirement gratuity pending departmental or judicial proceedings. Therefore, the poser no. (ii) is also answered in the affirmative by holding that pending departmental or judicial proceedings gratuity or death-cum-retirement gratuity. With regard to withholding of the amount of leave encashment, the department has to record a specific finding of possibility of some money becoming recoverable from him on conclusion of the proceedings against him.
15. The learned counsel for the applicant has also relied upon a judgment of Honble Apex Court in the case of State of Jharkhand & Ors. versus Jitendra Kumar Srivastava & Another 2013(12) S.C.C. Page 210, wherein in paras 8 & 14, it has been held as follows :-
It is an accepted position that gratuity and pension are not bounties. An employee earns these benefits by dint of his long, continuous, faithful and unblemished service. Conceptually it is so lucidly described in D.S.Nakara v. Union of India by D.A. Desai, J. who spoke for the Bench, in his inimitable style, in the following words: SCCpp.319-20, paras 18-20).
xx xx xx
14. The right to receive pension was recognized as a right to property by the Constitution Bench judgment of this Court in Deokinandan Prasad v. State of Bihar, as is apparent from the following discussion: (SCC pp.342-43 paras 27-33).
The Court has further held in para 17 as follows:-
17. It hardly needs to be emphasized that the executive instructions are not having statutory character and, therefore, cannot be termed as law within the meaning of the aforesaid Article 300-A. On the basis of such a circular, which is not having force of law, the appellant cannot withhold even a part of pension or gratuity. As we noticed above, so far as statutory Rules are concerned, there is no provision for withholding pension or gratuity in the given situation. Had there been any such provision in these Rules, the position would have been different. However, the Court finds a major difference between the facts in the case of J.K. Srivastava & Another (supra) and case before us. In that case the facts were that under Rule 43 & 43(b) of the Bihar Pension Rules, there was no provision for withholding of pension during the pendency of the departmental or criminal proceedings and same was passing an administrative order issued by the Finance department of Government of Bihar. The judgment in Para 5 of the order quoting High Court states as under :-
To sum up the answers for the two questions are as follows:-
(i) Under Rules 43(a) and 43(b) of the Bihar Pension Rules, there is no power for the Government to withhold gratuity and pension during the pendency of the departmental proceeding or criminal proceeding. It does not give any power to withhold leave encashment at any stage either prior to the proceeding or after conclusion of the proceeding.
(ii) The circular, issued by the Finance Department, referring to the withholding of the leave encashment would not apply to the present facts of the case as it has no sanctity of law.
16. In the case in hand, as discussed above rule 2.2 (1) clearly talks of withholding of gratuity or dearth-cum-retirement gratuity pending departmental or judicial proceedings. Thus the issue gets settled in the light of the above provision namely Rule 2.2 (1) that there does exist a provision in the statue to withhold the gratuity of a retired employee. The ratio laid down in the case of Jitendra Kumar Srivastava (supra) would not be applicable to this case and is clearly distinguishable.
17. In the light of the above, now we proceed to examine the facts of the present case. An FIR no.08 dated 07.05.2008 was registered against the applicant under the provisions of Prevention of Corruption Act, 1988. He was acquitted by the Special Judge, CBI vide its judgment dated 26.02.2014 on merits, against which a criminal appeal at the hands of the CBI is pending adjudication before the Honble High Court where the leave has been granted. Perusal of the judgment passed by the Special Judge, CBI, particularly para-46, which is reproduced hereunder, makes it clear that the prosecution has failed to bring the evidence to substantiate the allegations levelled against the applicant for holding him guilty:
46. As an off-shot of above-said discussion and from the evidence led by the prosecution, it is found that the prosecution has miserably failed to bring home the charge levelled against the accused by way of placing reliable, probable and worthy of credence evidence to prove the demand, acceptance and recovery of the amount. Therefore, the accused is hereby acquitted of the charges under sections 7 and 13 (2) of the Prevention of Corruption Act, framed against him. His bail bonds stands discharged. After compliance, the file be consigned to record room. It is true that under Section 389 of the Cr. PC appeal is a continuing cause of action and in a criminal appeal filed at the hands of the CBI the Honble High Court has already granted leave, meaning thereby that the High Court found substance in appeal while admitting it, but we cannot escape to notice here that the Special Judge, CBI had already acquitted the applicant on merits and mere pendency of appeal will not shadow the acquittal of applicant from the criminal charges levelled against him, for example if in a given case an employee is convicted by the trial court against which he filed appeal and while admitting the appeal he was released on bail and sentence was suspended then it can be said that until his conviction is set aside in appeal he continues to be a convict. In another case where an employee has been acquitted by the court of law on merits then mere filing of appeal will not be taken as that he will continue to be a convict despite being acquitted till the appeal is decided by the Honble High Court. An accused is presumed to be innocent till he / she is convicted of the charge. His/her innocence is further strengthened by the acquittal recorded by the Trial Court. In the present case applicant comes under the latter category because the respondents have not returned any finding in departmental proceedings for any misconduct on his part, the retiral benefits were withheld only on ground of pendency of appeal. In absence of any finding by the competent authority whether his act comes within the definition of misconduct or there is a financial/pecuniary loss caused to the Government, which has already been quantified then the amount of leave encashment cannot be withheld. Our view also stands approved by the decision of the Honble Supreme Court in the case of D.V. Kapoor v. Union of India and Ors., JT 1990 (3) SC 403 wherein it was held that unless the pensioner is found guilty of misconduct in a departmental or a judicial proceeding, any part of his pension cannot be withheld.
18. A co-ordinate Division Bench of this Tribunal considered the issue in O.A.No. 060/00450/2014 Surjan Dass Vs. Union of India & Others, decided on 27.4.2015 in which retiral benefits like DCRG and leave encashment of the applicant had been withheld on ground of pendency of departmental proceedings. After scanning through the rule and legal position on the issue, the Bench held that gratuity and commuted value of pension could be withheld as there was a specific decision to withhold the same. However, the Bench held that there was no decision to withhold leave encashment and withholding of leave encashment was not justified in absence of any decision or provision to that effect.
19. In the case in hand, in terms of rule 8.21 of the PCS rules, the competent authority is well within its power and authority to withhold whole or part of cash equivalent of earned leave in the case of government employee who retires from service on superannuation while under suspension or while disciplinary or criminal proceedings are pending against him. However, there is a caveat before such a action is to be taken by the authority. The rules indicates that the competent authority has to form an opinion that there is a possibility of some money becoming recoverable from him on conclusion of the proceedings against him and on conclusion of the proceedings, he will become eligible to the amount so withheld after adjustment of government dues, if any. The documentation available on record and pleadings do not show that the competent authority has formed an opinion that there is possibility of some money becoming recoverable from the applicant. In the absence of such a decision it would not be proper for the respondents to withhold the leave encashment due to the applicant as such action would amount to arbitrariness on their part.
20. In view of the aforesaid discussion, this O.A. is partly allowed. The respondents are directed to re-consider the issue of release of leave encashment in terms of the rule position and decisions aforesaid and pass necessary orders within a period of two months from the date of receipt of a certified copy of this order. The parties are left to bear their own costs.
(SANJEEV KAUSHIK) MEMBER (J) Chandigarh Dated: 19.1.2016 San. OA no.060/112/15 (Krishan Sarup Sharma v. UOI & Ors.)
T. Kalaiselvan, Advocate
(Expert) 07 April 2017
A good effort by expert Mr. HM Patnaik.
A very informative and useful judgment.
Advocate. Arunagiri
(Expert) 07 April 2017
I am also providing one of the judgement of the Madras High court in the similar case.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 06.08.2014
CORAM
The Hon'ble Mr.Justice R.S.RAMANATHAN
W.P.No.20946 of 2014
B.Udayakumar ... Petitioner
Vs.
1. The District Collector, Cuddalore.
2. The District Revenue Officer, Cuddalore.
3. The Revenue Divisional Officer, Chidambaram, Cuddalore.
4. The Tahsildar, Kattumannarkoil, Kattumanarkoil Taluk,
Cuddalore District. ... Respondents
Prayer: This Writ Petition is filed under Article 226 of the Constitution of India, praying for a Writ of mandamus, directing the respondents to settle the terminal benefits to the petitioner such as death-cum-retirement, gratuity, encashment of earned leave, commutation of pension and General Provident. Fund within the time limit fixed by this Hon'ble Court.
For petitioner : Mr.M.Vijayakumar
For Respondent : Mr.M.E.Rani Selvam,
Additional Government Pleader.
O R D E R
The petitioner was suspended by order dated 06.02.2009 by the 3rd respondent for his involvement in a criminal case in Cr.No.1 of 2009 for offence under Sections 7 and 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988 on the file of the Inspector of Police, Vigilance and Anti Corruption, Cuddalore. By order dated 31.07.2012, he was not allowed to retire and retained in the service till the conclusion of the criminal case. He was paid the subsistence allowance at the rate of 50% of his pension. The petitioner filed this writ petition, seeking for a direction, directing the respondent to pay his gratuity, leave encashment salary, commutation of pension and General Provident Fund.
2. It is submitted by the learned counsel for the petitioner that though the petitioner prayed for commutation of pension, provident fund accrued to his credit, along with gratuity and leave encashment salary, considering the judgments rendered in W.P.Nos.15875 and 15926 of 2013 dated 02.12.2013 and W.P.No.3935 of 2014 dated 11.02.2014, he is restricting his relief in respect of gratuity and leave encashment salary and the respondents may be directed to pay these amounts to the petitioner.
3. Mrs.M.E.Rani Selvam, learned Additional Government Pleader takes notice for the respondents.
4. Learned Additional Government Pleader submitted that the petitioner is not entitled to commutation of pension as the petitioner was not allowed to retire and the criminal case is pending against the petitioner. However, the
learned Additional Government Pleader submitted that without prejudice to
the right of the respondents to proceed with the departmental proceedings if any and also to proceed with the suspension proceedings, the respondents may be directed to pay the leave encashment salary as well as the gratuity as per the judgments referred to by the learned counsel for the petitioner.
5. It is seen from the aforesaid two judgments rendered by this Court that even though a person is placed under suspension and was not allowed to retire, he is entitled to payment of gratuity and leave encashment salary and that was ordered. Following the same, this writ petition is disposed of by directing the respondents to pay the gratuity and leave encashment salary to the petitioner within a period of eight weeks from the date of receipt of a copy of this order. No costs.
R.S.RAMANATHAN, J.
A SRIDHAR
(Querist) 07 April 2017
Thank you Arunagiri Sir
A SRIDHAR
(Querist) 07 April 2017
Thank you Arunagiri Sir
