1. Heard, Shri Sudeep Seth, learned Senior Advocate assisted by Shri Sridhar Awasthi, learned counsel for the petitioner and Shri A.R.Khan, learned counsel for the respondents.
2. The writ petition under Article 226 of the Constitution of India has been filed challenging the resolution No.43 passed by opposite party no.2/Committee of Management, District Cooperative Bank Limited, Sitapur in its meeting dated 07.10.2013. The further prayer has been made for commanding the opposite parties to release and pay the retiral benefits of Gratuity amounting to Rs.6,17,905/- alongwith accrued interest thereon w.e.f. 01.07.2013 till the date of payment at the rate of 18% per annum to the petitioner.
3. The brief facts, for adjudication of the case, are that the petitioner retired on 30.06.2013 on attaining the age of superannuation from the services of respondent no.1/District Cooperative Bank Limited, Sitapur. The petitioner was informed about his retirement on 30.06.2013 by means of an order dated 22.06.2013 and his relieving on the said date as the charge was to be handed over to one Shri Ashish Shukla, who had to assume the charge. The petitioner received all the retiral benefits except the amount of Gratuity after his retirement on 30.06.2013. The petitioner made a representation dated 29.10.2013 and reminder dated 12.06.2014 to the opposite party no.1 for payment of his Gratuity. Thereafter he made a representation on 19.12.2014 to the opposite party no.2 for payment of Gratuity. On the representation dated 19.12.2014 of the petitioner the Chairman of the Bank made an endorsement to the Secretary/Chief Executive Officer of the Bank to make payment of Gratuity forthwith. However the Gratuity was not paid to the petitioner.
4. The petitioner approached to the Regional Labour Commissioner, who on an objection raised by the opposite party no.1 regarding jurisdiction of the Regional Labour Commissioner (Central), Lucknow, closed the case by means of the order dated 30.09.2015 and granted liberty to the petitioner to raise his grievance before the appropriate forum at State of U.P. Thereafter the petitioner approached the Assistant Labour Commissioner, Lucknow under the Payment of Gratuity Act 1972 vide P.G. Case No.124 of 2015. He disposed of the case by means of order dated 16.08.2016 on the ground that he has no jurisdiction. The petitioner thereafter approached to the Registrar, Cooperative Societies, U.P., Lucknow by means of the application dated 23.12.2016, who by means of the order dated 04.01.2017 directed to the Secretary/Chief Executive Officer to take necessary action for immediate payment of the amount of Gratuity of the petitioner. The response thereof was sent to the opposite party no.1 on 10.02.2017 informing that the post retiral benefits i.e. Provident Fund, Group Insurance and Leave Encashment have been paid to the petitioner on various dates. It had further been informed that the amount of Gratuity of Rs.6,17,905/- has been received from the Insurance Company but since the loan amount disbursed by the petitioner had not been recovered from the borrowers and the petitioner had not made any effort to recover the loan amount and the said accounts have become non performing assets (NPA) as such under the provisions of Payment of Gratuity Act 1972 the amount of Gratuity had been adjusted towards the NPA loan accounts of 8 borrowers. It was also informed that in case borrowers deposit the loan amount, the said amount would be paid/released to the petitioner. A certificate dated 24.04.2015 had been issued by the Mahmoodabad Branch of the Bank with respect to the three loan accounts in which the amount had been deposited from time to time.
5. The petitioner again approached to the Additional Commissioner and Additional Registrar (Banking), Cooperative Societies, U.P., Lucknow for payment of amount of Gratuity by means of representation dated 04.08.2018. In response thereof it was informed to the petitioner by means of letter dated 13.02.2019 that the amount of Gratuity had been adjusted against the NPA loan accounts of the defaulter borrowers and there being a provision to settle the dispute under Section 70 of the U.P. Cooperative Societies Act 1965 and Chapter 18 of Rules 1968, therefore he may institute an Arbitration Case. Therefore the petitioner had approached this court by means of writ petition Service Single No.14287 of 2019, but he was not having the resolution dated 07.10.2013, therefore he got the writ petition dismissed as withdrawn with liberty to file a fresh. Thereafter filed the present writ petition challenging the resolution dated 07.10.2013 passed by the opposite party no.2.
6. I have considered the submissions of learned counsel for the parties and perused the records.
7. An objection was raised by learned counsel for the respondents that the petitioner has an alternative and statutory remedy of Arbitration under Section 70 of the U.P. Cooperative Societies Act 1965 and Chapter 18 of Rules 1968, therefore, the writ petition is not maintainable and liable to be dismissed on this ground. Learned counsel for the petitioner had submitted that the amount of gratuity of petitioner has been adjusted towards NPA loan accounts without jurisdiction or authority of law. The remedy provided under Section 70 is also not efficacious remedy and the petitioner will be required to deposit 1% of the fee amount for raising his grievance in Arbitration and the petitioner is already on the verge of starvation and famine as pension is not admissible to him, therefore the petitioner has approached to this court by means of the present writ petition and he may not be relegated to alternative remedy and writ petition may be decided on merit.
8. It appears that this plea was not raised when the writ petition had come up for hearing for the first time on 29.05.2019 and the time for counter affidavit was sought and granted by this court. This court had also directed to list the case in the category of senior citizen as the petitioner is a senior citizen. The petitioner had retired after attaining the age of superannuation on 30.06.2013. The various correspondences and proceedings were undertaken by the petitioner since his retirement as disclosed above. But it appears that the respondents had not taken this plea. The counter and rejoinder affidavits have been exchanged. This court also finds that purely question of law is involved in the present writ petition as to whether the amount of Gratuity can be adjusted towards NPA loan accounts after retirement or not without any authority of law. That too without inquiry and proved misconduct of an employee. Normally the writ petition should not be entertained if there is an alternative remedy but there is no bare also. Therefore in the facts and circumstances of the case, this court feels it appropriate to decide the case on merit instead of relegating it to the alternative remedy.
9. The Hon'ble Supreme Court in the case of Whirlpool Corporation Versus Registrar of Trade Marks; (1998) 8 SCC 1, has held that in an appropriate case inspite of availability of alternative remedy, High Court may still exercise its jurisdiction in at least three contingencies i.e. where the writ petition seeks enforcement of any of the fundamental rights or where there has been a violation of principles of natural justice or where the orders or proceedings are wholly without jurisdiction or vires of an Act is challenged. The same view has been taken by the Hon'ble Supreme Court in the case of Radha Krishna Industries Versus State of Himachal Pradesh and others; (2021) 6 SCC 771, and it has been held that the rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion.
10. The sole issue which falls for considering in this writ petition is as to whether after retirement of an employee of the respondent-bank, his amount of Gratuity can be adjusted towards NPA loan accounts or not. The petitioner had retired after attaining the age of superannuation on 30.06.2013 from the service of the respondent no.1. Thereafter all the retiral dues except the Gratuity were paid to the petitioner. It appears that the Gratuity has not been paid to the petitioner on the basis of a resolution dated 07.10.2013 of the respondent no.2 which reads as under:-
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11. The aforesaid resolution indicates that the decision was taken, after retirement of the petitioner, for conducting an inquiry in regard to the disbursement of the loans by the petitioner during his posting. It as also decided that after inquiry the proceedings of recovery should be made. The further decision was taken that in future at least prior to two years of retirement of any employee, the assessment of the status of the loans disbursed during his period may be made. Therefore the decision was taken for conducting an inquiry in regard to the loans disbursed by the petitioner. Thereafter the proceedings of recovery were to be undertaken. However, in pursuance thereof the amount of Gratuity of the petitioner has been adjusted towards NPA loan accounts on account of alleged none repayment of the loans without any enquiry and proof of misconduct of petitioner.
12. The services of the petitioner are governed by the U.P. Cooperative Societies Employees' Service Regulations, 1975 (hereinafter referred as Regulations 1975). Section 95 provides for the Gratuity. Regulation 95 is extracted below:-
"95-Gratuity-(i) A co-operative society may by a resolution of its committee of management allow to its employees gratuity equivalent to not more than 15 days, salary for every complete year of service (part of the year if less than six months, to be ignored), if he has attained the age of superannuation or has been declared invalid for service by the Civil Surgeon or has been retrenched or dies while in service:
Provided he has put in ten years of continuous service immediately preceding retirement, invalidation, or retrenchment or five years' continuous service in case of death, as the case may be. In case of death, gratuity shall be payable to the nominee of the employee and in the absence of nomination, to his legal heir;
(ii) For purposes of meeting its obligations under clause(1), a co-operative society ma create Employees' Gratuity Fund."
13. In view of Regulation 95, an employee would be entitled to Gratuity equivalent to not more than 15 days salary for every complete year of service, if he has attained the age of superannuation provided he has put in ten years of continuous service immediately preceding retirement. Admittedly the aforesaid Regulations are applicable and the Payment of Gratuity Act 1972 is not applicable on the petitioner. The petitioner had rendered the requisite service mentioned in the aforesaid Regulation. He retired on attaining the age of superannuation on 60 years of age. Therefore, the petitioner is entitled for Gratuity in accordance with the aforesaid Regulations. However the same has not been paid on the ground that certain loan accounts disbursed by the petitioner have become NPA. The petitioner has annexed a certificate dated 24.04.2015 of the concerned Branch of the Bank to indicate that the repayment was being made time to time in three loan accounts. However, as stated, after adjustment of the amount of Gratuity of the petitioner towards the said loan accounts no repayment is being made.
14. It has been stated by the respondent-bank in his letter dated 10.02.2017 to the Additional Commissioner and Additional Registrar (Banking), Cooperative Societies, U.P. Lucknow that in case the loan amount is deposited, the amount of Gratuity would be paid to the petitioner. This court fails to understand as to when the amount has already been adjusted against the loan accounts as to how and why the same would be repaid by the defaulters. Nothing has been brought before this court to show that any inquiry was made in pursuance of the resolution dated 07.10.2013 in regard to the loan accounts and anything was found against the petitioner. However it appears that no effort has also been made in accordance with law for recovery of the loan amounts in regard to the loans in question.
15. It is settled that the Gratuity and pension are not bounties and an employee gets these benefits by his long continuous fulfilled unblemished service as such it is hard earned benefit of an employee and is in the nature of property. The right of property cannot be taken away without due process of law as per provisions of Article 300-A of the Constitution of India. Nothing has been brought before this court to show any provision of law for withholding, forfeiting or adjustment of amount of gratuity towards NPA loan accounts. That too without any proof of misconduct or loss by the petitioner during his period of service. Therefore the same could not have been adjusted towards NPA loan accounts or withheld/forfeited merely on the basis of a resolution of the respondent no.2 passed against the petitioner or any executive instructions.
16. The Hon'ble Supreme Court considered the issue in the case of State of Jharkhand and others Versus Jitendra Kumar Srivastava and another; Civil Appeal No.6770 of 2013 and held as under in paragraphs 14 and 15 by means of judgment and order dated 14th August, 2013;-
"14. Article 300 A of the Constitution of India reads as under:
"300A Persons not to be deprived of property save by authority of law. No person shall be deprived of his property save by authority of law."
Once we proceed on that premise, the answer to the question posed by us in the beginning of this judgment becomes too obvious. A person cannot be deprived of this pension without the authority of law, which is the Constitutional mandate enshrined in Article 300 A of the Constitution. It follows that attempt of the appellant to take away a part of pension or gratuity or even leave encashment without any statutory provisions and under the umbrage of administrative instruction cannot be countenanced.
15. 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 aforesaid Article 300A. 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."
17. A Coordinate Bench of this court in the case of Amod Prasad Rai Versus State of U.P. and another; 2009 SCC OnLine All.2624, in regard to a case covered under the payment of Gratuity Act, 1972 held that withholding the Gratuity is not permissible under any circumstance other than those enumerated in section 4(6) of the Act and right to gratuity is a statutory right. Section 4(6) of the said Act provides that the gratuity of an employee, can be forfeited only on account of termination for any act, willful omission or negligence causing any damage or loss or destruction of property belonging to the employer, termination for his riotous or desorderly conduct or any other act of violence on his part or offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. The respondents have failed to show even any such ground for withholding or forfeiting the Gratuity of the petitioner against the petitioner.
18. In the case of Baroda Uttar Pradesh Gramin Bank Versus Union of India and others; 2019 SCC OnLine All.4945 considering the issue as to whether the employers are entitled to recover a sum of Rs.5 lakhs, ordered to be realized from the terminal benefits of the employee in enforcement of the punishment order made in disciplinary proceedings, by deducting it from gratuity payable to the employee? The Coordinate Bench held that the gratuity cannot be forfeited without any power and also held that what is not attachable in enforcement of a decree of any court, civil, revenue or criminal, cannot be made available to the employer to recover his dues, howsoever, lawfully adjudged. Thus gave answer to the aforesaid question in negative.
19. Learned counsel for the respondents has relied on Remington Rand of India Ltd. Versus The Workmen; AIR 1970 Supreme Court 1421, The Management of Tournamulla Estate Versus Workmen; AIR 1973 Supreme Court 2344, Secretary, O.N.G.C. Ltd. and another Versus V.U.Warrier; (2005) 5 SCC 245 and M/S. Steel Authority of India Ltd. Versus Raghbendra Singh and others decided on 15th December 2020, by the Supreme Court in Special Leave to Appeal (C) No.(s) 11025 of 2020.
20. These all cases relied by learned counsel for the respondents are not applicable on the facts and circumstances of the present case because in the said cases the forfeiture of gratuity has been upheld on account of misconduct resulting in damage of the property of the employer, whereas in the present case nothing has been proved against the petitioner, even the enquiry as proposed in the impugned resolution appears to have not been done to find out as to whether the loans were wrongly and illegally disbursed by the petitioner to the ineligible persons. It appears that no effort has also been made by the respondents to recover the amount after retirement of the petitioner.
21. In view of above, this court is of the considered view that the amount of gratuity of the petitioner has wrongly and illegally been forfeited and adjusted towards the NPA Loan Accounts without authority of law. Therefore the writ petition is liable to be allowed.
22. The writ petition is allowed. The impugned resolution dated 07.10.2013 is hereby quashed so far as it relates to the petitioner. The respondents are directed to release and pay the amount of Gratuity of Rs.6,17,905/- to the petitioner alongwith interest @ 8% per annum w.e.f. the date of retirement of petitioner till the date of payment within a period of six weeks from the date of production of a certified copy of this order. No order as to costs.
.....................................(Rajnish Kumar,J.) Order Date :-24.12.2021 Banswar