JUDGMENT Ashok Bhushan, J.
1. Heard Sri K.N. Mishra, learned Counsel for the petitioner and Sri Ajit Kumar Singh appearing for the respondents.
2. By this writ petition the petitioner has prayed for quashing the order dated 13th February, 2001 passed by Secretary/General Manager, Deoria Kasaya Zila Sahkari Bank Limited, Deoria directing for recovery of an amount of Rs. 27,628/- with 5.50% interest from the gratuity of the petitioner.
3. Brief facts necessary for deciding the writ petition are; the petitioner, who was working as Clerk-cum-Cashier at Baitalpur Branch of District Cooperative Bank, Deoria, while bringing cash of Rs.6,00,000/- from the head office to the Branch was intercepted by miscreants and the said amount was looted. The Deputy Registrar, Cooperative Society initiated proceedings under Section 68 of the U.P. Cooperative Societies Act, 1965 (hereinafter referred to as the Act) and by order dated 7th July, 1995 directed recovery of 35% of the balance amount of Rs. 6,00,000/- after deducting the claim allowed by the insurance of Rs. 4,00,812/- . The Deputy Registrar directed recovery of the balance amount which comes to Rs. 1,84,188/- by recovery 30% from Devendra Nath Mishra, the Branch Manager, 35% from the petitioner and 35% from Awadhesh Singh, the Guard. In the disciplinary proceedings the Board of Directors directed for recovery of the balance amount from the petitioner and Awadhesh Singh, the Guard to the extent of 50- 50 percent vide its resolution dated 6th July, 1995. The Secretary/General Manager passed order dated 13th July, 1995 directing recovery of Rs. 99,594/- from the petitioner and also recovery of the same amount from Awadhesh Singh. The Secretary of the Bank vide order dated 21st July, 1995 has modified the earlier order dated 13th July, 1995 and reduced the amount of recovery from the petitioner from Rs. 99,594/- to Rs. 64,466/- . Against the order dated 21st July, 1995 the petitioner had filed a writ petition being Writ Petition No. 37559 of 1995 which has been dismissed by order of the date. The amount of Rs. 64,466/- has already been recovered from the petitioner. Devendra Nath Mishra against whom order was passed for recovery of 30% of the balance amount, i.e., Rs. 55,256/- , filed an appeal before the Cooperative Tribunal, U.P., Lucknow. The Tribunal vide its order dated 17th June, 1998 allowed the appeal of Devendra Nath Mishra and set-aside the order of exchange passed against Devendra Nath Mishra by Deputy Registrar dated 7th July, 1995. The Bank filed an application to review the order dated 17th June, 1998 which too was rejected by the Cooperative Tribunal on 20" April, 2000. The petitioner in the meantime has attained the age of superannuation on 31st July, 1999. The Board of Directors of the Bank on 5th July, 2000 took a decision that entire amount be recovered only from the petitioner and Awadhesh Singh. The Bank sent the proposal to the Deputy Registrar for guidance and approval. The Deputy Registrar vide its order dated 30th September, 2000 approved the resolution of the Board dated 5th July, 2000. An order dated 13th February, 2001 has been passed by the Secretary/General Manager of the District Cooperative Bank taking the view that amount recovered from Devendra Nath Mishra, i.e., Rs. 55,256/- has to be returned to Sri Devendra Nath Mishra in view of the order of Cooperative Tribunal dated 17th June, 1998 along with 5.50% interest, hence the 50% of the said amount along with 5.50% be recovered from the gratuity of the petitioner as he has retired. The order dated 13th February, 2001 has been challenged in this writ petition.
4. Sri K.N. Mishra, learned Counsel for the petitioner, challenging the order dated 13th February, 2001 submitted that the said order has been passed without notice and opportunity to the petitioner and is liable to be set-aside on this ground alone. He further submits that petitioner having already retired on 31st July, 1999, there was no jurisdiction in the Bank to direct for recovery from the gratuity of the petitioner.
5. Sri Ajit Kumar Singh, learned Counsel for the respondents has supported the impugned order of the Secretary/General Manager of the Bank.
6. I have considered the submissions and perused the record.
7. The Deputy Registrar vide his order dated 7th July, 1995 passed under Section 68 had directed recovery of the balance amount of Rs. 6,00,000/- , which was looted on 26th July, 1993, after deducting the claim received from the Insurance of Rs. 4,00,812/- from three persons, i.e., Devendra Nath Mishra, 30%, petitioner 35% and Awadhesh Singh 35%. The order passed by the Deputy Registrar is still intact and the liability of the petitioner as assessed by the Deputy Registrar was only 35%. In the disciplinary proceedings against the petitioner although the Bank initially passed a resolution on 6th July, 1995 for making recovery from the petitioner and Awadhesh Singh to the extent of 50% each but the said order was modified by the Bank on 21st July, 1995 by reducing the liability of the petitioner only up to 35% of the balance amount. According to the order dated 21st July, 1995 passed by the Bank and in accordance with the order of surcharge dated 7th July, 1995, an amount of Rs. 64,466/- was to be recovered from the petitioner. The said amount was, in fact, recovered from the petitioner. Devendra Nath Mishra filed an appeal before the Cooperative Tribunal which was allowed on 17th June, 1998. The question to be considered in this writ petition is as to whether the amount which the Bank had to return to Devendra Nath Mishra in pursuance of the order of Cooperative Tribunal could have been validly recovered from the gratuity of the petitioner by the impugned order dated 13th February, 2001.
8. The first submission of the petitioner's counsel is that the order dated 13th February, 2001 has been passed by the Bank without giving any opportunity and notice to the petitioner. It has been specifically pleaded in paragraph 18 of the writ petition that the order dated 13th February, 2001 has been passed without giving any notice or opportunity to the petitioner. There is no specific denial in the counter affidavit to the averments made in paragraph 18 of the writ petition. The order dated 13th February, 2001 also does not indicate that notice or opportunity was given to the petitioner before passing the order. No order could have been passed by the Bank for recovery of any amount without giving any opportunity to the petitioner. The order dated 13th February, 2001 thus having been passed in violation of principles of natural justice is liable to be set-aside on this ground alone. However, I have proceeded to consider the second submission of the counsel for the petitioner also to test the validity of the order dated 13th February, 2001.
9. The Deputy Registrar vide order dated 7th July, 1995 passed under Section 68 has directed for recovery of only 35% of the balance amount from the petitioner which comes to Rs. 64,466/- . The said order has become final in so far as petitioner is concerned. The liability of the petitioner which was fixed as 35% of the balance amount remain unchanged. In the disciplinary proceedings against the petitioner by the Bank although by resolution dated 6th July, 1995 the Bank has initially resolved to recover 50% from the petitioner and 50% from Awadhesh Singh of the balance amount and order dated 13th July, 1995 was passed in pursuance thereof, however, the said order dated 13th July, 1995 was itself modified by the Bank on 21st July, 1995 reducing the liability of the petitioner only to the extent of 35% of the balance amount as per the order of Deputy Registrar passed under Section 68 of the Act dated 7th July, 1993. Thus in the disciplinary proceedings also against the petitioner decision of the bank was to recover only 35% of the balance amount from the petitioner. The fact that appeal of Devendra Nath Mishra was allowed and he was exonerated from liability of surcharge does not automatically put the liability of Devendra Nath Mishra on the petitioner. The order of the Deputy Registrar fixing the liability on the petitioner towards 35% being remain unchanged, the Bank was not justified in passing any order for recovery of the amount which was recovered from Devendra Nath Mishra. The petitioner has already retired on 31st July, 1999 and the recovery has been directed from the gratuity of the petitioner.
10. The petitioner is governed by the statutory rules. namely, U.P. Cooperative Societies Employees Service Regulations, 1975. Chapter VIII of the Regulations provides for provident fund, gratuity, security etc. Regulation 95 deals with Gratuity and Regulation 96 deals with Security. Regulations 95 and 96 of the said Regulations are 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 (i), a co-operative society may create Employees' Gratuity Fund.
96. Security.- (i) Employees of cooperative societies shall furnish such security as may be specified by the Registrar under Sub-section (1) of Section 120 of the Act. It shall be recoverable in lump sum or in such instalments as may be required by the Registrar.
(ii) Interest as admissible, on the saving bank account in the post office, shall be given on the amount of the security of the employee concerned.
(iii) When an employee ceases to be in the service of the society or dies, the security amount together with interest due shall be refunded to the employee and in the case of death, his heir, within a period of 3 months from the date of completion of audit following cessation of service or death:
Provided that the society shall deduct any claim or dues outstanding against such employee.
11. There is mark difference in the provisions of Regulations 95 and 96. With regard the amount of gratuity there is no provision for deducting any claim or dues outstanding against such employee whereas such provision is very much there in Regulation 96. In the Regulation 95, thus, there is no provision for making any deduction from the gratuity. The submission of counsel for the petitioner that after retirement no deduction can be made from gratuity is fully supported by the judgment of the Apex Court in Jena v. Board of Directors, O.S.F.C. and Ors. . The Apex Court in the said judgment laid down that there is no specific provision in the regulation for deducting any amount from provident fund, hence there is no legal authority for recovering the amount from provident fund on the basis of any departmental inquiry which continued even after retirement of the employee. Paragraphs 6 and 7 of the said judgment are extracted below:
6. It will be noticed from the abovesaid regulations that no specific provision was made for deducting any amount from the provident fund consequent to any misconduct determined in the departmental enquiry nor was any provision made for continuance of the departmental enquiry after superannuation.
7. In view of the absence of such a provision in the abovesaid regulations, it must be held that the Corporation had no legal authority to make any reduction in the retiral benefits of the appellant. There is also no provision for conducting a disciplinary enquiry after retirement of the appellant and nor any provision stating that in case misconduct is established, a deduction could be made from retiral benefits. Once the appellant had retired from service on 30.6.1995, there was no authority vested in the Corporation for continuing the departmental enquiry even for the purpose of imposing any reduction in the retiral benefits payable to the appellant. In the absence of such an authority, it must be held that the enquiry had lapsed and the appellant was entitled to full retiral benefits on retirement.
12. In the U.P. Cooperative Societies Employees Service Regulations, 1975, which governs the service condition of the petitioner, there is no provision for making any deduction from gratuity, more so when no proceedings have been drawn for making any deduction from gratuity after retirement of the petitioner, the submission of counsel for the petitioner that no deduction from the gratuity can be made after retirement of the petitioner, in facts of the present case, has substance.
13. In view of the foregoing discussions, the order dated 13th February, 2001 cannot be sustained and is hereby set-aside. Learned Counsel for the petitioner submitted that in pursuance of the order dated 13th February, 2001 the amount was withheld and has not been paid to the petitioner. The petitioner has retired on 31st July, 1999. There was no order on 31st July, 1999 for making any deduction from the gratuity. The order dated 13th February, 2001 having been quashed by this Court, the petitioner is entitled to payment of the amount of gratuity, which was withheld and subsequently deducted from the gratuity of the petitioner, with simple interest of 5.50% per annum from the date of retirement of the petitioner, i.e., the respondents shall make payment of the amount of gratuity, which has been withheld/deducted along with 5.50% simple interest to be calculated on the said amount with effect from 1st August, 1999. The respondent No. 1 is directed to make entire payment of the gratuity amount within a period of three month to the petitioner from the date of production of a certified copy of this order.
14. The writ petition is allowed accordingly. Parties shall bear their own costs.