Coal India Limited vs Tarak Nath Roy

Tarun Chatterjee, J.—This appeal is preferred against the judgment and/or order passed by a Learned Judge of this Court on November 17, 1996 in Company No. 9804(w) of 1995 by which the letter dated June 3, 1995 (Annexure ''H'' to the writ petition) issued by the Chairman/Managing Director of Eastern Coal Fields Limited forfeiting the entire amount of gratuity of the writ Petitioner/Respondent for the services rendered by him, was quashed and set aside in the above writ petition which was moved by the writ Petitioner/Respondent for the above relief. By the impugned order, the Learned Judge also directed the Authorities to pay the writ Petitioner/Respondent the entitled amount of gratuity under the Retirement Gratuity Scheme, 1974 (for executive Cadre employees) (In short ''Gratuity Scheme'') within six weeks from the date of judgment.

Feeling aggrieved by this order, the present appeal has been preferred at the instance of the Coal India Limited.

The facts leading to filing of this appeal may be summarised as follows:

On attainment of 58 years of age, the writ Petitioner/Respondent was superannuated from service with effect from January 31, 1994. At the time of superannuation, he was holding the post of Deputy Chief Mining Engineer/Area Manager, in E-6 Grade and posted at planning construction development of Satgram Area of the Eastern Coal Fields Limited. Admittedly, the service conditions of the writ Petitioner/ Respondent were governed by the Rules and Regulations framed by Coal India Limited. The grievance of the writ Petitioner/Respondent was that although he was superannuated with effect from January 31, 1994, the Authorities had not paid him the gratuity despite applications made by him on diverse occasions. It is not in dispute that the payment of gratuity of Officers of Coal India Limited and Eastern Coalfields Limited is governed by Coal Mines Authority Limited under Gratuity Scheme. By a Memo dated August 31, 1993 issued by the Deputy Financial Manager, Eastern Coal Fields Limited, an application form of gratuity for the writ Petitioner/Respondent was sent to the General Manager, Satgram Area for getting the said form filled up by the writ Petitioner/Respondent and countersigned by the controlling officer and then to send the said application to the office of the Deputy Financial Manager, Eastern Coalfields Limited well in advance before retirement. It is not in dispute that the writ Petitioner/Respondent duly filled in the application form for payment of gratuity which he was entitled to under Rule 4(A) of the Gratuity Scheme. A certificate was also issued by the General Manager, Satgram Area, Eastern Coalfields Limited dated 23rd November, 1993 in favour of the writ Petitioner/Respondent for the purpose of meeting the requirement under the provisions of Gratuity Scheme. By a letter dated June 27, 1994, the Deputy Financial Manager (Administration) of Eastern Coalfields Limited by his reference dated June 27, 1994 intimated the General Manager, Satgram Area that the competent Authority had sanctioned an amount of Rs. 1,00,000.00 lakh towards payment of gratuity to the writ Petitioner/Respondent. However, in the said letter, it was made clear that the payment might be made after obtaining ''No Demand Certificate'' from all concerned. Further in the said reference, it was also made clear that no vigilance case was pending against the writ Petitioner/Respondent. Although the competent Authority sanctioned the amount of Rs. 1,00,000.00 lakh towards payment of gratuity to the writ Petitioner/Respondent as noted herein earlier, the said gratuity amount was not paid by the Appellants. While the writ Petitioner/Respondent found that the gratuity amount was not released in his favour although sanctioned by the competent authorities, the representations were made by him. Eventually by a letter dated August 2, 1994 the General Manager, Satgram Area, Eastern Coalfields Limited intimated the writ Petitioner/Respondent in the following manner:

I have noted the contents of your letter dated July 18, 1994 addressed to me, in connection with the payment of your gratuity dues.

I regret to inform you that after scrutiny of several payment vouchers of Kalidaspur Project, it has transpired that huge sum of money has been misappropriated from the colliery by the Colliery cashier in collusion with some of the employees and in all such cases it also appears that the payment has been sought to be made to persons whose names and U. Man No. mentioned in the respective petition and approved by you for necessary payment as advances, were never employed at Kalidaspur Project. As such, the aforesaid irregularities so far detected as an adverse reflection on your performance as Dy. General Manager, Lalidaspur project in the relevant time.

You can well appreciate that for the reason stated above the Area Management is not in a position to give it''s clearance as regards the payment of gratuity.

Precisely, it is this letter issued by the competent Authority which was challenged by the writ Petitioner/ Respondent in the writ petition in which the writ Petitioner/Respondent has prayed for a direction upon the competent Authority to release the gratuity of Rs. 1,00.000.00 lakh in his favour at an early date.

Mr. Garai, appearing on behalf of the Coal India Limited has sought to argue that as it appears from the letter that ''No Demand Certificate'' should be required to be issued by all concerned for release of gratuity amount in favour of the writ Petitioner/Respondent and in view of the aforesaid letter the said gratuity could not be released, the Trial Court was not justified in not rejecting the plea of the writ Petitioner/Respondent that he is entitled to gratuity under the Gratuity Scheme as huge sum of money was misappropriated from the colliery by the colliery cashier in collusion with some of the employees and in all such cases the payment was sought to be made to persons whose names and U. Man No. mentioned in the respective petition were approved by the writ Petitioner/Respondent for necessary payment as advances, were never employed at Kalidaspur Project. According to Mr. Garai, in view of such irregularities and in view of the allegation that huse sum of money was misappropriated, the writ Petitioner/ Respondent was not entitled to release of his gratuity money of Rs. 1,00,000.00 lakh.

We are unable to support the contention of Mr. Garai. The writ Petitioner/Respondent at the relevant point of time was holding. the post of Deputy Chief Mining Engineer/Area Manager in E-6 Grade. Long before his retirement and in terms of provisions of Gratuity Scheme, 1974, an application form duly filled in by the writ Petitioner/Respondent was filed by the writ Petitioner/Respondent on August 31, 1993. A certificate was also issued by the General Manager, Satgram Area, Eastern Coalfields Limited dated November 23, 1993 in favour of the writ Petitioner/Respondent for the purpose of meeting the requirement under the provisions of Gratuity Scheme. On the basis of the no demand certificate and also the application which was duly filled in for release of gratuity, the Deputy Financial Manager (Administration) of Eastern Coalfields Ltd. by a reference dated June 27, 1994 intimated the General Manager, Satgram Area that the competent Authority had sanctioned an amount of Rs. 1,00,000.00 lakh towards payment of gratuity to the writ Petitioner/ Respondent. It was further intimated in the said reference that the aforesaid payment should be made after obtaining no demand certificate from all concerned. It was also mentioned in the said reference that no vigilance case was pending against the writ Petitioner/Respondent. As noted herein earlier, the writ Petitioner/Respondent retired on January 31, 1994. Long after his retirement, the aforesaid letter dated August 2, 1994 was written by the General Manager, Satgram Area, Eastern Coalfields Limited informing the writ Petitioner/Respondent that huge sum of money was misappropriated from the colliery by the colliery cashier in collusion with some of the employees and in all such cases, the payment was sought to be made to persons whose names and U. Man No. mentioned in the respective petition and approved by the writ Petitioner/ Respondent for necessary payment as advances, were never employed at Kalidaspur Project and, therefore, in view of the said irregularities which reflected the performance of the writ Petitioner/Respondent, the question of giving no demand certificate from their and cannot arise at all. From the aforesaid/letter, it is, therefore, clear that only on the aforesaid letter, the release of the gratuity money of the writ Petitioner/ Respondent was stopped. In our view, no reliance could be placed in the aforesaid letter. Admittedly, the writ Petitioner/Respondent worked with the Coal India Limited for a long time. It is also an admitted position that there is no adverse report against him at the time of retirement and also subsequent to the retirement no vigilance case was pending against the writ Petitioner/ Respondent. The letter dated August 2, 1994 was issued long after no demand certificate given by the General Manager and long after the retirement of the writ Petitioner/Respondent and also after issuance of the sanction letter in favour of the writ Petitioner/Respondent by the competent Authority informing him that a sum of Rs. 1,00,000.00 lakh was sanctioned so far as payment of gratuity of the writ Petitioner/Respondent was concerned. We have carefully perused the aforesaid letter by which the gratuity money was not released in favour of the writ Petitioner/Respondent. From a perusal of the same, it does not appear that any allegation directly has been made by the Authorities against the writ Petitioner/ Respondent excepting that an allegation was made by the Authorities against the writ Petitioner/Respondent to the extent that payment was sought to be made to persons whose names and U. Man No. mentioned in the respective petition and approved by the writ Petitioner/ Respondent for necessary payment as advances, were never employed at Kalidaspur Project. It is not in dispute that no proceedings either against the writ Petitioner/Respondent or against the persons named in the said letter were started by the Authority for realisation of the amount that was misappropriated. Mr. Garai, appearing on behalf of the Appellants also submits before us on instruction that till today no proceedings have been started against the cashier who had misappropriated in collusion with some of the employees nor any proceeding was initiated against the writ Petitioner/Respondent. It cannot-be disputed that only by making an allegation against an employee for misappropriation without proving such case of misappropriation, release of gratuity could be withheld. It is difficult to accept that only by making an allegation and without proceeding further with the said allegation, the gratuity of an employee can be withheld by the Authorities as it is well-settled that allegation of misappropriation cannot be said to be a proof of the same. Therefore, in view of the aforesaid admitted fact which could not be denied by Mr. Garai appearing for the Appellants that no steps could be taken either against the writ Petitioner/ Respondent or against the other persons named in the aforesaid letter, the question of withholding gratuity on the basis of the said letter, in our view, cannot arise at all. It is not in dispute that Rule 4 of the Gratuity Scheme, 1974 provides for payment and/or release of gratuity money of an employee who would be entitled to such gratuity if he had done good, efficient and faithful service in executive cadre and who had completed 5 years of continuous qualifying service but shall be payable on the termination of employment under any of the following conditions:

(i) Superannuation;

(ii) Discharge in the event of the post being abolished;

(iii) Permanent incapacity due to bodily or mental infirmity;

(iv) Death while in service of the Company, and (v) Voluntary Retirement, Resignation or Termination of employment for any other reason;

Provided that in the event of death or permanent incapacity, the condition of 5 years qualifying service shall not apply.

Provided further that Company shall always have the right to recover from the Gratuity admissible under the Scheme any amount which may be due from the employee.

Rule 4B, however, makes a restriction when such gratuity payment can be withheld by the Authorities which runs as follows:

(i) The Gratuity of an employee whose services have been terminated for any act, willful omission or negligence causing any loss or damage to the Company or destruction of property belonging to the Company shall be forfeited to the extent of loss, damage or destruction.

(ii) The gratuity payable to an employee shall be wholly for feed if the service of the employee has been terminated for misconduct, insolvency or inefficiency.

(iii) Gratuity Payable to an employee against whom departmental proceedings are contemplated or pending at the time of resignation/retirement etc. should be withheld and authorised only after the conclusion of proceedings and issue of final order thereon.

(iv) Gratuity of an employee may be forfeited wholly or partly as per final order of the disciplinary authority after being withheld under 4(B)(iii) above.

From a plain reading of the aforesaid Rule being Rule 4(B) of the Gratuity Scheme, we do not find any ground on which release of the payment of the gratuity of the writ Petitioner/Respondent could be forfeited as on a plain reading of four Sub-rules of Rule 4(B), we do not find that the writ Petitioner/Respondent''s case can come within the purview of any of the aforesaid sub-rules of Rule 4(B). Admittedly, the writ Petitioner/Respondent had retired from service due to superannuation. His service was not terminated for any misconduct or moral aptitude. No charge was framed against him and no chargesheet was, however, issued against him during the tenure of his service for any misconduct as. per service rules of the Coal India Limited. No vigilance case was pending against the writ Petitioner/Respondent up to the date of his retirement. That being the admitted position, it is therefore, difficult to conclude that the writ Petitioner/Respondent would not be entitled to release of his gratuity money which was sanctioned but withheld in view of Annex. ''H'' to the writ petition. As found earlier that only by issuing a letter complaining association of the writ Petitioner/Respondent in the misappropriation of fund of the colliery concerned would not entitle the Authorities to forfeit the gratuity payment in terms of Rule 4(B) of the Gratuity Scheme, 1974 in the absence of any proof of the same. For the reasons aforesaid, no reliance could be placed on the aforesaid letter being Annex. ''H'' to the writ petition and, therefore, in our view, the case of the writ Petitioner/Respondent does not come within the purview of Rule 4(B) of the Gratuity Scheme and, therefore, the writ Petitioner/Respondent is entitled to release of his gratuity money which was sanctioned by the competent Authority forthwith.

10 Accordingly, we do not find any merit in this appeal and the appeal is dismissed.

There will be no order as to costs.

Urgent Xerox certified copy of this judgment be given to the parties, if applied for.

Hrishikesh Banerji, J.

I agree.