Allowed

Kusum Rani Srivastava and Another v. Madhyanchal Vidyut Vitran Nigam Ltd. Thru. Manging Director Lko. and 5 Others

Allahabad HC10 May 2023/1418/2023

Case brief

AI extract

What is this about?

In this writ petition, the Allahabad High Court (Lucknow Bench) held that an employer cannot withhold gratuity payable upon retirement merely due to a subsequent order demanding damages for irregularities, as such circumstances do not fall within the forfeiture exceptions under Section 4(6) of the Payment of Gratuity Act.

What did the court decide?

The respondents are directed to pay the granduity payable to the petitioner along with interest at 8% p.a. within four months.

Kusum Rani Srivastava and Another Vs… — Pension and Retirement Benefits | Allahabad HC (2023)

¶1

Neutral Citation No. - 2023:AHC-LKO:32098

¶2

Court No. - 17

¶3

Case :- WRIT - A No. - 1418 of 2023

¶4

Petitioner :- Kusum Rani Srivastava And Another Respondent :- Madhyanchal Vidyut Vitran Nigam Ltd. Thru. Manging Director Lko. And 5 Others Counsel for Petitioner :- Kaushal Kishore,Saurabh Upadhyay Counsel for Respondent :- Alok Saran

¶5

Hon'ble Pankaj Bhatia,J.

¶6

Heard learned counsel for the petitioners and Sri Ashutosh Verma holding brief of Sri Alok Saran, learned counsel for the respondents.

¶7

The present petition has been filed by the petitioners claiming that the husband of the petitioner No.1 was employed with the respondents and retired on 31.12.2003, however his gratuity has not been paid by the respondents and thus, the present petition.

¶8

Learned counsel for the respondents, based upon instructions, argues that after retirement of the husband of the petitioner No.1 on 31.12.2003, an order came to be passed on 02.03.2005 whereby it was directed that the husband of the petitioner No.1 was liable to pay the damages amounting to Rs.95,94,500/- on account of certain irregularities. He argues that on account of the said demand dated 02.03.2005, the gratuity was not paid to the husband of the petitioner No.1. He further argues that against the order dated 02.03.2005, the husband of the petitioner No.1 had approached the State Public Services Tribunal (hereinafter referred to as, "the Tribunal") vide Claim Petition No.759 of 2009 which is still pending and the petitioner No.1 has been substituted in place of her husband who died in the year 2018.

¶9

Learned counsel for the petitioners argues that against the order dated 02.03.2005, the husband of the petitioner No.1 has initiated proceedings which are pending before the Tribunal, however he argues that despite the order dated 02.03.2005, the respondents cannot withhold the gratuity which was payable to the husband of the petitioner No.1 on his retirement on 31.12.2003. He takes me to the provisions of the Payment of Gratuity Act, 1972 (hereinafter referred to as, "the Act") to argue the matter in terms of the mandate of the Act. He submits that Section 4(1) of the Act clearly mandates that the gratuity is payable on retirement. The only restriction is contained in Section 4 (6) of the Act which prescribes the forfeiture of the gratuity only when the services of the employee have been terminated.

¶10

Section 4 (1) and Section 4(6) of the Act are quoted hereinbelow:-

¶11

"Payment of gratuity.-(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,-

¶12

(a) on his superannuation, or

¶13

(b) on his retirement or resignation, or

¶14

(c) on his death or disablement due to accident or disease:

¶15

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:

¶16

Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.

¶17

(6) Notwithstanding anything contained in sub-section (1), -

¶18

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.

¶19

(b) the gratuity payable to an employee may be wholly or partially forfeited

¶20

(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or

¶21

(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment."

¶22

Considering the mandate of Section 4 of the Act, it is clear that the payment of gratuity is to be done immediately on retirement and can be stopped/withheld only when the conditions stipulated under Section 4(6) of the Act are existing.

¶23

In the present case, the order dated 02.03.2005 (SA-1), clearly does not fall within the exceptions as carved out under Section 4(6) of the Act and as noted, thus, the stand of the respondents in withholding the payment of gratuity, to which the husband of the petitioner No.1 was entitled, is wholly unjustified and arbitrary. Accordingly, the writ petition is allowed .

¶24

The respondents are directed to pay the gratuity which was payable to the petitioner along with the interest as specified under Section 7(3A) of the Act @8% per annum from the 30th day of retirement, to be more precise from 31.01.2004 till actual payment/realization. The amount of gratuity as directed above along with the interest shall be paid to the petitioner No.1, being the wife, within a period of four months from today.

¶25

It is made clear that this Court is not going into the question of validity of the order dated 02.03.2005,which is subject matter of dispute before the Tribunal.

¶26

Learned counsel for respondent argues that the petition filed by the petitioners is liable to be dismissed on account of inordinate laches. He further argues that in terms of the order dated 02.03.2005, the amount as ascertained against the husband of the petitioner No.1 is huge amounting to Rs.95,94,500/- and thus, this Court should not exercise the discretionary remedy in favour of the petitioners. He further argues that the interest may not be awarded.

¶27

The said submission of the counsel for the respondent cannot be accepted as, the duty of payment of gratuity, is statutory duty cast by virtue of the Act. Similarly, the prayer for non-payment of interest, also cannot be accepted as the interest is itself provided for under Section 7(3A) of the Act itself and thus, it is a statutory interest. I have already dealt with the third contention with regard to the order dated 02.03.2005.

¶28

Order Date :- 10.5.2023 Saurabh Yadav/-

¶29

Digitally signed by :- SAURABH YADAV High Court of Judicature at Allahabad, Lucknow Bench

Kusum Rani Srivastava and Another v. Madhyanchal Vidyut Vitran Nigam Ltd. Thru. Manging Director Lko. and 5 Others

Case brief

What is this about?

What did the court decide?

Kusum Rani Srivastava and Another v. Madhyanchal Vidyut Vitran Nigam Ltd. Thru. Manging Director Lko. and 5 Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Avinash Sharma Vs State of U.P. Thru Prin.Secy. Higher Edu. Lucknow and Ors.

Vijay Kumar Vs Oriental Insurance Company Ltd. Thru Chairman-Cum-M.D. and Anr.

Rahul Pandey Vs State of U.P. Thru. Addl. Chief Secy. Deptt. Basic Education, Lko. and 4 Others

Rajendra Prasad Vs State of U.P. Thru Prin.Secy.Basic Edu. Lukcnow and Ors.

Pooja Soni Vs State of U.P. Thru. Prin. Secy. Basic Edu. Lko. and 2 Others

Deepesh Kumar Mishra and Others Vs State of U.P. Thru. Addl. Chief Secy. Deptt. of Basic Education Lko. and Others