Dr. O.S. Ramachandraiah Vs Jawaharlal Nehru Technological University

“to issue a writ, order or direction, particularly one in the nature of writ of Mandamus directing the first respondent to consider the petitioner's case for appointment as Director notionally from the date when the post fell vacant or was filled up, on the basis of his research papers, or at least from the date when he acquired his Ph. D. with all consequential benefits including notional fixation of pay; and also to pay him the withheld amount of Rs. 98,220/- from his Gratuity and also interest on GPF and pensionary benefits i.e, Encashment of Earned Leave, FBFS, Gratuity etc., and on payment of arrears and pass ….”

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2. ( a) Petitioner possessed a Master's Degree in Chemistry (M.Sc.)

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and later acquired a Ph.D. in the year 2003. He was initially appointed as Junior Research Assistant in Oil Technological Research Institute (for

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brevity, “OTRI”), which was under the control of Department of Industries,

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Government of Andhra Pradesh. Later, he got promoted as Senior Scientific Assistant, OTRI.

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(b) Eventually, OTRI came to be absorbed into Jawaharlal Nehru Technological University (for brevity “JNTU”) in pursuance to G.O.Ms. No.199, Industries, Commerce and Power (IF.CELL) Department, dated 18.04.1985. Under the said transfer scheme, all the assets got transferred; besides, even the existing employees were also given option to either choose the services of JNTU or, in default, they would be absorbed into the Department of Industries, Government of Andhra Pradesh.

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(c) Petitioner stated to have exercised the option of serving in JNTU. By proceedings, dated 06.04.1991, general orders were issued whereby all those employees who opted to work with JNTU were accordingly recognized to work with JNTU with effect from 01.04.1985. By proceedings, dated 04.10.1991, petitioner was specifically assigned to JNTU.

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(d) Petitioner claimed that he has been discharging functions as Senior Scientific Assistant, which incidentally also requires assisting the teaching faculty and conducting special classes to the students. That being so, based on proceedings, dated 23.09.1998, stated to have been issued by the Government of Andhra Pradesh to the Registrar of JNTU, by referring to Statute XIV(25)(2), the services of those who have been absorbed from OTRI were sought to be superannuated on attaining the

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age of 58 years. Eventually, as petitioner was sought to be superannuated on attaining the age of 58 years, he preferred W.P.No.10053 of 2004. As this Court has refused to grant interim order, he stated to have preferred W.A.No.1138 of 2004.

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(e) While hearing the said Writ Appeal, when it is brought to the notice of the Court that the Executive Council passed a resolution, dated 28.12.1990, proposing to treat the employees of OTRI as distinct category and fixed the age of superannuation at 58 years on par with the other nonteaching staff of University, and further that an amendment to statute has been given effect to, both writ petition as well as writ appeal came to be dismissed as withdrawn by order, dated 30.08.2004, with liberty to seek appropriate remedies insofar as the amendment made to the statute. Further, petitioner also claimed that though he was eligible to be considered for promotion to the post of Director, OTRI, the respondent University has denied him further promotion, despite acquiring the eligibility by holding Ph.D. in chemistry.

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(f) Petitioner was made to retire from service on attaining age of 58 years. Petitioner has resisted superannuating him on attaining age of 58 years and also instituted W.P.No.18433 of 2004. One of the prayers in the said writ petition also dealt with his entitlement for promotion to the post of Director, OTRI. The issues raised in the said writ petition are being considered independently.

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(g) By impugned proceedings, dated 27.02.2006, the respondents have passed orders by which the pensionary benefits came to be sanctioned, however, an amount of Rs.98,220/- came to be ordered for recovery from the retirement gratuity. Assailing the same, the present writ petition is filed.

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3. This Court has passed interim order, dated 08.10.2007, directing the respondent University to pay the withheld amount of Rs.98,220/- within a period of three weeks. It is stated that so far, the respondents have not complied with the said order.

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4. The respondents have filed counter-affidavit trying to justify the impugned action of withholding the amount. It is stated that in the process of conducting Golden Jubilee Celebrations in the year 1999, petitioner, who was supposed to look after the accounts of the event along with another officer, failed to render the expenditure accounts, therefore, the Local Fund Audit found that an amount of Rs.1,96,440/- came to be misappropriated and ordered for recovery from concerned officers. In that view of the matter, the respondent University has appointed a Committee to conduct enquiry and take appropriate action. Petitioner was issued notice, dated 13.10.2005, for which, he had submitted explanation and thereafter, by impugned order, dated 27.02.2006, an amount of Rs.98,220/- came to be ordered for recovery from the retirement gratuity

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in terms of Section 4(6)(a) of the Payment of Gratuity Act, 1972 (for short, “Gratuity Act”).

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5. Heard Sri M.Srikanth, learned counsel for the petitioner; Sri D. Krishna, learned Standing Counsel for JNTU, and Sri S.Satish Babu, learned counsel appearing for the respondents.

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6. The first part of prayer in the writ petition relating to petitioner’s entitlement for appointment as Director, by efflux of time, and that he already was superannuated, renders infructuous. The writ petition, therefore, survives to the extent of challenge laid to the action of respondents in withholding an amount of Rs.98,220.- from the retirement gratuity and also claim of interest on G.P.F., pensionary benefits etc.

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7. Learned counsel for the petitioner would contend that the impugned order to the extent of ordering withholdment of Rs.98,220/- neither preceded with any show-cause nor enquiry and merely order came to be communicated, which is clearly in violation of principles of natural justice. By way of counter-affidavit, the respondents tried to justify the aforesaid withholdment by referring to Section 4(6)(a) of the Gratuity Act, which does not apply to the case on hand. Section 4(6)(a) of the Gratuity Act applies only in the eventuality of termination from service followed by ordering recovery on account of any damage or loss suffered, that too upon establishing the same. In the present case, inasmuch as petitioner came

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to be retired on attaining age of superannuation and that it was not a case of termination and that too without there being any assessment of damage or loss by conducting proper enquiry, respondents would not have invoked Section 4(6)(a) of the Gratuity Act. In support of aforesaid submission, reliance has been placed on the judgment of the Hon’ble Apex Court in Jyotirmay Ray v. Field General Manager, Punjab National Bank¹ .

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8. Learned standing counsel for the respondent University tried to support the impugned order, dated 27.02.2006, and reiterated the averments made in the counter-affidavit.

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9. Perusal of impugned order goes to show neither it refers to issuance of any show-cause notice nor enquiry conducted before taking the decision of withholdment of Rs.98.220/- from the retirement gratuity amount. The respondents tried to justify their action in the counter-affidavit by referring to issuance of notice, calling upon petitioner to submit explanation and finally passing the order in terms of Section 4(6)(a) of the Gratuity Act. Except for stating the above, respondents have not annexed any documents as such in that regard. Be that as it may, the impugned order proposing to withhold the amount is required to be tested with reference to Section 4(6)(a) of the Gratuity Act.

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1 2023 SCC OnLine SC 1452

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10. As rightly contended by the learned counsel for the petitioner that in all and every cases, the powers under Section 4(6)(a) of the Gratuity Act cannot be invoked, only in cases where the proposed action emanates from the termination of services and upon quantifying the damage and loss, the deduction or withholdment of gratuity can be resorted to. In the present case, there is no specific order dealing with withholding of gratuity after providing opportunity of hearing to the petitioner. While settling the pensionary benefits, a passing remark has been made that withholdment is being made, which clearly is in violation of principles of natural justice. Though this Court, by way of interim order, directed the respondents to pay the said amount, it is stated that the same has not been settled so far. Section 7(3A) of the Gratuity Act postulates that delayed payment of gratuity has to be settled along with interest. Even the Hon’ble Apex Court in the judgment in Jyotirmay Ray¹ held so.

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11. In that view of the matter, the writ petition has to succeed to the extent of setting aside the impugned order insofar as withholdment of Rs.98,220/-. The respondents are directed to pay the said amount along with interest at the rate of 10% p.a. from the date when the amount fell due within a period of eight weeks from the date of receipt of a copy of this Order.

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12. Accordingly, this writ petition is partly allowed. No order as to costs.

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As a sequel, miscellaneous petitions pending consideration, if any,

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in this case shall stand closed.

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_____________________________ JUSTICE CHALLA GUNARANJAN