Dismissed

Project Officer,Bachra Project v. Union of India And Ors.

Jharkhand HC20 Mar 2023WPC/1527/2005

Case brief

AI extract

What is this about?

The High Court of Jharkhand dismissed a writ petition filed by the Central Coalfields Limited challenging an appellate order that directed payment of gratuity to the legal heir of a deceased employee. The Court held that without a specific direction in the arbitration award to deduct penal rent, the employer cannot adjust such dues against the gratuity and rejected the claim for adjustment from th

What did the court decide?

The writ petition was dismissed; the appellate order directing payment of gratuity with interest was upheld.

Project Officer,Bachra Project Vs Union of… — Pension and Retirement Benefits | Jharkhand HC (2023)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI

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W.P. (C) No. 1527 of 2005

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The Project Officer, Bachra Project, M/s. Central Coalfields Limited P.O. Bachra, District-Chatra … … Petitioner

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Versus

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Union of India

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Assistant Labour Commissioner (Central) Ranchi-cum-Controlling Authority under the Payment of Gratuity Act, 1972 E-191/Sector, H.E.C. Colony, P.O. Dhurba, District-Ranchi

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The Regional Labour Commissioner (Central) Dhanbad and Appellate Authority under the Payment of Gratuity Act, 1972

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Smt. Zeera Devi, W/O Late Chandra Kumar Singh, Ex-UDC of Bachra Colliery M/s. Central Coalfields Limited, At Bachra Colliery, P.O. Bachra, District-Chatra

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… … Respondents

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CORAM :HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

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For the Petitioner : Mr. A.K. Das, Advocate Ms. Swati Shalini, Advocate For the Respondents : None

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15 /20.03.2023 Heard Mr. A.K. Das, learned counsel appearing on behalf of the

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petitioner along with Ms. Swati Shalini, Advocate.

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2. Nobody appears on behalf of the respondents.

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3. This writ petition has been filed for the following reliefs:-

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“ That the instant writ application is for the issuance of a writ of or in the nature of certiorari or any other appropriate writ, order or direction for quashing the Appellate order dated 27. 12. 2004 (Annexure-7) passed by the Appellate Authority (Respondent No. 3) and the Order dated 30. 04. 2004 passed by the Respondent No. 2(Annexure-5) whereby and whereunder the claim of the Respondent No. 4 relating to payment of Gratuity to her deceased husband, who had been dismissed from service on 15. 06. 90 and despite specific direction to handover possession of quarter, had continued to occupy the quarter which was ultimately vacated after 8 years that on 19. 10. 2001 has been allowed holding with the adjustment of penal rent of the quarter by the Central Coalfields Limited, is unauthorised and accordingly a direction has been issued for payment of the Gratuity Amount of Rs.43,604.40 with interest @6% from the date of filing of the application in Form „N‟; as also for the issuance of such other writ, order or direction as may appear just and proper for doing equitable justice to the petitioner.”

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Arguments of the petitioner.

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4. Learned counsel for the petitioner submits that the husband of the petitioner was dismissed on 15.06.1990 and thereafter he died on 26.06.1993. He further submits that the matter regarding dismissal of

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the husband of the petitioner was subject matter of arbitration and an award dated 14.02.1997 was passed wherein it was observed that there were some illegalities in the matter of termination but the learned Arbitrator did not choose to reinstate the husband of the petitioner, rather directed for payment of gratuity by calculating one month’s salary for each year till his age of superannuation.

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5. The learned counsel submits that thereafter a petition was filed before the Authority under Payment of Gratuity Act and the specific case of the petitioner before the Authority was that the petitioner is entitled for penal rent for the period the private respondent had retained the quarter. He has relied upon a judgment passed by the Hon’ble Supreme Court reported in (2001) 6 SCC 596 (Wazir Chand versus Union of India and Others) and he submits that the penal rent is adjustable against death cum retiral dues. He has also relied upon a judgment passed by this court passed in L.P.A. No. 15 of 2013 and submits that this court has upheld the power of the Authority to deduct penal rent from the payable gratuity amount.

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6. Learned counsel has also submitted that a notice dated 21.09.2001 was issued to the private respondent quantifying the penal rent as Rs. 1,78,160/- stating that the same was adjustable against the gratuity payable to the husband of the private respondent and she was directed to evict the quarter. Learned counsel has also relied upon one more judgment passed in the case of Project Officer versus Regional Labour Commissioner, Central in W.P. (C) No. 2178 of 2006 decided on 23.07.2012 wherein this court while referring to the aforesaid judgment passed by the Hon’ble Supreme Court in the case of Wazir Chand has held that the employer is at liberty to adjust the penal rent due to the employee for the period of unauthorized occupation of his quarter from the outstanding post retiral dues of the employees gratuity amount. Learned counsel has relied upon another judgment reported in (2005) 5 SCC 245 para No. 17 , to submit that there is a right to effect recovery of dues from any officer without his consent from gratuity.

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7. Learned counsel for the petitioner has submitted that there are two points involved in the present case. Firstly, once the employee was terminated, no gratuity at all was payable and secondly if any

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amount was payable the penal rent was adjustable. Operative portion of the award as quoted in para 8 of the writ petition is as under: -

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“ The workman concerned cannot claim reinstatement in service with any consequential benefits. However, in case, person concerned have not been paid the Gratuity by the management they should pay their Gratuity. But, since the procedure adopted in the Disciplinary Action are not being fully correct, the concerned workmen are entitled to some reliefs. Accordingly, we direct the management to pay a sum of rupees equivalent to one Month‟s pay per Year of service from the date of dismissal of each aforesaid concerned workmen till their actual date of superannuation on attaining the age of 60 Years or the date of death, whichever is earlier at the rate of gross pay drawn by them immediately prior to their dismissal.”

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This is our Award.”

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8. However, during the course of argument, learned counsel has fairly submitted that the order passed by the Authority under Payment of Gratuity Act, which was subject matter of appeal in Annexure-7 and is impugned order has not been filed in the present proceedings nor the award which was passed on 14.02.1997 has been filed for perusal and consideration of this court. It is further not in dispute that upon perusal of annexure-2 dated 21.09.2001, there is no reference of any earlier notice issued to the private respondent or her husband to evict the quarter. It simply says that penal rent is to be adjusted as the husband of the petitioner was terminated w.e.f. 15.06.1990 and the quantum of penal rent was assessed for the period from 15.06.1990 to 15.09.2001 and it was also mentioned that if the private respondent did not vacate the quarter, the appropriate steps would be taken under the provisions of Public Premises (Eviction of Unauthorized Occupants) Act, 1971. Admittedly, as per the records no proceeding was initiated under the provisions of Public Premises (Eviction of Unauthorized Occupants) Act, 1971 and the private respondent had evicted the quarter on 19.10.2001.

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Findings of this court

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9. It is not in dispute that the husband of the private respondent was in the service of the petitioner who was dismissed from service on 15.06.1990. The dismissal letter is dated 15.06.1990 which also contained direction to vacate the company’s quarter within 15 days failing which steps were to be taken to enforce the right of the petitioner in an appropriate manner as admissible in law and with a

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further rider that the dues will be settled when commitments have been checked. He expired on 26.06.1993 without getting gratuity amount. The operative portion of the order of dismissal is quoted as under:-

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“ Sri Chandra Kumar Singh, UDC, DG, Sct. Ashok Area, Bachra is hereby advised to return any articles or property of CCL in his possession to Project Officer, DG Set, Ashok Area, Bachra and handover vacant possession of the quarter under his occupation to Asstt. Security Officer, Bachra, within 15 days of issue of this order. If he fails to do so, steps will be taken to enforce the rights of CCL against him in this respect in an appropriate manner as admissible under law. His dues will be settled when his commitments have been checked. ”

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10. Thus, the consequences of failure to vacate the quarter including that the dues of the husband of the petitioner were to be settled when his commitments have been checked was apparent from the order of dismissal.

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11. The order of dismissal of the husband of the petitioner along with other persons was subject matter of arbitration which resulted in an award passed by joint arbitrators on 14.02.1997 . The award also mentioned about the entitlement of the employees/ deceased employees. The order of dismissal clearly mentioned about direction to vacate the quarter within 15 days and also the consequences of not abiding by such direction but the award was completely silent on this point. Upon perusal of the operative portion of the award as quoted above it appears as follows: -

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i. The workman concerned cannot claim reinstatement in service with any consequential benefits.

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ii. In case, person concerned was not paid the Gratuity by the management they should pay their Gratuity.

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iii. Since the procedure adopted in the Disciplinary Action were not fully correct, the concerned workmen were held entitled to some reliefs.

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iv. The management was directed to pay a sum of rupees equivalent to one Month‟s pay per Year of service from the date of dismissal of each workman till their actual date of superannuation on attaining the age of 60 Years or the date of death, whichever was earlier at the rate of gross pay drawn by them immediately prior to their dismissal.

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12. The award has not been filed with the writ records. However considering the order of dismissal of the husband of the petitioner it is clear that dismissal order mentioned about dismissal as well as

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vacation of quarter and also consequences of not abiding with such direction but the award is completely silent with regard to vacation of quarter / recovery of penal rent etc. It is also not clear as to whether the petitioner had ever raised any such issue before the learned arbitrator though the letter of dismissal covered dismissal as well as vacation of quarter. The fact also remains that the award on the one hand held that the workmen cannot claim reinstatement in service with any consequential benefits and also held that the procedure adopted in the Disciplinary Action were not fully correct, the concerned workmen were held entitled to some reliefs i.e

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gratuity and,

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one Month’s pay per Year of service from the date of

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dismissal till actual date of superannuation or the date of death, whichever was earlier.

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13. The aforesaid award neither contained any direction to evict the quarter nor contained any direction to adjust or realize the penal rent right from the date of order of dismissal i.e 15.06.1990. Accordingly, the argument of the petitioner that they were entitled to adjust penal rent from the date of dismissal i.e 15.06.1990, is devoid of any merit.

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14. The very fact that procedural illegality was found in the matter of dismissal and the employees having retired/deceased, were granted appropriate relief in terms of gratuity and also some pay till date of death /superannuation, it cannot be said that continuation of occupation of quarter beyond the date of dismissal i.e 15.06.1990 was illegal and the liability to pay penal rent stood from 15.06.1990 stood admitted and was realizable by way of adjustment from gratuity. Considering the nature of award, it cannot be held that the penal rent sought to be realized was an admitted amount.

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15. After evicting the quarter, the private respondent filed application in Form-N before the Controlling Authority on 11.12.2003 for getting gratuity amount of her late husband in terms of the arbitral award dated 14.02.1997 and also claimed interest. The authority under the provisions of Payment of Gratuity Act directed for payment of gratuity in terms of the award and also interest on payment of gratuity w.e.f. 14.02.1997 i.e. from the date of arbitral award, though the

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application in form-N was filed only on 11.12.2003. No direction was issued for adjustment of rent/penal rent from the payable amount of gratuity.

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16. The petitioner filed appeal before the appellate authority on the ground that controlling authority under the Payment of Gratuity Act had condone the delay in filing application without giving any reason and had also allowed interest w.e.f. 14.02.1997 i.e. from the date of arbitral award whereas the application was filed in form-N only on 11.12.2003. Further grievance of the petitioner before the appellate authority was that the private respondent was in unauthorized occupation of the company’s quarter till 2001 and was accordingly entitled to adjust penal rent from the payable amount of gratuity which exceeded the payable amount of gratuity and as such the private respondent was not entitled for any amount.

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The Appellate Authority formulated the point for determination in paragraph 7 of the impugned order as “whether the appellant employer is authorized to deduct house rent from the gratuity amount of the respondent and whether interest on delayed payment is admissible”. The impugned order reflects from para 8 that the present petitioner had filed a written statement dated 06.07.2004 wherein it was submitted that the respondent was entitled for payment of gratuity of her late husband as per the arbitral award even then the gratuity amount was not paid on the ground of non-vacation of company’s accommodation as well as deduction of penal rent.

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The appellate authority recorded a finding that the respondent’s entitlement to receive gratuity of her late husband as per the arbitration award was without any recovery and it could not be linked with the vacation of company’s quarter and that the employer was not authorized to deduct/recover any dues from gratuity amount which was protected under section 13 of the Payment of Gratuity Act from attachment in execution of any decree or order of any civil, revenue or criminal court. Ultimately the appellate authority held that as per sub section 3(A) of Section 7 of the Act, the employee or his legal heir is entitled to receive interest on the delayed payment of gratuity and held that private respondent being the wife of the late employee was entitled to receive interest on the gratuity amount only from the date

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of submission of application in form-N i.e. from 11.12.2003 to the date of deposit of the amount by the employer before the appellate authority while filing the appeal. The appellate authority accordingly modified the order passed by the controlling authority and held that the respondent was entitled to the gratuity amount of Rs. 43,604/- as determined by the controlling authority vide decision dated 24.04.2004 along with the simple interest @ 6% per annum from the date of filing the application in form-N i.e. 11.12.2003 to 16.07.2004 which came to Rs. 1556 and the private respondent was entitled to a total sum of Rs. 45,160/-.

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17. The petitioner has relied upon para 17 of the judgment passed in the case reported in (2005) 5 SCC 245 (supra) , wherein Regulation 5 of Oil and Natural Gas Commission Act, 1959 has been quoted and considered. Regulation 5 clearly provided that the Commission had the right to recover dues before payment of gratuity dues even without obtaining consent. The Hon’ble Supreme Court held that the Regulation 5 left no room for doubt that the Commission has the right to effect recovery of its dues from any officer without his consent from gratuity. It was also recorded that the regulation has the force of law.

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In the present case, no such regulation or provision of law has been brought on record either before the authorities under the Payment of Gratuity Act or even before this Court enabling the respondent to recover penal rent from the gratuity payable to the wife of the employee or even the employee. This is over and above the fact that in the instant case direction for payment of gratuity was issued in terms of the award. The said judgement relied upon by the petitioner does not help the petitioner in any manner what so ever.

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18. So far as the judgment passed in L.P.A. No. 15/2013 (Bokaro Steel Limited vs. Shri Ram Naresh Singh) decided on 24.01.2014 is concerned, the same is clearly distinguishable from the facts and circumstances of this case. In the said case, while framing the question for consideration, it has been recorded in paragraph 11 that the fact of the case was that the respondent had offered the gratuity amount as security deposit for retaining the quarters after retirement and the

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question falling for consideration in the appeal was whether the respondent can claim payment of the gratuity as a matter of right. Thus, the gratuity amount itself was offered as a security. Further in the said case a proceeding under Sections 5 and 7 of the Public Premises (Eviction of Unauthorized occupants) Act, 1971 was decided and consequently the estate officer had not only passed an order of eviction, but also quantified the damages. Thus, the damages in former penal rent etc. was already adjudicated, quantified and crystalized. In this background, the direction issued by the learned Single Judge of this Court, directing payment of entire gratuity amount with interest without deducting penal rent, was set aside.

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19. In Wazir Chand v. Union of India (supra) , the factum of unauthorized occupation of quarter and that the penal rent was payable as per rules was not in dispute . In such background the Hon’ble Supreme court did not interfere with adjustment of penal rent while paying gratuity. The Court observed that the appellant having unauthorizedly kept the government quarters was liable to pay penal rent in accordance with rules and there was no illegality in adjusting those dues against death-cum-retirement benefits.

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20. The judgement of Wazir Chand (supra) also does not apply to the facts of this case. In the present case the order of dismissal dated 15.06.1990 also contained a direction to evict the quarter and upon failure, steps were to be taken to enforce the right of CCL and dues was to be settled when commitments were checked. The order of dismissal containing the aforesaid stipulation of eviction of quarter was subject-matter of consideration in an arbitration, wherein an award dated 14.02.1997 was passed and as per the award, the private respondent was entitled for certain amount of salary of her late husband till the date of superannuation or till the date of death whichever was earlier and there was also a direction to make payment of gratuity in terms of the said award. Admittedly, the private respondent evicted the quarter on 19.10.2001 and thereafter filed a petition to realize the gratuity amount as per the arbitration award. The award did not direct for any adjustment or recovery of any penal rent or recovery of any dues. The appellate authority while passing the impugned order has acted in terms of the award.

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21. This court does not find any illegality or perversity in the impugned appellate order directing payment of gratuity in terms of the arbitral award with interest from the date of application and consequently refusing to deduct penal from the gratuity amount. The impugned order passed by the appellate authority does not call for any interference under writ jurisdiction.

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22. Accordingly, the present writ petition is dismissed.

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(Anubha Rawat Choudhary, J.)

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Binit

Project Officer,Bachra Project v. Union of India And Ors.

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Project Officer,Bachra Project v. Union of India And Ors.

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