Allowed

S Narasimha Murthy v. Indian Overseas Bank

Karnataka HC11 Oct 2012WP/43809/2011

Case brief

AI extract

What is this about?

A High Court Writ Petition challenge an Indsian Overseas Bank's appropriation of a retired officer's Provident Fund. The Court quashed the endorsement, holding that compulsory retirement alone does not justify withholding terminal benefits without specific orders for loss or moral turpitude.

What did the court decide?

The impugned endorsement appropriating the Provident Fund was quashed; the Bank was directed to pay the Provident Fund accrued to the petitioner along with necessary interest.

S Narasimha Murthy Vs Indian Overseas Bank — Pension and Retirement Benefits | Karnataka HC (2012)

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IN THE HIGH COURT OF KARNATAKA AT BANGALORE

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DATED THIS THE 11TH DAY OF OCTOBER 2012

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BEFORE

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THE HON'BLE MR. JUSTICE SUBHASH B ADI

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WRIT PETITION NO.43809/2011 (S-RES)

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BETWEEN :

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S NARASIMHA MURTHY S/O LATE T V SUBRAMANYAM AGED ABOUT 57 YEARS, R/AT NO.757, 29TH MAIN, 29TH CROSS, POORNAPRAGNA LAYOUT, BANASHANKARI 5TH STAGE, BANGALROE 560061. ...PETITIONER

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( By Sri. M N PRASANNA, ADV. )

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AND :

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INDIAN OVERSEAS BANK A BODY CONSTITTUTED UNDER THE BANKING COMPANIES' (ACQUISITION & TRANSFER OF UNDERTAKINGS) ACT 1970, CENTRAL OFFICE, POST BOX NO.3765 763, ANNA SALAI, CHENNAI-600002 REP. BY ITS CHAIRMAN & MANAGAING DIRECTOR. ...RESPONDENT

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( By Sri.J.PRADEEP KUMAR, ADV. FOR M/S.KASTURI ASSOCIATES )

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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER OF THE RESPONDENT/ BANK DT.10.12.09, UNDER ANN-K TO THE WP, BY ISSUE

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OF A WRIT IN THE NATURE OF CERTIORAR & DIRECT THE RESPONDENT BY ISSUE OF WRIT IN THE NATURE OF MANDAMUS TO FORTHWITH SETTLE THE ENTIRE TERMINAL BENEFITS TO THE PETITIONER INCLUDING PROVIDENT FUND BOTH PETITIONER'S CONTRIBUTION, BANK'S CONTRIBUTION & VOLUNTARY CONTRIBUTION TO PROVIDENT FUND, GRATUITY & ENCASHMENT OF PRIVILEGE LEAVE TOGETHER WITH INTEREST AT 18% P.A FROM THE DATE THEY FELL DUE TILL THE DATE OF PAYMENT.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP THIS DAY, THE COURT MADE THE FOLLOWING:

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O R D E R

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Petitioner has called in question the communication dated 10.12.2009 issued by the respondent – Bank interalia stating that, the Provident Fund of the petitioner has been appropriated as per the instructions from Central Office Personnel Department to the tune of Rs.14,54,602/-.

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Case of the petitioner is that, he joined the Bank as a Probationary Officer in the year 1976. While he was promoted as Officer of Grade Scale-IV, a disciplinary enquiry was initiated against him, which culminated in passing of an order of punishment of compulsory retirement, as against which, the petitioner filed an Appeal and Review. Both Appeal and Review came to be dismissed.

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However, on his compulsory retirement, he made a demand for payment of terminal benefit, in response to the same, the Bank replied by Annexure-K interalia stating that, as per the instructions from the Central Office Personnel Department, the terminal benefits such as Provident Fund has been appropriated towards the alleged loss stated to have been caused by the petitioner.

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Learned Counsel for the petitioner submits that, the order of punishment imposed against him is only compulsory retirement, neither the Disciplinary Authority nor the Appellate Authority or the Review Authority had passed any order, quantifying the alleged loss alleged to have been caused by the petitioner nor there is any order of punishment, which shows that the petitioner has caused certain loss to the Bank to the tune of certain amount. He also submitted that, the Provident Fund is managed by a Trust, which amount cannot be withheld by the Bank. Further submitted that, even in case of payment of gratuity, unless the amount is forfeited or petitioner is punished for an offence of moral turpitude, the Bank has no authority to withhold gratuity amount. Petitioner is retired long back and the

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amount has been illegally withheld by the Bank and endorsement has

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been issued.

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On the other hand, learned Counsel for the Bank submitted that, during the enquiry proceedings, it is revealed that this petitioner had caused loss to the Bank and it is in pursuance of the same, he has

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been punished with compulsory retirement. He also submitted that, when there is a loss caused by the petitioner and the petitioner is also due of certain loan amount, it is not possible for the Bank to recover

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the same unless it withholds Provident Fund and Gratuity.

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Section 4 sub-section (6) of the Payment of Gratuity Act

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provides for withholding of amount only in certain circumstances.

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The provisions of Section 4 sub-section (6) reads as under:

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“ 4. Payment of gratuity.- . . . . . . .

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(6) Notwithstanding anything contained in sub-section 91),-

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(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;

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

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(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

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(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.”

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Admittedly, neither the Disciplinary Authority nor the Appellate Authority or the Review Authority has passed any order quantifying the loss stated to have been caused by the petitioner nor it is the case of the Bank that the gratuity amount has been forfeited. In such case, the Bank cannot withhold the gratuity. Merely because he has been punished with compulsory retirement, it does not disentitle him for the terminal benefits. Very fact that the petitioner has suffered a compulsory retirement, even in case of compulsory retirement, the delinquent official will be entitled for all terminal benefits. Hence, in the absence of any order, the Bank was not justified in replying as per Annexure-K. Even in case of Provident Fund, unless there is any provision,which enables the Bank to withhold such amount, it cannot

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withhold the Provident Fund, as the Gratuity and Provident Fund being the terminal benefits, they can be withheld only under certain circumstances prescribed under the provisions of Payment of Gratuity Act and also under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act 1952. Hence, the endorsement at Annexure-K is not sustainable in law.

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Accordingly, the Writ Petition is allowed. The impugned endorsement at Annexure-K dated 10.12.2009, is hereby quashed. Insofar as gratuity is concerned, petitioner shall work out his remedy in accordance with the provisions of Payment of Gratuity Act. As far as Provident Fund is concerned, Bank is directed to pay the Provident Fund accrued to the account of the petitioner along with necessary interest.

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Sd/JUDGE

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KNM/-

S Narasimha Murthy v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

S Narasimha Murthy v. Indian Overseas Bank

Case brief

What is this about?

What did the court decide?

What the court decided

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