The Management, Vs the Appellate Authority Under

1.The Appellate Authority under the Payment of Gratuity Act, [Additional Commissioner of Labour] Tamil Nadu Housing Board Building 1^st Floor, Ellis Nagar, Madurai.

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2.The Authority under the Payment of Gratuity Act, [Assistant Commissioner of Labour] Bharathi Ula Street, Race Course Colony, Near Thamarai Thotti, Madurai – 625 002.

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3.R.Ramachandran

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... Respondents

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PRAYER: Writ Petition filed under Article 226 of the Constitution of India for issuance of a writ of certiorari calling for the records of the 1^st respondent relating to P.G.Appeal No.62 of 2018, quash the order dated 24.10.2018 passed therein.

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For Petitioner : Mr.S.Seenivasagam For Respondent : Mr.C.Venkatesh Kumar, Nos.1 & 2 Special Government Pleader : Mr.VOS.Kalaiselvam, for R3

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ORDER

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The Management of Virudhunagar District Central Bank has filed this writ petition as against the orders passed by the 1^st respondent in PG Appeal No.62 of 2018 dated 24.10.2018. This appeal was filed by the petitioner management as against the order dated 20.12.2017 of the 2^nd respondent the authority under the Payment of Gratuity Act, allowing the claim of the 3^rd respondent.

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2.The learned counsel for the petitioner submits that the gratuity is payable to the employee on the termination of his employment either on superannuation, or on retirement or resignation, or on death or disablement due to accident or disease. But in this case, according to the learned counsel, the 3^rd respondent was working as a Branch Manager of the petitioner bank and he indulged in misappropriation. Therefore, a criminal case was registered as against the 3^rd respondent and this

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criminal case according to the learned counsel, is pending.

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3.The learned counsel further submits that based on the enquiry report, surcharge proceedings were initiated as against the 3^rd respondent by the Deputy Registrar under Section 87 of the Tamil Nadu Co-Operative Societies Act and surcharge order was also passed. While so the 3^rd respondent was relieved from service on attaining the age of superannuation subject to the outcome of criminal case and the surcharge proceedings. However the surcharge order passed by the Deputy Registrar has become final and the 3^rd respondent has not challenged the same. Therefore the termination of his service would not fall under the categories as defined under Section 4 of the Payment of Gratuity Act. However, without considering the same, the 1^st respondent has allowed the appeal by confirming the order passed by the 2^nd respondent.

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4.The learned counsel for the 3^rd respondent submits that the

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3^rd respondent has not indulged in any misappropriation. The 3^rd respondent was made liable for non recovery of certain loans and this loan amount was also subsequently repaid. The management

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claiming interest for this belated collection of the loan amount at the rate of 18%, has initiated surcharge proceedings and therefore, it is not the case of misappropriation.

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5.The learned counsel further submits that it is a settled position that by citing pendency of a criminal case, gratuity amount cannot be denied and surcharge proceedings cannot deprive the right of gratuity. The gratuity amount has been deposited by the petitioner management pursuant to the order of the 2^nd respondent and the said amount has also been withdrawn by the 3^rd respondent. In the event, if they are claiming any amount pursuant to the surcharge proceedings and it can be recovered only by way of a separate proceedings and not by denying the gratuity amount.

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6.This court considered the rival submissions made and perused the materials placed.

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7.This writ petition has been filed as against the order of the 1^st respondent under the Payment of Gratuity Act in PGA No.62 of 2018

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dated 24.10.2018. The 3^rd respondent an employee of the petitioner management made claim for payment of gratuity under Section 4 of the Payment of Gratuity Act and the same was entertained by the 2^nd respondent in PG No.4 of 2016. Though notice was served on the management, the petitioner management had not contested the claim. Therefore, an ex-parte order was passed by the 2^nd respondent by order dated 21.06.2016 allowing the claim made by the 3^rd respondent. Aggrieved by that order the petitioner management had preferred the above appeal before the 1^st respondent under Section 7(7) of the Payment of Gratuity Act in PGA No.62 of 2018 and it was dismissed by order dated 24.10.2018, which is challenged in this writ petition.

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8.The 3^rd respondent was appointed in the petitioner bank on 26.09.1990. He had rendered 26 years of service. He was relieved from service by order dated 31.12.2022 while he was working as the Branch Manager.

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9.Every employee, who renders continuous of service of not less than five years is entitled for payment of gratuity as per Section 4 of the

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Payment of Gratuity Act on his termination of service. The contention of the petitioner management is that the 3^rd respondent was not terminated and he was only relieved from service subject to the outcome of the surcharge proceedings. The management claims that the surcharge proceedings was initiated as against the 3^rd respondent and the surcharge order passed under Section 87 of the Tamil Nadu Co-Operative Societies Act became final. That apart the criminal case is also pending as against the 3^rd respondent and therefore, he is not entitled for payment of gratuity.

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10.Admittedly the 3^rd respondent was relieved from service by order dated 31.12.2012 as under:

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“tpUJefh; khtl;l kj;jpa Tl;LWt[ t';fp. jpUj;j';fy; fpisapy; nkyhsuhf gzpg[hpe;J tUk; jpU/Mh;/,uhkr;re;jpud;. taJ Kjph;tpd; fhuzkhf 58 taJ epiwtile;jijbahl;o. ,th; kPJ tpUJefh; tzpf Fw;wg;g[ydha;t[ gphpthy;. tpUJefh; Fw;wtpay; eLth; ePjpkd;wk; 2y; jhf;fy; bra;ag;gl;L epYitapYs;s Fw;wtHf;fpw;F ghjfkpy;yhj tifapYk;. ,th; kPJ _tpy;ypg[j;J}h; Jizg;gjpthsuhy; tH';fg;gl;l jz;l tHf;F Miz ef/2/2011?2012- ehs; 30/11/2011 f;F ghjfkpy;yhj tifapYk; ,th; 31/12/2012k; njjp gpw;gfy; Kjy; t';fpg; gzpapypUe;J tpLtpf;fg;gLfpwhh;/

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,tUf;F Xa;t[f; fhyg;gyd;fs;

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tH';FtJ ,th; kPJ epYitapYs;s Fw;w tHf;F jPh;g;gpd; mog;gilapYk; jz;l tHf;F bjhlh;ghf ,th; bjhlh;e;Js;s nky;KiwaPl;od; jPh;g;gpd; mog;gilapYk; ghprPypf;fg;gLk; vdj; bjhptpf;fg;gLfpwJ/”

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11.By this order, the 3^rd respondent was relieved from service on attaining the age of superannuation without initiating disciplinary proceedings. Though the management claimed that the surcharge proceedings was initiated as against the 3^rd respondent and criminal case is also pending, neither the surcharge order nor the details about the criminal case is placed before this court.

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12.The Payment of Gratuity Act is a welfare legislation, mainly intended to provide the benefit to an employee, who renders long period of services, at his old age. The 3^rd respondent was relieved from service without any disciplinary proceedings. This reliving according to the learned counsel for the petitioner is not by way of termination on superannuation, but it is subject to the outcome of the surcharge proceedings and the criminal prosecution.

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13.Admittedly the 3^rd respondent was relieved from service and there is no disciplinary proceedings. Payment of Gratuity Act is a welfare legislation and liberal interpretation has to be made that his service has been terminated. The 3^rd respondent has rendered more than 26 years of service and there is no disciplinary proceedings, his service has been terminated by way of reliving order and hence, the 3^rd respondent is entitled payment gratuity. Therefore, this writ petition is liable to be dismissed. Accordingly this writ petition is dismissed. No costs. Consequently connected miscellaneous petition is closed.

28.10.2025

Internet : Yes / No

DSK

To

1.The Appellate Authority under the Payment of Gratuity Act, [Additional Commissioner of Labour] Tamil Nadu Housing Board Building 1^st Floor, Ellis Nagar, Madurai.

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