Allowed

Indrakanti Kamalakar v. Union Bank of India (Formerly Andhra Bank)

Telangana HC18 Nov 2023WP/994/2023

Case brief

AI extract

What is this about?

The High Court of Telangana allowed a writ petition filed by a formerly compulsorily retired bank employee. Relying on a Division Bench judgment and the Payment of Gratuity Act, the court held that the employee cannot be denied leave encashment unless regulations expressly deny it. Additionally, without quantification of financial loss, the bank could not withhold gratuity. The court directed paym

What did the court decide?

The petitioner was directed to receive encashment of earned leave and the amount withheld from gratuity along with interest at 7% per annum from the date of retirement.

Indrakanti Kamalakar Vs Union Bank of… — Pension and Retirement Benefits | Telangana HC (2023)

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132191

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HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction)

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SATURDAY, THE EIGHTEENTH DAY OF NOVEMBER TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HONOURABLE SMT JUSTICE P.MADHAVI DEVI

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WRIT PETITION NO: 994 OF 2023

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Between:

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lndrakanti Kamalakar, (Formerly. Senior Manager, Andhra Bank, N.S.Road Branch, Hyderabad) Rl/o Flat No.'102, SNS Homes Xl, Anand Nagar, Ramanthapur, Hyderabad-50001 3

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...PETITIONER

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AND

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Union Bank of lndia (Formerly Andhra Bank), Rep. by its Managing Director and Chief Executive Officer, Central Office, 239-Union Bank Bhavan, Vidhan Bhavan Marg, Nariman Point, Mumbai, Maharashtra-4O0021

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Field General [Vanager, Hyderabad, Union Bank of lndia, 2nd Floor, Bungalow No 109, New No. 1-7-252 to 254, Oxford Street, S.D Road, Secundrabad, Telangana.

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Regional Head, Union Bank of lndia, Andhra Bank Building, Kothi, Hyderabad

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...RESPONDENTS

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Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or direction, more in the nature of Writ of Mandamus or any other appropriate writ, declaring that the impugned s€t aside the impugned order Lr.No.CO. ERD.6162.2022 dated 15J22022 as illegal and consequently directing the Respondents To pay the amount of Leave encashment, of the unavailed Privilege Leave of 240 days that was to my credit as the date of his compulsory retirement, together wrth interest orlopercentage per annum from the date of compulsory retirement on 15.03.2014,fo Pay the amount of Rs.8,03,0001 that was illegally withheld by the Respondent from the total amount of Gratuity payable to the me as per the Gratuity Act, with interest of 10% from the date of such illegal withholding.

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' rA No:¹ oF 2oz3

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Respondents to compute the total amount payable to the petitioner towards the balance of Gratuity and leave encashment, together with interest @1O% p.a. from the date of compulsory retirement of the petitioner from the service of the bank and deposit the amount with the bank in a fixed deposit.

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Counsel for the Petitioner: SRI KONA VIJAY KUMAR Counsel for the Respondents: SRI K.LAKSHMI NARASIMHA, SC FOR UBI

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The Court made the following: ORDER

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THE HON'BLE SMT. JUSTICE P.MADHAVI DEVI WRIT PETITION No.994 of 2023

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ORDER:

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This Writ Petition is filed seeking a writ of mandarnus declaring the impugned order dated 15.12.2022 as illegal a.rrd arbitrary and consequentiy to direct the respondents to pay the amount of leave encashment of the unavailed privilege leave of 24O days that was to the credit of the petitioner as on the date of his compulsory retirement, together with interest (@ 10% per annum from the date of compulsory retirement i.e., on 15.03.2014 and also to pay the amount of Rs.8,03,000/- which has been withheld by the respondents from the total amount of gratuity payable as per the Gratuity Act with interest at the rate of 7O%' from the date of such illegal withholding and to pass such other order or orders.

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Brief facts leading to the filing of the present writ petition are that on certain allegations of hnancial irregularities committed by the petitioner, the petitioner was imposed with the punishment of compulsory retirement ulde orders dated 15.03.2014 and as the petitioner did not challenge the said order, it has become frnal. It is subrnitted that the petitioner, thereafter, has made a request for

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PMD,J W.P.No.g94 OF 2023

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encashment of his earned leave and also for payment of gratuity to him. When the same was not considered by the respondents, the petitioner frled W.P.No.25920 of 2022 and this Court, utde orrler dated,29.12.2022, directed the respondents to consider the representation of the petitioner dnd to pass appropriate orders thereon ra.ithin a time frame. The respondents have thereafter issued a show oause notice dated 29.L1.2O22 and passed the impugned order dated 15.72.2022 rejecting the request of the petitioner for encashment of leave and also for payment of the entire gratuity and for not withholding a sum of Rs.8,03,o00/-. chalrenging rhe same, the present writ petition is filed.

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3' Learned counsel for the petitioner submitted that the respondents have not compried with the directions of this court dated, 2g . 12 .2022 in w'P'No'25g20 0f 2022 in its true letter and spirit and have issued a show cause notice' without giving details as to how the petitioner is not eligible for encashment of earned leave in view of the penalt5r of compulsory retirement imposed on him, and also as to ho,,t. the loss of Rs.g,OO, 109/_ has been incurred by the bank on account of the alleged financia-l irregularities committed by the petitioner. The reamed counser for the petitioner further submitted that the petitioner has given a detailed expla,ation to the respondents with regard to each of the issues raised in

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l PMD,., W-P.N0.994 OF 2023

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the show cause notice dated 29 . | 1 .2022 but the respondents without referring to any of them have summarily rejected the request of the petitioner. Learned counsel for the petitioner submitted that the order of compulsory retirement did not refer to any forfeiture of the encashment of privilege leave and that the said issue is a,lso covered by the judgment of the Division Bench of this court in W.A.No.SO2 of 2076 dated 12.08.2016 in respect of the amount withheld from the gratuity payable to the petitioner. Since the respondents have not followed the principles of natural justice and have not given particulars as to how financial loss has been arrived at, the respondents could not have withheld the same.

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Dr. K. Lakshmi Narasimha, learned Standing Counsel however relied upon the averments made in the counter affidavit and submitted that the petitioner is not eligible for leave encashment and also the gratuity which has been withheld. He submitted that the authorities have brought out as to how the bank has incurred the loss of Rs.8,00,109/- and therefore the gratuity and leave encashment have been rightly withheld.

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Having regard to the rival contentions and the materia-l on record, this Court finds that on the issue of entitlement of encashment of eamed leave by an employee who has been compulsorily retired from the service,

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PMD,] W.P.No.994 Ot 2023 \

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the Division Bench of this Court has alreadv considered the same in W.A.No.502 of 2016 dated 12.OB.2O16 in respect of the service regulations of the very same bank i.e., Andhra Bank in the case of Andhra Bank a. Y,Shioaji, and has held as under

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"12. h is tite ttnt an emplogee eams Priuileqe Leaue uthile in seruice. Wlen tlrc Seruice Regulation provided for enmshment of Pnuilege l,eaue, a ight in resped thereto comes to be uested irt an employee. Unless the Regulations gouerning the seruice condition^s of the emplogee either eryresslg or bg necessary implication takes atuay such uested nght, le cannot be denied such igLrt. While the seruice regt\ations per se do not expresslg deny this ight to an employee utho suffered punishment of ampulsory retirement, the plain language of the Regulations discussed aboue olso does not lead thts Courl to the conclusion thot euen bg implication tLe employee is denied of this ictht.

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Moreouer, as ightlg obserued bA the learned single Judge, the disciplinary autlnity has not forkited the ight of the respondent to encash the Priuilege Leaue. Thus, neither under th.e Regulations nor und.er the order of tLte disciplinary authoitA, the respondent is depiued of his ight to encnsh the Pivilege Leaue-

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18Before anduding, here in an icing on the cake ! Almost at the fag^{end of the heaing,learnedaunsel} for^{the respondent placedbefore} us letter dt.11.O5.2O15 of the Deputg Chief Dxeattiue of the Indian Banks' Assocration wherein it was stated that based on uaious representations receiued from the banks, the decisions of the Courts, that of the Gouemment of India, and the HR Committee. the Monaging Committee ot its meeting held on 30.04.2015 accepted the reammendations of the HR Committee and decided to permit encashrnent of Priuilege Leaue bg the compulsoilg retired emplogees/ offitnrs. This decision of the Indian .8anks' Association uas

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PMD,J W.P.No.994 OF 2023

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approued by the Board of oppellant No.1 bank in its Fourlh Meeting fed on 8.7.2015 at Hgderabod. When this mateiol tuas placed before us, ute haue called uSnn appellant No.2 to explain their conduct in antesting the appeal, and Le has sought to justify the same based on an earlier Ciranlar dt.27.11.2000 as per uhich the compulsoilg retired employees uere held not entitled for leaue encashment and that when the punishment of compulsory rettrement u.tas imposed on the respondent the said Circular was in force- TLnugh in stricl sensu the benefit of the Board's Resolution dt.8.7.2015 cannot be made applicable to the respondent, uhat is pertinent is that Indian Banks' Asstrciation Lns gielded to tle preponderance of the judicial opinion on the interpretation of Regulation 38 of tLe Seruice Regulations and ueered round to the reality that the Rerylattons do not deng a compulsory retired emploAee of his ight to encnsh the Piuilege Leaue. Thsts, our uiew deiues strength from the aforementioned decision of the Indian Banks' Association and also the Resolution of the Board of Diredors of appellant No. 1."

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ln view of the same, the request of the petitioner for encashment of earned leave is allowed

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As regards the withholding of Rs.8,0O;lO9 l-, this Court finds that this issue is also covered by the decision of the Hon'ble Supreme Court in the case of Jgotirtnau Rag a. Field. General Manager, Punjab National Bankt wherein the Honble Suprerne Court was considering the case of forfeiture of gratuity under the Payment of Gratuity Act ald have upheld the judgment of the fuli bench of the Punjab and Haryana

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'^2023SCC OnLine^SC 1452

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6 PMO,J \tu.P.No.994 OF 2023

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High Court in UCO Bank under similar circumstances. In the said case also, the linalcial loss which is sought to be recovered from the gratuity \'as not quantified and therefore the Court has held that when the quantifrcation of loss is not proved, the same is not recoverable. ln the present case, since there is no quantification of financial loss to the bank at any stage of the departmental proceedings, the same could not have been withheld by the respondent. Therefore, on the said ground also, the Writ Petition is allowed and the respondents are directed to make payment of encashment of earned leave and also the annount which has been withheld from gratuity with interest at the rate of 60/o per annum from the date of retirement of the petitioner to the date of payment.

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Accordingly, this Writ Petition is allowed. There shall be no order as to costs.

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Miscellaneous applications, if any pending, shall also stand ciosed.

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SD/- N. CHANDRA^{SEKHAR RAO} ASSISTANT BEGIS-TRAR /ffRUE coPY/'

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To ,1 The Manaqing^{Director andChiefExecutiveOfficer'UnionBank of lndia} irlinl.ir, X"inia einkl,^{centratOnice' 239-Union Bank Bhavan'Vidhan} tirrii,r-"'ilrlii. Ninmin'point,^{Mumbai, Maharashtra-400021}

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2 Fi"ii cl"llii'nlti"is;i,'niotiraoao,^{union Bankof lndia 2nd Floor'.} bil;r"&"N; ioti,^{tl.,,il ii:-i-i-zsito 254, oxfordstreet' S D Road'} Secundrabad,^Telangana

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