Judgment · High Court

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 24.06.2011CORAMTHE HONOURABLE MR.JUSTICE K.CHANDRUW.P.No.15154 of 2010 and M.P.No.1 of 2010 The Management, The Coimbatore District CentralCo-operative Bank Ltd.,Coimbatore – 641 018Rep. By its General Manager, Mr.A.Muthusamy... PetitionerVs.

N.Somasundaram2.The Authority under Payment of Gratuity Act, Assistant Commissioner of Labour, Dr.Balasundaram Road, Coimbatore – 611 018.

The Appellate Authority, Under Payment of Gratuity Act, Joint Commissioner of Labour (I.C) Dr.Balasundaram Road, Coimbatore -611 018. ... RespondentsThis writ petition is preferred under Article 226 of the Constitution of India praying for the issue of a writ ofcertiorari, calling for the entire records pertaining to the order of the 3rd respondent dated 14.06.2010 in A.G.A.No.38 of 2009 inG.A.No.124 of 2007 on the file of the 2nd respondent dated13.07.2009 and quash the same. For Petitioner : Mr.S.SaravananFor Respondents : Mr.G.B.Saravana Bhavan for R1 Mr.R.Ravichandran, AGP for R2 and R3

O R D E RThe petitioner is the Management of the Coimbatore DistrictCentral Co-operative Bank Limited, represented by its GeneralManager. They have filed the present writ petition, challenging an https://hcservices.ecourts.gov.in/hcservices/ order passed by the third respondent Appellate Authority under the Payment of Gratuity Act-cum-Joint Commissioner of Labour made inA.G.A.No.38 of 2009 dated 14.06.2010 confirming the order of the second respondent, the Controlling Authority under the Payment of Gratuity Act made in G.A.No.124 of 2007.2. The writ petition was admitted on 15.07.2010. Pending the writ petition, this Court directed respondents 2 and 3 not to disburse the amount, pending disposal of the writ petition.3. The case of the petitioner Bank was as follows:-The first respondent was employed as a Manager in the Headquarters. He was given a charge memo dated 18.04.2007 alleging fraud against him and causing loss to the Bank to an extent ofRs.7,81,911/-. Even during the pendency of the charges, the petitioner had attained the age of superannuation on 30.04.2007.Therefore, the petitioner was relieved from service on 30.04.2007in terms of Special By-law No.5(ii). It was stated that the relief was given without prejudice to the charges pending against him and for any final orders that may be made on the said charges.

In the mean while, the first respondent filed an application for gratuity under Section 4(1) of the Payment of Gratuity Act, 1972. The said application was taken on file by the second respondent in G.A.No.124 of 2007. The first respondent claimed a total gratuity of Rs.4,71,600/- for the 32 years service rendered by him. It was claimed that the gratuity became payable on account of his getting superannuated from service.

On notice from the second respondent, the petitioner Bankfiled a counter statement. It was contended that the first respondent did not cooperate with the enquiry and charges were pending against him. Since he was solely responsible for the loss, he is not eligible for any gratuity.

In the mean while, proceedings under Section 87 of the Tamil Nadu Cooperative Societies Act, 1983 for surcharging the first respondent for the loss was also initiated and the surcharging officer fixed the liability on the first respondent fora sum of Rs.7,81,911/- by an order dated 06.01.2009. But the second respondent Controlling Authority held that since the petitioner was allowed to retire from service on superannuation, the gratuity cannot be forfeited since there was no termination on grounds of causing loss to the employer. The defence taken by the petitionerBank was not accepted. The authority also placed reliance upon the judgments of the Andhra Pradesh High Court in Narasinga Rao v.District Co-op. Central Bank Ltd., reported in 1998 III LLN 123 and another judgment in B.Mohan Reddy v. A.P.State Co-op. MarketingFederation Ltd reported in 1993 III LLN 417. The authority also relied upon a judgment of the Division Bench of Kerala High Courtin K.C.Mathew v. Plantation Corporation of Kerala Limited reported in 2001 LLR 123. In all the three cases, the same stand was taken https://hcservices.ecourts.gov.in/hcservices/ by the Court. Therefore, it was held that if an employee was not terminated on grounds of causing loss to the employer, then the employer in a gratuity application cannot claim the defence under Section 4(6) of the Payment of Gratuity Act. It is with that view of the matter, the Authority computed the gratuity by an order dated 13.07.2009. In the light of Section 7(3A) of the Act, he also fixed 10% interest on the delayed payment.

The petitioner, thereafter deposited the entire amount ofRs.3.5 lakhs and preferred an appeal under Section 7(7) of the Payment of Gratuity Act. The said appeal was taken on file asA.G.A.No.38 of 2009 and notice was sent to the first respondent. The third respondent Appellate Authority agreed with the reasoningsgiven by the second respondent and after referring to the judgment of the Gujarat High Court in Panchammal District Cooperative BankLtd. v. Harjivandas Purshottamdas Prajapati reported in 2009 LLR1156 dismissed the appeal on 14.06.2010.

The reasons given by both the authorities below are inconsonance with Section 4(6) of the Payment of Gratuity Act. Eventhough the first respondent was suffering from surcharge proceeding, it is open to the petitioner Bank to recover the amount from the first respondent by proceedings including his properties as available under law. But on no account, the gratuity can be attached for the recovery to be made against the first respondent in the light of Section 13 of the Payment of Gratuity Act, wherein it has been specifically held that the gratuity is not liable for attachment to satisfy any decree.

The Appellate Authority, Under Payment of Gratuity Act, Joint Commissioner of Labour (I.C) Dr.Balasundaram Road, Coimbatore -611 018. 1 cc To The Government Pleader, SR.371581 CC to Mr.S.Saravanan, Advocate, S.R.No.36719 1 CC to Mr.G.B.Saravana Bhavan Advocate, S.R.No.34142Order inW.P.No.15154 of 2010KJI(CO)SRA(5/7/2011)