Writ Petition No. 24151 of 2018 · The High Court
Case Details
- 1 - NC: 2025:KHC:5920 WP No. 24151 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE WRIT PETITION NO. 24151 OF 2018 (L-PG) BETWEEN: M/S. UNION BANK OF INDIA, INDUSTRIAL RELATION DIVISION, CENTRAL OFFICE, UNION BANK BHAVAN, NO.239, VIDHAN BHAVAN MARG, NARIMAN POINT, MUMBAI-400021, A BODY CONSTITUTED UDNER THE BANKING COMAPNIES ACQUISITION AND TRANSFER OF UNDERTAKINGS ACT 1970, REPRESENTED BY ITS CHIEF MANAGER, SRI H K PANIGRAHI. (BY SRI SOMASHEKAR, ADVOCATE) AND: …PETITIONER Digitally signed by PRAMILA G V Location: HIGH COURT OF KARNATAKA 1. SRI. B. N. BYRAPPA, S/O NINGAPPA, AGED ABOUT 59 YEARS, #9, 1ST BLOCK, II CROSS, AKSHYANAGAR, RAMAMURTHY NAGAR POST, BANGALORE-560016. 2. THE APPELLATE AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT AND DEPUTY CHIEF LABOUR COMMISSIONER (CENTRAL), SHRAMA SADAN, III 3RD CROSS, III 3RD MAIN, SECOND PHASE, TUMKUR ROAD YESHWANTHPUR, BENGALURU-560022
Legal Reasoning
(BY SRI S V GIRIDHAR, ADVOCATE FOR R1, SMT SHUBHA S, CGC FOR R2) …RESPONDENTS - 2 - NC: 2025:KHC:5920 WP No. 24151 of 2018 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 30.06.2017 PASSED BY THE SECOND RESPONDENT IN APPEAL NO.36(209)2015-B1 AT ANNEXURE-K TO THIS WRIT PETITION. THIS PETITION COMING ON FOR FURTHER DICTATION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE ORAL ORDER This petition is filed assailing the order dated 30.06.2017 in Appeal No.36(209)2015-B1 passed by the Appellate Authority which is marked at Annexure - K. In terms of the said order, the Appellate Authority has set aside the order of the Controlling Authority which has held that the gratuity payable to the respondent has to be withheld. The Appellate Authority held that there is a mismatch in the alleged figure of misappropriation as such the Controlling Authority could not have passed an order for withholding the gratuity. 2. 3. Certain facts are admitted. First respondent was employee of the petitioner. On the allegation that first respondent has sanctioned loan to - 3 - NC: 2025:KHC:5920 WP No. 24151 of 2018 persons violating norms, disciplinary proceedings was initiated against him. In the disciplinary proceedings, the charges against first respondent were held to be established and penalty of compulsory retirement was imposed. The said penalty of compulsory retirement was questioned by filing a writ petition. The writ petition was allowed. Penalty was set aside. The petitioner filed a Writ Appeal before this Court. The Division Bench allowed the writ appeal and restored the order of compulsory retirement, said order has attained finality. 4. Subsequently, respondent No.1 claimed gratuity for the period starting from 08.10.1973 the date of employment till 26.06.2003, the date of compulsory retirement. His claim was rejected on the premise that the 'amount is at stake'. 5. This order was questioned by first respondent before the Controlling Authority. The Controlling Authority rejected first respondent's claim. However, First Appellate Authority passed an order to pay the gratuity amount. - 4 - NC: 2025:KHC:5920 WP No. 24151 of 2018 6. Learned Counsel appearing for the petitioner would contend that the Appellate Authority erred in setting aside the order of the Controlling Authority on the premise that there is a mismatch in the amount of misappropriation mentioned in two orders. He would contend that it is only a typographical error and in the departmental enquiry, it has been concluded that the amount of misappropriation is the tune of Rs.444.61 lakhs. However due to the typographical error, it has been wrongly mentioned as Rs.144.61 lakhs in the forfeiture order. In addition, he would also contend that the gratuity amount payable to first respondent is only Rs.3.5 lakhs. In any case Rs.144.61 lakhs being much higher amount, first Appellate Authority could not have set aside the order. 7. Learned counsel for first respondent would contend that the gratuity cannot be withheld unless the loss is established. He would refer to Sub-Section 6(a) of Section 4 of the Payment of Gratuity Act, 1972 (for short 'the Act, 1972'). He would further contend that no action is initiated so far to contend that the amount is not recovered and the - 5 - NC: 2025:KHC:5920 WP No. 24151 of 2018 petitioner has suffered the loss. Even before the disciplinary enquiry, it is not the finding that the petitioner has suffered the loss. The only allegation is that a certain amount of loan has been released violating norms. Thus, it is his contention that unless loss is established, the Controlling Authority could not have passed the said order. 8. In addition to that, the learned counsel would also submit that a criminal case is initiated against the petitioner and certain other employees and the said criminal case ended in an acquittal and even in the said criminal case, there is no finding that the petitioner has suffered financial loss. Unless there is a financial loss there cannot be an order withholding the gratuity. 9. Learned counsel appearing for the respondent No.1 has relied on the judgment of the Hon'ble Apex Court in Jyotirmay Ray Vs Field General Manager, Punjab National Bank And Others1. Referring to paragraph No.28 of the said judgment, learned counsel would urge that the 1 2023 SCC OnLine SC 1452. - 6 - NC: 2025:KHC:5920 WP No. 24151 of 2018 petitioner was not given any opportunity of defending his claim that there is no loss caused to the petitioner/bank. It is also his contention that without holding an enquiry and without giving an opportunity to the respondents to ascertain the loss caused to the petitioner, the gratuity amount cannot be withheld. 10. It is also his further contention that the loss can be caused even in a situation where the bank has lent the loan in compliance of norm and the recovery may not have happened because of some various other factors not within the control of the bank. It is his further contention that while holding the disciplinary enquiry, the charge was not levelled against the delinquent employees alleging that the bank has sustained loss and even in the final order imposing penalty of dismissal, the bank has not stated that the petitioner/bank has sustained loss. The finding is that substantial amount of the bank is at stake. Referring to paragraph No.2 of the said judgment, learned counsel would urge that the quantification of loss if any, should have been made in the disciplinary enquiry itself and in the disciplinary - 7 - NC: 2025:KHC:5920 WP No. 24151 of 2018 enquiry, loss is not quantified, the petitioner has no right to withhold the gratuity. 11. Learned counsel appearing for the petitioner on the other hand would contend that in the disciplinary enquiry, the disciplinary authority has given a finding that huge amount of the bank is at stake and later some loan accounts have been written off as bad debts and this would establish the fact that the bank has sustained loss. 12. This Court has considered the contentions raised at the bar and perused the records. 13. Sub-section 6(a) of Section 4 of Payment of Gratuity Act, 1972 reads as under: "Notwithstanding anything contained in sub- section (1),- (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;" - 8 - NC: 2025:KHC:5920 WP No. 24151 of 2018 14. On perusal of Sub-section 6(a) of Section 4 of the Act of 1972, it is evident that payment of gratuity can be withheld provided that there is loss. In the instant case, as rightly contended by the learned counsel for the respondent No.1 in the disciplinary proceeding, the amount of loss is not ascertained. The disciplinary proceeding was not initiated on the premise that the bank has suffered the loss, however, it is initiated on the premise that the loan was sanctioned by violating the norms governing sanctioning of loan. This being the position, Form No-M issued by the petitioner without ascertaining the loss is untenable. As already noticed, no enquiry was held to ascertain the loss. Hence, the ratio laid down in the aforementioned judgment does apply to the facts of the case. 15. Though the Appellate Authority has held that the quantification is not done properly by referring to two different figures in Form No-M and the dismissal order, what is required is to be noticed is that the Appellate Authority in principle has held that the adjudication has not taken place - 9 - NC: 2025:KHC:5920 WP No. 24151 of 2018 in respect of the loss Accordingly, there is no merit in the Writ Petition. 16. Hence the following:
Decision
ORDER (i) Writ Petition is dismissed. (ii) The respondent No.1 is entitled to admissible gratuity payable to him along with interest @ 10% per annum from the due date till the date of payment. Sd/- (ANANT RAMANATH HEGDE) JUDGE BRN List No.: 1 Sl No.: 31