Orissa High Court
Case Details
Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.9067 of 2018 (In the matter of an application under Articles 226 and 227 of the Constitution of India, 1950). Pabitra Jena …. Petitioner(s) -versus- The General Manager (Personal) Services Department), UCO Bank, Kolkata &Anr. …. Opposite Party (s) Advocates appeared in the case through Hybrid Mode: For Petitioner(s) For Opposite Party (s) : : Mr.Surendra Nath Panda, Adv. Mr. B.B. Swain, Adv. CORAM: DR. JUSTICE S.K. PANIGRAHI DATE OF HEARING:-17.09.2024 DATE OF JUDGMENT:-17.12.2024 Dr. S.K. Panigrahi, J. 1. In the present Writ Petition, the petitioner seeks an order from this Court directing the Opposite Party Bank to release the terminal dues of her late husband, which were allegedly excluded from the previously sanctioned amount. I. FACTUAL MATRIX OF THE CASE:
Legal Reasoning
2. The brief facts of the case are as follows: Page 1 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 (i) Late Sarbeswar Jena, the husband of the petitioner, was appointed by the UCO Bank as Peon and joined the Ghanteshwar Branch on 27.09.1980.He was drawing salary at initial basic pay of Rs. 245/- with applicable rate of D.A & H.R.A in September 1980.
Legal Reasoning
(ii) Mr. Sarbeswar Jena retired from his position as Peon-cum-Farash at the UCO Bank, Bhadrak Branch, on 30.04.2014, upon reaching the age of superannuation. Allegedly, the Bank also did not issueany retirement letter to him. (iii) Following his retirement, the gratuity amount of Rs. 2,37,217/- was paid to Mr. Jena on 02.03.2016. However, Mr. Sarbeswar Jena passed away on 02.08.2016. (iv) Late Sarbeshwar Jena had previously approached this Court by filing W.P.(C) No. 1033 of 2016 seeking payment of all due wages, including basic pay, increment, Dearness Allowance (D.A.), and House Rent Allowance (H.R.A.) from 1981 until April 2014, along with the consequential retirement dues such as Gratuity, Pension, and applicable interest, within a prescribed time period. (v) In response to the court order, dated 22.01.2016, the Opposite Party Bank disbursed the admissible dues amounting to Rs.17,00,949.45/- to the husband of the petitioner towards the retiral benefits for the services of the petitioner’s late husband. (vi) However, the petitioner contends that the amount of Rs. 17,00,949.45/- was released in haste, without a proper and thorough calculation of the exact dues in accordance with the Bank’s rules. The petitioner alleges that no Provident Fund (PF) number was ever allotted to the late Page 2 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 Sarbeswar Jena, and that the due interest on the gratuity amount was not paid, as the gratuity was disbursed with a delay of two years. II. SUBMISSIONS ON BEHALF OF THE PETITIONER: 3. (i) Learned counsel for the Petitioner earnestly made the following submissions in support of his contentions: It is submitted that Sarbeswar Jena retired from his position as Peon- cum-Farash on 30.04.2014. However, the gratuity amount of Rs. 2,37,217/- was not disbursed to him until 02.03.2016. The petitioner contends that due to this inordinate delay in payment, she is entitled to interest on the gratuity amount for the period of delay. Accordingly, the petitioner claims an additional sum of Rs. 1,73,840/- towards interest on the delayed gratuity payment. (ii) Further, the petitioner claims Rs. 5,37,288.64/- towards the contributions to the P.F./ including both the employee's and the Bank’s contributions/ in addition to an arrear salary of Rs. 2,15,020.40/-. Ergo, the total claim made by the petitioner amounts to Rs.10,26,260.04/-. (iii) The petitioner also submits that her husband, Sarbeswar Jena, was never sanctioned any annual increments by the controlling office authority, for reasons best known to them. As a consequence, by the time he reached the age of superannuation on 30.04.2014, he was still receiving a monthly salary based solely on the initial basic pay in the sub-staff cadre, with periodic wage revisions, and applicable D.A. and H.R.A. (iv) This resulted in a substantial deprivation of his rightful financial dues, through no fault of his own. Furthermore, he was not issued a formal Page 3 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 letter of retirement; rather, he received only an oral instruction from the Bhadrak Branch, directing him not to report to work from 01.05.2014 onwards. III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES: 4. (i) The Learned Counsel for the Opposite Parties earnestly made the following submissions in support of his contentions: The claim of the petitioner is purely a monetary claim and is barred by the law of limitation, making the writ petition not maintainable and liable to be rejected. The present writ application is also hit by the principle of res judicata, as the husband of the petitioner had previously approached this Court by filing W.P.(C) No. 1033 of 2016, seeking the same reliefs. (ii) Additionally, the writ is not maintainable because the petitioner has bypassed the statutory forum for filing an appeal under the provisions of the Payment of Gratuity Act, 1972. (iii) It is submitted that the petitioner should have approached the Controlling Authority under the Payment of Gratuity Act for her claim of gratuity against the Opposite Party Bank. (iv) Regarding the claim for the Bank’s contribution to the P.F., it is stated that the deceased employee, Sarbeswar Jena, was not allotted a Provident Fund (P.F.) number, and consequently, no deductions were made from his salary for both the employee’s and the Bank’s contributions to the P.F. The admissible dues, after accounting for Leave Without Pay (LWP), were calculated and paid to the husband of the Page 4 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 petitioner. Therefore/ the petitioner’s claims are denied as they are not sustainable in law. (v) The deceased employee was not mentally fit to perform his duties as a disciplined staff member of the Opposite Party Bank. He had been issued a show-cause notice for indiscipline and irregular behavior, and in response, he submitted a medical certificate on 09.03.1982, stating that he was under treatment due to illness. Due to his mental health issues, his services were never confirmed, and no P.F. number was allotted to him. Throughout his service, he never sought regularization, as he was aware of his inability to perform his duties properly. Therefore, the claim of the petitioner regarding the irregularity by the Opposite Party Bank is denied. (vi) The Opposite Party Bank correctly calculated the arrear salary, taking into account the applicable increment, D.A., Leave Without Pay (LWP), and other relevant factors, and paid a total of Rs. 17,00,949.45/- (comprising Rs. 4,60,166/- as gratuity and Rs. 12,40,783.45/- as arrear salary) on 18.01.2018. Therefore/ the petitioner’s claim for Rs. 2/38/951/- towards gratuity, including interest on the delayed payment, and the claims for the Bank’s P.F. contribution and arrear salary are irrelevant/ imaginary, and unsupported by the material available on record. The calculation of Rs. 10,26,260.04/- by the petitioner is self-styled and made without considering the LWP period or the last 10 months of salary used to calculate the gratuity. Page 5 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 (vii) As the amount due under the provisions of law has already been paid by the Opposite Party Bank, the reply was given to the petitioner accordingly. (viii) Additionally, during his service, the deceased employee, Mr. Sarbeswar Jena, neither approached the Opposite Party Bank nor any court of law for any claim regarding his service benefits. Therefore, the present writ application, being devoid of merit, is liable to be rejected. IV. COURT’S REASONING AND ANALYSIS: 5. 6. Heard the Learned Counsels for both parties and examined the records presented. First, I would like to address and dismiss the Opposite Party’s objections regarding the petition being barred by the principle of res judicata. While it is true that the late husband of the petitioner had previously approached this Court in W.P.(C) No. 1033 of 2016 seeking
Decision
arrears of pending retiral dues, the Court had disposed of the matter by directing the Opposite Party to consider the representation of Sarbeshwar Jena. 7. Now, in order to attract the principles of Res judicata, the following ingredients mustbe fulfilled:1 (i) The matter must have been directly and substantially in issue in the formersuit; (ii) The matter must be heard and finally decided by the Court in the formersuit; 1 See The Jamia Masjid v. Sri K V Rudrappa (Since Dead) By Lrs. &Ors., 2021 SCC OnLine SC 792 Page 6 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 (iii) The former suit must be between the same parties or between partiesunder whom they or any of them claim, litigating under the same title; and (iv) The Court in which the former suit was instituted is competent to try the subsequent suit or the suit in which such issue has been subsequently raised. 8. The first two points in the aforementioned conditions have been elaborated in Prem Kishore &Ors. v.BrahmPrakash&Ors.2where the Supreme Court held that the previous suit must have been decided on its merits, and the decision must have attained finality. Such a disposal, even if confirmed on appeal, does not operate as res judicata in a subsequent suit. The relevant excerpt is produced hereinbelow: “34. The general principle of res judicata under Section 11 of the CPC contain rules of conclusiveness of judgment, but for res judicata to apply, the matter directly and substantially in issue in the subsequent suit must be the same matter which was directly and substantially in issue in the former suit. Further, the suit should have been decided on merits and the decision should have attained finality. Where the former suit is dismissed by the trial court for want of jurisdiction, or for default of the plaintiff’s appearance/ or on the ground of non- joinder or mis-joinder of parties or multifariousness, or on the ground that the suit was badly framed, or on the ground of a technical mistake, or for failure on the part of the plaintiff to produce probate or letter of administration or succession certificate when the same is required by law to entitle the plaintiff to a decree, or for failure to furnish security for costs, or on the ground of improper valuation, or for failure to pay additional court fee on a plaint which was undervalued, or for 22023 SCC OnLine SC 356 Page 7 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 want of cause of action, or on the ground that it is premature and the dismissal is confirmed in appeal (if any), the decision, not being on the merits, would not be res judicata in a subsequent suit.” 9. It is submitted that the present writ petition is not barred by the principle of res judicata as this Court, in W.P.(C) No. 1033 of 2016, merely directed the Opposite Parties to reconsider the petitioner’s representation and did not adjudicate the matter on its merits. Consequently, this Court retains full jurisdiction to adjudicate the present case on its merits, as the substantive issues raised herein have not been previously addressed or decided. I will now address the prayer concerning the issue of interest due to the delay in the payment of gratuity. Section 7(2) of the Payment of Gratuity Act mandates that as soon as gratuity becomes payable, the employer, whether an application has been made or not, shall determine the amount of gratuity and notify the person to whom it is payable, as well as the Controlling Authority, 10. 11. specifying the amount so determined. 12. Section 7(3) further stipulates that the employer must arrange to pay the gratuity amount within 30 days from the date it becomes payable. Additionally, under Section 7(3-A), the employer is liable to pay interest on the gratuity if the payment is not made within the specified 30-day period. 13. The scheme of Section 7 of the Payment of Gratuity Act makes it clear that the Act is not dependent upon a formal claim by the employee; Page 8 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 14. 15. rather, it is the employer’s responsibility to ensure the payment of gratuity. If the employer defaults on this obligation and fails to make the payment within the prescribed 30-day period, they are liable to pay interest for the delay. Thus, the employer’s duty to pay gratuity within 30 days of retirement/ dismissal, or death remains mandatory, and any delay in payment incurs a liability for interest. In D.D. Tewari (D)Thr. LRs v. Uttar Haryana BijliVitran Nigam Limited and others,3and in consideration of the facts and circumstances presented, where the opposite parties delayed the sanction of pension and gratuity for the petitioner by more than twelve years post- retirement/ the Supreme Court held that/ when an employee’s pensionary benefits and gratuity are wrongfully withheld by the employer, the legal representatives of the deceased employee are entitled to receive the withheld amounts along with interest. The Court emphasized that interest should be awarded on the delayed payment of pension and gratuity, calculated from the date of entitlement until the date of actual payment. The relevant excerpt is produced hereinbelow: “4. It is an undisputed fact that the appellant retired from service on attaining the age of superannuation on 31.10.2006 and the order of the learned single Judge after adverting to the relevant facts and the legal position has given a direction to the employer-respondent to pay the erroneously withheld pensionary benefits and the gratuity amount to the legal representatives of the deceased employee without awarding interest for which the appellant is legally 32014 (8) SCC 894 Page 9 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 entitled, therefore, this Court has to exercise its appellate jurisdiction as there is a miscarriage of justice in denying the interest to be paid or payable by the employer from the date of the entitlement of the deceased employee till the date of payment as per the aforesaid legal principle laid down by this Court in the judgment referred to supra. We have to award interest at the rate of 9% per annum both on the amount of pension due and the gratuity amount which are to be paid by the respondent. 5. It is needless to mention that the respondents have erroneously withheld payment of gratuity amount for which the appellants herein are entitled in law for payment of penal amount on the delayed payment of gratuity under the provisions of the Payment of Gratuity Act, 1972. Having regard to the facts and circumstances of the case, we do not propose to do that in the case in hand.” 16. In the present case, the late Sarbeswar Jena retired from his position as Peon-cum-Farash at the UCO Bank, Bhadrak Branch, on 30.04.2014, upon reaching the age of superannuation. However, the gratuity amount of Rs. 2,37,217/- was paid to Mr. Jena only on 02.03.2016, nearly 11 months after his retirement. Subsequently, the Bank made a further payment of a differential gratuity amount of Rs. 2,22,949/- on 18.01.2018. This delay of almost four years in the full and final settlement of the gratuity entitles the petitioner to interest on the delayed payment. 17. The next issue to address is the compensation amount related to the P.F. account/ which was never provided to the petitioner’s husband. The petitioner claims that a P.F. number was never allotted to the late Sarbeswar Jena. In response, the Opposite Party has offered a baseless justification, asserting that due to his mental health issues, his services Page 10 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 were never confirmed, and as a result, no P.F. number was assigned to him. This explanation is both unfounded and inadequate. 18. It is no longer res integra in service jurisprudence that gratuity and pension are not mere bounties or charitable handouts; rather, they are earned benefits resulting from an employee’s long/ continuous/ faithful/ and unblemished service. These benefits serve as a recognition of the employee’s contribution and commitment over the years. This concept is clearly articulated in D.S. Nakara and Ors. v. Union of India,4 where the Supreme Court validated the above stance and held as follows: “The approach of the respondents raises a vital and none too easy of answer, question as to why pension is paid. And why was it required to be liberalised? Is the employer, which expression will include even the State, bound to pay pension? Is there any obligation on the employer to provide for the erstwhile employee even after the contract of employment has come to an end and the employee has ceased to render service? …… What is a pension? What are the goals of pension? What public interest or purpose, if any, it seeks to serve? If it does seek to serve some public purpose, is it thwarted by such artificial division of retirement pre and post a certain date? We need seek answer to these and incidental questions so as to render just justice between parties to this petition. The antiquated notion of pension being a bounty a gratituous payment depending upon the sweet will or grace of the employer not claimable as a right and, therefore, no right to pension can be enforced through Court has been 4(1983) 1 SCC 305 Page 11 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 swept under the carpet by the decision of the Constitution Bench in DeokiNandan Prasad v. State of Bihar and Ors.[1971] Su. S.C.R. 634 wherein this Court authoritatively ruled that pension is a right and the payment of it does not depend upon the discretion of the Government but is governed by the rules and a Government servant coming within those rules is entitled to claim pension. It was further held that the grant of pension does not depend upon any one’s discretion. It is only for the purpose of quantifying the amount having regard to service and other allied maters that it may be necessary for the authority to pass an order to that effect but the right to receive pension flows to the officer not because of any such order but by virtue of the rules. This view was reaffirmed in State of Punjab and Anr. V. Iqbal Singh (1976) IILLJ 377SC.” 19. The Allahabad High Court inUdai Narayan Sahu v. State of U.P.,5held that where an employee did not make any contribution to the General Provident Fund because he was not allotted a GPF number by the employer, the employee cannot be denied pension due to the fault of the employer. Deduction towards C.P.F./G.P.F. is not a condition precedent for eligibility of an employee for receiving pension. Therefore, the mere fact that no deduction was made towards G.P.F. from the salary of the petitioner would not affect his eligibility to get pension after his retirement. The relevant paragraphs are produced hereinbelow: “17. It is a rudimentary principle of law that no person can be made to suffer for a fault, for which he is not responsible. Apparently, the petitioner was in no manner responsible for 52024 SCC OnLine All 4898 Page 12 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 non allotment of G.P.F. account number and for non deduction of contribution towards G.P.F. by the Authority is concerned. Therefore, even if deduction of G.P.F. contribution was necessary, the petitioner was not at fault for non- deduction thereof and he cannot be penalized in any manner for non deduction of General Provident Fund for which he is not responsible. …… 19. Keeping in view the aforesaid discussion, so far as the petitioner’s offer of depositing the amount of General Provident Fund, this Court does not find it necessary to direct the petitioner to deposit the amount of General Provident Fund for more than one reason. Firstly, the is not a deduction toward General Provident Fund condition precedent for eligibility to receive pension. Secondly, the petitioner was not at fault for non-deduction of the contribution by the authorities. Thirdly, having been retired, the petitioner would be entitled to receive the amount of General Provident Fund and directing the petitioner to deposit the amount merely for the amount being refund to him immediately thereafter, would not serve any purpose.” 20. It is now unequivocally established that the petitioner is entitled to receive both interest on the delayed payment of gratuity as well as compensation for the P.F. account, which has been wrongfully withheld. The withholding of gratuity without the payment of interest constitutes an infringement of the petitioner’s lawful entitlement/ and the failure to provide a P.F. account or its associated compensation further aggravates the injustice suffered. Page 13 of 14 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 25-Dec-2024 17:32:41 V. 21. 22. 23. 24. 25. CONCLUSION: In light of the facts and circumstances of the present case, this Court finds that the petitioner is unequivocally entitled to the benefits in question. Given the petitioner’s right to these dues/ it is imperative that the employer be directed to grant compensation for the withheld gratuity amount, inclusive of interest, and to compensate the petitioner for the P.F. dues that were unlawfully denied. The Opposite Party/Bank is hereby directed to pay a lump sum compensation of Rs.5,00,000/- to the petitioner, in settlement of the pending dues, including the gratuity and PF amounts. This compensation should be paid without delay; within 3 months of the receipt of true copy of this order. In light of the foregoing, the Writ Petition is allowed and disposed of in accordance with the observations set out above. Interim order, if any, passed earlier stands vacated. (Dr.S.K. Panigrahi) Judge Orissa High Court, Cuttack, Dated the17th Dec., 2024/ Page 14 of 14