High Court · 2025

1. Heard Sri Abhishek Prabhakar Awasthi, the petitioner who has appeared in person and Sri Asit Srivastava learned counsel for the opposite parties.

2. By means of this petition, the petitioner has prayed the following relief:- "1. Issue a writ of certiorari or a writ, order or direction in the nature of writ of certiorari: a. To quash the order dated 28.8.2019/21.8.2019 passed by New India Assurance Company Limited, Opposite party no.1, as contained in Annexure no. 1 to this writ petition. b. To quash the order of forfeiture of gratuity passed by New India Assurance Company Limited, Opposite party no.1, as mentioned in the communication letters dated 23.5.2017/ 2.6.2017 contained in Annexure no. 2 to this writ petition, summoning the original thereof from the opposite parties.

2. Issue a writ of Mandamus or a writ, order or direction in the nature of writ of Mandamus commanding the New India Assurance Company Limited and its authorities: a. To pay to the petitioner an amount of Rs.1,65,164/- (One Lakh Sixty Five Thousand one Hundred and Sixty Four Only) the balance of Provident Fund Amount. b. To pay to the petitioner the Gratuity amounting to more than Rs. 11,00,000/- (Eleven Lakhs) only. c. To pay the amount of the petitioner's earned leave of 240 days to his credit; and d. To pay to the petitioner the interest on the aforesaid amount w.e.f. 13.12.2016, date of petitioner's termination of service.

3. On the first date of admission, this Court has passed the order dated 19.09.2019, which reads as under:- "Heard Sri Ravi Nath Tilhari, learned counsel for the petitioner. Issue notice to opposite parties returnable at an early date, for which, necessary steps be taken within a week. Office to proceed accordingly. By means of this writ petition, the petitioner has prayed that direction may be issued to the opposite parties to release and make payment of the petitioner's terminal dues consequent upon the petitioner's order of dismissal from service having been modified/ converted into order of removal from service. Learned counsel for the petitioner has drawn attention of this Court towards an order dated 20.08.2019, which is relating to release of terminal dues of the petitioner, para-1 thereof provides that in the head of the Provident Fund there is nothing remained to pay by the Company on the Provident Fund head. However, learned counsel for the petitioner has drawn attention of this Court towards Annexure No.8 to the writ petition, which is a letter of the Company dated 20.06.2017 relating to the statement of the Provident Fund Account of the petitioner, which provides that the net Provident Fund dues is Rs.22,01,032/-, whereas as per the rules the contribution is the same in the part of the petitioner as of the Company. The petitioner has clearly recited in para-17 of the writ petition that the petitioner's contribution in the Provident Fund including the interest accrued to the tune of Rs.11,83,098/-, as per own statement of the Company even the contribution with interest has been shown as Rs.10,17,934/-, however it should be Rs.11,83,098/-. Therefore, as per Sri Tilhari, the total amount in the Provident Fund was calculated as Rs.22,01,032/-, breakup of which was given Rs.11,83,098/- plus Rs.10,17,934/- and after deducting Rs.2,00,239/- plus (recovery of outstanding dues) and amount of Rs.2,00,239/- only was released and paid to the petitioner and in that case a sum of Rs.1,65,164/- has not been paid. Learned counsel for the petitioner has further submitted that as per the impugned letter dated 20.08.2019, vide para-2, it has been indicated that the gratuity has already been forfeited by the competent authority. In the said para, it has categorically been indicated that although the penalty of dismissal was reduced to removal from services by the Appellate Authority and duly confirmed by the Memorial Authority, but seeing to the nature of proven misconduct amounting to moral turpitude, gratuity is not payable. Learned counsel for the petitioner has clearly recited in para-29 of the writ petition that the petitioner was not convicted of any offence involving moral turpitude. Therefore, para-2 of the impugned order is misconceived so far as the issue of the petitioner is concerned. Learned counsel for the petitioner has referred Section 4 (6) of Payment of Gratuity Act, 1972, sub-clause (6) (b) provides that the gratuity payable to an employee (may be wholly or partially forfeited), (i) if the services of such employees have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or; (ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. Since the petitioner has categorically mentioned in para-29 of the writ petition that he was not convicted of any offence involving moral turpitude, therefore, the gratuity of the petitioner could have not been withheld. Learned counsel for the petitioner has referred the dictum of Hon'ble Supreme Court in re: Union Bank of India and others vs. C.G. Ajay Babu and others reported in (2018) 9 SCC 529 referring paras 15, 16, 17 & 19 thereof by submitting that the Hon'ble Supreme Court has also held that if there is no conviction of an employee for misconduct, which according to the Institution is an offence involving moral turpitude, the gratuity may not be withheld. The matter requires consideration. Let the counter affidavit be filed within a period of three weeks. Rejoinder affidavit, if any, may be filed within a week thereafter. List this petition in the week commencing 21.10.2019 within top ten cases. In the meantime, the petitioner shall be paid an amount of Rs.1,65,164/-, i.e. the balance amount of the Provident Fund. For the remaining claim, for which the interim relief application has been filed, the same shall be considered on the next date. " ₹

4. Thereafter, pleadings have been exchanged. The petitioner has submitted that he has not been given the amount of leave encashment and a sum of 1,70,452/- has been recovered from the amount of gratuity, as has been shown in the letter dated 22.11.2019 (Annexure No. CA-7) without quantifying the financial loss as has been indicated in such order and without issuing any show cause notice to that effect. Sri Awasthi has submitted that when the opposite parties decided to make payment of gratuity, the entire payment of gratuity should have been paid to him, not after deducting sum of 1,70,452/- in the name of 'financial loss caused to the company'. Sri Awasthi has stated that if it was the loss of company, the aforesaid amount of loss must be quantified and the show cause notice to that effect should have been given to him but no show cause notice has been given. Therefore, such deduction is not permissible in the eyes of law. Sri Awashti has confined his prayer on the aforesaid two dues. ₹

5. Replying the contention, Sri Asit Srivastava has drawn attention of this Court towards the office order dated 13.12.2016 (Annexure No. 3) of the writ petition wherein the disciplinary authority has indicated that the petitioner had tried to defraud the company with malafide intention by getting two cheques amounting to Rs. 1,00,000 and Rs. 56,800 encashed in two different banks at Lucknow, which were stolen from the Hardoi branch. Further, cheque no. 271511 was fraudulently ₹ issued for the sum of rupees 13,652/- and the petitioner had prepared that cheque in the name of Mrs Madhu Awasthi, who happens to be the wife of his elder brother, therefore, if all the aforesaid amount is calculated, it would come to 1,70,452/-. ₹ ₹

6. On that Sri Awashti has stated that in the aforesaid observation of the disciplinary authority, neither the dates of both the cheques have been indicated, nor the cheque numbers have been indicated. Whereas, the petitioner had transferred from Hardoi to Lucknow on 23.02.2007. Further the date of cheque amounting to 13,652/- has also not been indicated. Sri Avasthi has submitted with vehemence that even if those amounts have been considered as loss of the company, a specific show cause notice indicating detail thereof must have been provided to the petitioner so that the petitioner could defend that allegation. But neither the loss has been quantified properly nor any show cause notice has been given to the petitioner. Therefore, such amount may not be recovered from the petitioner.

7. Sri Asit Srivastava has fairly admitted on this point that before making deduction to the tune of 1,70,452/-, no show cause notice has been issued to the petitioner. ₹

8. So far as the payment of leave encashment is concerned, Sri Asit Srivastava has drawn attention of this Court towards Annexure No. 5 of the counter affidavit, which is notification dated, 27.05.1974, amended up to 08.10.2010 in the name of General Insurance (Rationalisation and Revision of Pay Scales and Other Conditions of Service of Supervisory, Clerical and Subordinate Staff) Scheme, 1974 (hereinafter referred as Scheme, 1974). Sri Srivastava has stated that the aforesaid notification is still existing for the employees of the company. He has further drawn attention of this Court towards the item number 10 of the Scheme, 1974, which defines 'leave'. In said heading "Earned Leave" has been defined. The aforesaid provision provides that this clause shall not apply to an employee who has been compulsorily retired, removed or dismissed in accordance with the General Insurance (Conduct, Discipline and Appeal) Rules, 1975. Sri Srivastava has submitted that since the petitioner has been removed from service, therefore, he is not entitled to get Earned Leave.

9. Replying to the contention, Sri Awasthi has submitted that since the impugned action against the petitioner has been taken in the year 2016, therefore, the provisions of Scheme 1974 would not be applicable. However Sri Srivastava has stated that provision was very much applicable at that point of time.

10. Having heard learned counsel for the parties and having ₹ perused the material available on record, I am of the considered opinion that if the petitioner has been paid the amount of gratuity, he should have been paid the entire amount of gratuity and the amount in the impugned recovery to the tune of ₹ 1,70,452/- in the name of 'financial loss caused to the company' without giving any show cause notice to that effect is improper and impermissible, therefore, the recovery to the tune of 1,70,452/- is hereby set-aside/quashed. However, if the competent authority of the company is willing to execute the aforesaid recovery, a proper show cause notice indicating complete details should be given to the petitioner within a period of 15 days from today and the petitioner may submit his explanation/reply within a further period of 15 days. Thereafter, the final decision on such amount of recovery may be taken by affording opportunity of hearing to the petitioner within a further period of one month. All the aforesaid exercises should be undertaken within the time stipulated in this order, failing which the amount to the tune of 1,70,452/-, which has been recovered from the petitioner shall be returned to him within a further period of 15 days with interest at the rate of 6% from the date the amount of gratuity has been paid to him, i.e., 22.11.2019 till the date of it’s actual payment. It is also directed that if the admissible dues have not been paid to the petitioner within aforesaid stipulated time, the petitioner may claim interest thereon, on the delayed payment, and that request of the petitioner may be considered strictly in accordance with law within a period of two months. ₹

11. So far as the amount of leave encashment is concerned, since the aforesaid amount is not payable in terms of the Scheme, 1974, therefore, authorities may not be compelled to make payment of leave encashment to the petitioner. However, it is always open to the petitioner to challenge the said provision before the competent court of law.

12. In view of the aforesaid terms, this writ petition is disposed of finally. Order Date :- 23.4.2025 Anurag ANURAG SINGH High Court of Judicature at Allahabad, Lucknow Bench

1. Heard Sri Abhishek Prabhakar Awasthi, the petitioner who has appeared in person and Sri Asit Srivastava learned counsel for the opposite parties.

2. By means of this petition, the petitioner has prayed the following relief:- "1. Issue a writ of certiorari or a writ, order or direction in the nature of writ of certiorari: a. To quash the order dated 28.8.2019/21.8.2019 passed by New India Assurance Company Limited, Opposite party no.1, as contained in Annexure no. 1 to this writ petition. b. To quash the order of forfeiture of gratuity passed by New India Assurance Company Limited, Opposite party no.1, as mentioned in the communication letters dated 23.5.2017/ 2.6.2017 contained in Annexure no. 2 to this writ petition, summoning the original thereof from the opposite parties.

2. Issue a writ of Mandamus or a writ, order or direction in the nature of writ of Mandamus commanding the New India Assurance Company Limited and its authorities: a. To pay to the petitioner an amount of Rs.1,65,164/- (One Lakh Sixty Five Thousand one Hundred and Sixty Four Only) the balance of Provident Fund Amount. b. To pay to the petitioner the Gratuity amounting to more than Rs. 11,00,000/- (Eleven Lakhs) only. c. To pay the amount of the petitioner's earned leave of 240 days to his credit; and d. To pay to the petitioner the interest on the aforesaid amount w.e.f. 13.12.2016, date of petitioner's termination of service.

3. On the first date of admission, this Court has passed the order dated 19.09.2019, which reads as under:- "Heard Sri Ravi Nath Tilhari, learned counsel for the petitioner. Issue notice to opposite parties returnable at an early date, for which, necessary steps be taken within a week. Office to proceed accordingly. By means of this writ petition, the petitioner has prayed that direction may be issued to the opposite parties to release and make payment of the petitioner's terminal dues consequent upon the petitioner's order of dismissal from service having been modified/ converted into order of removal from service. Learned counsel for the petitioner has drawn attention of this Court towards an order dated 20.08.2019, which is relating to release of terminal dues of the petitioner, para-1 thereof provides that in the head of the Provident Fund there is nothing remained to pay by the Company on the Provident Fund head. However, learned counsel for the petitioner has drawn attention of this Court towards Annexure No.8 to the writ petition, which is a letter of the Company dated 20.06.2017 relating to the statement of the Provident Fund Account of the petitioner, which provides that the net Provident Fund dues is Rs.22,01,032/-, whereas as per the rules the contribution is the same in the part of the petitioner as of the Company. The petitioner has clearly recited in para-17 of the writ petition that the petitioner's contribution in the Provident Fund including the interest accrued to the tune of Rs.11,83,098/-, as per own statement of the Company even the contribution with interest has been shown as Rs.10,17,934/-, however it should be Rs.11,83,098/-. Therefore, as per Sri Tilhari, the total amount in the Provident Fund was calculated as Rs.22,01,032/-, breakup of which was given Rs.11,83,098/- plus Rs.10,17,934/- and after deducting Rs.2,00,239/- plus (recovery of outstanding dues) and amount of Rs.2,00,239/- only was released and paid to the petitioner and in that case a sum of Rs.1,65,164/- has not been paid. Learned counsel for the petitioner has further submitted that as per the impugned letter dated 20.08.2019, vide para-2, it has been indicated that the gratuity has already been forfeited by the competent authority. In the said para, it has categorically been indicated that although the penalty of dismissal was reduced to removal from services by the Appellate Authority and duly confirmed by the Memorial Authority, but seeing to the nature of proven misconduct amounting to moral turpitude, gratuity is not payable. Learned counsel for the petitioner has clearly recited in para-29 of the writ petition that the petitioner was not convicted of any offence involving moral turpitude. Therefore, para-2 of the impugned order is misconceived so far as the issue of the petitioner is concerned. Learned counsel for the petitioner has referred Section 4 (6) of Payment of Gratuity Act, 1972, sub-clause (6) (b) provides that the gratuity payable to an employee (may be wholly or partially forfeited), (i) if the services of such employees have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or; (ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. Since the petitioner has categorically mentioned in para-29 of the writ petition that he was not convicted of any offence involving moral turpitude, therefore, the gratuity of the petitioner could have not been withheld. Learned counsel for the petitioner has referred the dictum of Hon'ble Supreme Court in re: Union Bank of India and others vs. C.G. Ajay Babu and others reported in (2018) 9 SCC 529 referring paras 15, 16, 17 & 19 thereof by submitting that the Hon'ble Supreme Court has also held that if there is no conviction of an employee for misconduct, which according to the Institution is an offence involving moral turpitude, the gratuity may not be withheld. The matter requires consideration. Let the counter affidavit be filed within a period of three weeks. Rejoinder affidavit, if any, may be filed within a week thereafter. List this petition in the week commencing 21.10.2019 within top ten cases. In the meantime, the petitioner shall be paid an amount of Rs.1,65,164/-, i.e. the balance amount of the Provident Fund. For the remaining claim, for which the interim relief application has been filed, the same shall be considered on the next date. " ₹

4. Thereafter, pleadings have been exchanged. The petitioner has submitted that he has not been given the amount of leave encashment and a sum of 1,70,452/- has been recovered from the amount of gratuity, as has been shown in the letter dated 22.11.2019 (Annexure No. CA-7) without quantifying the financial loss as has been indicated in such order and without issuing any show cause notice to that effect. Sri Awasthi has submitted that when the opposite parties decided to make payment of gratuity, the entire payment of gratuity should have been paid to him, not after deducting sum of 1,70,452/- in the name of 'financial loss caused to the company'. Sri Awasthi has stated that if it was the loss of company, the aforesaid amount of loss must be quantified and the show cause notice to that effect should have been given to him but no show cause notice has been given. Therefore, such deduction is not permissible in the eyes of law. Sri Awashti has confined his prayer on the aforesaid two dues. ₹

5. Replying the contention, Sri Asit Srivastava has drawn attention of this Court towards the office order dated 13.12.2016 (Annexure No. 3) of the writ petition wherein the disciplinary authority has indicated that the petitioner had tried to defraud the company with malafide intention by getting two cheques amounting to Rs. 1,00,000 and Rs. 56,800 encashed in two different banks at Lucknow, which were stolen from the Hardoi branch. Further, cheque no. 271511 was fraudulently ₹ issued for the sum of rupees 13,652/- and the petitioner had prepared that cheque in the name of Mrs Madhu Awasthi, who happens to be the wife of his elder brother, therefore, if all the aforesaid amount is calculated, it would come to 1,70,452/-. ₹ ₹

6. On that Sri Awashti has stated that in the aforesaid observation of the disciplinary authority, neither the dates of both the cheques have been indicated, nor the cheque numbers have been indicated. Whereas, the petitioner had transferred from Hardoi to Lucknow on 23.02.2007. Further the date of cheque amounting to 13,652/- has also not been indicated. Sri Avasthi has submitted with vehemence that even if those amounts have been considered as loss of the company, a specific show cause notice indicating detail thereof must have been provided to the petitioner so that the petitioner could defend that allegation. But neither the loss has been quantified properly nor any show cause notice has been given to the petitioner. Therefore, such amount may not be recovered from the petitioner.

7. Sri Asit Srivastava has fairly admitted on this point that before making deduction to the tune of 1,70,452/-, no show cause notice has been issued to the petitioner. ₹

8. So far as the payment of leave encashment is concerned, Sri Asit Srivastava has drawn attention of this Court towards Annexure No. 5 of the counter affidavit, which is notification dated, 27.05.1974, amended up to 08.10.2010 in the name of General Insurance (Rationalisation and Revision of Pay Scales and Other Conditions of Service of Supervisory, Clerical and Subordinate Staff) Scheme, 1974 (hereinafter referred as Scheme, 1974). Sri Srivastava has stated that the aforesaid notification is still existing for the employees of the company. He has further drawn attention of this Court towards the item number 10 of the Scheme, 1974, which defines 'leave'. In said heading "Earned Leave" has been defined. The aforesaid provision provides that this clause shall not apply to an employee who has been compulsorily retired, removed or dismissed in accordance with the General Insurance (Conduct, Discipline and Appeal) Rules, 1975. Sri Srivastava has submitted that since the petitioner has been removed from service, therefore, he is not entitled to get Earned Leave.

9. Replying to the contention, Sri Awasthi has submitted that since the impugned action against the petitioner has been taken in the year 2016, therefore, the provisions of Scheme 1974 would not be applicable. However Sri Srivastava has stated that provision was very much applicable at that point of time.

10. Having heard learned counsel for the parties and having ₹ perused the material available on record, I am of the considered opinion that if the petitioner has been paid the amount of gratuity, he should have been paid the entire amount of gratuity and the amount in the impugned recovery to the tune of ₹ 1,70,452/- in the name of 'financial loss caused to the company' without giving any show cause notice to that effect is improper and impermissible, therefore, the recovery to the tune of 1,70,452/- is hereby set-aside/quashed. However, if the competent authority of the company is willing to execute the aforesaid recovery, a proper show cause notice indicating complete details should be given to the petitioner within a period of 15 days from today and the petitioner may submit his explanation/reply within a further period of 15 days. Thereafter, the final decision on such amount of recovery may be taken by affording opportunity of hearing to the petitioner within a further period of one month. All the aforesaid exercises should be undertaken within the time stipulated in this order, failing which the amount to the tune of 1,70,452/-, which has been recovered from the petitioner shall be returned to him within a further period of 15 days with interest at the rate of 6% from the date the amount of gratuity has been paid to him, i.e., 22.11.2019 till the date of it’s actual payment. It is also directed that if the admissible dues have not been paid to the petitioner within aforesaid stipulated time, the petitioner may claim interest thereon, on the delayed payment, and that request of the petitioner may be considered strictly in accordance with law within a period of two months. ₹

11. So far as the amount of leave encashment is concerned, since the aforesaid amount is not payable in terms of the Scheme, 1974, therefore, authorities may not be compelled to make payment of leave encashment to the petitioner. However, it is always open to the petitioner to challenge the said provision before the competent court of law.

12. In view of the aforesaid terms, this writ petition is disposed of finally. Order Date :- 23.4.2025 Anurag ANURAG SINGH High Court of Judicature at Allahabad, Lucknow Bench