• Nationalised Banks - Disciplinary proocedings after retirement

CONCERNING SECTION 20 (3) i ii and iii of Officers service regulation of Nationalised bank . SC judgments has come in the case of UCO Bank Vs Rajinderlal Capur DOJ 18 5 2007 AND REVIEW PETITION 20085 SC DOJ 31 3 2008 that no disciplinary proceedings can be initiated after retirement. Now the matter is referred to 3 judge Bench in my similar case BY MY bank Canara Bank. Service regulations are all same for Nationalized banks. I have won in HC Madras. Bank appealed tomSC. My case reference 17338/2008 DOJ 4 8 2010 referring to 3 judge bench. Is there any judgment after the above judgment in similar cases and how to present the case. My e mail id "xbancx@gmail.com". case is posted on 11th Jan. Kindly advise URGENTLY as only 3 days left
Asked 11 months ago in Civil Law from Chennai, Tamil Nadu
Kolkata High Court (Appellete Side)
Gour Chandra Sarkar vs The State Of West Bengal & Others on 6 May, 2010
Author: Pranab Kumar Chattopadhyay
                                           1


                       IN THE HIGH COURT AT CALCUTTA
                           CIVIL APPELLATE JURISDICTION
                                  APPELLATE SIDE


Present:
The Hon'ble Justice Pranab Kumar Chattopadhyay
And
The Hon'ble Justice Pranab Kumar Deb



W.P.S.T. 185 of 2010



                                 Gour Chandra Sarkar
                                         Versus
                           The State of West Bengal & Others


For the Petitioner :             Mr. Alok Banerjee
                                 Mr. Partha Ghosh




For the State :                  Mr. Subroto Mukhopadhyay
                                 Mr. Bhaskar Ghosh



Heard On:                        03.05.2010



Judgment On:                     06.05.2010




PRANAB KUMAR DEB, J.
This writ petition has been filed challenging the order dated 24th March, 2010 passed by the learned West Bengal Administrative Tribunal in Case No. O.A. 107 of 2010 whereby and whereunder the said learned Tribunal refused to pass any interim order staying the disciplinary proceedings initiated against the petitioner herein.

It has been urged on behalf of the petitioner before us that the disciplinary proceedings cannot continue against the said petitioner after retirement.

Going through the records, we find that the petitioner was allowed to retire from service on attaining the age of super- annuation by the respondent authorities without raising any objection. After retirement, the relationship of master and servant between the petitioner and the employer had ceased to exist.

The learned Counsel representing the State-respondents, however, submitted that even after retirement disciplinary proceedings can continue specially when the same was initiated while the petitioner was in service. Mr. Subroto Mukhopadhyay, learned Standing Counsel representing the State-respondents, submitted that in view of the financial involvement, departmental proceedings can continue in the facts of the present case.

Mr. Mukhopadhyay further submitted that Rule 10(1) of the West Bengal Services (Death-cum-Retirement Benefit) Rules, 1971 empowers the authorities to continue the disciplinary proceedings even after retirement.

On examination of the charge levelled against the petitioner, we find that there was no charge of causing pecuniary loss to the Government. Furthermore, on examination of the charge-sheet issued to the petitioner, we find that the said petitioner was charged with dereliction of duty and gross misconduct unbecoming of member of Police Force.

Main allegation levelled against the petitioner in the said charge-sheet is that on 21st January, 2008 under the direction of the said petitioner, one Sub-Inspector of Police arrested Sri Mahendra Suralia, Proprietor of Shree Hanuman Steel Traders and allegedly detained him in Police Station for the entire day with malafide intention and booked him on flimsy grounds of violation of the provisions of Motor Vehicles Act.

The other charge mentioned in the said charge-sheet against the petitioner is that on 23rd June, 2008, said petitioner arrested and restrained said Sri Mahendra Suralia again from attending the Government auction.

Rule 10 (1) of West Bengal Services (Death-cum-Retirement Benefit) Rules 1971 provides :-

"10. Right of the Governor to withhold pension in certain cases. - (1) The Governor reserves to himself the right of withholding or withdrawing a pension or any part of it whether permanently or for a specified period, and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to Government, if the pensioner is found in a departmental or judicial proceeding to have been guilty of grave misconduct or negligence, during the period of his service, including service rendered on re-employment after retirement:
Provided that-
a) such departmental proceeding if instituted while the officer was in service, whether before his retirement or during his re-employment, shall after the final retirement of the officer, be deemed to be a proceeding under this article and shall be continued and concluded by the authority by which it was commenced in the same manner as if the officer had continued in service ;
b) such departmental proceedings, if not instituted while the officer was in service, whether before his retirement or during his re-employment-
                              i)    shall not be instituted save with the
                                    sanction of the Governor
ii) shall not be in respect of any event which took place more than (four years) before such institution; and
iii) shall be conducted by such authority and in such place as the Governor may direct and in accordance with the procedure applicable to departmental proceedings in which an order of dismissal from service could be made in relation to the officer during his service;
c) no such judicial proceeding, if not instituted while the officer was in service, whether before his retirement or during his re-employment shall be instituted in respect of a cause of action which arose on an event which took place more than (four years) before such institution;....................."
The application of Rule 10 (1) of West Bengal (Death-cum-
Retirement Benefit) Rules 1971 was considered by the Division Bench of this Court in the case of Arun Kumar Biswas vs. Superintendent of Police, Burdwan & Ors. reported in 1992 (1) CHN

354. The relevant extracts from Paragraph 4 of the said judgment are set out hereunder:

"4........................So unless there was a definite charge against a pensioner that he had caused loss to the government while he was in service by committing grave misconduct or negligence, in that event, the proceeding could not be continued so that if he is ultimately found guilty of the same in that event, the loss actually caused to the government might be recovered from the pension payable by the Government to the pensioner. Save and except for this specific purpose, Rule 10(1) of the said Rules had no manner of application whatsoever. Looking to the charges framed against the petitioner, I find that there was not a single charge against the petitioner for causing any pecuniary loss to the Government and as such the question of invoking the provisions of Rule 10 of the said Rules for recovery of the loss caused to the Government did not and could not arise at all. Disciplinary proceeding on the basis of the charges as framed, in my view, could not be continued or concluded against the petitioner after the petitioner had retired from service. I respectfully agree with the above decision of the Full Bench of the Kerala High Court in the case mentioned above and hold that the departmental proceeding on the basis of the charges framed against the petitioner could not be continued and concluded after the retirement of the petitioner as there was no charge for causing any pecuniary loss to the Government while the petitioner was in service and as such, the proceeding could not be continued against the petitioner in the instant case. I am constrained to take this view in the interest of social justice and as the retired employees had no social security excepting the retiremental benefits..............."
In the case of State of Punjab vs. Khemi Ram reported in AIR 1970 SC 214, Hon'ble Supreme Court held:

"11. There can be no doubt that if disciplinary action is sought to be taken against a Government servant it must be done before he retires as provided by the said Rule................................."
In State of U.P. & Ors. Vs. Harihar Bholenath reported in (2006)13 SCC 460, Hon'ble Supreme Court held that a departmental proceeding can be initiated for recovery of amount suffered by the State exchequer owing to the acts or omission or commission of a delinquent employee in three different situations.

i) when a disciplinary proceeding is initiated and concluded against a delinquent employee before he reaches his age of superannuation.

ii) When a proceeding is initiated before the delinquent officer reached his age of superannuation but the same has not been concluded and despite the superannuation of the employee, an order of recovery of the amount from the pension and gratuity passed ; and

iii) An enquiry is initiated after the delinquent employee reaches his age of superannuation.

In State of West Bengal Vs. Harish C Banerjee & Ors., reported in (2006) 7 SCC 651, it has been held that if the government incurs pecuniary loss on account of misconduct or negligence of a government servant and he retires from service before any departmental proceeding is taken against him, it is open to the state government to initiate departmental proceedings.

With the retirement of an employee, the employer employee relationship snaps. Therefore, unless there is allegation of Government suffering financial loss on account of the misconduct or negligence of the retired employee, the departmental proceedings after his retirement cannot continue.

The learned Standing Counsel representing the State- respondents desperately argued before this court that the petitioner herein has waived his right to raise the objection regarding continuation of the disciplinary proceedings after participation in the said disciplinary proceedings.

We fail to understand how the aforesaid objection can be raised at the instance of the State-respondents since there cannot be any waiver of statutory right. We would like to point out that the petitioner challenged the continuation of the departmental proceeding at the very outset. We cannot subscribe to the view that there has been waiver of the statutory right either.

The respondent authorities are not entitled to proceed against the employee concerned after retirement due to the operation of law. Mere participation at any stage cannot debar the said employee from challenging the decision of the respondent authorities to proceed with the disciplinary proceedings even after retirement from service.

The learned Tribunal refused to grant any interim order as a result whereof the petitioner was directed to participate in the disciplinary proceedings, although it is well settled that the relationship of master and servant ceases to exist after retirement and, therefore, no disciplinary proceedings can continue against a retired employee unless there is a specific charge of causing pecuniary loss to the Government.

It is contended by Mr. Subrata Mukhopadhyay, learned standing counsel, that auction date is an important aspect of revenue earnings and all interested persons are encouraged to participate in it in a free and fair manner so as to ensure that the government gets highest bidding price. It is contended by Mr. Mukhopadhyay that had Mahendra Suralia not been detained before auction, the railways might have received a higher offer. We are afraid such hypothetical assessment of imaginary loss of revenue can never be accepted. Recovery of pecuniary loss from the pension can be made only in the event of government sustaining pecuniary loss on account of the alleged misconduct or negligence of the concerned employee. Here no such allegation has been levelled against the petitioner. It has not even been claimed that the railway has suffered any financial loss because of non- participation of any bidder. No financial loss having been sustained by the Government because of the alleged conduct of the petitioner, the departmental proceeding after his retirement is not permissible.

In the present case, even in absence of any charge of causing pecuniary loss to the Government, continuation of the disciplinary proceedings after retirement is not at all permissible.

For the aforementioned reasons, we hold that the disciplinary proceedings initiated against the petitioner cannot be allowed to continue after retirement and the same is, therefore, quashed.

In the aforesaid circumstances, the impugned order passed by the learned Tribunal cannot be sustained and the same is accordingly set aside.

This application thus stands allowed.

In the facts of the present case, there will be, however, no order as to costs.

Let urgent Xerox certified copy of this judgment and order, if applied for, be given to the learned Advocates of the parties on usual undertaking.

[PRANAB KUMAR DEB, J.] PRANAB KUMAR CHATTOPADHYAY, J.

I agree.

[PRANAB KUMAR CHATTOPADHYAY, J.] LATER :

After pronouncement of the judgment, Mr. Bhaskar Ghosh, learned Counsel representing the State-respondents prays for stay of the operation of the said judgment and order. We find no reason to grant such stay.

Accordingly, the prayer for stay is refused.

[PRANAB KUMAR CHATTOPADHYAY, J.] [PRANAB KUMAR DEB, J.]
Ajay Sethi
Advocate, Mumbai
23125 Answers
1214 Consultations
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Hon'ble Supreme Court reported in 2007(4) LLN 132 in the case of U.P.Co- op. Federation Ltd., vs. L.P.Raj to contend that the respondents are entitled to continue the disciplinary proceeding even after retirement. I perused the above Judgment of the Hon'ble Supreme Court.

19. In that case, entire disciplinary proceedings were initiated during the service period of the delinquent therein and he was also punished before his retirement. When the said order of punishment was challenged, the same was set aside by the High Court on the ground of certain procedural irregularities. Against which, further the appeal was taken before the Hon'ble Supreme Court and during the pendency of the proceedings, it appears that the delinquent therein retired and therefore, by taking note of the gravity of the charges levelled against the said employee, the Hon'ble Supreme Court granted liberty to hold fresh enquiry against the said person by observing that foreclosing the right of the employer to hold a fresh enquiry will not be proper only on the ground that the employee had since retired from the service.
Ajay Sethi
Advocate, Mumbai
23125 Answers
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Madras High Court
A.John Durain vs The Registrar Of Co-Operative ... on 21 December, 2012
       

  

  

 
 
 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

DATED: 21/12/2012

CORAM
THE HONOURABLE MR.JUSTICE K.RAVICHANDRABAABU

W.P(MD)No.4627 of 2008

A.John Durain			        ... Petitioner
				
Vs

1.The Registrar of Co-operative Societies,
  E.V.R.Salai,
  Chennai - 600 010.

2.The Joint Registrar,
  Thiruchirappalli District Co-op. Bank Ltd.,
  No.1, Fort Station Road,
  Thiruchirappalli - 620 002.
	 			        ... Respondents

PRAYER

Petition filed under Article 226 of the Constitution of India, to issue
a Writ of Certiorarified Mandamus to call for the records from the second
respondent relating to the impugned proceedings in No.3952/2004.05 (N.4)A.10
dated 8.4.2008 and quash the same and direct the respondents to pay all the
terminal benefits to the petitioner immediately, award cost.

!For Petitioner	  ... Mr.R.Rajendran
^For Respondents  ... Mrs.Bharathi G.A. (R1)  				
	   	      Mr.K.Jayaraman (R2)
		
:ORDER
Aggrieved against the show-cause notice, dated 08.04.2008, issued by the second respondent, the present writ petition is filed by the petitioner.

2. The following of the facts and circumstances, which warranted the petitioner to file this writ petition:-

The petitioner was working as Manager in the second respondent Society between 11.02.1997 and 20.04.2003 at the Edimalayanpatti Puddur Branch. The petitioner sanctioned gas connection loan to the needy persons as per the scheme of the Government, strictly by following the rules and procedures. The petitioner was transferred from the said branch on 22.04.2003. Thereafter, it was the responsibility of the Branch Manager to collect money from the persons, who have availed the loan for the cooking gas connection. On 27.08.2005, a charge memo was issued to the petitioner in connection with the non-recovery of the loan amount. The petitioner gave an explanation on 10.07.2006 denying the charges. From 30.05.2007, he was on leave on loss of pay. A second charge memo was issued to the petitioner on 06.07.2007 for not joining duty in spite of the orders from the superior. The petitioner gave his explanation on 28.07.2007. Not satisfied with the explanation given by the petitioner, a domestic enquiry was conducted and the same was completed on 05.05.2007. Thereafter, the second respondent issued an order, dated 30.08.2007 directing the petitioner to handover all the charges to the Assistant Manager, since the petitioner was attaining the age of superannuation on the next date, namely, 31.08.2007. The second respondent being the appointing authority, is therefore, a competent person to relieve the petitioner. Accordingly, the petitioner handed over the charges on 31.08.2007 and retired from service. Thereafter, an order of termination was served on the petitioner on 01.09.2007, by anti-dating as 31.08.2007. The petitioner filed a writ petition in W.P(MD)No.10238 of 2007, challenging the said order of termination. By an order, dated 07.12.2007, this Court directed the first respondent to dispose of the appeal filed by the petitioner against the order of termination. Accordingly, the first respondent through his order, dated 13.03.2008, set aside the order of termination and however, permitted the second respondent to continue the disciplinary proceedings. Consequently, the impugned show-cause notice, dated 08.04.2008, came to be issued. Aggrieved against the same, the present writ petition is filed before this Court.

3.The above writ petition was admitted by this Court on 22.05.2008. I find no counter affidavit is filed in this writ petition by the respondents. On the other hand, the learned counsel appearing for the respondents contested the matter, by filing a typed set of papers, dated 03.08.2012.

4.The learned counsel appearing for the petitioner submitted that when the petitioner had already retired from service on 31.08.2007, the order of dismissal served on him on 01.09.2007, cannot be sustained. Moreover, when the appellate authority had set aside the said order of termination, he has no jurisdiction to direct the second respondent to continue the disciplinary proceeding against the petitioner, in view of the fact that such setting aside the order of termination results in automatic confirmation of the retirement of the petitioner from service on 31.08.2007. Consequently, the second respondent has got no jurisdiction to issue show-cause notice. It is also contended by the learned counsel appearing for the petitioner that when the petitioner attained the age of superannuation, unless any order or proceedings are issued retaining his service till the departmental proceedings are over, his retirement become automatic and there need not be any separate relieving order to be issued to the petitioner. There is no enabling provision in the service rules empowering the employer to retain the petitioner in service and continue the disciplinary proceedings. In the absence of such enabling provision, continuation of disciplinary proceedings against the petitioner after his retirement is not valid and without jurisdiction.

5. The learned counsel appearing for the petitioner further submitted that reliance placed by the first respondent on the decision of the Hon'ble Supreme Court reported in 2007(4) LLN 132 in the case of U.P. Co-op Federation Ltd vs. L.P.Rai cannot be applied to the facts and circumstances of this case and therefore, the appellate authority was jot justified in relying the said judgment. At any event, since the appellate authority had set aside the order of termination, the petitioner thought fit not to challenge the said order and only challenged the further direction issued therein for continuing the disciplinary proceeding, as the said direction was without jurisdiction. The second respondent himself through his communication, dated 30.08.2007, had directed the petitioner to handover the charge, since he attained the age of superannuation and pursuant to such communication, the petitioner had also handed over the charge on 31.08.2007. In all effect, the petitioner was relieved from duty and was permitted to retire from service on 31.08.2007. Therefore, the present impugned proceedings cannot be issued when the respondents are totally not having jurisdiction or control over the petitioner any more.

6. In support of his contention, the learned counsel for the petitioner relied on the following decisions:-

(1) (1993)3 SCC 666 (Bhagirathi Jena vs. Board of Directors, O.S.F.C. and others) (2) 2008(1) MLJ 119 (N.K.Gowder v. Coimbatore District Co-operative Milk Producers' Union Ltd) (3) 2007(10) SCC 249 (State Bank of India v. Ram Lal Baskar and another) (4) 2008(5) SCC 527 (UCO Bank v. Rajinder Lal Capoor) (5) (1997)8 SCC 60 (State Bank of India v. A.N.Gupta and others) (6) 2007(1) CTC 844 (Siemens Ltd vs. State of Maharashtra and others).

7.Per contra, the learned counsel appearing for the respondents submitted that the petitioner was not relieved by the second respondent, by issuing any relieving order and the communication, dated 30.08.2007, issued by the Special Officer to the petitioner cannot be termed as a relieving order. When the petitioner was not relieved, he was permitted to be in service continuously and therefore, the appellate authority though set aside the order of termination had rightly directed the disciplinary proceedings to continue and consequently, the impugned show-cause notice issued is within the jurisdiction of the second respondent. It is also contended by the learned counsel for the second respondent that the petitioner had not challenged the order of the appellate authority and therefore, he cannot be permitted to canvass the correctness of the said order in this writ petition.

8. In support of his submissions that the disciplinary proceedings can go on even after retirement, he relied on a decision of the Hon'ble Supreme Court reported in 2007(4) LLN 132 (cited supra), which in fact relied by the appellate authority for remitting the matter for fresh enquiry.

9. Heard the learned counsel for the respective parties.

10. The point for consideration in this case are as follows:- (1) Whether the termination order passed against the petitioner was well within the jurisdiction of the second respondent?

(2) Whether the appellate authority having set aside the order of termination, has got jurisdiction to direct the continuation of the disciplinary proceedings against the petitioner when he had already attained the age of superannuation?

(3) Whether the show-cause notice, impugned in this writ petition, is within the jurisdiction of the second respondent and if so, whether the petitioner is entitled to challenge the said show-cause notice alone without challenging the order of appellate authority where the second respondent was directed to proceed with the disciplinary proceedings?

11. Before considering the above said issues, the admitted facts are to be reiterated. The petitioner was working as Manager in Edimalayanpatti Puddur Branch between 11.02.1997 and 20.04.2003. He was transferred from the said place to another place on 20.04.2003. A charge memo, dated 27.06.2005, came to be issued against the petitioner in connection with the non-recovery of the loan amount, which was disbursed during his tenure as Manager at Edimalayanpatti Puddur Branch between 11.02.1997 and 20.04.2003. A domestic enquiry was conducted and that was also completed on 05.05.2007 itself. On 30.08.2007, the Special Officer of the second respondent bank issued an order directing the petitioner to handover the charge to one R.Dhayanithi and get relieved on 31.08.2007. The petitioner accordingly, handed over the charge on 31.08.2007. Thereafter, the order of termination, dated 31.08.2007, came to be served on the petitioner only on 01.09.2007. The petitioner challenged the said order before the first respondent by way of an appeal and by an order dated 13.03.2008, the first respondent set aside the order of termination, on the ground of violation of principles of natural justice and consequently, permitted the second respondent to continue the disciplinary proceedings from the stage where the violation of the procedures was found.

12. From the above facts, which are not disputed by the respondents by filing any counter affidavit, it is to be seen as to whether the petitioner on attaining the age of superannuation on 31.08.2007, got retired and whether he was relieved by the second respondent from his post without retaining him into service so as to enable the department to continue the disciplinary proceedings.

13. At this juncture it is useful to note the proceedings of the Special Officer of the second respondent bank, dated 30.08.2007, which is extracted as hereunder:-

"jpUr;rpuhg;gs;sp khtl;l kj;jpa Tl;Lwt[ tA;fp ypl;., jpUr;rpuhg;gs;sp . 02 jpUkjp Mh; . gpUe;jh, vk;.fhk;., rpVIIgp., vr;orpvk;., nizg;gjpthsh;/jdp mYtyh;

			 (Kgf;TLjy; bghWg;g[)

3915/06 v1                                 bray;Kiw Miz		ehs;
30.08.2007

bghUs; :- gzpaikg;g[ - jpUr;rpuhg;gs;sp khtl;l kj;jpa Tl;Lwt[ tA;fp ypl;., gzpahsh; 31.08.2007k; Bjjp gzp Xa;tpy; bry;yt[s;sJ - gzpg;bghWg;g[fis xg;gilj;Jtpl;L tpLtpj;Jf;bfhs;s cj;jutpLjy; --

bjhlh;ghf.

---------

Miz:

__ jpUr;rpuhg;gs;sp khtl;l kj;jpa Tl;Lwt[ tA;fp Jiwa{h;fpisBkyhsh; gzpaplj;jpw;F gzpakh;j;jk; bra;ag;gl;l Bkyhsh; jpU V.$hd;Jiu (jw;BghJ kUj;Jt tpLg;g[ tpz;zg;gpj;J cs;sth;) nth; Jiwa{h; fpisapy; Bkyhsh; gzpapy; Brh;e;j gpwF nth; nf;fpisapy; Bkyhsh; gzp bghWg;g[fis nf;fpisapy; cjtpBkyhsh; jpU Mh;. jahe[pjp trk; 31.08.07k; Bjjp gpw;gfy; xg;gilj;Jtpl;L tpLtpj;Jf;bfhs;s cj;jputplg;gLfpwJ.

Jiwa{h; fpis cjtpBkyhsh; jpU Mh;. jahejp, nf;fpisapd; Bkyhsh; gzp bghWg;g[fis jpU v.%$hd;Jiu Bkyhsh; trkpUe;J bgw;Wf; bfhz;L mtiu tpLtpf;ft[k; kW cj;jput[ tUk;tiu ng;gzpapid ghh;j;J tut[k; cj;jutplg;gLfpwJ.

Xg;gk;/- Mh;.gpUe;jh jdp mYtyh;.

14. A perusal of the said proceedings shows that the petitioner was directed to handover the charge to one R.Dhayanithi on 31.08.2007 and also to get relieved thereafter. The words "xg;gilj;Jtpl;L tpLtpj;Jf;bfhs;s" and "gzp Xa;tpy; bry;yt[s;sJ" found in the said proceedings undoubtedly lead to a conclusion that it was not a simple direction to handover the charge, but it was also an order relieving the petitioner on 31.08.2007. Further, when we refer to the subject matter of the said proceedings, it also indicates that the petitioner was to retire on 31.08.2007 and consequently, the order came to be passed for relieving him from the service. It is also to be noted that nowhere in the said proceedings, the second respondent had reserved his right to continue the disciplinary proceedings against the petitioner or it is not stated therein that the petitioner's service was retained with the respondents department. Therefore, the said proceedings dated 30.08.2007 was a pure and simple relieving order issued to the petitioner thereby directing him to handover the charge to the other person on 31.08.2007 and consequently, to get relieved himself. Further, the fact remains that as per the order, dated 30.08.2007, the petitioner handed over the charge to the other person on 31.08.2007. Therefore, when the petitioner had complied with the direction issued by the second respondent on 31.08.2007, by handing over the charge to other person and got relieved from the service, it has to be held that the petitioner was no more in the service of the respondents after 31.08.2007.

15. When that being the position, the order of termination, dated 31.08.2007, came to be served on the petitioner only on 01.09.2007. No doubt, the reason for not serving the same on 31.08.2007 itself had been discussed by the appellate authority in his order. But at the same time, it has to be seen that if any such order was sought to be served on the petitioner on 31.08.2007 itself, there should have been no occasion for the petitioner to handover the charge to the other person on 31.08.2007 as directed by the second respondent in his proceedings, dated 30.08.2007, and the other person should have also not accepted the charge from the petitioner on the same day, without making any reference about the order of termination, passed against the petitioner. Therefore, I am of the view that an order of termination, though was made on 31.08.2007, having been served on the petitioner only on 01.09.2007, cannot be held to be made before the retirement of the petitioner i.e., 31.08.2007.

16.At this juncture, it is useful to refer to the decision of the Hon'ble Supreme Court reported in 2001(8) SCC 443 in the case of State Bank of West Bengal vs. Mondal at paragraph 16 which reads as follows:-

16. .... An order passed but retained in file without being communicated to the plaintiff can have no force or authority whatsoever and the same has no valid existence in the eye of the law or claim to have come into operation and effect. No reliance can be placed on the same to even assert a claim based on its contents....."

17. Thus from the reading of the above said judgment of the Hon'ble Supreme Court, it is clear that mere passing of an order is not sufficient to claim its legality without getting it served on the person against whom it was passed in time or within time, especially, when the order sought to be made on the eve of the retirement. Therefore, in my considered view, the order of termination passed by the second respondent cannot have any legal force. Even otherwise, further facts show that the petitioner cannot be proceeded with by the second respondent any more. When the said order of termination was challenged before the first respondent, he had set aside the same through his order, dated 30.09.2008, on the ground of violation of principles of natural justice. Consequently, he further directed the second respondent to continue the disciplinary proceedings by granting opportunity to the petitioner. At this juncture, it has to be seen as to whether the first respondent, after setting aside the order of termination, has got jurisdiction to direct the continuation of the proceedings afresh, especially under the circumstances, the petitioner in the meantime had attained the age of superannuation and also got relieved and retired from the post. The effect of setting aside the order of termination by the first respondent would undoubtedly lead to the conclusion that it should date back to the order of termination on which date the petitioner was already relieved from the post and got retired. In other words, it has to be construed that there was no order of termination at all on 31.08.2007. It is also further to be noted that the respondents have not retained his service by passing any proceedings. No rule empowering the respondents to retain the service of the employee even after retirement for the purpose of conducting the disciplinary proceedings, is also produced before this Court. Thus in effect, when the petitioner got retired on 31.08.2007 there was nothing available empowering the respondents to proceed further against the petitioner.

18. No doubt, the learned counsel for the respondents relied on a decision of the Hon'ble Supreme Court reported in 2007(4) LLN 132 in the case of U.P.Co- op. Federation Ltd., vs. L.P.Raj to contend that the respondents are entitled to continue the disciplinary proceeding even after retirement. I perused the above Judgment of the Hon'ble Supreme Court.

19. In that case, entire disciplinary proceedings were initiated during the service period of the delinquent therein and he was also punished before his retirement. When the said order of punishment was challenged, the same was set aside by the High Court on the ground of certain procedural irregularities. Against which, further the appeal was taken before the Hon'ble Supreme Court and during the pendency of the proceedings, it appears that the delinquent therein retired and therefore, by taking note of the gravity of the charges levelled against the said employee, the Hon'ble Supreme Court granted liberty to hold fresh enquiry against the said person by observing that foreclosing the right of the employer to hold a fresh enquiry will not be proper only on the ground that the employee had since retired from the service.

20. Therefore, the facts of that case are totally different and distinguishable while considering the facts on hand. Consequently, the reliance placed on the said judgment by the learned counsel for the respondent is not correct. On the other hand, the learned counsel for the petitioner relied on a decision reported in 1999(3) SCC 666 (cited supra), wherein at paragraphs 6 and 7, the Hon'ble Supreme Court has held as follows:-

" 6. It will be noticed from the above said regulations that no specific provision was made for deducting any amount from the provident fund consequent to any misconduct determined in the departmental enquiry nor was any provision made for continuance of the departmental enquiry after superannuation.

7. In view of the absence of such a provision in the above said regulations, it must be held that the Corporation had no legal authority to make any reduction in the retiral benefits of the appellant. There is also no provision for conducting a disciplinary enquiry after retirement of the appellant and nor any provision stating that in case misconduct is established, a deduction could be made from retiral benefits."

21. In 2008(5) SCC 257 (as cited supra) the Hon'ble Supreme Court has held at paragraphs Nos.29 to 31 are as follows:-

29.We have noticed in para 15 of our judgment that ordinarily no disciplinary proceedings can be continued in absence of any rule after an employee reaches his age of superannuation. A rule which would enable the disciplinary authority to continue a disciplinary proceeding despite the officers reaching the age of superannuation must be a statutory rule. A fortiori it must be a rule applicable to disciplinary proceedings.

30. There cannot be any doubt whatsoever that the employer may take resort to a preliminary inquiry, but it will bear repetition to state that the same has a limited role to play. But, in absence of the statutory rules operating in the field, resorting to a preliminary enquiry would not by itself be enough to hold that a departmental proceeding has been initiated.

31. Initiation of a disciplinary proceeding may lead to an evil or civil consequence. Thus, in absence of clear words, the court must lean in favour of an interpretation which has been applied by this Court in the main judgment.

22. In the above said judgment, the Hon'ble Supreme Court rejected the claim for reconsideration of its earlier judgment in the same case in 2007(6) SCC 694 (cited supra), wherein, the Hon'ble Apex Court has held that the disciplinary proceedings initiated after the retirement of the employee is not proper.

23. In 1997(8) SCC 60, the Hon'ble Apex Court at paragraphs 14 and 16 held as follows:-

"14. ...The Court noted that there was no provision in the Service Rules of the Bank providing for extension of service of an employee to enable the authorities to complete the disciplinary enquiry against him which power was available under the Government Service Rules. The Court said even if an enquiry was pending against an employee there was nothing to stop him from retiring on his attaining the age of superannuation. The enquiry could not continue after his retirement. ..."

16. ... We cannot agree with the plea of the Bank that sanctioning of retirement must be understood as sanctioning of service which in terms must be understood as approval of service. Proceeding in the garb of disciplinary proceedings cannot be permitted after an employee has ceased to be in the service of the Bank as Service Rules do not provide for continuation of disciplinary proceedings after the date of superannuation. ..."

24. The Hon'ble Division Bench of this Court reported decision in 2008(1) MLJ 119 at paragraph 6 held as follows:-

6. A departmental proceeding can continue so long as the employee is in service. In the event, a disciplinary proceeding is kept pending by the employer, the employee cannot be made to retire. In the instant case, no rule has been brought to our notice providing for continuation of such proceeding despite permitting the employee concerned to retire. There has to be a specific provision of law or regulation or a by-law governing the service conditions of the person in question for continuing a departmental enquiry, initiated before the date of superannuation, even after the employee had retired from service. Without such a provision being available, there cannot be an employer-employee relationship surviving after the employee retires from service. Therefore, continuing the enquiry proceedings or conducting an action against the person after his retirement from service cannot be sustained in the eye of law. "

25. Thus from the reading of all these case laws of the Hon'ble Apex Court as well as by this Hon'ble Court, the reasonable conclusion that can be arrived at in this case is that the respondents 1 and 2 are not justified in continuing the proceedings against the petitioner, even after his retirement and therefore, the said action of issuing the show-cause notice, impugned in this writ petition, is totally without jurisdiction.

26. Then, we come to the next question as to whether the petitioner is entitled to challenge the show-cause notice alone without challenging the order of the appellate authority. As I have already pointed out that when the order of the appellate authority in directing the second respondent to continue the disciplinary proceedings is solely without jurisdiction when he has chosen to set aside the order of termination, in my considered view, the said portion of the order of the appellate authority is to be held as non-est one without any legality and jurisdiction, since once the order of termination is set aside, it should date back to such order of termination. Consequently, on 31.08.2007, when the fact remains that the petitioner had already attained the age of superannuation on that day and also got relieved and retired from the post on the very same date, he was no more in service and consequently, continuation of the disciplinary proceedings without retaining him in service is not legal as the same is without jurisdiction.

27. At this juncture, it is useful to refer to the decision of the Hon'ble Supreme Court reported in 2008(7) SCC 748 (cited supra), wherein, it was held that a decree or order passed without jurisdiction is nullity and the same can be challenged at any stage even in a collateral proceedings. Therefore, the petitioner can very well canvass the correctness or otherwise of the order passed by the appellate authority even while challenging the subsequent show- cause notice issued by the second respondent.

28. Thus, the last question as to whether the petitioner is entitled to challenge the show-cause notice is also to be answered in favour of the petitioner, especially, under the facts and circumstances of the present case, and in view of my finding that the second respondent is not having any jurisdiction to issue the said show-cause notice on the petitioner.

29. At this juncture, it is useful to refer to the decision of the Hon'ble Supreme Court reported in 2007(1) CTC 844 (cited supra) wherein, at paragraph 10, it is held as follows:-

"Although ordinarily a writ court may not exercise its discretionary jurisdiction in entertaining a writ petition questioning a notice to show cause unless the same inter alia appears to have been without jurisdiction as has been held by this Court in some decisions including State of Uttar Pradesh v. Brahm Datt Sharma and Anr. AIR 1987 SC 943, Special Director and Another v. Mohd. Ghulam Ghouse and Another, (2004) 3 SCC 440 and Union of India and Another v. Kunisetty Satyanarayana, 2006 (12) SCALE 262]."

30. In another decision reported in 2006(12) SCC 28 in the case of Union of India vs. Kunisetty Satyanarayana, the Hon'ble Supreme Court has held as follows:-

"15. Writ Jurisdiction is discretionary jurisdiction and hence such discretion under Article 226 should not ordinarily be exercised by quashing a show-cause notice or charge-sheet.

16. No doubt, in some very rare and exceptional cases the High Court can quash a charge-sheet or show-cause notice if it is found to be wholly without jurisdiction or for some other reason if it is wholly illegal. However, ordinarily the High Court should not interfere in such a matter."

31. The reading of the above decision of the Hon'ble Supreme Court, only shows that the impugned show-cause notice issued by the second respondent without jurisdiction can be challenged by the petitioner.

32. In the result, by considering the all facts and circumstances of the case as well as the case laws cited supra, I am of the view that the petitioner is entitled to succeed in this writ petition.

33. Accordingly, the writ petition is allowed and impugned show-cause notice is set aside and consequently, the respondents are directed to pay all the terminal benefits to the petitioner within a period of eight weeks from the date of receipt of a copy of this order. No costs.

skn To

1.The Registrar of Co-operative Societies, E.V.R.Salai, Chennai - 600 010.

2.The Joint Registrar, Thiruchirappalli District Co-op. Bank Ltd., No.1, Fort Station Road, Thiruchirappalli - 620 002.
Ajay Sethi
Advocate, Mumbai
23125 Answers
1214 Consultations
5.0 on 5.0
1) it is well settled law that no disciplinary proceedings can be initiated after retirement . 

2) HC has directed bank to pay your retirement benefits with interest 

3) if no rate of interest is mentioned  you can have papers produced before court for speaking to the minutes of order 

4) seek clarification from court as to rate of interest to be payable by bank 
Ajay Sethi
Advocate, Mumbai
23125 Answers
1214 Consultations
5.0 on 5.0
As per law there can be no disciplinary proceedings initiated against an employee after his retirement by the employer.
The high court has already passed an order to release the withheld benefits with interest, however since there was no rate of interest mentioned in the order, you may approach the court for a speaking order specifying the rate of interest to be payable by the employer.
T Kalaiselvan
Advocate, Vellore
13935 Answers
127 Consultations
5.0 on 5.0
Kerala High Court
A.B.Viswanathan vs Fertilizers And Chemicals ...
        

 
IN THE HIGH COURT OF KERALAAT ERNAKULAM

                                           PRESENT:

                       THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN

                   TUESDAY, THE 28TH DAY OF JULY 2015/6TH SRAVANA, 1937

                                  WP(C).No. 8283 of 2015 (I)
                                     ---------------------------

PETITIONER:
------------------

            A.B.VISWANATHAN
            (RETIRED SENIOR REGIONAL MANAGER
            FERTILIZERS AND CHEMICALS TRAVANCORE LTD.(FACT)
            UDYOGAMANDAL, ERNAKULAM DISTRICT), HILL VIEW
            KALLEKULANGARA, PALAKKAD, PIN-678009.

            BY ADVS.SRI.S.P.ARAVINDAKSHAN PILLAY
                        SMT.N.SANTHA
                        SRI.V.VARGHESE
                        SRI.PETER JOSE CHRISTO
                        SRI.S.A.ANAND
                        SMT.L.ANNAPOORNA

RESPONDENTS:
-----------------------

        1. FERTILIZERS AND CHEMICALS TRAVANCORE LTD. (FACT)
            REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR
            UDYOGAMANDAL, ERNAKULAM DISTRICT, PIN-683501.

        2. THE GENERAL MANAGER,
            (HR & BD)AND DISCIPLINARY AUTHORITY
            FACT CORPORATE OFFICE, UDYOGAMANDAL
            ERNAKULAM DISTRICT, PIN-683501.

            R1,R 2 BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR
            R1,R 2 BY ADV. SRI.P.GOPINATH
            R1,R 2 BY ADV. SRI.P.BENNY THOMAS
            R1,R 2 BY ADV. SRI.K.JOHN MATHAI
            R1,R 2 BY ADV. SRI.JOSON MANAVALAN
            R1,R 2 BY ADV. SRI.KURYAN THOMAS

            THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
28-07-2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No. 8283 of 2015 (I)

                                          APPENDIX

PETITIONER'S EXHIBITS
-----------------------------------

EXT.P1             TRUE COPY OF THE MEMORANDUM NO.GM(HR & BD) -CO-D07-136
                   DATED 25.08.2014 OF THE 2ND RESPONDENT
EXT.P2             TRUE COPY OF THE EXPLANATION DATED 07.10.2014 SUBMITTED BY
                   THE PETITIONER TO EXT.P1
EXT.P3             TRUE COPY OF THE REPRESENTATION DATED 12.11.2014 SUBMITTED
                   BY THE PETITIONER BEFORE THE 2ND RESPONDENT
EXT.P4             TRUE COPY OF THE REPRESENTATION DATED 18.02.2015 SUBMITTED
                   BY THE PETITIONER BEFORE THE CHAIRMAN AND MANAGING
                   DIRECTOR OF FACT.

EXT.P5:            COPY OF SPEED POST ENVELOPE.

EXT.P6:            COPY OF REGISTERED POST ENVELOPE.

EXT.P7:            COPY OF E-MAIL MESSAGE SENT BY THE RESPONDENTS TO THE
                   PETITIONER.

EXT.P8:            COPY OF MEDICAL CERTIFICATE ISSUED BY KALPANA MEDICAL
                   CENTRE, COIMBATORE TO THE PETITIONER.

RESPONDENTS' EXHIBITS
---------------------------------------
EXT.R1(A):          COPY OF CDA RULES APPLICABLE TO THE MANAGERIAL PERSONNEL
                    OF THE COMPANY.

EXT.R1(B):          COPY OF CDA RULES APPLICABLE TO THE MANAGERIAL PERSONNEL
                    OF THE COMPANY.

EXT.R1(C):          COPY OF COVER RETURNED FROM THE POSTAL AUTHORITIES WITH
                    REMARKS "REFUSED".

EXT.R1(C):          COPY OF EXTRACT OF THE STATEMENT MAINTAINED IN THE
                    ADMINISTRATIVE OFFICE OF THE 1ST RESPONDENT EVIDENCING
                    DISPATCH OF SPEED POST.

EXT.R1(D):          COPY OF LETTER DT.18.8.2014 SUBMITTED BY THE PETITIONER TO
                    THE PF DEPARTMENT OF THE 1ST RESPONDENT.



                                                        TRUE COPY


                                                        P.S.TO JUDGE


dsn



                      ANIL K. NARENDRAN, J.
              ------------------------------------------
                      W.P.(C) No.8283 of 2015
              ------------------------------------------
              Dated this the 28th day of July, 2015

                             JUDGMENT
The petitioner, who retired from service of the Fertilizers and Chemicals Travancore Limited (FACT) on 31.08.2014, has filed this writ petition seeking a writ of certiorari to quash Ext.P1 memorandum dated 25.08.2014 issued by the 2nd respondent; a declaration that no disciplinary action is liable to be taken against him on the basis of Ext.P1, which was served on him only on 24.09.2014, after he retired from service on 31.08.2014; a writ of mandamus commanding the respondents to drop the disciplinary action contemplated against him as per Ext.P1; and a writ of mandamus commanding the respondents to disburse all his retirement benefits with interest at the rate of 9% per annum, with effect from 01.09.2014 to the date of actual payment.

2. Going by the averments in the writ petition, the petitioner retired from service on 31.08.2014, while working as Senior Regional Manager of FACT at Coimbatore. After retirement, the petitioner was issued with Ext.P1 memorandum  dated 25.08.2014 of the 2nd respondent, which contains articles of charges framed against him, statements of imputations of misconduct in support of articles of charges, list of documents and also list of witnesses. The petitioner would submit that, though Ext.P1 is dated 25.08.2014, it was served on him only on 24.09.2014. The transactions which form the basis for issuance of the articles of charges read thus;

"1. During his tenure as SRM Co-ord Coimbatore, Shri.A.B.Viswanathan paid an amount of Rs.75,000/- to Mr.Murali Nair who was functioning as DGM(Fin) and GM (Corp Fin) as remittance in the State Bank of India Palarivattom Branch, Account No:30012379332 maintained by Shri.Murali Nair, through his wife Smt.V.Prasanna Rani vide SBI Account Pay-in-slips dated 12.11.2008 for Rs.25,000/- and 14.11.2008 for Rs.25,000/- of SBI Saibaba Colony Branch, Coimbatore and Pay-in-slip dated 04.04.2011 for Rs.25,000/- of SBI Olavakkode Branch.
2. Shri.A.B.Viswanathan paid Rs.25,000/- to Shri Murali Nair through the SBI account No.30012379332 maintained by Shri.Murali Nair by Account Pay-in-slip dated 11.08.2009 of SBI Saibaba Colony Branch, Coimbatore.
3. Shri.A.B.Viswanathan paid another Rs.20,000/- to Shri.Murali Nair through the SBI account No.30012379332 maintained by Shri.Murali Nair by Account Pay-in-slip dated 03.11.2011 of SBI Hassan Branch.
4. Thus Shri.A B Viswanathan paid a total amount of Rs.1,20,000/- in 5 installments by remittances made from SBI Saibaba Colony, Coimbatore, SBI Olavakkode and SBI Hassan branches to the SB Account of Shri.Murali Nair maintained at SBI, Palarivattom branch through core banking."
It is alleged in Ext.P1 that, all the above transactions were made without informing the Company as per the procedure laid down in the FACT Employees (Conduct, Discipline and Appeal) Rules, 1977 (hereinafter referred to as 'the CDA Rules') applicable to managerial personnel and that, the above acts/omissions on the part of the petitioner constitute violation of Rule 4(a)(ii) & (iii), Rule 5, Rule 7(t) & (x), Rule 15, and Rule 17(b) & (c) of the CDA Rules.

3. On receipt of Ext.P1, the petitioner submitted Ext.P2 explanation pointing out that, he has already retired from service on 31.08.2014 and as such no disciplinary proceedings can be initiated or continued against him, for the reason that, the master-servant relationship between FACT and the petitioner ceased to exist on retirement from service. Since Ext.P1 memorandum was communicated to him only on 21.09.2014,  i.e., after his retirement from service, the entire disciplinary proceedings initiated against him are void and unsustainable. In Ext.P2 explanation, the petitioner has also denied the charges levelled against him. Subsequently, the petitioner submitted Ext.P3 representation dated 12.11.2014 before the 2nd respondent, reiterating that the disciplinary action contemplated in Ext.P1 is legally unsustainable and that, even after a lapse of more than one month from the date of Ext.P2 reply and more than two months after his retirement from service, the benefits due to him like gratuity, leave encashment, etc., are remaining unpaid. Thereafter, the petitioner submitted Ext.P4 representation dated 18.2.2015 before the Chairman and Managing Director of FACT. It is aggrieved by the disciplinary action initiated pursuant to Ext.P1 and also the non-payment of terminal benefits, the petitioner has approached this Court in this writ petition seeking various reliefs.

4. A counter affidavit has been filed on behalf of the respondents, contending that the disciplinary action initiated against the petitioner is perfectly legal. The respondents would  contend that, Ext.R1(a) CDA Rules applicable to managerial personnel enables them to initiate disciplinary proceedings against the petitioner based on Ext.P1 memorandum. The petitioner was issued with articles of charges dated 25.08.2014, under Rule 26 of the CDA Rules, following the registration of a case by the Central Bureau of Investigation (CBI) against some of the officials in the Marketing Division of FACT. The petitioner is arrayed as an accused in Crime No.RC-6(A)/12 registered by the CBI against Sri.Murali Nair, a former employee of the Company, and the allegation made against the petitioner is that, during 2008-2011 he had habitually abetted commission of offence under Section 13(2) read with Section 13(1)(b) and Section 11 of the Prevention of Corruption Act, 1988 by Sri.Murali Nair, who was a public servant employed in FACT, by habitually offering him bribes for a total amount of Rs.1,20,000/- through the savings bank account held by Sri.Murali Nair at State Bank of India, Palarivattom Branch and as such the petitioner committed offences under Section 14 read with Section 12 of the said Act.

5. The specific stand taken by the respondents is that,  the departmental proceedings against the petitioner were set in motion, with the issuance of charge-sheet, vide Ext.P1 memorandum dated 25.08.2014, which was despatched to his residential address at Palakkad on 28.08.2014, by speed-post. But, the envelope containing Ext.P1 was returned by the postal authorities on 17.09.2014, with an endorsement 'refused', which is evident from Ext.R1(b). By that time, the petitioner retired from service. The envelope with the endorsement 'refused' was again sent to his address at Coimbatore on 20.09.2014 by speed post, which was acknowledged on 24.09.2014. On receipt of Ext.P1 memorandum, the petitioner submitted Ext.P2 explanation denying the charges, which was found not satisfactory and hence a departmental enquiry was ordered.

6. Relying on clause (i) of Rule 32 of the CDA Rules, the respondents would contend that, the disciplinary proceedings, if instituted while the employee was in service, whether before his retirement or during his re-employment, shall after the final retirement of the employee, be deemed to be proceeding and shall be continued and concluded by the authority by which it was  commenced in the same manner as if the employee had continued in service. Relying on clause (ii) of Rule 32, the respondents would contend that, during the pendency of the disciplinary proceedings, the disciplinary authority may withhold payment of gratuity in accordance with sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972.

7. The petitioner has filed a reply affidavit, reiterating that he received Ext.P1 only on 24.09.2014. When he received Ext.P1 by registered post, it was wrapped in two envelops. The 1st envelope (outer envelope) contained his correct residential address. But the mobile number shown therein was not the number he communicated to the respondents while he was stationed in Coimbatore. Beneath the outer envelope there was another envelope, which is in fact the speed post envelope in which Ext.P1 was originally sent in the Palakkad address. According to the petitioner, his father-in-law is presently residing in that address, who has rightly refused to accept the said envelope. The petitioner produced a photocopy of the envelope sent by speed post as Ext.P5 and a photocopy of the envelope  sent by registered post as Ext.P6. Ext.P7 is a copy of his e-mail sent on 18.10.2013, intimating the respondents his residential address at Coimbatore. According to the petitioner, since Ext.P1 was not served on the petitioner at his Coimbatore address, while he was in service, the disciplinary proceedings initiated against him based on the said memorandum cannot be justified placing reliance on Rule 32 of the CDA Rules.

8. The respondents have filed an additional affidavit producing therewith Ext.R1(c) extract of the statement maintained in its Administrative Office, evidencing despatch of Ext.P1 memorandum to the petitioner by speed post on 28.08.2014. Relying on the said document, the respondents would contend that, the envelope containing the articles of charges, etc., were originally despatched by speed post to his residential address, on 28.08.2014 itself, under Rule 26 of the CDA Rules. The departmental proceedings were set in motion with the issuance of the articles of charges, etc., vide Ext.P1 memorandum, which was sent to the petitioner by speed post to his residential address. But the envelope despatched on  28.08.2014 was returned by the postal authorities with an endorsement 'refused', on 17.09.2014.

9. The respondents have also filed a rejoinder, producing therewith Ext.R1(d) request made by the petitioner dated 18.08.2014 before the Secretary of the Provident Fund Trust, Udyogamandal Division, through the Manager (HR), requesting settlement of his PF account, wherein he has stated that all future communications are to be sent to his address mentioned therein, namely, "Hill View, Kallenkulangara, Palakkad-678009". Regarding Ext.P7 e-mail relied on by the petitioner, the respondents would contend that, the said e-mail does not state that there is any change in the address of the petitioner or that all future communications will have to be sent to the address mentioned therein. According to the respondents, in view of Ext.R1(d) letter dated 18.08.2014 of the petitioner, any reliance placed on Ext.P7 e-mail loses its significance.

10. I heard the arguments of the learned counsel for the petitioner and also the learned Standing Counsel for the respondents.

11. The issues that arise for consideration in this writ petition are as to the legality or otherwise of the disciplinary proceedings initiated against the petitioner based on the articles of charges, etc., contained in Ext.P1 memorandum and also whether the petitioner is entitled for disbursement of his retirement benefits together with interest at the rate of 9% per annum, with effect from 01.09.2014.

12. The fact that, the petitioner is governed by the provisions under the CDA Rules is not in dispute. Clause (a) of Rule 4 of the CDA Rules provides that, every employee of the Company shall at all times, (i) maintain absolute integrity, (ii) maintain devotion to duty, and (iii) do nothing, which is unbecoming of an employee of his/her status or of a public servant. Rule 5 of the CDA Rules deals with the liability of an employee to abide by the Rules. Rule 5 provides that, every employee of the Company shall at all times conform to and abide by these and every rules of the Company and shall observe, comply with and obey all lawful orders and directions which may, from time to time, be given to him in the course of his official  duties by any person or persons under whose jurisdiction, superintendence or control he may, for the time being, be placed. Rule 7 deals with misconducts. As per clauses (t) and (x) of Rule 7, commission of any act subversive of discipline or of good behaviour; and pursuance of conduct unbecoming of an employee of his/her status or a public servant, shall be treated as misconduct. Going by Rule 15, no employee shall, save in the ordinary course of business with a bank, the Life Insurance Corporation or a firm of standing, borrow money from or lend money to or otherwise place himself under pecuniary obligation to any person with whom he has or is likely to have official dealings or permit any such borrowing, lending or pecuniary obligation in his name or for his benefit or for the benefit of any member of his family. As per clauses (b) and (c) of Rule 17, no employee of the Company shall except with the previous sanction of the competent authority enter into any transaction concerning any immovable or movable property with a person or a firm having official dealings with the employee or his subordinates; and every employee of the Company shall report to the  competent authority every transaction concerning movable property owned or held by him in his own name or in the name of a member of his family within one month of such transaction, if the value of such property exceeds Rs.15,000/-. The allegation in Ext.P1 memorandum is that, the acts/omission on the part of the petitioner referred to therein violate Rule 4(a)(ii) & (iii), Rule 5, Rule 7(t) & (x), Rule 15, and Rule 17(b) & (c) of the CDA Rules.

13. Rue 24 of the CDA Rules deals with penalties, both minor penalties and major penalties, which may be imposed on an employee for misconduct committed by him or for any other good and sufficient reasons. Rule 26 deals with the procedure for imposing major penalties. Clause (a) of Rule 26 provides that, no order imposing any of the major penalties specified in Rule 24 shall be made except after an inquiry is held in accordance with this rule. Clause (c) of Rule 26 provides further that, where it is proposed to hold an inquiry the disciplinary authority shall frame definite charges on the basis of the allegations against the employee. The charges together with a statement of the allegations, on which they are based, a list of documents by  which and a list of witnesses by whom, the articles of charges are proposed to be sustained, shall be communicated in writing to the employee, who shall be required to submit within such time as may be specified by the disciplinary authority, not exceeding 15 days, a written statement whether he admits or denies any of or all the articles of charge. Similarly, Rule 28 deals with the procedure for imposing minor penalties.

14. Clause (i) of Rule 32 provides that, disciplinary proceedings, if instituted while the employee was in service whether before his retirement or during his re-employment, shall after the final retirement of the employee, be deemed to be proceeding and shall be continued and concluded by the authority by which it was commenced in the same manner as if the employee had continued in service. Clause (ii) of Rule 32 provides further that, during the pendancy of the disciplinary proceeding, the disciplinary authority may withhold payment of gratuity in accordance with sub-section (6) of Section (4) of the Payment of Gratuity Act, 1972.

15. The fact that the petitioner retired from service on  superannuation on 31.08.2014 is not in dispute. According to the petitioner, after retirement from service, he was issued with Ext.P1 memorandum dated 25.08.2014 of the 2nd respondent, which contains articles of charges, statements of imputations of misconduct, list of documents and also list of witnesses. Ext.P1 also contains an endorsement made on 26.08.2014 by the Chief Manager (Training & Development), before the same was despatched to the petitioner by speed post on 28.08.2014, in his residential address, i.e., "Hill View, Kallekulangara, Palakkad- 678 009", which is none other than the 'residential address' of the petitioner shown in the cause title of this writ petition. Photocopy of the envelope in which Ext.P1 memorandum was originally sent by speed on 28.08.2014 to the petitioner in his residential address at Palakkad is on record as Ext.P5/Ext.R1(b). Ext.P6 is a photocopy of the envelope in which Ext.P1 memorandum was later sent by registered post to his address at Coimbatore. Ext.R1(e) is the extract of the statement maintained in the Administrative Office of the respondents evidencing despatch of Ext.P1 by speed post on 28.08.2014. Therefore, the  documents on record make it explicitly clear that, Ext.P1 memorandum, which contained articles of charges framed against the petitioner, statements of imputations of misconduct in support of articles of charges, list of documents and also list of witnesses, was originally despatched from the office of the respondents on 28.08.2014 to the residential address of the petitioner at Palakkad, much prior to his date of retirement, namely, 31.08.2014.

16. The learned counsel for the petitioner would contend that, since Ext.P1 memorandum was originally addressed to his Palakkad address, which is not an address provided to the respondents for sending official communications, it cannot be treated as a communication properly addressed to the petitioner. Later, Ext.P1 memorandum was addressed to his Coimbatore address, by registered post, which was served on him only on 24.09.2014, much after his retirement and as such, no disciplinary proceedings can be initiated on the strength of Ext.P1. Though the petitioner would contend that, Ext.P5/R1(b) envelope sent by speed post was improperly addressed, the fact  remains that it is his residential address shown in the cause title of this writ petition. The petitioner is also not disputing the fact that, when Ext.P5/R1(b) envelope reached the above address, his father-in-law refused to accept the same and therefore, the postal authorities returned the said envelope to the 2nd respondent, which was later sent by registered post to his address at Coimbatore, as evident from Ext.P6 envelope. The learned counsel for the petitioner would then contend that, since the residential address of the petitioner at Palakkad is not the address provided to the respondents for sending official communications, his father-in-law was justified in refusing to accept the said communication. However, in Ext.R1(d) request dated 18.08.2014 made before the Secretary of the Provident Fund Trust, Udyogamandal Division, through the Manager (HR), the petitioner has stated that all future communications are to be sent to his address mentioned therein, namely, "Hill View, Kallenkulangara, Palakkad-678009". Therefore, the contention of the petitioner that, Ext.P1 memorandum is not a communication properly addressed to him can only be rejected. 

17. As I have already noticed, clause (c) of Rule 26 of the CDA Rules provides that, where it is proposed to hold an inquiry for imposing a major penalty, the charges together with a statement of the allegations, on which they are based, a list of documents by which and a list of witnesses by whom, the articles of charge are proposed to be sustained, shall be communicated in writing to the employee, who shall be required to submit within such time as may be specified by the disciplinary authority, not exceeding 15 days, a written statement whether he admits or denies any of or all the articles of charge. Clause (i) of Rule 32 provides further that, the disciplinary proceedings if instituted while the employee was in service whether before his retirement or re-employment, shall after the final retirement of the employee, be deemed to be proceeding and shall be continued and concluded by the authority by which it was commenced in the the same manner as if the employee had continued in service.

18. In State of Punjab v. Khemi Ram (1969 (3) SCC

28) a four-Judge Bench of the Apex Court had occasion to  consider the question whether 'communication' of the order means its actual receipt by the concerned Government servant. After referring to the decisions cited before it, the Apex Court held that, it was the communication of the impugned order which was held to be essential and not its actual receipt by the officer concerned and such communication was held to be necessary because till the order is issued and actually sent out to the person concerned the authority making such order would be in a position to change its mind and modify it if it thought fit. But once such an order is sent out, it goes out of the control of such an authority and therefore, there would be no chance whatsoever of its changing its mind or modifying it. The Apex Court held further that, once an order is issued and it is sent out to the concerned Government servant, it must be held to have been communicated to him, no matter when he actually received it. Para.17 of the judgment reads thus;

"17. The question then is whether communicating the order means its actual receipt by the concerned Government servant. The order of suspension in question was published in the Gazette though that was after the date when the respondent was to retire. But the point is  whether it was communicated to him before that date. The ordinary meaning of the word 'communicate' is to impart, confer or transmit information. (cf. Shorter Oxford English Dictionary, Vol. 1, p. 352). As already stated, telegrams dated July 31, and August 2, 1958, were despatched to the respondent at the address given by him where communications by Government should be despatched. Both the telegrams transmitted or imparted information to the respondent that he was suspended from service with effect from August 2, 1958. It may be that he actually received them in or about the middle of August 1958 after the date of his retirement. But how can it be said that the information about his having been suspended was not imparted or transmitted to him on July 31, and August 2, 1958, i.e., before August 4, 1958 when he would have retired? It will be seen that in all the decisions cited before us it was the communication of the impugned order which was held to be essential and not its actual receipt by the officer concerned and such communication was held to be necessary because till the order is issued and actually sent out to the person concerned the authority making such order would be in a position to change its mind and modify it if it thought fit. But once such an order is sent out, it goes out of the control of such an authority and therefore, there would be no chance whatsoever of its changing its mind or modifying it. In our view, once an order is issued and it is sent out to the concerned Government servant, it must be held to have been communicated to him, no  matter when he actually received it. We find it difficult to persuade ourselves to accept the view that it is only from the date of the actual receipt by him that the order becomes effective. If that be the true meaning of communication, it would be possible for a Government servant to effectively thwart an order by avoiding receipt of it by one method or the other till after the date of his retirement even though such an order is passed and despatched to him before such date. An officer against whom action is sought to be taken, thus, may go away from the address given by him for service of such orders or may deliberately give a wrong address and thus prevent or delay its receipt and be able to defeat its service on him. Such a meaning of the word 'communication' ought not to be given unless the provision in question expressly so provides. Actually knowledge by him of an order where it is one of dismissal, may, perhaps, become necessary because of the consequences which the decision in AIR 1966 SC 1313 (supra) contemplates. But such consequences would not occur in the case of an officer who has proceeded on leave and against whom an order of suspension is passed because in his case there is no question of his doing any act or passing any order and such act or order being challenged as invalid."
19. In Khemi Ram's case (supra), the Apex Court, with reference to the contention that, it is only from the date of the actual receipt by the employee that the order becomes effective,  observed that, if that be the true meaning of 'communication', it would be possible for a Government servant to effectively thwart an order by avoiding receipt of it by one method or the other till after the date of his retirement even though such an order is passed and despatched to him before such date. An officer against whom action is sought to be taken, thus, may go away from the address given by him for service of such orders or may deliberately give a wrong address and thus prevent or delay its receipt and be able to defeat its service on him. Such a meaning of the word 'communication' ought not to be given unless the provision in question expressly so provides.

20. In Delhi Development Authority v. H.C. Khurana (1993 (3) SCC 196) the Apex Court held that, service of the charge sheet on the Government servant follows the decision to initiate disciplinary proceedings, and it does not precede or coincide with that decision. The delay, if any, in service of the charge sheet to the Government servant, after it has been framed and despatched, does not have the effect of delaying initiation of the disciplinary proceedings, inasmuch as information  to the Government servant of the charges framed against him, by service of the charge sheet, is not a part of the decision making process of the authorities for initiating the disciplinary proceedings. Para.9 of the judgment read thus;

"9. The question now, is: What is the stage, when it can be said, that 'a decision has been taken to initiate disciplinary proceedings'? We have no doubt that the decision to initiate disciplinary proceedings cannot be subsequent to the issuance of the charge sheet, since issue of the charge sheet is a consequence of the decision to initiate disciplinary proceedings. Framing the charge sheet, is the first step taken for holding the enquiry into the allegations, on the decision taken to initiate disciplinary proceedings. The charge sheet is framed on the basis of the allegations made against the Government servant; the charge sheet is then served on him to enable him to give his explanation; if the explanation is satisfactory, the proceedings are closed, otherwise, an enquiry is held into the charges; if the charges are not proved, the proceedings are closed and the Government servant exonerated; but if the charges are proved, the penalty follows. Thus, the, service of the charge sheet on the Government servant follows the decision to initiate disciplinary proceedings, and it does not precede or coincide with that decision. The delay, if any, in service of the charge sheet to the Government servant, after it has  been framed and despatched, does not have the effect of delaying initiation of the disciplinary proceedings, inasmuch as information, to the Government servant of the charges framed against him, by service of the charge sheet, is not a part of the decision making process of the authorities for initiating the disciplinary proceedings."
The principle laid down by the four-Judge Bench of the Apex Court in H.C.Khurana's case (supra) was followed in the later decisions, namely, Union of India v. Sangram Keshari Nayak (2007 (6) SCC 704), Coal India Ltd. v. Saroj Kumar Mishra (2007 (9) SCC 625) and State of Andhra Pradesh and others v. G.H.Gandhi (2013 (5) SCC 111).

21. In V.M.Shamsuddin v. Union of India and others (2007 (4) KHC 90) a Division Bench of this Court, in the context of sub-rules (4) and (6) of Rule 14 and Rule 30 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965 held that, the principle laid down by the Apex Court in H.C. Khurana's case (supra) would not apply in a case where the charge sheet was never issued to the employee before his retirement. The facts as borne out from the judgment clearly indicate that, the employee concerned superannuated on  30.06.1997 and the charge sheet was served on him only on 01.08.1997. The charge sheet was sent from Delhi to the Vigilance Officer, Kavaratti on 30.06.1997. The stand of the Department was that, in the letter addressed to the Vigilance Officer, the charge sheet addressed to the employee was also enclosed. The mode of serving memo of charges under Rule 30 of the Central Civil Services (Classification, Control and Appeal) Rules is by tendering the memo in person on the Government servant, which means it must be served before Government servant's retirement. Another mode of service of notice or order, on the Government servant is through registered post. The Department have no case that, either from Delhi or from Kavaratti the charge sheet was even issued to the employee on or before 30.06.1997. In other words, before his retirement, the charge sheet was never issued to him either from Delhi or from Kavaratti. In that factual matrix, this Court held that, in a case where the charge sheet was never issued to the employee concerned before his retirement, the principle laid down by the Apex Court in H.C. Khurana's case (supra) would not apply. But,  in Para.4 of the judgment, the Division Bench observed that, if the charge sheet was issued by despatching it to the employee concerned on 30.06.1997 from Delhi at least it could have been said that the charge sheet has been issued to him before retirement. Para.4 of the judgment reads thus;

"4. The above principle would not apply to the facts of this case. This is a case where the charge sheet was never issued to him before his retirement. Charge sheet was sent from Delhi to the Chief Vigilance Officer situated at Kavaratti and not to the petitioner. If the charge sheet was issued by despatching it to the petitioner on 30.06.1997 from Delhi at least it could have been said that charge sheet has been issued to him before the retirement. The department had forwarded the charge sheet not to the petitioner but to the Vigilance Officer at Kavaratti and it was served on the petitioner only on 01.08.1997, after his retirement. Under such circumstance there has not been any compliance with Rule 14 read with Rule 30 of the CCS (CCA) Rules. We are, therefore, inclined to allow this original petition and set aside the order of the Tribunal and also the departmental proceeding initiated against the petitioner."
22. Relying on the judgment of the Apex Court in National Textile Corporation (M.P.) Ltd. v M.R.Jahav (2008 (7) SCC 29), the learned counsel for the petitioner would  contend that, actual communication of charge sheet, i.e., service of charge sheet on the employee before his retirement is essential for continuing the disciplinary proceedings after his retirement. But, the above judgment of the Apex Court was in the context of Sections 3 and 7 of the Contract Act, 1872, as per which, acceptance of an offer must be communicated to constitute a binding contract. The Apex Court held that, an offer of voluntary retirement must be made and accepted so long as the relationship of an employer and employee continues, subject to the rules to the contrary. Communication of acceptance of offer is necessary and an internal noting does not constitute a communication. However, the Apex Court noticed that, a distinction has always been made by it as to cessation of a contract of service by way of punishment vis-a-vis an order of suspension which does not bring about such a cessation. Paras.22 to 24 of the judgment read thus;

"22. What is the meaning of the word 'communication' has been noticed by this Court in State of Punjab v. Amar Singh Harika [AIR 1966 SC 1313] in the following terms:
"It is plain that the mere passing of an order of dismissal would not be effective unless it is published  and communicated to the officer concerned. If the appointing authority passed an order of dismissal, but does not communicate it to the officer concerned, theoretically it is possible that unlike in the case of a judicial order pronounced in Court, the authority may change its mind and decide to modify its order. [See also BSNL v. Subash Chandra Kanchan 2006 (8) SCC 279]"
A distinction, however, has always been made by this Court as to cessation of a contract of service by way of punishment vis a vis an order of suspension which does not bring about such a cessation, as for example suspension. [See State of Punjab v. Khemi Ram AIR 1970 SC 214]
23. In MCD v. Qimat Rai Gupta [2007 (7) SCC 309], this Court opined:
"27. An order passed by a competent authority dismissing a government servant from services requires communication thereof as has been held in State of Punjab v. Amar Singh Harika but an order placing a government servant on suspension does not require communication of that order. [See State of Punjab v. Khemi Ram AIR 1970 SC 214]"
24. Therefore, there cannot be any doubt whatsoever that communication of the acceptance of offer was necessary. An internal noting does not constitute a communication. Even in a case of order of suspension, only when the case goes out of the control of the appropriate authority, actual communication may not be necessary."
23. In the case on hand, Ext.P1 memorandum dated 25.08.2014, which contains articles of charges, statement of imputations of misconduct, list of documents and also list of witnesses was despatched to the petitioner by speed post on 28.08.2014, in his address at Palakkad, which is none other than the 'residential address' of the petitioner shown in the cause title of this writ petition and also the address for future communications mentioned in his Ext.R1(d) request made through the Manager (HR), dated 18.08.2014. Ext.P1 memorandum contains an endorsement made by the Chief Manager (Training & Development) on 26.08.2014 and Ext.R1(e) extract of the statement maintained in the Administrative Office of the respondents evidences despatch of Ext.P1 by speed post on 28.08.2014. Further, the petitioner is also not disputing the fact that, when Ext.P5/R1(b) envelope reached the above address at Palakkad, his father-in-law refused to accept the same and therefore, the postal authorities returned the said envelope to the 2nd respondent, which was later sent by registered post to his address at Coimbatore, as evident from Ext.P6 envelope.  Therefore, for the purpose of Rule 32 of the CDA Rules, the disciplinary proceedings against the petitioner shall be deemed to have been initiated on 28.08.2014, the date on which Ext.P1 memorandum, which contains articles of charges, statement of imputations of misconduct, list of documents and also list of witnesses, was originally despatched to the petitioner by speed post. Since the date of superannuation of the petitioner was only on 31.8.2014, the disciplinary proceedings pursuant to Ext.P1 memorandum squarely falls within the sweep of clause (i) of Rule 32 of the CDA Rules, which shall be continued and concluded by the 2nd respondent in the the same manner as if the petitioner had continued in service. Therefore, the challenge made in this writ petition against the disciplinary proceedings initiated pursuant to Ext.P1 memorandum dated 25.08.2014 can only be rejected and I do so.

24. Now the remaining issue to be considered is as to whether the petitioner is entitled for disbursement of his retirement benefits during the pendency of the disciplinary proceedings, together with interest at the rate of 9% per annum,  with effect from 01.09.2014. Clause (i) of Rule 32 of the CDA Rules provides that, the disciplinary proceedings if instituted while the employee was in service whether before his retirement or re-employment, shall after the final retirement of the employee, be deemed to be proceeding and shall be continued and concluded by the authority by which it was commenced in the same manner as if the employee had continued in service. Clause (ii) of Rule 32 provides further that, during the pendency of the disciplinary proceedings, the disciplinary authority may withhold payment of gratuity in accordance with sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972.

25. The Payment of Gratuity Act, 1972 was enacted by the Parliament to provide for a scheme for payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto. Clause (q) of Section 2 of the Act defines 'retirement' to mean termination of the service of an employee otherwise than on superannuation. Similarly, clause (r) of Section 2 defines 'superannuation' in  relation to an employee, to mean the attainment by the employee of such age as is fixed in the contract or conditions of service as the age on the attainment of which the employee shall vacate the employment. Sub-section (1) of Section 4 of the Act provides that, gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, (a) on his superannuation, or

(b) on his retirement or resignation, or (c) on his death or disablement due to accident or disease. As per the proviso to sub-section (1), the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement.

26. Sub-section (6) of Section 4 of the Act prescribes the grounds under which gratuity can be withheld or forfeited wholly or partially. Clause (a) of Sub-section (6) of Section 4 provides that, notwithstanding anything contained in sub-section (1), 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. Clause (b) provides further that, the gratuity payable to an employee may be wholly or partially forfeited (i) if the services of such employee 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.

27. Sub-section (6) of Section 4 of the Payment of Gratuity Act, which begins with a non obstante clause, at the outset indicates that it is in the nature of an exception to the provisions in sub-section (1) of Section 4 of the said Act. Sub- section (1) of Section 4 of the Act casts an obligation upon the employer to pay gratuity to an employee on termination of his employment after he has rendered continuous service of not less than of five years. However, sub-section (6) of Section 4 of the Act, dilutes such obligation to the extent and in the circumstances indicated thereunder. Clause (a) of sub-section (6)  deals with a situation where an employee, whose services have been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, then the gratuity payable to such an employee, shall be forfeited to the extent of the damage or loss so caused. On the other hand, clause (b) of sub-section (6) deals with two situations that are enumerated in sub-clauses (i) and

(ii), wherein gratuity payable to an employee may be wholly or partially forfeited.

28. The Apex Court in Garment Cleaning Works Bombay v. Workman (AIR 1962 SC 673) held that, gratuity is not paid to the employees gratuitously or merely as a matter of boon. It is paid to him for the service rendered by him to the employer. In Delhi Cloth and General Mills Co. Ltd. v. Workmen and others (AIR 1970 SC 919) the Apex Court held that, gratuity paid to workmen is intended to help them after retirement on superannuation, death, retirement, physical incapacity, disability or otherwise. The object of providing a gratuity scheme is to provide a retiring benefit to workmen who  have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer. It is one of the 'efficiency devices' and is considered necessary for an 'orderly and human elimination' from industry of superannuated or disabled employees who, but for such retiring benefits, would continue in employment even though they function inefficiently. It is not paid to an employee gratuitously or merely as a matter of boon; it is paid to him for long and meritorious service rendered by him to the employer.

29. In Ramington Rand of India Ltd. v. The Workmen (AIR 1970 SC 1421) one of the questions before the Apex Court was whether a provision can be made in gratuity scheme that, if the misconduct is a gross one, involving violence, riotous behaviour, etc., the qualifying period should be limited to fifteen years of continuous service. The Apex Court held that, once the principle that gratuity is paid to ensure good conduct throughout the period that the workman serves his employer is accepted as laid down in Calcutta Insurance Co. Ltd. v. Workmen (AIR 1967 SC 1286) some distinction in the matter of the qualifying period  between cases of resignation and retirement on the one hand and dismissal for misconduct on the other becomes logically necessary. Such a distinction cannot legitimately be assailed as unreasonable. Similarly, if the object underlying schemes of gratuity is to secure industrial harmony and satisfaction among workmen it is impossible to equate cases of death, physical incapacity, retirement and resignation with cases of termination of service incurred on account of misconduct.

30. In Tournamulla Estate v. Workmen (1973 (2) SCC

502) a three-Judge Bench of the Apex Court had occasion to consider the question of forfeiture of gratuity of a workman dismissed for misconduct, under clause (b) of sub-section (6) of Section 4 of the Act. After referring to its earlier judgments, the Apex Court held that the object of having gratuity scheme is to provide a retiring benefit to workmen who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer. It is, therefore, not correct to say that no misconduct, however grave, may not be visited with forfeiture of gratuity. Misconduct could be of three kinds: (1)  technical misconduct which leaves no trail of indiscipline, (2) misconduct resulting in damage to the employer's property which might be compensated by forfeiture of gratuity or part thereof, and (3) serious misconduct such as acts of violence against the management or other employees or riotous or disorderly behaviour in or near the place of employment, which, though not directly causing damage, is conducive to grave indiscipline. The first should involve no forfeiture, the second may involve forfeiture of the amount equal to the loss directly suffered by the employer in consequence of the misconduct and the third will entail forfeiture of gratuity due to the workman. In other words, if a workman is guilty of a serious misconduct of the third category, then, his gratuity can be forfeited in its entirety.

31. As laid down by the Apex Court in the judgments referred to above, the object of providing gratuity is to provide a retiring benefit to workmen who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer. Though sub-section (1) of Section 4 of the Act casts an obligation upon the employer to pay gratuity  to an employee on termination of his employment after he has rendered continuous service of not less than of five years, clause

(a) and clause (b) of sub-section (6) of Section 4 of the Act provides for forfeiture of gratuity payable to such an employee wholly or partially in the circumstances indicated thereunder. Clause (a) of sub-section (6) deals with forfeiture of 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, to the extent of the damage or loss so caused. On the other hand, clause (b) of sub-section (6) deals with cases in which the gratuity payable to an employee may be forfeited wholly or partially if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part; or 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.

32. The petitioner is not disputing the fact that, he was  issued with the articles of charges along with Ext.P1 memorandum following the registration of a case by the Central Bureau of Investigation (CBI) against the officials in the Marketing Division of FACT and that, he is arrayed as an accused in Crime No.RC-6(A)/12 registered by the CBI against Sri.Murali Nair, a former employee of the company. The allegation made against the petitioner is that, during 2008-2011 he had habitually abetted commission of offence under Section 13(2) read with Section 13(1)(b) and Section 11 of the Prevention of Corruption Act, 1988 by Sri.Murali Nair, who was a public servant employed in FACT, by habitually offering him bribes for a total amount of Rs.1,20,000/- through the savings bank account held by Sri.Murali Nair at State Bank of India, Palarivattom Branch and as such committed offences under Section 14 read with Section 12 of the said Act. Any order of termination of service of the petitioner for the misconduct alleged in Ext.P1 would squarely fall within the sweep of sub-clause (ii) of clause (b) of sub-section (6) of Section 4 of the Payment of Gratuity Act, which may result in forfeiture of the gratuity payable to him either wholly or  partially. On such an order of termination being passed, the petitioner will become disentitled for payment of gratuity admissible to a normally superannuated employee.

33. The CDA Rules applicable to the petitioner, namely, FACT Employees (Conduct, Discipline and Appeal) Rules, is a non-statutory one. Rule 5 of the CDA Rules provides that, every employee of the Company shall at all times conform to and abide by these and every rules of the Company and shall observe, comply with and obey all lawful orders and directions which may, from time to time, be given to him in the course of his official duties by any person or persons under whose jurisdiction, superintendence or control he may, for the time being, be placed. Rule 21 of the CDA Rules empowers the appointing authority to place an employee under suspension in the circumstances enumerated in clauses (a) to (c) of the said Rule. Similarly, Rule 24 empowers imposition of penalties, including dismissal from service. Clause (i) of Rule 32 provides that, the disciplinary proceedings if instituted while the employee was in service whether before his retirement or re-employment, shall after the final retirement of the employee, be deemed to be proceeding  and shall be continued and concluded by the authority by which it was commenced in the the same manner as if the employee had continued in service. Clause (ii) of Rule 32 provides further that, during the pendency of the disciplinary proceedings, the disciplinary authority may withhold payment of gratuity in accordance with sub-section (6) of Section 4 of the Payment of Gratuity Act.

34. The continuance of the disciplinary proceedings against the petitioner after his retirement from service would depend upon the CDA Rules governing his service conditions. Clause (i) of Rule 32 makes it explicitly clear that, the retirement of the employee does not affect the maintainability of the disciplinary proceedings initiated against him while he was in service. In view of clause (i) of Rule 32, such proceedings can be continued even after his retirement. It is not in dispute that, the management had permitted the petitioner to retire subject to the disciplinary proceedings initiated by Ext.P1 memorandum being continued in terms of clause (i) of Rule 32. It is not therefore as though the continuance of the disciplinary proceedings against the petitioner is unsupported by any rule, in which event it may  have been possible to contend that his retirement brings about a cessation of the relationship of master and servant so essential for the management to take any disciplinary action against him. On the contrary, clause (i) of Rule 32 of the CDA Rules authorise the disciplinary proceedings to be continued even after retirement of the employee concerned.

35. Similarly, the question whether withholding of the amount of gratuity payable under the Payment of Gratuity Act is justified having regard to the fact that no termination order has so far been issued would depend upon clause (ii) of Rule 32 of the CDA Rules. Clause (ii) of Rule 32 empower the disciplinary authority to withhold payment of gratuity in accordance with sub- section (6) of Section 4 of the Payment of Gratuity Act, during the pendency of the disciplinary proceedings. It is true that, the disciplinary proceedings initiated against the petitioner based on Ext.P1 memorandum dated 25.08.2014 is still pending and no order of termination has so far been issued. But it is not correct to say that, no order of termination can be issued even for the purpose of authorising forfeiture of his gratuity wholly or partially in terms of sub-clause (ii) of clause (b) of sub-section (6) of  Section 4 of the Payment of Gratuity Act. If the enquiry initiated against the petitioner can be continued, in terms of clause (i) of Rule 32 of the CDA Rules, it would necessarily carry with it, the power to pass a consequential order of punishment. The retirement of the petitioner having failed to abort the ongoing enquiry, in view of clause (i) of Rule 32 of the CDA Rules, cannot prevent the disciplinary authority from passing an appropriate order based on the findings in such enquiry, for otherwise holding of such an enquiry will be noting more than an exercise in futility. It is indeed difficult to conceive of a situation where the enquiry is valid and yet it cannot result in any punishment against the petitioner no matter he is found to be guilty of serious misconducts alleged against him, which even constitute an offence involving moral turpitude, committed in the course of his employment. In other words, although there is no termination order in existence as on date, it is not possible to say that no such order can be validly issued even in future on the basis of the pending disciplinary proceedings. Since the employer has the right to make such an order, withholding of the gratuity pending  finalisation of the disciplinary proceedings cannot be found fault with, in view of clause (ii) of Rule 32 of the CDA Rules, read with sub-clause (ii) of clause (b) of sub-section (6) of Section 4 of the Payment of Gratuity Act.

36. A conjoint reading of sub-section (1) and sub-section (6) of Section 4 of the Payment of Gratuity Act make it explicitly clear that, the said provisions by itself provide for forfeiture of gratuity, in cases falling under clause (a) and clause (b) of sub- section (6) of Section 4 of the Act. As held by the Apex Court in Delhi Cloth and General Mills Company's case (supra), the object of providing gratuity is to provide a retiring benefit to workmen who have rendered long and unblemished service to the employer. Therefore, clause (ii) of Rule 32 of the CDA Rules, which provides that during the pendency of the disciplinary proceedings, the disciplinary authority may withhold payment of gratuity in accordance with sub-section (6) of Section 4 of the Payment of Gratuity Act, is not in conflict with Section 4 of the said Act. Clause (ii) of Rule 32 of the CDA Rules is meant to take care of a situation where, on culmination of the disciplinary proceedings after retirement, the gratuity payable to the  employee is ordered to be forfeited wholly or partially, on his termination for an act or omission or conduct falling under clause

(a) or clause (b) of sub-section (6) of Section 4 of the Payment of Gratuity Act. In any such cases, if the amount of gratuity is paid during the pendency of the disciplinary proceedings initiated while the employee was in service, the management would be left with nothing to forfeit in terms of sub-section (6) of Section 4 of the Act. The power to forfeit the amount of gratuity, to the extent permissible under sub-section (6) of Section 4 of the Act, would be incapable of a meaningful exercise, unless the same is understood to carry with it the power to withhold payment of such amount pending finalisation of the the disciplinary proceedings initiated while the employee was in service. In that view of the matter, all that clauses (i) and (ii) of Rule 32 of the CDA Rules provide is to give expression to what can even otherwise be said to be implicit in the provisions of sub-section (6) of Section 4 of the Act. Therefore, clause (ii) of Rule 32, which enables the disciplinary authority to withhold payment of gratuity of such an employee, during the pendency of such  disciplinary proceedings, in accordance with sub-section (6) of Section 4 of the Payment of Gratuity Act, is in no way in conflict with the provisions of Section 4 of the said Act.

37. In Jaswant Singh Gill v. Bharat Coking Coal Ltd. and others (2007 (1) SCC 663) a decision relied on by the learned counsel for the petitioner, the Apex Court, in the context of Rules 27 and 34 of the Coal India Executives' Conduct Discipline and Appeal Rules, 1978, which is a non statutory rule, held that the provisions under the Payment of Gratuity Act must prevail over the said Conduct Rules. Rule 27 of the said Conduct Rules provides for the nature of penalties including 'recovering from pay or gratuity of the whole of or part of any pecuniary loss caused to the company by negligence or breach of orders or trust'. Major penalties prescribed in Rule 27, however, include reduction to a lower grade, compulsory retirement, removal from service and dismissal. Rule 34 provides for special procedure in certain cases. Rule 34.2 provides that, disciplinary proceeding, if instituted while the employee was in service whether before his retirement or during his re-employment shall, after the final retirement of the employee, be deemed to be proceeding and  shall be continued and concluded by the authority by which it was commenced in the same manner as if the employee had continued in service. Rule 34.3 provides further that, during the pendency of the disciplinary proceedings, the disciplinary authority may withhold payment of gratuity, for ordering the recovery from gratuity of the whole or part of any pecuniary loss caused to the company if have been guilty of offences/ misconducts as mentioned in Sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972 or to have caused pecuniary loss to the company by misconduct or negligence, during his service including service rendered on deputation or on re-employment after retirement. However, the provisions of Sub-sections (3) and (3A) of Section 7 of the Payment of Gratuity Act, 1972 should be kept in view in the event of delayed payment, in case the employee is fully exonerated. The Apex Court held that, the power to withhold penalty contained in Rule 34.3 of the Conduct Rules must be subject to the provisions of the Payment of Gratuity Act.

38. In Jaswant Singh Gill's case (supra) the factual matrix was that, the employee was charge sheeted on 24.02.1997 on  the allegation of shortage of stock of coal in the coal mine vested in the Bharat Coking Coal Ltd. During the pendency of the disciplinary proceedings the employee was allowed to retire on superannuation on 30.04.1998. Upon conclusion of the departmental enquiry, the disciplinary authority by an order dated 05.07.2000 came to the conclusion that, the employee had a major role in causing the shortages in the coal stock and conniving with the measurement team in concealing the shortages at the time of annual measurement. Considering the seriousness of the offence, the disciplinary authority opined that, but for his superannuation, the employee would have imposed with the punishment of dismissal from service, and thereafter ordered forfeiture of his gratuity. On an application filed by the employee under the Payment of Gratuity Act, the Controlling Authority by an order dated 11.04.2001 held that, since the service of the employee has not been terminated either under clause (a) or clause (b) of sub-section (6) of Section 4 of the Payment of Gratuity Act, the order of forfeiture of his gratuity issued by the disciplinary authority is not tenable. The basic  requirement of termination of service for any of the misconduct as enumerated under clause (a) or clause (b) of sub-section (6) of Section 4 of the Payment of Gratuity Act has not been fulfilled before the issue of order of forfeiture of gratuity. On an appeal preferred before the Appellate Authority, it was held that, for the application of sub-section (6) of Section 4 of the Act, it is pre- condition that the service should have been terminated for any act. For the purpose of clause (a) of sub-section (6) of Section 4, such act should be about willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, for which gratuity shall be forfeited to the extent of the damage or loss so caused, and for the purpose of clause (b) of sub-section (6) of Section 4, the gratuity can be forfeited wholly or partially only if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence etc. on his part. The Appellate Authority noticed that, by the order of the disciplinary authority, the service of the employee has not been terminated and rather could not have been terminated and the order does not indicate the extent of  damage or loss. Therefore, the Appellate Authority concluded that, since neither the service of the employee is terminated nor there is anything about the extent/quantification of the damage or loss in the order of punishment, the question of forfeiture of gratuity does not arise as per sub-section (6) of Section 4 of the Act.

39. In Jaswant Singh Gill's case (supra) the question which arose before the Apex Court was as to whether the provisions of the Payment of Gratuity Act will prevail over Rule 27 read with Rule 34.3 of the Coal India Executives' Conduct, Discipline and Appeal Rules. Rule 27 provides for the nature of penalties including 'recovering from pay or gratuity of the whole of or part of any pecuniary loss caused to the company by negligence or breach of orders or trust'. Rule 34.2 provides for continuation of a disciplinary proceeding despite retirement of employee if the same was initiated before his retirement. The Apex Court held that, gratuity becomes payable as soon as the employee retires. A statutory right accrued, thus, cannot be impaired by reason of a rule which does not have the force of a statute. The Apex Court held further that, sub-section (6) of Section 4 of the Act contains  a non obstante clause vis-a-vis sub-section (1) thereof. As by reason thereof, an accrued or vested right is sought to be taken away, the conditions laid down thereunder must be fulfilled. The provisions contained therein must, therefore, be scrupulously observed. Clause (a) of sub-section (6) of Section 4 of the Act speaks of termination of service of an employee for any act, willful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of damage or loss caused. Clause (b) of sub-section (6) of Section 4 of the Act also provides for forfeiture of the whole amount of gratuity or part in the event his services had been terminated for his riotous or disorderly conduct or any other act of violence on his part or if he has been convicted for an offence involving moral turpitude. Therefore, the Apex Court held that, termination of services for any of the causes enumerated in sub-section (6) of Section 4 of the Act is imperative for withholding payment of gratuity. Paragraphs 10 to 14 of the judgment read thus;

"10. The provisions of the Act, therefore, must prevail over the Rules. Rule 27 of the Rules provides for recovery from gratuity only to the extent of loss caused to the company by negligence or breach of orders or trust.  Penalties, however, must be imposed so long an employee remains in service. Even if a disciplinary proceeding was initiated prior to the attaining of the age of superannuation, in the event, the employee retires from service, the question of imposing a major penalty by removal or dismissal from service would not arise. Rule 34.2 no doubt provides for continuation of a disciplinary proceeding despite retirement of employee if the same was initiated before his retirement but the same would not mean that although he was permitted to retire and his services had not been extended for the said purpose, a major penalty in terms of Rule 27 can b
T Kalaiselvan
Advocate, Vellore
13935 Answers
127 Consultations
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Madras High Court
A.John Durain vs The Registrar Of Co-Operative ... on 21 December, 2012
       

  

  

 
 
 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

DATED: 21/12/2012

CORAM
THE HONOURABLE MR.JUSTICE K.RAVICHANDRABAABU

W.P(MD)No.4627 of 2008

A.John Durain			        ... Petitioner
				
Vs

1.The Registrar of Co-operative Societies,
  E.V.R.Salai,
  Chennai - 600 010.

2.The Joint Registrar,
  Thiruchirappalli District Co-op. Bank Ltd.,
  No.1, Fort Station Road,
  Thiruchirappalli - 620 002.
	 			        ... Respondents

PRAYER

Petition filed under Article 226 of the Constitution of India, to issue
a Writ of Certiorarified Mandamus to call for the records from the second
respondent relating to the impugned proceedings in No.3952/2004.05 (N.4)A.10
dated 8.4.2008 and quash the same and direct the respondents to pay all the
terminal benefits to the petitioner immediately, award cost.

!For Petitioner	  ... Mr.R.Rajendran
^For Respondents  ... Mrs.Bharathi G.A. (R1)  				
	   	      Mr.K.Jayaraman (R2)
		
:ORDER
Aggrieved against the show-cause notice, dated 08.04.2008, issued by the second respondent, the present writ petition is filed by the petitioner.

2. The following of the facts and circumstances, which warranted the petitioner to file this writ petition:-

The petitioner was working as Manager in the second respondent Society between 11.02.1997 and 20.04.2003 at the Edimalayanpatti Puddur Branch. The petitioner sanctioned gas connection loan to the needy persons as per the scheme of the Government, strictly by following the rules and procedures. The petitioner was transferred from the said branch on 22.04.2003. Thereafter, it was the responsibility of the Branch Manager to collect money from the persons, who have availed the loan for the cooking gas connection. On 27.08.2005, a charge memo was issued to the petitioner in connection with the non-recovery of the loan amount. The petitioner gave an explanation on 10.07.2006 denying the charges. From 30.05.2007, he was on leave on loss of pay. A second charge memo was issued to the petitioner on 06.07.2007 for not joining duty in spite of the orders from the superior. The petitioner gave his explanation on 28.07.2007. Not satisfied with the explanation given by the petitioner, a domestic enquiry was conducted and the same was completed on 05.05.2007. Thereafter, the second respondent issued an order, dated 30.08.2007 directing the petitioner to handover all the charges to the Assistant Manager, since the petitioner was attaining the age of superannuation on the next date, namely, 31.08.2007. The second respondent being the appointing authority, is therefore, a competent person to relieve the petitioner. Accordingly, the petitioner handed over the charges on 31.08.2007 and retired from service. Thereafter, an order of termination was served on the petitioner on 01.09.2007, by anti-dating as 31.08.2007. The petitioner filed a writ petition in W.P(MD)No.10238 of 2007, challenging the said order of termination. By an order, dated 07.12.2007, this Court directed the first respondent to dispose of the appeal filed by the petitioner against the order of termination. Accordingly, the first respondent through his order, dated 13.03.2008, set aside the order of termination and however, permitted the second respondent to continue the disciplinary proceedings. Consequently, the impugned show-cause notice, dated 08.04.2008, came to be issued. Aggrieved against the same, the present writ petition is filed before this Court.

3.The above writ petition was admitted by this Court on 22.05.2008. I find no counter affidavit is filed in this writ petition by the respondents. On the other hand, the learned counsel appearing for the respondents contested the matter, by filing a typed set of papers, dated 03.08.2012.

4.The learned counsel appearing for the petitioner submitted that when the petitioner had already retired from service on 31.08.2007, the order of dismissal served on him on 01.09.2007, cannot be sustained. Moreover, when the appellate authority had set aside the said order of termination, he has no jurisdiction to direct the second respondent to continue the disciplinary proceeding against the petitioner, in view of the fact that such setting aside the order of termination results in automatic confirmation of the retirement of the petitioner from service on 31.08.2007. Consequently, the second respondent has got no jurisdiction to issue show-cause notice. It is also contended by the learned counsel appearing for the petitioner that when the petitioner attained the age of superannuation, unless any order or proceedings are issued retaining his service till the departmental proceedings are over, his retirement become automatic and there need not be any separate relieving order to be issued to the petitioner. There is no enabling provision in the service rules empowering the employer to retain the petitioner in service and continue the disciplinary proceedings. In the absence of such enabling provision, continuation of disciplinary proceedings against the petitioner after his retirement is not valid and without jurisdiction.

5. The learned counsel appearing for the petitioner further submitted that reliance placed by the first respondent on the decision of the Hon'ble Supreme Court reported in 2007(4) LLN 132 in the case of U.P. Co-op Federation Ltd vs. L.P.Rai cannot be applied to the facts and circumstances of this case and therefore, the appellate authority was jot justified in relying the said judgment. At any event, since the appellate authority had set aside the order of termination, the petitioner thought fit not to challenge the said order and only challenged the further direction issued therein for continuing the disciplinary proceeding, as the said direction was without jurisdiction. The second respondent himself through his communication, dated 30.08.2007, had directed the petitioner to handover the charge, since he attained the age of superannuation and pursuant to such communication, the petitioner had also handed over the charge on 31.08.2007. In all effect, the petitioner was relieved from duty and was permitted to retire from service on 31.08.2007. Therefore, the present impugned proceedings cannot be issued when the respondents are totally not having jurisdiction or control over the petitioner any more.

6. In support of his contention, the learned counsel for the petitioner relied on the following decisions:-

(1) (1993)3 SCC 666 (Bhagirathi Jena vs. Board of Directors, O.S.F.C. and others) (2) 2008(1) MLJ 119 (N.K.Gowder v. Coimbatore District Co-operative Milk Producers' Union Ltd) (3) 2007(10) SCC 249 (State Bank of India v. Ram Lal Baskar and another) (4) 2008(5) SCC 527 (UCO Bank v. Rajinder Lal Capoor) (5) (1997)8 SCC 60 (State Bank of India v. A.N.Gupta and others) (6) 2007(1) CTC 844 (Siemens Ltd vs. State of Maharashtra and others).

7.Per contra, the learned counsel appearing for the respondents submitted that the petitioner was not relieved by the second respondent, by issuing any relieving order and the communication, dated 30.08.2007, issued by the Special Officer to the petitioner cannot be termed as a relieving order. When the petitioner was not relieved, he was permitted to be in service continuously and therefore, the appellate authority though set aside the order of termination had rightly directed the disciplinary proceedings to continue and consequently, the impugned show-cause notice issued is within the jurisdiction of the second respondent. It is also contended by the learned counsel for the second respondent that the petitioner had not challenged the order of the appellate authority and therefore, he cannot be permitted to canvass the correctness of the said order in this writ petition.

8. In support of his submissions that the disciplinary proceedings can go on even after retirement, he relied on a decision of the Hon'ble Supreme Court reported in 2007(4) LLN 132 (cited supra), which in fact relied by the appellate authority for remitting the matter for fresh enquiry.

9. Heard the learned counsel for the respective parties.

10. The point for consideration in this case are as follows:- (1) Whether the termination order passed against the petitioner was well within the jurisdiction of the second respondent?

(2) Whether the appellate authority having set aside the order of termination, has got jurisdiction to direct the continuation of the disciplinary proceedings against the petitioner when he had already attained the age of superannuation?

(3) Whether the show-cause notice, impugned in this writ petition, is within the jurisdiction of the second respondent and if so, whether the petitioner is entitled to challenge the said show-cause notice alone without challenging the order of appellate authority where the second respondent was directed to proceed with the disciplinary proceedings?

11. Before considering the above said issues, the admitted facts are to be reiterated. The petitioner was working as Manager in Edimalayanpatti Puddur Branch between 11.02.1997 and 20.04.2003. He was transferred from the said place to another place on 20.04.2003. A charge memo, dated 27.06.2005, came to be issued against the petitioner in connection with the non-recovery of the loan amount, which was disbursed during his tenure as Manager at Edimalayanpatti Puddur Branch between 11.02.1997 and 20.04.2003. A domestic enquiry was conducted and that was also completed on 05.05.2007 itself. On 30.08.2007, the Special Officer of the second respondent bank issued an order directing the petitioner to handover the charge to one R.Dhayanithi and get relieved on 31.08.2007. The petitioner accordingly, handed over the charge on 31.08.2007. Thereafter, the order of termination, dated 31.08.2007, came to be served on the petitioner only on 01.09.2007. The petitioner challenged the said order before the first respondent by way of an appeal and by an order dated 13.03.2008, the first respondent set aside the order of termination, on the ground of violation of principles of natural justice and consequently, permitted the second respondent to continue the disciplinary proceedings from the stage where the violation of the procedures was found.

12. From the above facts, which are not disputed by the respondents by filing any counter affidavit, it is to be seen as to whether the petitioner on attaining the age of superannuation on 31.08.2007, got retired and whether he was relieved by the second respondent from his post without retaining him into service so as to enable the department to continue the disciplinary proceedings.

13. At this juncture it is useful to note the proceedings of the Special Officer of the second respondent bank, dated 30.08.2007, which is extracted as hereunder:-

"jpUr;rpuhg;gs;sp khtl;l kj;jpa Tl;Lwt[ tA;fp ypl;., jpUr;rpuhg;gs;sp . 02 jpUkjp Mh; . gpUe;jh, vk;.fhk;., rpVIIgp., vr;orpvk;., nizg;gjpthsh;/jdp mYtyh;

			 (Kgf;TLjy; bghWg;g[)

3915/06 v1                                 bray;Kiw Miz		ehs;
30.08.2007

bghUs; :- gzpaikg;g[ - jpUr;rpuhg;gs;sp khtl;l kj;jpa Tl;Lwt[ tA;fp ypl;., gzpahsh; 31.08.2007k; Bjjp gzp Xa;tpy; bry;yt[s;sJ - gzpg;bghWg;g[fis xg;gilj;Jtpl;L tpLtpj;Jf;bfhs;s cj;jutpLjy; --

bjhlh;ghf.

---------

Miz:

__ jpUr;rpuhg;gs;sp khtl;l kj;jpa Tl;Lwt[ tA;fp Jiwa{h;fpisBkyhsh; gzpaplj;jpw;F gzpakh;j;jk; bra;ag;gl;l Bkyhsh; jpU V.$hd;Jiu (jw;BghJ kUj;Jt tpLg;g[ tpz;zg;gpj;J cs;sth;) nth; Jiwa{h; fpisapy; Bkyhsh; gzpapy; Brh;e;j gpwF nth; nf;fpisapy; Bkyhsh; gzp bghWg;g[fis nf;fpisapy; cjtpBkyhsh; jpU Mh;. jahe[pjp trk; 31.08.07k; Bjjp gpw;gfy; xg;gilj;Jtpl;L tpLtpj;Jf;bfhs;s cj;jputplg;gLfpwJ.

Jiwa{h; fpis cjtpBkyhsh; jpU Mh;. jahejp, nf;fpisapd; Bkyhsh; gzp bghWg;g[fis jpU v.%$hd;Jiu Bkyhsh; trkpUe;J bgw;Wf; bfhz;L mtiu tpLtpf;ft[k; kW cj;jput[ tUk;tiu ng;gzpapid ghh;j;J tut[k; cj;jutplg;gLfpwJ.

Xg;gk;/- Mh;.gpUe;jh jdp mYtyh;.

14. A perusal of the said proceedings shows that the petitioner was directed to handover the charge to one R.Dhayanithi on 31.08.2007 and also to get relieved thereafter. The words "xg;gilj;Jtpl;L tpLtpj;Jf;bfhs;s" and "gzp Xa;tpy; bry;yt[s;sJ" found in the said proceedings undoubtedly lead to a conclusion that it was not a simple direction to handover the charge, but it was also an order relieving the petitioner on 31.08.2007. Further, when we refer to the subject matter of the said proceedings, it also indicates that the petitioner was to retire on 31.08.2007 and consequently, the order came to be passed for relieving him from the service. It is also to be noted that nowhere in the said proceedings, the second respondent had reserved his right to continue the disciplinary proceedings against the petitioner or it is not stated therein that the petitioner's service was retained with the respondents department. Therefore, the said proceedings dated 30.08.2007 was a pure and simple relieving order issued to the petitioner thereby directing him to handover the charge to the other person on 31.08.2007 and consequently, to get relieved himself. Further, the fact remains that as per the order, dated 30.08.2007, the petitioner handed over the charge to the other person on 31.08.2007. Therefore, when the petitioner had complied with the direction issued by the second respondent on 31.08.2007, by handing over the charge to other person and got relieved from the service, it has to be held that the petitioner was no more in the service of the respondents after 31.08.2007.

15. When that being the position, the order of termination, dated 31.08.2007, came to be served on the petitioner only on 01.09.2007. No doubt, the reason for not serving the same on 31.08.2007 itself had been discussed by the appellate authority in his order. But at the same time, it has to be seen that if any such order was sought to be served on the petitioner on 31.08.2007 itself, there should have been no occasion for the petitioner to handover the charge to the other person on 31.08.2007 as directed by the second respondent in his proceedings, dated 30.08.2007, and the other person should have also not accepted the charge from the petitioner on the same day, without making any reference about the order of termination, passed against the petitioner. Therefore, I am of the view that an order of termination, though was made on 31.08.2007, having been served on the petitioner only on 01.09.2007, cannot be held to be made before the retirement of the petitioner i.e., 31.08.2007.

16.At this juncture, it is useful to refer to the decision of the Hon'ble Supreme Court reported in 2001(8) SCC 443 in the case of State Bank of West Bengal vs. Mondal at paragraph 16 which reads as follows:-

16. .... An order passed but retained in file without being communicated to the plaintiff can have no force or authority whatsoever and the same has no valid existence in the eye of the law or claim to have come into operation and effect. No reliance can be placed on the same to even assert a claim based on its contents....."

17. Thus from the reading of the above said judgment of the Hon'ble Supreme Court, it is clear that mere passing of an order is not sufficient to claim its legality without getting it served on the person against whom it was passed in time or within time, especially, when the order sought to be made on the eve of the retirement. Therefore, in my considered view, the order of termination passed by the second respondent cannot have any legal force. Even otherwise, further facts show that the petitioner cannot be proceeded with by the second respondent any more. When the said order of termination was challenged before the first respondent, he had set aside the same through his order, dated 30.09.2008, on the ground of violation of principles of natural justice. Consequently, he further directed the second respondent to continue the disciplinary proceedings by granting opportunity to the petitioner. At this juncture, it has to be seen as to whether the first respondent, after setting aside the order of termination, has got jurisdiction to direct the continuation of the proceedings afresh, especially under the circumstances, the petitioner in the meantime had attained the age of superannuation and also got relieved and retired from the post. The effect of setting aside the order of termination by the first respondent would undoubtedly lead to the conclusion that it should date back to the order of termination on which date the petitioner was already relieved from the post and got retired. In other words, it has to be construed that there was no order of termination at all on 31.08.2007. It is also further to be noted that the respondents have not retained his service by passing any proceedings. No rule empowering the respondents to retain the service of the employee even after retirement for the purpose of conducting the disciplinary proceedings, is also produced before this Court. Thus in effect, when the petitioner got retired on 31.08.2007 there was nothing available empowering the respondents to proceed further against the petitioner.

18. No doubt, the learned counsel for the respondents relied on a decision of the Hon'ble Supreme Court reported in 2007(4) LLN 132 in the case of U.P.Co- op. Federation Ltd., vs. L.P.Raj to contend that the respondents are entitled to continue the disciplinary proceeding even after retirement. I perused the above Judgment of the Hon'ble Supreme Court.

19. In that case, entire disciplinary proceedings were initiated during the service period of the delinquent therein and he was also punished before his retirement. When the said order of punishment was challenged, the same was set aside by the High Court on the ground of certain procedural irregularities. Against which, further the appeal was taken before the Hon'ble Supreme Court and during the pendency of the proceedings, it appears that the delinquent therein retired and therefore, by taking note of the gravity of the charges levelled against the said employee, the Hon'ble Supreme Court granted liberty to hold fresh enquiry against the said person by observing that foreclosing the right of the employer to hold a fresh enquiry will not be proper only on the ground that the employee had since retired from the service.

20. Therefore, the facts of that case are totally different and distinguishable while considering the facts on hand. Consequently, the reliance placed on the said judgment by the learned counsel for the respondent is not correct. On the other hand, the learned counsel for the petitioner relied on a decision reported in 1999(3) SCC 666 (cited supra), wherein at paragraphs 6 and 7, the Hon'ble Supreme Court has held as follows:-

" 6. It will be noticed from the above said regulations that no specific provision was made for deducting any amount from the provident fund consequent to any misconduct determined in the departmental enquiry nor was any provision made for continuance of the departmental enquiry after superannuation.

7. In view of the absence of such a provision in the above said regulations, it must be held that the Corporation had no legal authority to make any reduction in the retiral benefits of the appellant. There is also no provision for conducting a disciplinary enquiry after retirement of the appellant and nor any provision stating that in case misconduct is established, a deduction could be made from retiral benefits."

21. In 2008(5) SCC 257 (as cited supra) the Hon'ble Supreme Court has held at paragraphs Nos.29 to 31 are as follows:-

29.We have noticed in para 15 of our judgment that ordinarily no disciplinary proceedings can be continued in absence of any rule after an employee reaches his age of superannuation. A rule which would enable the disciplinary authority to continue a disciplinary proceeding despite the officers reaching the age of superannuation must be a statutory rule. A fortiori it must be a rule applicable to disciplinary proceedings.

30. There cannot be any doubt whatsoever that the employer may take resort to a preliminary inquiry, but it will bear repetition to state that the same has a limited role to play. But, in absence of the statutory rules operating in the field, resorting to a preliminary enquiry would not by itself be enough to hold that a departmental proceeding has been initiated.

31. Initiation of a disciplinary proceeding may lead to an evil or civil consequence. Thus, in absence of clear words, the court must lean in favour of an interpretation which has been applied by this Court in the main judgment.

22. In the above said judgment, the Hon'ble Supreme Court rejected the claim for reconsideration of its earlier judgment in the same case in 2007(6) SCC 694 (cited supra), wherein, the Hon'ble Apex Court has held that the disciplinary proceedings initiated after the retirement of the employee is not proper.

23. In 1997(8) SCC 60, the Hon'ble Apex Court at paragraphs 14 and 16 held as follows:-

"14. ...The Court noted that there was no provision in the Service Rules of the Bank providing for extension of service of an employee to enable the authorities to complete the disciplinary enquiry against him which power was available under the Government Service Rules. The Court said even if an enquiry was pending against an employee there was nothing to stop him from retiring on his attaining the age of superannuation. The enquiry could not continue after his retirement. ..."

16. ... We cannot agree with the plea of the Bank that sanctioning of retirement must be understood as sanctioning of service which in terms must be understood as approval of service. Proceeding in the garb of disciplinary proceedings cannot be permitted after an employee has ceased to be in the service of the Bank as Service Rules do not provide for continuation of disciplinary proceedings after the date of superannuation. ..."

24. The Hon'ble Division Bench of this Court reported decision in 2008(1) MLJ 119 at paragraph 6 held as follows:-

6. A departmental proceeding can continue so long as the employee is in service. In the event, a disciplinary proceeding is kept pending by the employer, the employee cannot be made to retire. In the instant case, no rule has been brought to our notice providing for continuation of such proceeding despite permitting the employee concerned to retire. There has to be a specific provision of law or regulation or a by-law governing the service conditions of the person in question for continuing a departmental enquiry, initiated before the date of superannuation, even after the employee had retired from service. Without such a provision being available, there cannot be an employer-employee relationship surviving after the employee retires from service. Therefore, continuing the enquiry proceedings or conducting an action against the person after his retirement from service cannot be sustained in the eye of law. "

25. Thus from the reading of all these case laws of the Hon'ble Apex Court as well as by this Hon'ble Court, the reasonable conclusion that can be arrived at in this case is that the respondents 1 and 2 are not justified in continuing the proceedings against the petitioner, even after his retirement and therefore, the said action of issuing the show-cause notice, impugned in this writ petition, is totally without jurisdiction.

26. Then, we come to the next question as to whether the petitioner is entitled to challenge the show-cause notice alone without challenging the order of the appellate authority. As I have already pointed out that when the order of the appellate authority in directing the second respondent to continue the disciplinary proceedings is solely without jurisdiction when he has chosen to set aside the order of termination, in my considered view, the said portion of the order of the appellate authority is to be held as non-est one without any legality and jurisdiction, since once the order of termination is set aside, it should date back to such order of termination. Consequently, on 31.08.2007, when the fact remains that the petitioner had already attained the age of superannuation on that day and also got relieved and retired from the post on the very same date, he was no more in service and consequently, continuation of the disciplinary proceedings without retaining him in service is not legal as the same is without jurisdiction.

27. At this juncture, it is useful to refer to the decision of the Hon'ble Supreme Court reported in 2008(7) SCC 748 (cited supra), wherein, it was held that a decree or order passed without jurisdiction is nullity and the same can be challenged at any stage even in a collateral proceedings. Therefore, the petitioner can very well canvass the correctness or otherwise of the order passed by the appellate authority even while challenging the subsequent show- cause notice issued by the second respondent.

28. Thus, the last question as to whether the petitioner is entitled to challenge the show-cause notice is also to be answered in favour of the petitioner, especially, under the facts and circumstances of the present case, and in view of my finding that the second respondent is not having any jurisdiction to issue the said show-cause notice on the petitioner.

29. At this juncture, it is useful to refer to the decision of the Hon'ble Supreme Court reported in 2007(1) CTC 844 (cited supra) wherein, at paragraph 10, it is held as follows:-

"Although ordinarily a writ court may not exercise its discretionary jurisdiction in entertaining a writ petition questioning a notice to show cause unless the same inter alia appears to have been without jurisdiction as has been held by this Court in some decisions including State of Uttar Pradesh v. Brahm Datt Sharma and Anr. AIR 1987 SC 943, Special Director and Another v. Mohd. Ghulam Ghouse and Another, (2004) 3 SCC 440 and Union of India and Another v. Kunisetty Satyanarayana, 2006 (12) SCALE 262]."

30. In another decision reported in 2006(12) SCC 28 in the case of Union of India vs. Kunisetty Satyanarayana, the Hon'ble Supreme Court has held as follows:-

"15. Writ Jurisdiction is discretionary jurisdiction and hence such discretion under Article 226 should not ordinarily be exercised by quashing a show-cause notice or charge-sheet.

16. No doubt, in some very rare and exceptional cases the High Court can quash a charge-sheet or show-cause notice if it is found to be wholly without jurisdiction or for some other reason if it is wholly illegal. However, ordinarily the High Court should not interfere in such a matter."

31. The reading of the above decision of the Hon'ble Supreme Court, only shows that the impugned show-cause notice issued by the second respondent without jurisdiction can be challenged by the petitioner.

32. In the result, by considering the all facts and circumstances of the case as well as the case laws cited supra, I am of the view that the petitioner is entitled to succeed in this writ petition.

33. Accordingly, the writ petition is allowed and impugned show-cause notice is set aside and consequently, the respondents are directed to pay all the terminal benefits to the petitioner within a period of eight weeks from the date of receipt of a copy of this order. No costs.

skn To

1.The Registrar of Co-operative Societies, E.V.R.Salai, Chennai - 600 010.

2.The Joint Registrar, Thiruchirappalli District Co-op. Bank Ltd., No.1, Fort Station Road, Thiruchirappalli - 620 002.
T Kalaiselvan
Advocate, Vellore
13935 Answers
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No there is none. You have to wait for the judgment of the 3 judge bench. It goes without saying that a larger bench can always unsettle the law laid down by a smaller bench. The rate of interest, unless quantified by the court in its order, has to be either contractual rate of interest or the one that is statutorily mandated.
Ashish Davessar
Advocate, Jaipur
18061 Answers
446 Consultations
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1. I have not come across any Apex court Judgement in contrary to the Judgement referred by you,

2. You are expected to get favourable judgement in the said matter.
Krishna Kishore Ganguly
Advocate, Kolkata
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228 Consultations
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1. It can not be assured that Supreme Court will not change its earlier judgement passed by some other Judges,

2. Normally the interest rate is treated as the rate applicable on Bank Fixed deposits,

3. However, you can take this opportunity to get the rate of interest specified by the Court.
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
5.0 on 5.0

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