M.R.SHAH,J. - (1.) The short but interesting questions of law which fell for consideration of this Court are, (i) as to whether is it permissible in law for the appellant (employer) to withhold the payment of gratuity of the respondent (employee), even after his superannuation from service, because of the pendency of the disciplinary proceedings against him?, and (ii) where the departmental enquiry had been instituted against an employee while he was in service and continued after he attained the age of superannuation, whether the punishment of dismissal can be imposed on being found guilty of misconduct in view of the provisions made in Rule 34.2 of the CDA Rules of 1978?
(2.) While considering the issues involved, the facts in nutshell are required to be considered, which are as under: The respondent herein (hereinafter referred to as the "employee") was posted as Chief General Manager (Production) at Rajmahal area under Mahanadi Coalfields Limited, the appellant herein (hereinafter referred to as the "employer"). That the employer Mahanadi Coalfield Limited has made the Conduct, Discipline and Appeal Rules, 1978 (hereinafter referred to as the "CDA Rules"). That these Rules are applicable to all the employees of the appellant company. Rule 27 of the CDA Rules mentions the authorities who are empowered to impose various punishments which are specified in column 3 of the schedule attached to the CDA Rules. Rule 29 of the CDA Rules enlists the procedure for imposing major penalties for misconduct and mis-behaviour. Rule 30 of the CDA Rules provides for action on the Inquiry Report. Rule 34 of the CDA Rules, which is relevant for our purpose, provides for special procedure in certain cases and which permits continuance of disciplinary proceedings even after the final retirement of an employee, provided the disciplinary proceedings are instituted while the employee was in service whether before his retirement or during his reemployment. It further provides that such disciplinary proceedings 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 for withholding the payment of gratuity during the pendency of the disciplinary proceedings and it further permits 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/misconduct 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. The relevant Rules of the CDA Rules shall be discussed in detail hereinbelow. 2.1. While the respondent-employee was in service and posted as Chief General Manager, he was served with the charge-sheet dated 1.10.2007. There was very serious allegation of misconduct alleging dishonestly causing coal stock shortages amounting to Rs.31.65 crores and thereby causing substantial loss to the employer. The employee was thereafter suspended from service on 09.02.2008 under Rule 24.1 of the CDA Rules, pending departmental enquiry against him. This suspension however was revoked from 27.02.2009 without prejudice to the departmental enquiry. On completion of 60 years of age, the respondent-employee was superannuated with effect from 31.07.2010. However, at the time of superannuation, the departmental enquiry which was initiated against the employee remained pending. Therefore, the appellant - employer withheld the gratuity due and payable to the respondent-employee. The respondent herein submitted an application dated 21.09.2010 to the Director (Personnel) for payment of gratuity. On the same date, he also submitted an application before the Controlling Authority under the Payment of Gratuity Act for payment of gratuity. Notice was issued to the appellant to appear. The appellant appeared and stated that the payment of gratuity was withheld due to the reason that the disciplinary proceedings are pending against him. The Controlling Authority held that in that view of the matter, the claim of the respondent was pre-mature. The respondent-employee challenged the order by filing the writ petition. The learned Single Judge dismissed the writ petition holding that in view of the existence of an appellateforum against the order passed by the Controlling Authority, the respondent may file an appeal before the Appellate Authority. However, instead of filing an appeal before the Appellate Authority, the respondent-employee then filed Intra Court Writ Appeal before the Division Bench of the High Court. The Division Bench of the High Court has held that the writ petition was maintainable. On merits and relying upon the decision of this Court in the case of Jaswant Singh Gill vs. Bharat Coking Coal Ltd., reported in (2007) 1 SCC 663, the High Court ruled that the disciplinary proceedings against the respondent were initiated prior to the age of superannuation. However, the respondent retired from service on superannuation and hence the question of imposing a major penalty of removal from service would not arise. The Division Bench of the High Court has further held that the power to withhold payment of gratuity as contained in Rule 34(3) of the CDA Rules shall be subject to the provisions of the Payment of Gratuity Act, 1972. The Division Bench of the High Court has further held that the statutory right accrued to the respondent to get gratuity cannot be impaired by reason of the Rules framed by the Coal India Limited which do not have the force of a statute. Consequently, direction is given to the appellant-employer to release the amount of gratuity payable to the respondent-employee. Hence, the present appeal.
(3.) Shri Mahabir Singh, learned Senior Advocate appearing on behalf of the appellant-employer has vehemently submitted that in the facts and circumstances of the case and in view of the specific provisions under the CDA Rules, namely, Rules 34.2 and 34.3 of the CDA Rules, the decision of this Court in the case of Jaswant Singh Gill (supra) shall not be applicable. 3.1. It is further submitted by Shri Mahabir Singh, learned Senior Advocate appearing on behalf of the employer that Rule 34.2 of the CDA Rules authorises and/or permits the authority to continue the disciplinary proceedings, if instituted while the employee was in service, even after the final retirement of the employee and such disciplinary proceedings shall be deemed to be the proceedings 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. It is submitted that therefore even a major penalty of dismissal can be imposed on conclusion of departmental proceedings even after the final retirement of the employee, if the departmental proceedings are instituted while the employee was in service. It is submitted thatthe afore-stated Rule 34.2 of the CDA Rules has not been properly appreciated and/or considered by this Court in the case of Jaswant Singh Gill (supra). It is submitted that in the said decision, this Court has proceeded on the footing that after the final retirement of the employee, a penalty of removal or dismissal is not permissible. It is submitted that the aforesaid is just contrary to Rule 34.2 of the CDA Rules. 3.2. It is further submitted by Shri Mahabir Singh, learned Senior Advocate appearing on behalf of the employer that even otherwise Rule 34.3 authorises and/or permits the disciplinary authority to withhold the payment of gratuity, or order the recovery from gratuity of the whole or part of any pecuniary loss caused to the company if such an employee has been guilty of offences/misconduct 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. It is submitted that Rule 34.3 of the CDA Rules is in conformity and/or in consonance with sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972 and there is no conflict between the two. 3.3. Learned Senior Advocate appearing on behalf of the appellant has heavily relied upon the decision of this Court in the case of State Bank of India vs. Ram Lal Bhaskar, reported in (2011) 10 SCC 249. It is submitted that while considering the pari materia provisions under the State Bank of India Officers' Service Rules, 1992, namely, Rule 19(3), this Court has confirmed the order of dismissal of an employee which was passed after his retirement. It is submitted that in the said decision, this Court distinguished another judgment of this Court in the case of UCO Bank vs. Rajinder Lal Capoor, reported in (2007) 6 SCC 694 on the ground that in the said case the delinquent officer had already been superannuated and the charge-sheet was served upon him after his retirement. It is submitted that thereafter this Court has further held that if the charge-sheet is served before the retirement, enquiry can continue even after the retirement as per Rule 19(3) of the State Bank of India Officers' Rules, 1992. It is submitted that therefore this Court in the case of Ram Lal Bhaskar (supra) specifically held that if the rules permit, enquiry can continue even after the retirement of the employee. It is submitted that in the present case Rule 34.3 of the CDA Rules permits the enquiry to continue even after the retirement of the employee. It is submitted that the said decision is by a three Judge Bench, however, decision in the case of Jaswant Singh Gill (supra) is by a two Judge Bench. 3.4 It is further submitted by Shri Mahabir Singh, learned Senior Advocate appearing on behalf of the employer that therefore when Rule 34 of the CDA Rules permits continuation of the departmental enquiry even after the retirement of an employee and such a retired employee is deemed to be in service and on conclusion of the departmental enquiry initiated while the employee was in service, penalty of dismissal is permissible, the employer will get the right to forfeit the payment of gratuity of such an employee as provided under Section 4(1) and 4(6) of the Payment of Gratuity Act, 1972 and even under Rule 34.3 of the CDA Rules. 3.5 Making the above submissions and relying upon the decision of this Court in the case of Ram Lal Bhaskar (supra) and relying upon Rule 34.2 and 34.3 of the CDA Rules, it is prayed to allow the present appeal and quash and set aside the impugned judgment and order passed by the Division Bench of the High Court. ;