{"id":140750,"date":"2010-11-22T00:00:00","date_gmt":"2010-11-21T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-management-vs-the-joint-commissioner-of-labour-on-22-november-2010-2"},"modified":"2014-05-11T09:14:23","modified_gmt":"2014-05-11T03:44:23","slug":"the-management-vs-the-joint-commissioner-of-labour-on-22-november-2010-2","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-management-vs-the-joint-commissioner-of-labour-on-22-november-2010-2","title":{"rendered":"The Management vs The Joint Commissioner Of Labour on 22 November, 2010"},"content":{"rendered":"
Madras High Court<\/div>\n
The Management vs The Joint Commissioner Of Labour on 22 November, 2010<\/div>\n
       \n\n  \n\n  \n\n \n \n BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT\n\nDATED: 22\/11\/2010\n\nCORAM\nTHE HONOURABLE MR.JUSTICE K.CHANDRU\n\nW.P.(MD)NO.9144 OF 2010\nAND\nM.P.(MD)Nos.1 and 2 of 2010\n\nThe Management,\nSivagangai District Central\n  Cooperative Bank Ltd.,\nrep by its Special Officer,\nSivagangai.     ..  Petitioner\n\nVs.\n\n1.The Joint Commissioner of Labour\n   No.76,Keela Maarat Street,\n   Anjali Towers,\n   Madurai.\n2.The Assistant Commissioner of Labour,\n   Sundaram Theatre Road,\n   K.K.Nagar, Madurai-20.\n3.S.Tajudeen     ..  Respondents\n\n      This writ petition is preferred under Article 226 of the Constitution of\nIndia praying for the issue of a writ of certiorari to call for the records\nrelating to the order passed by the first respondent in P.G.A.No.2\/2010, dated\n28.05.2010 confirming the order passed by the second respondent in\nP.G.No.46\/2008 dated 26.05.2009 and to quash the same.\n\n!For Petitioner   ...  Mr.D.Shanmugaraja Sethupathi\n^For Respondents  ...  Mr.S.C.Herold Singh, GA for RR1 and 2\n                       Mr.V.O.S.Kalaiselvan for R-3\n- - - -\n:ORDER\n<\/pre>\n
      The petitioner is the management. The matter arises under the Payment of
\nGratuity Act, 1972 (for short PG Act). Aggrieved by the order passed by the
\nfirst respondent the appellate authority under the Payment of Gratuity Act in
\nP.G.Appeal No.2 of 2010 confirming the order passed by the second respondent
\nControlling authority, dated 26.5.2009, the writ petition came to be filed. The
\nwrit petition was admitted on 16.7.2010 and an interim stay was granted on the
\nsame day.\n<\/p>\n
      2.Heard the arguments of Mr.D.Shanmugaraja Sethupathi, learned counsel
\nappearing for the petitioner, Mr.S.C.Herold Singh, learned Government Advocate
\ntaking notice for respondents 1 and 2 and Mr.V.O.S.Kalaiselvan, learned counsel
\nappearing for the third respondent employee.\n<\/p>\n
      3.The third respondent was employed by the petitioner District Central
\nCooperative Bank as an Assistant Manager. The third respondent reached the age
\nof superannuation on 31.10.2006. He was relieved from service on the same day.
\nBut, however in the order it was indicated that his relieve was without
\nprejudice to the disciplinary action pending against him vide charge memo, dated
\n18.7.2005 as well as the surcharge proceedings, dated 14.10.2006.\n<\/p>\n
      4.It was also claimed by the petitioner that the third respondent had
\ngiven an indemnity bond, dated 30.10.2006, stating that in case any irregularity
\nin the work of the third respondent is found and if there is any finding of loss
\ncaused to the Bank, he had agreed to have the amount recovered both from him as
\nwell as from his legal heirs together with interest. However, when the third
\nrespondent was not paid his gratuity after his retirement, he filed a gratuity
\napplication before the second respondent in P.G.Case No.46 of 2008. In the
\nmeanwhile, the petitioner Bank tried to invoke execution proceedings for
\nrecovering the amount computed by the Surcharge Officer. A counter statement,
\ndated 12.08.2008 was also filed by the petitioner herein and a reference was
\ndrawn to Section 4(6)(1)(a) of the Payment of Gratuity Act, wherein an employer
\ncan withhold the gratuity in case the employee was terminated for any act either
\nby wilful omission or negligence causing damages or loss to the property
\nbelonged to the employer.\n<\/p>\n
      5.Before the Controlling Authority, the third respondent examined himself
\nas P.W.1 and marked seven documents as Exs.P.1 to P.7. On the side of the
\npetitioner Bank, one Somanathan, the manager, was examined as R.W.1 and on their
\nside, five documents were filed and marked as Exs.R.1 to R.5. The Controlling
\nAuthority held that the question of invoking the defence under Section
\n4(6)(1)(a) will arise only when  termination was made against the employee for
\nhaving caused loss to the employer’s property. But, in the present case, the
\npetitioner therein was allowed to retire without prejudice to the disciplinary
\naction. Therefore, the defence in terms of Section 4(6) is not available. It was
\nalso held that on the basis of the by-laws and service conditions available to
\nthe petitioner Bank, no enquiry can be held after reaching the age of
\nsuperannuation. Therefore, it directed the Bank to pay the gratuity for a sum of
\nRs.3,48,061\/-. The petitioner bank deposited the said amount with the second
\nrespondent on 21.8.2009.\n<\/p>\n
      6.The Bank had filed an appeal before the first respondent the appellate
\nauthority under Section 7(7) of the Payment of Gratuity Act. Reliance was placed
\nupon the judgment of the Supreme Court in Jarnail Singh Vs. Secretary, Ministry
\nof Home Affairs reported in 1993 (1) SCC 47 for contending that the employer can
\nwithhold the gratuity and adjust the dues payable to the State. Further reliance
\nwas also placed upon a judgment of the Supreme Court in U.P.State Sugar
\nCorporation Ltd. Vs. Kamal Swaroop Tondon reported in 2008 (2) SCC 4. This case
\nwas relied on for the purpose of contending that an enquiry can be conducted
\neven after reaching the age of superannuation as the third respondent was
\nentitled to get the terminal benefits. The said appeal was taken on file as P.G.
\nAppeal No.2 of 2010. Notice was given to the third respondent. The third
\nrespondent had filed a counter statement. He contended that the judgment in
\nJarnail Singh case (cited supra) will not apply as it arose out of the Central
\nCivil Services (Pension) rules, 1972, wherein specific provision has been
\nprovided for withholding the DCRG in case of any dues to the State. Likewise,
\nthe judgment in U.P. State Sugar Corporation Ltd. (cited supra) also have no
\nrelevance since in that case the employee was not allowed to retire. Therefore,
\nthe Supreme Court held the proceedings can continue. But, in the present case,
\nthe petitioner was allowed to retire from service and there is no service
\nconditions to continue the disciplinary proceedings. The appellate authority had
\nheld that termination was not due to any misconduct, in which the allegation was
\nthat the employee had committed loss to the employer on account of his
\nnegligence. Therefore, the judgments relied on by the petitioner Bank will no
\napply to the case of the petitioner and dismissed the appeal by an order, dated
\n28.5.2010.\n<\/p>\n
      7.The two questions that arise for consideration in the present case are
\nas follows:\n<\/p>\n
      (a)whether the petitioner can deny the payment of gratuity by invoking the
\nprovisions in Section 4(6) of the Payment of Gratuity Act? and\n<\/p>\n
      (b)Whether the Cooperative society can conduct an enquiry even after an
\nemployee had reached the age of superannuation?\n<\/p>\n
      8.Before proceeding to deal with the case, it is necessary to refer to
\nSection 4(6)(a) of the Payment of Gratuity Act which reads as follows:\n<\/p>\n
4.(6)Notwithstanding anything contained in sub-section (1),-\n<\/p>\n
      (a)the gratuity of an employee, whose services have been terminated for
\nany act, wilful omission or negligence causing any damage or loss to, or
\ndestruction of, property belonging to the employer, shall be forfeited to the
\nextent of the damage or loss so caused;”\n<\/p>\n
      9.As to whether an employer can rise a plea of adjustment of gratuity
\ntowards the loss sustained by it for the first time before the authority and
\nalso whether without passing an order  of termination on such misconduct can
\nclaim to withhold the gratuity on that score came up for consideration by
\nvarious courts.\n<\/p>\n
      10.In Gujarat State Road Transport Corporation Vs. Devendrabhai Mulvantrai
\nVaidya reported in 2004 (1) LLJ 77, it was held that forfeiture can be made only
\nwhen employee’s service was terminated for the reasons set out in Section 4(6).
\nSimilarly, in Radheyshyam Khichrolia Vs. Madhya Pradesh State Cooperative
\nMarketing Federations Ltd. and another reported in 2002 (3) LLJ 513, it was held
\nthat there should be a valid order of dismissal or imposition of punishment
\nbefore forfeiture can be claimed.\n<\/p>\n
      11.In Gujarat State Fertilizers and Chemicals Ltd. Vs. Surendra T.Amin
\nreported in 2005 (1) LLN 221, it was held that forfeiture issue cannot be raised
\nfor the first time before the authority.  In Dunlop India Ltd. Vs. Union of
\nIndia and others reported in 2003 (3) LLJ 1125, it was held that termination of
\nservice is sine qua non for the applicability of Section 4(6). A similar view
\nwas also taken in Travancore Plywood Industries Ltd. Vs. Regional Joint Labour
\nCommissioner reported in 1996 (2) LLJ 85 and the Court held that the employer’s
\nright to withhold the gratuity under Section 4(6) can be made only if there was
\nprior termination.\n<\/p>\n
      12.Very  recently,  the  Supreme  Court vide its decision reported in
\nP. Rajan Sandhi v. Union of India<\/a> reported in (2010) 10 SCC 338, while dealing
\nwith the case of a working Journalist having right to get gratuity under Section
\n5 of the Working Journalist Act held that the Working Journalist Act is a
\nspecial Act and it will prevail over the general Act like the Payment of
\nGratuity Act. In that context, in paragraphs 11 and 12, it was observed as
\nfollows:\n<\/p>\n
11.It may be seen that there is a difference between the provisions for denial
\nof gratuity in the Payment of Gratuity Act and in the Working Journalists Act.
\nUnder the Working Journalists Act gratuity can be denied if the service is
\nterminated as a punishment inflicted by way of disciplinary act, as has been
\ndone in the instant case. We are of the opinion that Section 5 of the Working
\nJournalists Act being a special law will prevail over Section 4(6) of the
\nPayment of Gratuity Act which is a general law. Section 5 of the Working
\nJournalists Act is only for working journalists, whereas the Payment of Gratuity
\nAct is available to all employees who are covered by that Act and is not limited
\nto working journalists. Hence, the Working Journalists Act is a special law,
\nwhereas the Payment of Gratuity Act is a general law. It is well settled that
\nspecial law will prevail over the general law, vide G.P. Singh’s Principles of
\nStatutory Interpretation, 9th Edn., 2004, pp.133 and 134.\n<\/p>\n
12.The special law i.e. Section 5(1)(a)(i) of the Working Journalists Act, does
\nnot require any allegation or proof of any damage or loss to, or destruction of,
\nproperty, etc. as is required under the general law i.e. the Payment of Gratuity
\nAct. All that is required under the Working Journalists Act is that the
\ntermination should be as a punishment inflicted by way of disciplinary action,
\nwhich is the position in the case at hand. Thus, if the service of an employee
\nhas been terminated by way of disciplinary action under the Working Journalists
\nAct, he is not entitled to gratuity.”\n<\/p>\n
                    (Emphasis added)\n<\/p>\n
      13.Therefore, on the first question, the petitioner management must fail
\nbecause not only the third respondent was allowed to retire, but the question of
\nforfeiture was raised only in the counter pleadings before the Controlling
\nAuthority. No termination was made on account of ingredients found under Section
\n4(6) of the PG Act.\n<\/p>\n
      14.The second question, i.e. right to continue the proceedings even after
\nreaching the age of superannuation, the appellate authority had erred in
\nupholding the contention of the third respondent. The issue is no longer res
\nintegra. A division bench of this court in  The Registrar of Co-operative
\nSocieties, Kilpauk, Chennai-10 and another Vs. G.Manoharan reported in 2010 (2)
\nCTC 234, after reviewing the case laws in paragraph 33 held as follows :\n<\/p>\n
      “33.From the records produced in this case, the following facts are
\nobvious:-\n<\/p>\n
      (a)The activities of the first respondent had caused a great deal of
\nconsternation among the authorities and they were forced to transfer him from
\nthe place where, according to them, he was causing a lot of damage.\n<\/p>\n
      (b)The disciplinary proceedings had been actually initiated before his age
\nof superannuation, since the first charge memo is dated 6.6.2003, whereas his
\nage of superannuation is 31.6.2003.\n<\/p>\n
      (c)He had also given a reply to the charge memo dated 6.6.2003, but had
\nnot chosen to reveal the fact of the issuance of this earlier charge memo in his
\nwrit affidavit.\n<\/p>\n
      (d)No orders had been passed permitting him to retire; on the contrary, he
\nwas suspended on the eve of his attaining the age of superannuation.\n<\/p>\n
      (e)The Supreme Court has held that even if a person had retired, if it is
\nproved that he had caused loss to the establishment, then proceedings can be
\ninitiated to recover the amount of loss from him.\n<\/p>\n
      (f)Even if a person has attained the age of superannuation, it is possible
\nto dismiss him, in which event, he will not be entitled to his terminal dues
\nvide (2007) 9 S.C.C. 15 (supra).\n<\/p>\n
      (g)In any event, Section 87 of the Act gives the power to proceed against
\neven a past employee for recovery and restoration of the financial loss caused
\nto the Society.”  (Emphasis added)\n<\/p>\n
      15.Therefore, it is always open to the petitioner Bank to proceed against
\nthe third respondent for recovering the amounts ordered to be surcharged against
\nhim in person as well as against his property. But, however the payment of
\ngratuity on that score cannot be withhold in view of the non obstante clause
\nfound under Section 14 of the Payment of Gratuity Act and also the payment is
\nfreed from any attachment as provided under Section 13 of the Act.\n<\/p>\n
      16.In view of the above, the writ petition will stand dismissed. No costs.
\nConsequently, connected miscellaneous petitions stand closed.\n<\/p>\n
vvk<\/p>\n
To\n<\/p>\n
1.The Joint Commissioner of Labour
\n   No.76,Keela Maarat Street,
\n   Anjali Towers,
\n   Madurai.\n<\/p>\n
2.The Assistant Commissioner of Labour,
\n   Sundaram Theatre Road,
\n   K.K.Nagar, Madurai-20.<\/p>\n","protected":false},"excerpt":{"rendered":"
Madras High Court The Management vs The Joint Commissioner Of Labour on 22 November, 2010 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 22\/11\/2010 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.(MD)NO.9144 OF 2010 AND M.P.(MD)Nos.1 and 2 of 2010 The Management, Sivagangai District Central Cooperative Bank Ltd., rep by its Special Officer, Sivagangai. .. Petitioner […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,13],"tags":[],"class_list":["post-140750","post","type-post","status-publish","format-standard","hentry","category-high-court","category-madras-high-court"],"yoast_head":"\nThe Management vs The Joint Commissioner Of Labour on 22 November, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/the-management-vs-the-joint-commissioner-of-labour-on-22-november-2010-2\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Management vs The Joint Commissioner Of Labour on 22 November, 2010 - 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