# Bankey Bihari Chauhan v. State of U.P. & Ors

- **Citation:** (2015) 1 ILRA 256
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2015-02-06
- **Case number:** Special Appeal Defective No. 101 of 2015
- **Bench:** Dr. Dhananjaya Yeshwant Chandrachud, C.J. Suneet Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/bankey-bihari-chauhan-v-state-of-u-p-ors-43292
- **Pages:** 4

## Headnote

C.S.C., Sri Ajit Kumar Singh
Uttar
Pradesh
State
Transport
Corporation
Employee
(other
than
officers)
Service
Regulation
1981Regulation-39, 63-Gratuity payment to
employees of corporation-provision of
Payment of Gratuity Act 1972-Rule 4(6)-
deduction
of
amount
of
loss
from
gratuity-held-illegal without following
procedure-action of corporation ultra
virus-appeal allowed.
Held: Para-8
In any event, it is clear that even
Regulation 63 contains no such provision
of recovery from gratuity. In these
circumstances, we are of the view that
the action for recovery from gratuity was
contrary to law and in the teeth of the
express provision of the Act. The learned
Single Judge, with great respect, was not
justified in dismissing the petition on the
ground that the appellant had not
challenged the order of penalty or the
appellate order. For the purposes of the
present proceedings, it is not necessary
for the
Court to enquire into the
grievance of the appellant that he was
not served with the appellate order.
Moreover, we may clarify that the
learned counsel for the appellant has
only confined himself to the payment of
gratuity. Even if the order of penalty has
attained finality, as is urged on behalf of
the
employer,
any
recovery
or
adjustment of the amount of gratuity has
to be made by following the statutory
provisions contained in the Act. Since the
conditions set out in Section 4 (6) of the
Act for forfeiture of the gratuity have not
been fulfilled, the action of the employer
was ultra vires.
Case Law discussed:
(2007) 1 SCC 663; (2013) 12 SCC 210.

## Text

256
 INDIAN LAW REPORTS ALLAHABAD SERIES
explained by the judgment of the Supreme
Court.
11. For these reasons and subject to
the above, we see no reason to interfere
with the order of the learned Single Judge.
The special appeal is dismissed.
12. Since in the meantime, the
respondent has instituted a contempt
application for non compliance of the
impugned order under appeal, we deem it
appropriate in the interest of justice to
extend the time for compliance by a
further period of two months from today.
13.

The
special
appeal
is,
accordingly, disposed of. There shall be
no order as to costs.
--------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 06.02.2015
BEFORE
THE HON'BLE DR. DHANANJAYA YESHWANT
CHANDRACHUD, C.J.
THE HON'BLE SUNEET KUMAR, J.
Special Appeal Defective No. 101 of 2015
Bankey Bihari Chauhan
...Appellant
Versus
State of U.P. & Ors.
...Respondents
Counsel for the Appellant:
Sri G.C. Pant, Sri Nitin Pant
Counsel for the Respondents:
C.S.C., Sri Ajit Kumar Singh
Uttar
Pradesh
State
Transport
Corporation
Employee
(other
than
officers)
Service
Regulation
1981Regulation-39, 63-Gratuity payment to
employees of corporation-provision of
Payment of Gratuity Act 1972-Rule 4(6)-
deduction
of
amount
of
loss
from
gratuity-held-illegal without following
procedure-action of corporation ultra
virus-appeal allowed.
Held: Para-8
In any event, it is clear that even
Regulation 63 contains no such provision
of recovery from gratuity. In these
circumstances, we are of the view that
the action for recovery from gratuity was
contrary to law and in the teeth of the
express provision of the Act. The learned
Single Judge, with great respect, was not
justified in dismissing the petition on the
ground that the appellant had not
challenged the order of penalty or the
appellate order. For the purposes of the
present proceedings, it is not necessary
for the
Court to enquire into the
grievance of the appellant that he was
not served with the appellate order.
Moreover, we may clarify that the
learned counsel for the appellant has
only confined himself to the payment of
gratuity. Even if the order of penalty has
attained finality, as is urged on behalf of
the
employer,
any
recovery
or
adjustment of the amount of gratuity has
to be made by following the statutory
provisions contained in the Act. Since the
conditions set out in Section 4 (6) of the
Act for forfeiture of the gratuity have not
been fulfilled, the action of the employer
was ultra vires.
Case Law discussed:
(2007) 1 SCC 663; (2013) 12 SCC 210.
(Delivered by Hon'ble Dr. Dhananjaya
Yeshwant Chandrachud, C.J.)
1. This special appeal has arisen
from a judgment of the learned Single
Judge dated 9 December 2014 dismissing
a writ petition filed by the appellant.
2. The appellant was appointed as a
Bus Conductor in the Uttar Pradesh State
Road Transport Corporation1 on 20
March 1978. His services are governed by
1 All]
Bankey Bihari Chauhan Vs. State of U.P. & Ors.
257
the Uttar Pradesh State Road Transport
Corporation
Employees
(Other
than
Officers) Service Regulations, 19812.
Disciplinary proceedings were initiated
against the appellant by the issuance of a
charge sheet on 6 July 2002. The
appellant submitted a reply to the charge
sheet.
His
reply
was
not
found
satisfactory and a notice to show cause
was issued to him on 15 December 2005,
proposing to punish him for the loss
stated to have been incurred by the
Corporation
in
the amount
of
Rs
2,99,848/-. After considering the reply of
the appellant and the report of the Inquiry
Officer, the competent authority found the
appellant
to
be
negligent
in
the
performance of his duties, thereby causing
a financial loss in the amount of Rs
219,846/- and an order was passed on 27
June 2006 for the recovery of the
aforesaid amount by deducting Rs 500/-
per month from his salary until his
retirement. The appellant filed a writ
petition which was dismissed on 24 July
2006 with liberty to file an appeal.
According to the respondents, the appeal
was dismissed by the appellate authority
on 9 April 2009. On the other hand,
according to the appellant, the order of the
appellate authority was never served on
him. The appellant moved the prescribed
authority under the Payment of Wages
Act, 1936. The Commissioner, by an
order dated 22 June 2009 allowed the
application and set aside the deduction of
Rs 500/- with a direction, consequently, to
refund an amount of Rs 22,000/- to the
appellant. That amount was admittedly
refunded. The Corporation filed an appeal
which was rejected by the appellate
authority on 27 October 2010. A writ
petition was filed by the Corporation in
which, on 8 April 2011, the operation of
the orders dated 22 June 2009 and 27
October 2010 was stayed. The stay order
dated 8 April 2011 is stated to have been
extended on 4 July 2011.
3. The cause of action for the
appellant for filing the writ petition was
the initiation of recovery proceedings by
the Corporation represented in these
proceedings by the second and third
respondents. On 1 September 2014, an
order was passed by the Regional
Manager of the Corporation sanctioning
the total gratuity amount of Rs 2,50,945/-
and adjusting it towards the balance
amount of Rs 2,89,250/- which was to be
recovered. The entire amount of gratuity
has thus been adjusted towards the
recovery.
Challenging
the
recovery
action,
the
appellant
moved
writ
proceedings which have been dismissed
by the learned Single Judge by the
impugned order dated 9 December 2014.
What has weighed with the learned Single
Judge is that the appellant did not
challenge the order of punishment that
was originally passed or the order passed
in the departmental appeal and has now
challenged only a consequential decision
to recover the amount from the gratuity
due and payable.
4. Regulation 39 of the Regulations
provides as follows:
"39. Pension and other retirement
benefit.- (1) (i) Subject to the provisions
of clause (ii) of this sub-regulation, an
employee of the Corporation shall not be
entitled to pension, but he shall be entitled
to the retirement benefits mentioned in
sub-regulation (2).
(ii) A person, who was the employee
of the State Government in the erstwhile
U.P. Government Roadways and has
opted for the service of the Corporation,
258
 INDIAN LAW REPORTS ALLAHABAD SERIES
shall be entitled to pension and other
retirement benefits in terms of the G.O.
No. 3414/302-170-N-72, dated July 5,
1972.
(2)
Without
prejudice
to
the
provisions of sub-regulation (1) an
employee (including an employee who
was
in
the
service
of
the
State
Government
in
the
erstwhile
U.P.
Government
Roadways
Department),
shall
be
entitled
to
the
following
retirement benefits:
(i) Employees Provident Fund or the
General Provident Fund, as the case may
be;
(ii) Gratuity in accordance with the
Payment of Gratuity Act, 1972 or the
relevant Government Rules, as may be
applicable;
(iii)
amount
due
under
Group
Insurance Scheme, 1972;
(iv) one free family pass in a year for
journey within the State;
(v) a free family pass for his return to
his home from the place of posting at the
time of retirement in case he does not
accept railway fare;
(vi) any other benefit that may be
allowed by the Corporation from time to
time."
5. Hence, under Regulation 39 (2)
(ii), an employee of the Corporation is
entitled to gratuity in accordance with the
Payment of Gratuity Act, 19723 or the
relevant rules of the Government as may
be applicable.
6. Section 4 (6) of the Act provides
for the circumstances in which the
gratuity of an employee, whose services
have been terminated, can be forfeited.
Section 4 (6) is in the following terms:
"4. Payment of gratuity. - (1) ... ...
(6)
Notwithstanding
anything
contained in sub-section (1), -
(a) the gratuity of 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 shall be forfeited to the extent
of the damage or loss so caused;
(b) 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."
7. In the decision of the Supreme
Court in Jaswant Singh Gill Vs Bharat
Coking Coal Limited4, it has been held that
termination of services for any of the causes
enumerated in sub-section (6) of Section 4 of
the Act is imperative before the gratuity can
be forfeited. The same principle has been
followed in a more recent decision of the
Supreme Court in State of Jharkhand Vs
Jitendra Kumar Srivastava5.
8.
In the present case, it is not in
dispute that the services of the appellant
were never terminated. The appellant
continued to be in service and retired on
attaining the age of superannuation. In the
circumstances, the basic pre-condition for
the forfeiture of gratuity under Section 4
(6) of the Act was not fulfilled. We may
also note that Regulation 63 of the
Regulations provides for penalties and
clause (4) thereof provides for the
1 All] Saraya Distellery A Unit of Saraya Indus Sardar Nagar Gorakhpur Vs. Union of India & Ors. 259
recovery from pay or deposit at the credit
of an employee of the whole or part of a
pecuniary loss caused to the Corporation
by negligence or breach of an order. The
Regulations
must
necessarily
be
harmonized with the provisions of the Act
and cannot override the express statutory
provision. In any event, it is clear that even
Regulation 63 contains no such provision of
recovery
from
gratuity.
In
these
circumstances, we are of the view that the
action for recovery from gratuity was
contrary to law and in the teeth of the
express provision of the Act. The learned
Single Judge, with great respect, was not
justified in dismissing the petition on the
ground that the appellant had not challenged
the order of penalty or the appellate order.
For the purposes of the present proceedings,
it is not necessary for the Court to enquire
into the grievance of the appellant that he
was not served with the appellate order.
Moreover, we may clarify that the learned
counsel for the appellant has only confined
himself to the payment of gratuity. Even if
the order of penalty has attained finality, as
is urged on behalf of the employer, any
recovery or adjustment of the amount of
gratuity has to be made by following the
statutory provisions contained in the Act.
Since the conditions set out in Section 4 (6)
of the Act for forfeiture of the gratuity have
not been fulfilled, the action of the
employer was ultra vires.
9. We, accordingly, allow the
special appeal and set aside the impugned
judgment and order of the learned Single
Judge dated 9 December 2014. In
consequence, we allow the writ petition
filed by the appellant and set aside the
impugned directions of the Corporation
contained in the orders dated 1 September
2014 and 10 January 2014 in regard to the
recovery from the amount of gratuity. The
gratuity which is admissible to the
appellant shall be paid to him within a
period of two months from the receipt of a
certified copy of this order together with
interest computed at the rate as applicable
under sub-section (3A) of Section 7 of the
Act with effect from the date on which the
gratuity became payable to the appellant.
10.

The
special
appeal
is,
accordingly, disposed of. There shall be
no order as to costs.
--------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.02.2015
BEFORE
THE HON'BLE TARUN AGARWALA, J.
THE HON'BLE DR. SATISH CHANDRA, J.
Civil Misc. Writ Petition No. 182 of 2011
Saraya
Distillery
A
Unit
of
Saraya
Indus.Saradar Nagar Gorakhpur..Petitioner
Versus
Union of India & Ors.
...Respondents
Counsel for the Petitioner:
Sri Avnish Kumar Srivastava, Sri Tarun
Veer Singh Khehar
Counsel for the Respondents:
C.S.C.,
A.S.G.I.
2011/237,
Sri
C.B.
Tripathi, Sri Siddharth Saran
Constitution of India, Art.-226-Writ of
mandamus-seeking direction to private
respondent-the purchaser company to issue
for
'C'-held-the
agreement
between
petitioner and private company-sales tax
department not bound-only course to file
civil suit on invoke arbitration clause-no
mandamus
can
be
issued-petition
dismissed.
Held: Para-8
In the instant case we find that there is
an agreement between the
petitioner