# Ram Sewak Gupta v. State of U.P. & Ors

- **Citation:** (2015) 1 ILRA 33
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2014-12-01
- **Case number:** Service Single No. 4735 of 2013
- **Bench:** Devendra Kumar Upadhyaya
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ram-sewak-gupta-v-state-of-u-p-ors-43088
- **Pages:** 3

## Headnote

Constitution of India, Art.-226-withholding
gratuity
-admittedly
neither
any
departmental enquiry either prior or after
retirement pending-recovery based upon
audit report not sustainable-quashed.
Held: Para-14 & 17

## Text

1 All].
 Ram Sewak Gupta Vs. State of U.P. & Ors.
33
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 01.12.2014
BEFORE
THE HON'BLE DEVENDRA KUMAR
UPADHYAYA, J.
Service Single No. 4735 of 2013
Ram Sewak Gupta
...Petitioner
Versus
State of U.P. & Ors.
...Respondents
Counsel for the Petitioner:
Sri D.S. Yadav
Counsel for the Respondents:
C.S.C.
Constitution of India, Art.-226-withholding
gratuity
-admittedly
neither
any
departmental enquiry either prior or after
retirement pending-recovery based upon
audit report not sustainable-quashed.
Held: Para-14 & 17
14. As observed above, admittedly, in
the instant case, no departmental or
judicial proceeding or any such inquiry
was pending, hence there cannot be any
justification for withholding the gratuity
of the petitioner.
17. Merely on the basis of said audit
report without the charge of causing loss
being
established
in
a
full-fledged
departmental inquiry, no recovery of
alleged
loss
caused
to
the
State
Exchequer can be made.
Case Law discussed:
Special Appeal Defective No. 1278 of 2013;
1993 (7) SLR 706; 2006 (110) FLR 101.
(Delivered by Hon'ble Devendra Kumar
Upadhyaya, J.)
1.
Heard learned counsel for the
petitioner and learned Standing Counsel
appearing for the respondents.
2.
The petitioner, who has retired on
30.06.2012 from the post of Marketing
Inspector, has filed this petition with the
prayer that the order dated 24.07.2013 passed
by the Regional Food Controller, Faizabad
Region, Faizabad whereby part of the
gratuity amount of Rs.2,62,271/- has been
withheld for recovering the same on account
of the alleged loss caused to the State
Exchequer by the petitioner, be quashed. The
petitioner has also prayed that the pension
payment order dated 04.01.2013 be also
quashed to the extent it withholds the amount
of leave encashement. Further prayer has
been made for commanding the opposite
party no.4 to accord the benefit of IIIrd
Assured Career Progression to the petitioner
with effect from 01.12.2008 in terms of the
prevalent Government Order and further that
the petitioner be permitted to withdraw the
GPF amount.
3. So far as the prayer relating to
withholding of the leave encashement
amount is concerned, learned counsel for
the petitioner states that the said amount
has been released. Accordingly, the
prayer made in this petition in respect of
the same has been rendered infructuous.
As regards the prayer relating to grant of
the benefit of IIIrd Assured Career
Progression to the petitioner, it has been
informed that the said benefit has also
been given to him which renders the
prayer made in this regard infructuous.
The petitioner, has, since been permitted
to withdraw the amount of GPF, hence in
this view, the prayer made in this regard
has also become infructuous.
4. The sole issue which now
survives for consideration in this case is
as to whether the part of the amount of
gratuity i.e. the sum of Rs.2,62,271/- has
legally been withheld by the Regional
34
 INDIAN LAW REPORTS ALLAHABAD SERIES
Food
Controller,
Faizabad
Division,
Faizabad by passing the impugned order.
5. It has been submitted by the learned
counsel for the petitioner that at the time of
retirement, the petitioner was not facing any
departmental
inquiry,
neither
any
departmental proceedings were initiated after
his retirement in terms of the provision
contained in Regulation 351-A of the Civil
Service Regulations, hence there was no
occasion for the respondents to have
withheld the part of the amount of gratuity.
6.
Per contra, learned counsel
appearing for the State has vehemently
argued that on the basis of special audit
report, it was determined that the petitioner
has caused loss of Rs.2,62,271/-, hence the
loss caused to the State Exchequer has been
sought to be recovered by withholding the
amount equal to the loss, from the gratuity of
the petitioner by the Regional Food
Controller, Faizabad Division, Faizabad by
means of order dated 24.07.2013.
7. I have considered the arguments
advanced by learned counsels appearing
for the parties.
8. Admittedly, no departmental
proceedings were instituted, neither the
same were pending against the petitioner
on the date of retirement. It is also not
denied that no departmental proceedings,
after seeking approval of the competent
authority under Regulation 351-A of the
Civil Service Regulations, have been
initiated against the petitioner.
9. In the counter affidavit, it has
been stated by the respondents that on the
basis of liability of a sum of Rs.2,62,271/-
, which has been determined on the basis
of audit report, the amount has been
ordered to be recovered from the gratuity
amount of the petitioner. No other reason
has been indicated by the respondents for
withholding the amount of gratuity for
recovery of the alleged loss caused to the
State Exchequer.
10.
The U.P. Recruitment Benefit
Rules 1961 provides that recovery from the
gratuity of retired employee can be made
only if the conditions of Regulation 351-A of
the Civil Service Regulation are fulfilled. As
observed above, in the instant case, there is
no material which in any manner suggests
that any departmental proceedings were
initiated against the petitioner by taking
recourse to the provisions of Regulation 351A of the Civil Service Regulations.
11.
Learned
Standing
Counsel
appearing for the State has, however, sought
to defend the impugned order of recovery
from the gratuity amount on the basis of
decision rendered by a Division Bench of this
Court in the case of State of U.P. and others vs
Jai Prakash, decided on 17.12.2013 in Special
Appeal Defective No.1278 of 2013. The
Division Bench in the aforesaid case has held
that Government has the power to withhold
the gratuity, however, the gratuity can be
withheld
only
until
conclusion
of
departmental or judicial proceedings or any
inquiry by administrative tribunal.
12. Referring to the provision contained
in Regulation 351-AA, this Court in the said
case of State of U.P and others vs Jai Prakash
(supra) has held that death-cum-retirement
gratuity may be withheld until the conclusion
of departmental or judicial proceedings and
the issue of final orders thereon.
13. Thus, condition precedent for
withholding or making recovery from the
gratuity is pendency of departmental or
1 All]. Kaleem Ullah Khan Vs. State of U.P. & Ors.
35
judicial proceedings or any inquiry by the
administrative tribunal and in absence of
these inquiries or proceedings pending on
the date of retirement, gratuity of the
retiring employee cannot be withheld.
14. As observed above, admittedly,
in the instant case, no departmental or
judicial proceeding or any such inquiry
was pending, hence there cannot be any
justification for withholding the gratuity
of the petitioner.
15. In fact, the impugned order does
not withhold part of amount of gratuity;
rather it seeks to recover the same citing
the cause that the petitioner has been
responsible for causing loss to the State
Exchequer to the extent of the amount
mentioned in the impugned order.
16. The question, thus, is as to
whether without holding any departmental
inquiry and without determining the
responsibility of the petitioner for the
alleged loss, solely on the basis of audit
report, can any recovery from the
petitioner be made.
17.
It is well established that audit
report cannot be used as substantive evidence
of the genuineness or bonafide nature of the
transactions referred to in the accounts. As
has been held by this Court in the case of
Dilip Singh Rana vs State of U.P. reported in
1993 (7) SLR 706, audit is only official
examination of the accounts in order to make
sure that the accounts have been properly
maintained according to prescribed mode
and further that audit report is a statement of
facts pertaining to the maintenance of
accounts coupled with the opinion of the
auditor and thus it can only give rise to
reasonable suspicion of commission of a
wrong. Merely on the basis of said audit
report without the charge of causing loss
being
established
in
a
full-fledged
departmental inquiry, no recovery of alleged
loss caused to the State Exchequer can be
made.
18.

In
similar
circumstances,
recovery sought to be made from the
gratuity of a retired government employee
on the basis of some audit report was not
approved by a Division Bench of this
Court in the case of Radhey Shyam Dixit
vs State of U.P. and others, reported in
2006 (110) FLR 101.
19. For the reasons disclosed above in
the instant case as well, the recovery of the
part of the amount of gratuity of the petitioner,
which has been sought to be made by passing
the impugned order dated 24.07.2013, cannot
be permitted to be sustained.
20. In the result, the writ petition is
allowed and the impugned order dated
24.07.2013 passed by the Regional Food
Controller, Faizabad Region, Faizabad as
contained in annexure no.1 to the writ
petition is hereby quashed. It is directed
that payment of entire gratuity amount
shall be made to the petitioner within six
weeks from the date of production of
certified copy of this order.
21. However, there will be no order
as to costs.
--------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 08.12.2014
BEFORE
THE HON'BLE MAHESH CHANDRA TRIPATHI, J.
Civil Misc. Writ Petition No. 10039 of 2013
Kaleem Ullah Khan
 ...Petitioner