IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. R.S.A. No.3629 of 2008 Date of Decision: 19.5.2009 State of Haryana and another. ....... Appellants through Shri L.R.Nandal,Assistant Advocate General, Haryana. Versus Smt.Kanta Gupta and others. ....... Respondents through Shri Navin Daryal,Advocate. CORAM: HON'BLE MR.JUSTICE MAHESH GROVER .... 1. Whether Reporters of Local Newspapers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? .... Mahesh Grover,J. This Regular Second Appeal is directed against the judgments and decrees dated 27.11.2007 and 29.8.2008 passed respectively by the Civil Judge (Junior Division), Karnal (hereinafter referred to as `the trial Court') and the Additional District Judge, Karnal (described hereinafter as `the First Appellate Court') whereby the suit filed by Shri D.D.Gupta, since deceased and now represented by the appellants being his legal heirs, was decreed and the appeal of the defendants-appellants was dismissed. A suit was filed by Shri D.D.Gupta for declaration to the effect that he was entitled to various benefits as detailed in the plaint. The case as set up in the plaint was as under:- R.S.A.No.3629 of 2008 -2- .... Shri D.D.Gupta had remained posted as Junior Engineer (Civil) from 1977 to 1985 on National Highway No.1 for the work of four-laning within the area of Sahabad. The work of earth-filling and construction of culverts was allotted to M/S Markanda Construction Company vide order dated 5.10.1984 of the Executive Engineer, Provincial Division No.III, Karnal. On the basis of measurement of earth-filling work was recorded by Shri Gupta, the total payment of Rs.1,52,274.37 was made to the said agency on 13.5.1985. Later on, it was found that excess payment of Rs.66285/- was made to M/S Markanda Construction Company in connivance with Shri A.K.Gupta, S.D.E. and,thus, a loss to that extent was caused to the State exchequer. A departmental enquiry was conducted and Shri D.D.Gupta was charge-sheeted under Rule 7 of the Haryana Civil Services (Punishment and Appeal) Rules,1987 (for short, `the Rules') on 16.6.1988 and an order dated 28.10.1999 was passed and an amount of Rs.4052.20 was imposed as minor punishment upon him. The appeal filed against the said order is still awaiting decision. Shri D.D.Gupta was also charge sheeted under Rule 7 of the Rules on 9.1.1987 on the allegation that he had accepted inferior quality of Reflective Junction Boards and Reflective Boards in contravention of the terms and conditions of the work order and in violation of the terms and conditions of the work order and had caused loss of Rs.6474/- to the State exchequer. After enquiry, he was exonerated from the allegations. However, the Engineer-in-Chief, P.W.D., B.& R., Haryana did not agree with the findings of the enquiry officer and issued show cause notice of the proposed punishment to him on 7.2.2002. R.S.A.No.3629 of 2008 -3- .... Disagreement note was also issued. He had filed a reply to the show cause notice and thereafter, punishment of recovery of an amount of Rs.3237/- was imposed upon him vide order dated 29.4.2002 despite the fact that the enquiry officer did not conduct the enquiry in accordance with the provisions contained in Rule 7.2 of the Rules as he was not afforded opportunity to cross-examine the witnesses. The punishment orders dated 28.10.1999 and 29.4.2002 were challenged on the plea that no opportunity of hearing was given to him and that the same were illegal and were liable to be quashed as principles of natural justice were violated. As a consequence to this, he had also prayed that the amount of Rs.11066/- which was withheld by the appellants at the time of his retirement on 31.1.1992, be also directed to be paid to him along with interest at the rate of 18% per annum. It was claimed that the payment of remaining gratuity of Rs.28121.50 was delay by 3-1/2 years and, therefore, interest on this amount be also awarded to him. Upon notice, the appellants had appeared and filed written statement controverting the allegations contained in the plaint. It was pleaded that the punishment had been awarded to Shri Gupta for stoppage of one increment with future effect, besides recovery of Rs.6474/- vide order dated 14.10.1987 in connection with the allegations against him of receiving sub -standard items. The appeal filed by him was partly allowed and the punishment regarding stoppage of one increment with future effect was affirmed, but recovery of penalty was reduced to Rs.3237/- from Rs.6474/-. It was averred that these orders were challenged by Shri Gupta R.S.A.No.3629 of 2008 -4- .... before the Civil Court and the same were held illegal being passed without holding regular enquiry,but liberty was given to take appropriate disciplinary action against him after holding enquiry as per rules. Thereafter, the punishment orders were withdrawn and enquiry proceedings were again initiated. It was, however, admitted that the enquiry officer had exonerated Shri Gupta, but the competent authority disagreed with the findings of the enquiry officer and after taking a lenient view, the punishment of recovery of Rs.3237/- was imposed upon him. With regard to the disciplinary action against Shri Gupta on the allegations of excess payment to M/S Markanda Construction Company, it was averred that after adopting due procedure under the Rules, the order of punishment was passed and, therefore, he had no cause of action against the same. It was pleaded that amount of Rs.11066/- was withheld from the gratuity payable to Shri Gupta keeping in view the loss caused by him to the department and now, the punishment orders have been passed and he was held liable to pay a total sum of Rs.7829/- and after adjustment, the balance amount of Rs.3237/- was to be paid to him and in that regard, the process had been started. The parties went to trial on the following issues:- 1. Whether the order dated 28.10.1999 for recovery of Rs.4052/- and order dated 29.4.2002 for recovery of Rs.3237/- are illegal, null and void and not binding on the rights of the plaintiff and he is entitled to the release of withheld amount of Rs.11066/- and he is also entitled to the R.S.A.No.3629 of 2008 -5- .... interest on delayed payment of Rs.28121.50 paise?OPP 2. Whether the plaintiff has no cause of action to file the present suit?OPD 3. Whether the suit is not maintainable?OPD 4. Whether the suit is bad for non joinder of necessary parties?OPD 5. Whether the suit is barred by limitation?OPD 6. Relief. It is pertinent to mention here that during the pendency of the proceedings before the trial Court, Shri Gupta expired and his legal representatives were allowed to come on record. After appraisal of the entire evidence on record, the trial Court decreed the suit of Shri Gupta as prayed for except the rate of interest which was allowed @ 16% per annum. In appeal, the findings of the trial Court were affirmed by the First Appellate Court. Hence, this Regular Second Appeal. Learned counsel for the appellant contended that the findings recorded by the Courts below are erroneous and are liable to be set aside. He further contended that the relief which has been granted to Shri Gupta was contrary to the statutory rules and the interest awarded is exorbitant and is not in consonance with the provisions of the Payment of Gratuity Act,1972 (for short, `the Act'). It was submitted by him that the following questions of law arise for determination in this appeal:- R.S.A.No.3629 of 2008 -6- .... 1. Whether the amount of gratuity can be ordered to be paid to a delinquent official, when his appeal against punishment order is pending before the Appellate Authority? 2. Whether the payment of interest at the rate of 16% per annum over the amount of gratuity is contrary to the provisions of Section 7(3) of the Payment of Gratuity Act,1972? On the other hand, learned counsel for the respondents contended that the impugned judgments are totally justified and that the amount of gratuity was withheld arbitrarily and without any reason and that Shri Gupta was deprived of his legitimate dues for total extraneous reasons. After hearing the learned counsel for the parties and perusing the impugned judgments, I am of the considered pinion that there is no infirmity in the findings recorded by the Courts below. The facts of the case reveal a shocking state of affairs. It is to be noticed that Shri D.D.Gupta retired from service on 31.1.1992. The enquiry report was submitted on 11.11.1993. Thereafter, the punishing authority took more than six years to pass a punishment order on the basis of this enquiry which was passed on 28.10.1999. An appeal against the same was preferred by Shri Gupta which was not even decided till the time when the First Appellate Court concluded the matter. Before this Court, an order dated 19.7.2008 was produced which has been passed by the Special Secretary to Govt., Haryana, Public Works (B&R), Haryana, reflecting that the appeal of Shri Gupta was dismissed being infructuous. The relevant R.S.A.No.3629 of 2008 -7- .... extract thereof is reproduced below:- “I have gone through the case and comments given by EIC, Haryana thereto. The employee in question (late Sh.D.D.Gupta) passed away. The punishment Rules are applicable only on employees and not to their legal heirs/ wife etc. Hence, the appellant being not alive makes appeal infructuous. The appeal is dismissed being infructuous. It is, therefore, ordered accordingly.” It is also to be noticed that after passing of order dated 28.10.1999 against which an appeal was pending, Shri Gupta died in the year 2003 and the appellants could not even complete the proceedings during this period and deprived him of his legitimate dues during his life time. Even his legal representatives were kept away of the benefits which were admissible to Shri Gupta. In this view of the matter, the judgment of the First Appellate Court, who had maintained 16% interest granted by the trial Court from 1.4.1992 till the date of payment of all dues and the grant of special compensatory costs, does not warrant any interference in the facts which have been detailed above. No doubt, the provisions of Section 7(3A) of the Act lays down that if the amount of gratuity payable to an employee is not paid by the employer within the period of thirty days, the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, no exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that R.S.A.No.3629 of 2008 -8- .... Government may, by notification specify. Further, the proviso to this Section clarifies that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground. But, the facts of this case reveal that it was not the fault of Shri D.D.Gupta for the delay in the payment of gratuity and no permission in writing was obtained by the employer from the controlling authority in this regard. As noticed above, the appeal of Shri Gupta remained pending for a long period with the appellate authority and he was deprived of the benefit of gratuity during his life time. Therefore, the impugned judgments whereby the payment of gratuity along with interest at the rate of 16% per annum has been ordered cannot be faulted with as Shri Gupta was kept away from this benefit without his fault and he could not enjoy its fruits during the period he remained alive. Accordingly, this appeal is dismissed with costs being without any merit and the questions as posed by the learned counsel for the appellants are answered to say that the amount of gratuity could be ordered to be paid to Shri Gupta during the pendency of his appeal and even though the rate of interest awarded should ordinarily have been in consonance with the prescribed rate of interest given in the Act, yet, the Civil Court, while taking cognizance of the enormous laxity and arbitrariness of the appellants, was not precluded from noticing their unfairness, to compensate the respondents with a higher rate of interest, which could be awarded by it while resorting to its powers under Section 34 of the C.P.C. in order to do R.S.A.No.3629 of 2008 -9- .... justice to the aggrieved person. As a consequence of it, the impugned judgments and decrees are upheld. May 19,2009 ( Mahesh Grover ) “SCM” Judge