THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.1362 OF 2004 DATED FEBRUARY, 2010 BETWEEN K.Saraswathi Devi … Petitioner And A.P.State Warehousing Corporation, Warehousing Sadan, II Floor, Behind Gandhi Bhavan, Nampalli, Hyderabad, Represented by its Managing Director. And Others. … Respondents THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.1362 OF 2004 ORDER: The petitioner is the widow of one K.J.Prasada Rao, an employee of the Andhra Pradesh State Warehousing Corporation (for brevity, ‘the Corporation’). She filed the present writ petition seeking payment of certain monetary benefits allegedly due to her husband. The petitioner’s husband entered the service of the Corporation in the year 1978 as a Junior Assistant. He was working as a Warehouse Manager at Kakinada at the time of his death on 28.02.2001. The petitioner submitted a representation seeking payment of her husband’s terminal benefits. Thereupon, the Corporation, under its letter dated 21.07.2001, informed the petitioner that a sum of Rs.3,43,822/- was due to her husband towards his Provident Fund but the same was liable to be reduced by Rs.69,678/- (towards transit loss), Rs.1,44,092/- (towards storage losses) and Rs.18,454/- (towards conveyance advance & interest). After deducting the aforestated sums, totaling Rs.2,32,224/-, the Corporation remitted the balance of Rs.1,11,598/- to the petitioner. In so far as his gratuity amount is concerned, the Corporation under its Memo dated 06.08.2001 paid the sum of Rs.1,00,000/- to the petitioner. Under Memo dated 23.05.2003 the petitioner was informed that she was not entitled to any differential gratuity as the revised pay scales were implemented after her husband’s death. It is the case of the petitioner that her husband was not put on notice of his alleged liability for any transit or storage losses. No proceedings were initiated against him during his life time or even after his death in this regard. The petitioner further stated that as regards payment of arrears from April, 1999 to the date of her husband’s death in accordance with the PRC, 1999, a sum of Rs.1,22,295.50 ps. was due. However, certain deductions amounting to Rs.30,454/- were effected therefrom, including a sum of Rs.18,454/- towards conveyance advance. She was accordingly paid the reduced sum of Rs.91,840/-. It is pointed out that the same deduction of Rs.18,454/- towards conveyance advance was effected both from the Provident Fund amount as well as the PRC arrears. It is further stated that the gratuity amount was not calculated in accordance with Section 4(2) of the Payment of Gratuity Act, 1972 (for brevity, ‘the Act of 1972’) and that a sum of Rs.1,39,000/- and not Rs.1,00,000/- was due on this count. As regards the deduction from the Provident Fund amount, it is the case of the petitioner that the same was illegal in the light of Section 10 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (for brevity, ‘the Act of 1952’). The petitioner accordingly sought for a direction to the Corporation to make good the shortfall in the payments due to her husband under various counts along with interest. No counter affidavit has been filed by the Corporation. However, Ms.R.Kameswari, learned standing counsel for the Corporation, made her submissions on instructions. She admitted that no enquiry or any other proceeding preceded the action of the Corporation in effecting deductions towards transit and storage losses from the Provident Fund amount due and payable to the petitioner’s husband. Under 10(2) of the Act of 1952, the amounts standing to the credit of a member in the Provident Fund at the time of his death and payable to his nominee, vest in the nominee free from any debt or other liability incurred by the deceased subject to deductions authorized by the Scheme or Rules. Whether the deductions effected in the present case were authorized by the Scheme or Rules is one matter but the glaring admitted fact that requires to be noticed is that the petitioner’s husband was mulcted with the liability towards transit and storage losses without any finding in this regard being recorded against him by a competent authority after following the due procedure. It is not in dispute that the petitioner’s husband was never subjected to any disciplinary proceedings with regard to the alleged transit and storage losses before his death. In the absence of such a procedure being followed, it is not open to the Corporation to unilaterally attach such a liability upon the petitioner’s husband and effect deductions on this score from the Provident Fund amount due and payable to the petitioner upon the death of her husband. As regards the amount of Rs.18,454/-, being the amount due from the petitioner’s husband to the Corporation towards conveyance advance and interest, the same was already deducted from the PRC arrears due to him. Hence, its action in effecting the same deduction from the Provident Fund was per se illegal. The action of the Corporation in deducting the sum of Rs.2,32,224/- from the Provident Fund amount due and payable to the petitioner is therefore illegal and unsustainable. The petitioner would also be entitled to interest upon the delayed payment of the Provident Fund so withheld illegally, under the provisions of Section 7Q of the Act of 1952. As regards the payment of gratuity, the petitioner is entitled to claim the gratuity amount due and payable to her husband in accordance with the explanation to sub-section (2) of Section 4 of the Act of 1972. If there is any shortfall in the payment of gratuity, the petitioner would be entitled to be paid such amount along with interest under Section 7(3-A) of the Act of 1972. The writ petition is accordingly disposed of with the above directions. The amounts due and payable to the petitioner under this order shall be remitted to her within a period of two (2) months from the date of receipt of a copy of this order. In the circumstances of the case, there shall be no order as to costs. ____________________ SANJAY KUMAR, J. ___________February, 2010. VGSR