IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP(T) No. 4952 of 2008. Reserved on: 22.09.2010. Decided on: 01.10.2010. _____________________________________________________ Manmohan Prasad. …Petitioner. -Versus- H.P. State Small Scale Industries and Export Corporation Ltd. …Respondent. Coram: The Hon’ble Mr. Justice Rajiv Sharma, Judge. Whether approved for reporting?1No. __________________________________________________________ For the petitioner. : Mrs. Ranjana Parmar, Advocate. For the respondent. : Mr. Yoginder Paul, Advocate. ---------------------------------------------------------------------------------------- Rajiv Sharma, Judge: Petitioner sought voluntary retirement from the respondent-Corporation vide letter dated 3rd March, 1994. The application was accepted on 20th June, 1995 and the petitioner was allowed to retire from service on 30th June, 1995. However, a sum of Rs.10722/- was withheld from the gratuity on account of notice pay. 2. Mrs. Ranjana Parmar, learned counsel for the petitioner has strenuously argued that action of the respondents of withholding a sum of Rs.10722/- is illegal, arbitrary, thus, violative of Articles 14 and 16 of the Constitution of India. She then contended that no notice was issued to the petitioner before a sum of Rs.10,722/- was withheld from the gratuity amounting Rs.17010/-. 1 Whether the reporters of the local papers may be allowed to see the judgment? No. 3. Mr. Yoginder Paul, learned counsel for the respondent has vehemently argued that a sum of Rs.10,722/- has been deducted on the basis of instructions issued vide Annexure R-1, dated 29th May, 1992. 4. I have heard the learned counsel for the parties and gone through the pleadings carefully. 5. Petitioner has requested for voluntary retirement on 03.03.1994, which was accepted on 20th June, 1995 and he was permitted to retire from service w.e.f. 30th June, 1995. The application was submitted by the petitioner on 3rd March, 1994. The State Government has taken a decision vide letter dated 15.05.1997, which was conveyed to the respondent-Corporation that Dearness Allowance, as admissible to the employee shall be treated as Darness Pay for reckoning emoluments for the purpose of retirement Gratuity. Petitioner’s entitlement to gratuity comes to Rs.17,010/-, however, a sum of Rs.10,722/- has been deducted on account of Notice Pay. Admittedly, the petitioner has not been issued any show-cause notice before withholding an amount of Rs.10,722/-. Petitioner has suffered civil and evil consequences. Petitioner was permitted to work for a period of three months and the Corporation has been benefited by the same. Petitioner has been permitted to work during the notice period till his retirement. In view of this, the salary of the petitioner could not be deducted. Moreover, the salary is a property within the meaning of Article 300-A of the Constitution of India and it can be withheld only in accordance with law. 6. Their Lordships of the Hon’ble Supreme Court in Union of India Versus Natarajan, 2010(5) SLR 13 have held that the retiral/pensionary benefits cannot be withheld without complying with the principles of natural justice. Their lordships have held as under: “11. We have considered the respective submissions and carefully scrutinized the records. Although, neither the learned Single Judge nor the Division Bench considered the issue of violation of the rules of natural justice, having given serious though to the entire matter, we are convinced that the retiral benefits payable to the respondents could not be revised to their disadvantage without giving them action oriented notice and opportunity of hearing. By virtue of the option exercised by them under Section 12A(4)(b) and consequential action taken by the competent authority to fix their pension etc., the private respondents acquired a valuable right to accordingly receive the financial benefits and the same could not have been reduced without complying with one of the basic rules of natural justice that no one shall be condemned unearned. The rule of audi alteram partem has been treated as fundamental to the system established by rule of law and any action taken or order passed without complying with that rule is liable to be declared void State of Orissa Vs. Dr. (Miss) Binapani Dei and others AIR 1967 SC 1269 and Sayeedur Rehman Vs. State of Bihar and others (1973) 3 SCC 333. 12. It is not in dispute that before directing revision of the pension etc., payable to the private respondents, the Central Government did not give them action oriented notice and opportunity of showing cause against the proposed action. Therefore, it must be held that the direction given by the Central Government to revise the retiral benefits including the pension payable to the respondents was nullity. 13. Dehors the above conclusion, we are convinced that the action taken by the appellants to revise and reduce the retiral benefits payable to the respondents was ex facie arbitrary, unreasonable and unjustified and the learned Single Judge did not commit any error by declaring that the Central Government did not have the jurisdiction to unilaterall alter/change the option exercised by the writ petitioners under Section 12A(4)(b) read with Section 12A(4)(c).” 7. Consequently, the action of the respondent of withholding a sum of Rs.10,722/- from the gratuity of the petitioner is declared illegal and arbitrary. 8. Accordingly, in view of the observations made hereinabove, the petition is allowed. The respondent-Corporation is directed to pay a sum of Rs.10,722/- to the petitioner with interest @ 7% per annum, within a period of three months after the production of a certified copy of this judgment by the petitioner. No costs. (Rajiv Sharma) Judge October 01, 2010. (bhupender)