WP(C) 3189/2008 BEFORE THE HON’BLE MRS. JUSTICE ANIMA HAZARIKA The petitioner herein, who has been compulsorily retired from service in a disciplinary proceeding holding the charges of imputation of misconduct prove d, questioned the legality and validity of withholding the following benefits vi z., a) Subsistence allowance for 17 days i.e. till 17.03.2007 when the order of punishment of compulsory retirement was served upon him; b) Interest accrued on his own contribution relating to Provident Fund from 17.03.2007 to 06.08.2007 i.e. the date of releasing his own contribution al ongwith interest @ 18%; c) Interest accrued on Bank’s contribution towards Provident Fund from 17.03.2007 to 19.05.2009 i.e. date of releasing Bank’s contribution alongwith interest @ 18%; d) Leave Encashment for 8 months; and e) Gratuity for 15 (fifteen) months alongwith the interest accrued there on. 2. In order to determine the claim and counterclaim alongwith the pleadings set forth in the writ petition it would be appropriate to summarize the facts i n a nutshell which is depicted hereinbelow: The petitioner who was holding the post of Chief Manager, Zonal Office, Muzaffarpur was put under suspension vide order dated 14.02.2006 wherein it was alleged that while he was Chief Manager, Siliguri Branch, Central Bank of India, has committed serious irregularities in making advances further stating therein that the departmental inquiry against him for his omission and commission will be initiated in due course. Accordingly the authority issued the charge sheet No .253 dated 15.06.2006 alongwith articles of charges wherein 6 (six) charges were leveled and he was asked to submit his written statement in defence within 15 ( fifteen) days of receipt of the charge-sheet. 3. On receipt of charge-sheet the petitioner submitted his written statemen t in defence denying the allegations, which, however, the Disciplinary Authority did not accept and proceeded to hold the inquiry. The inquiry started on 07.09. 2006 and completed on 14.11.2006. The Disciplinary Authority passed the final or der on 26.02.2007 holding that all the six (6) charges were proved and passed th e consolidated punishment which reads as under: Compulsory retirement in terms of Regulation 4(h) of Central Bank of In dia Officer Employees’ (D & A) Regulations 1976 with amendments thereto. 4. The said award of compulsory retirement from service was issued on 01.03 .2007 which was served upon the petitioner on 17.03.2007 and the contribution to wards his own contribution relating to Provident Fund was received vide cheque d ated 06.08.2007 on 06.08.2007 itself and no other benefits under the service reg ulations was made available to him though vide communication dated 28.08.2007, t he petitioner prayed for other benefits entitled under the law and on getting no response the petitioner has approached this court seeking a writ of Mandamus fo r a direction to release the retiral benefits as indicated above. However, duri ng the pendency of the writ petition, the Bank’s contribution towards Provident Fund was released on 11.04.2009 which has been received on 19.05.2009 amounting to Rs.7,05,075/85. 5. I have heard Mr. B. Banerjee, Advocate appearing on behalf of the petiti oner. Also heard Mr. N.C. Das, learned Senior Advocate assisted by Mr. M.K. Misr a, Advocate for the respondent Bank. 6. Mr. Banerjee learned counsel appearing for the petitioner contended that the order of compulsory retirement was issued on 01.03.2007 but not communicate d till 17.03.2007 which has no valid existence in the eye of law and therefore t he petitioner is entitled to get the subsistence allowance at the rate of half o f the basic pay, which he was drawing prior to his date of suspension and other allowances except conveyance/entertainment and special allowance on reduced pay as indicated in the suspension order dated 14.02.2006. In support of his content ion, Mr. Banerjee has referred to a decision in State of West Bengal -Vs- M.R. M ondal & Another reported in AIR 2001 SC 3471, wherein at Para 16, it was held th at an order passed but retained in file without being communicated to the plaint iff can have no force or authority whatsoever and the same has no valid existenc e in the eye of law or claim to have come into operation and effect. 7. Drawing the attention of this Court to the provisions of Central Bank o f India Employees Provident Fund Rules, (Rules for short), more particularly Rul e 9, 11, 14 and 15 of the Rules alongwith the provisions of section 4 of the Pay ment of Gratuity Act, 1972, Mr. Banerjee has contended that the payment of Gratu ity cannot be withheld without following the procedure prescribed under Section 4(6)(a) of the Payment of Gratuity Act, 1972. The counsel has further drawn the attention of the court to the analogous provisions of Rule 15 of the Rules along with Rule 12 of the Central Bank of India Employees’ Gratuity Fund Rules. As per Rule 15 of the Rules the Management of the Bank is empowered to recover from th e contributions made by the Bank to the individual account of the contributor an d the interest (simple/compound) credited in respect of such contributions, any loss or damage resulting to the Bank from the cause which entailed such dismissa l meaning thereby, that if the Bank sustained loss due to the misconduct by the contributor, the bank ought to have recovered from the contributions of the cont ributor. Simultaneously Rule 12 of the Gratuity Rules provides that in case of t ermination of service of the member on account of proven misconduct, gratuity pa yable shall not be forfeited except where such misconduct causes financial loss to the Bank and in that case the forfeiture of the gratuity shall be to the exte nt of the financial loss only which is not the case in hand since the amount of provident fund contributions made by the Bank has been released and therefore wo uld urge that without determining the loss sustained by the Bank, the Bank has n o power to withhold the payment of gratuity and that too, without affording any opportunity to the petitioner. In support of his contentions, he has referred a decision reported in (2007) 1 SCC 663 (Jaswant Singh Gill -Vs- Bharat Cooking C oal Ltd. & Others). 8. Mr. Banerjee has further contended that admittedly the amount towards hi s own contributions relating to Provident Fund has been released on 06.08.2007 a nd Bank’s contribution on 19.05.2009 and therefore the petitioner is entitled to get the interest at the rate, notified by the central government for repayment of long term deposits which may be quantified at the rate of 10% per annum and h is entitlement cannot be denied in the facts and circumstances of the case. Howe ver, the question of leave encashment has not been pressed before the court. 9. Countering the arguments advanced by Mr. Banerjee, Mr. NC Das, learned S r. Advocate has conceded that the petitioner is entitled to get the subsistence allowance till 17.03.2007 i.e. the date of receipt of the order of compulsory re tirement. His main thrust is relating to forfeiture of gratuity, which according to the learned Counsel has rightly been withheld. Drawing the attention of the court, Mr. Das has referred to Section 7 of the Payment of Gratuity Act, 1972 an d contended that since the petitioner has failed to take recourse to the aforesa id provision, the writ petition claiming the release of gratuity amount is not p ermissible. Mr. Das has further contended that the Central Bank of India Employe es’ Gratuity Fund Rules provides for forfeiture of gratuity and the employer is within the domain to forfeit the gratuity where such misconduct causes financial loss to the bank and the bank has sustained loss for the proven misconduct of t he petitioner thereby justified the action of the Bank in withholding the amount of gratuity. In support of his contentions, Mr. Das has referred the decision i n Secretary, ONGC Ltd. and another -Vs- V.U. Warrier reported in (2005) 5 SCC 24 5. 10. Heard the learned counsels at length. Perused the pleadings of the parti es alongwith the relevant provisions of the Act and the Rules referred during th e course of argument. Admittedly the petitioner was compulsorily retired under R egulation 4(h) of the Central Bank of India Officers Employees (Discipline & App eal) Regulations, 1976 in a disciplinary proceeding for the acts of omission and commission during his tenure as Chief Manger at Siliguri where 6(six) charges w ere brought against him and all the charges brought were proved. The said procee dings is not under challenge before this court and therefore only question left for determination is as to whether the petitioner is entitled to get the relief as sought for in the writ petition. The relief as sought for is answered hereund er:- a) Admittedly the petitioner was not paid the subsistence allowance from 01.03.2007 to 17.03.2007 i.e. the date of communication of the order of punishm ent of compulsory retirement and the said relief has been conceded by the counse l representing the Bank and therefore there is no impediment to direct the Bank to release the subsistence allowance from 01.03.2007 to 17.03.2007 at the rate o f half of the basic pay which he was drawing prior to the date of suspension and other allowance excepting conveyance/entertainment and special allowance on red uced pay as conveyed in the suspension order dated 14.02.2006. b) Interest on delayed payment on his own contribution to his Provident Fund from 17.03.2007 to 06.08.2007 i.e. the date of release and on Bank’s contri bution from 17.03.2007 to 19.05.2009 i.e. the date of release of Provident Fund, the petitioner would be entitled interest at the rate of 10% on the ground of d elayed payment of Provident Fund. c) Relating to forfeiture of gratuity, the court has carefully gone thro ugh the provisions of the payment of Gratuity Act, 1972 and the provisions of th e Employees Provident Fund Rules alongwith the charge-sheet drawn against the pe titioner. A reading of the charge-sheet dated 15.06.2006 would show that the pet itioner was charged under Regulations 3(1) and (3) read with Regulation 24 of th e Central Bank of India Officers Employees (Conduct) Regulations, 1976. The rele vant provisions are quoted hereunder- Regulation 3(1)- Every officer employee shall, at all times take all possible steps to ensure and protect the interests of the bank and discharge his duties w ith utmost integrity, honesty, devotion and diligence and do nothing which is un becoming of a bank officer. 3(3) No officer employee shall in the performance of his official duties or in t he exercise of powers conferred on him, act otherwise than in his best judgment except when he is acting under the direction of his official superior. 24- A breach of any of the provisions of these regulations shall be deemed to co nstitute a misconduct punishable under the Central Bank of India Officer Employe es’ (Discipline & Appeal) regulation, 1976. 11. Six charges were brought against the petitioner wherein it is spelt out for the acts of omissions and commissions the Bank’s interest is jeopardized. Bu t the authority has not charged him relating to the quantum of loss sustained by the Bank due to his proven misconduct nor any opportunity was given to him befo re forfeiture of gratuity. Moreover, in the order dated 26.02.2007, nowhere it w as mentioned that the Bank sustained loss save and except the words the bank is likely to suffer loss to the tune of Rs. One Crore which is at present outst anding in the account. 12. In this regard, it would be relevant to refer Rule 12 of the Central Ban k of India Employees’ Gratuity Fund Rules alongwith Rule 15 of the Employees’ Pr ovident Fund Rules. Rule12 of the Central Bank of India Employees’ Gratuity Fund Rules states as und er: Rule 12- In case of termination of service of the member on account of proven m isconduct, Gratuity payable shall not be forfeited, except where such misconduct causes financial loss to the Bank and in that case the forfeiture of the gratui ty shall be to the extent of the financial loss only , Whereas Rule 15 of the Employees’ Provident Fund Rules provides as under: Rule 15- If a contributor is dismissed for fraud or misconduct the Bank shall be entitled to recover from the contributions made by the Bank to the individual account of the contributor and the interest (simple / compound) credited in res pect of such contributions, any loss or damage resulting to the Bank from the ca use which entailed such dismissal. The Board shall be entitled to declare the am ount of loss or damage so resulting and their declaration in that behalf shall b e final and conclusive and the amount so declared shall be paid to the Bank. A reading of the aforesaid two provisions of Rules would amply demonstra te that the Bank is empowered to recover the amount of loss sustained by the Ban k or forfeit the amount of gratuity where the bank sustained financial loss to t he extent of loss only. The respondent Bank had initially withheld their own con tributions relating to Provident Fund but ultimately released their contribution s on 19.05.2009. Thus it may be presumed that Bank has not sustained loss and th e Bank has not quantified the loss sustained by the Bank due to proven misconduc t. 13. It may be examined from another angle viz., from the perspective of Sect ion 4 of the Payment of Gratuity Act, 1972. Section 4(6) (a) of the Payment of G ratuity Act, 1972 provides that the gratuity can be forfeited to the extent of t he damage or loss so caused, meaning thereby, the Bank before forfeiting the gra tuity must cause an inquiry relating to the extent of loss sustained by the Bank with an opportunity rendered to him to answer the loss which has not been done in the instant case. The reference made in Jaswant Singh Gill (Supra) would go t o show that the provisions of the Act would prevail over Rule 12 of the Central Bank of India Employees’ Gratuity Fund Rules wherein the Apex Court has held tha t the conditions laid down in Section 4(6) of the Payment of Gratuity Act must b e fulfilled which has not been done in the instant case. The other reference mad e by the respondent Bank reported in Secretary, ONGC Ltd. (Supra) relating to ob servation made in paragraph 20 was quoted from the decision rendered by the Apex Court relying on a decision reported in (1967) 2 SCR 596 (Calcutta Insurance Co .Ltd.-Vs.- Workmen) when the Payment of Gratuity Act was not in existence and he nce the Secretary ONGC Ltd. (supra) referred to on behalf of the Bank is not app licable in the instant case though it has been held that gratuity is not paid gratuitously. 14. In view of the discussions made above and by taking into consideration t he decisions of the Apex Court referred to by the parties, a mandamus is issued to the respondent Bank to release the following amounts, viz., a) The subsistence allowance from 01.03.2007 to 17.03.2007; b) The interest at the rate of 7% on delayed payment in respect of the p etitioner’s own contributions towards Provident fund with effect from 17.03.2007 to 06.08.2007 alongwith the same interest with effect from 17.03.2007 to 19.05. 2009 relating to the Bank’s own contribution towards Provident Fund till payment is made; c) The payment of gratuity alongwith 7% interest on the amount of gratui ty for illegal withholding and/or forfeiting the payment of gratuity till the pa yment is made. The court was told that the petitioner is suffering from various ailments and th erefore it is directed that the whole exercise would be completed within a perio d of three months from the date of receipt of a copy of this order. 15. The writ petition is accordingly allowed as indicated hereinabove. The p arties are left to bear their own costs.