LPA No.1950 of 2011 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH LPA No.1950 of 2011 (O&M) Date of Decision: November 29, 2011 Punjab National Bank & others .......Appellants Versus Y.K.Singla .......Respondent CORAM:- HON'BLE MR.JUSTICE PERMOD KOHLI HON'BLE MR.JUSTICE TEJINDER SINGH DHINDSA Present: Mr.RS Bhatia, Advocate for the appellants. Mr.HC Arora, Advocate for the Caveator. <><><> TEJINDER SINGH DHINDSA, J. CM No.5209 of 2011 On account of the averments made in the application, the delay of 37 days in filing the Letters Patent Appeal is condoned. LPA No.1950 of 2011 2. The Punjab National Bank is before us in the present Letters Patent Appeal impugning the judgment dated 4.5.2011 passed by the learned Single Judge in Civil Writ Petition No.6469 of 2010 whereby directions have been issued to pay interest @ 8% per annum to the respondent on his retiral benefits that had been withheld from the date the amount was due till the date of payment. 3. Briefly stated, the facts are that the respondent joined the LPA No.1950 of 2011 (O&M) 2 appellant-Bank as Clerk on 19.2.1958. Thereafter, he earned various promotions during his long tenure of service. Eventually, the respondent retired on 31.10.1996 upon attaining the age of superannuation while holding the post of Chief Inspector in the Inspection and Audit Division. The retiral benefits in the nature of gratuity and leave encashment were withheld by the appellant-Bank on account of the fact that judicial proceedings were pending against the respondent for certain alleged lapses committed by him in the year 1981-82 while holding the post of Manager. The aforementioned judicial proceedings concluded on 31.10.2009 wherein the respondent was acquitted of the said charges by the CBI Court, Chandigarh. It is the admitted case between the parties that the respondent was thereafter released the amount towards gratuity and leave encashment on 30.2.2010 and 6.2.2010 respectively and still further, he was paid interest for the period from his acquittal i.e. 31.10.2009 till the actual date of payment. Aggrieved of the action of the appellant-Bank in denying him interest on the withheld retiral benefits i.e. leave encashment and gratuity w.e.f. his date of retirement i.e. 31.10.1996, the respondent had filed Civil Writ Petition No.6469 of 2010 claiming interest for such period. The writ petition having been allowed and interest @ 8% per annum having been granted, resultantly, the instant Letters Patent Appeal. 4. Mr.RS Bhatia, learned counsel appearing for the appellant- Bank has invited our attention to the Punjab National Bank (Employees') Pension Regulation, 1995 (hereinafter to be referred as '1995 Rules') and has made a pointed reference to Regulation 46 which regulates provisional pension and the same reads as follows: “1) An employee who has retired on attaining the age of LPA No.1950 of 2011 (O&M) 3 superannuation or otherwise and against whom any departmental or judicial proceedings are continued, a provisional pension, equal to the maximum pension which would have been admissible to him, would be allowed subject to adjustment against final retirement benefits sanctioned to him, upon conclusion of the proceedings but no recovery shall be made where the pension finally sanctioned is less than the provisional pension or the pension is reduced or withheld etc. either permanently or for a specified period. 2) In such cases the gratuity shall not be paid to such an employee until the conclusion of the proceedings against him. The gratuity shall be paid to him on conclusion of the proceedings subject to the decision of the proceedings. Any recoveries to be made from an employee shall be adjusted against the amount of gratuity payable.” 5. Relying upon Rule 46 of the 1995 Rules, learned counsel contends that an employee who retires on attaining the age of superannuation and against whom any departmental or judicial proceedings are pending, the gratuity becomes payable only upon conclusion and subject to the decision of such proceedings. The submission accordingly is that the respondent having been acquitted in the judicial proceedings pending against him only on 31.10.2009, the gratuity became payable only w.e.f. such date and which actually has since been released on 13.2.2010 along with interest for the period 31.10.2009 till the date of payment. 6. Reliance has also been placed upon a decision of the Hon'ble Supreme Court in R.Veerabhadram v. Government of AP, AIR 2000 LPA No.1950 of 2011 (O&M) 4 (SC) 1918 in which while considering the scope of the relevant rule under the Andhra Pradesh (Revised) Pension Rules, 1980, it was held in the following terms: “7. The payment of gratuity was withheld, in the present case, since the criminal prosecution was pending against the appellant when he retired. Rule 52(c) of the A.P.Revised Pension Rules, 1980 expressly permits the State to withhold gratuity during the pendency of any judicial proceedings against the employee. In the present case, apart from Rule 52 (c), there was also an express order of the Tribunal which was binding on the appellant and the respondent under which the Tribunal had directed that death-cum-retirement gratuity was not to be paid to the appellant till the judicial proceedings were concluded and final orders were passed thereon. In view of this order as well as in view of Rule 52(c), it cannot be said that there was any illegal withholding of gratuity by the respondent in the case of the appellant. We, therefore, do not see any reason to order payment of any interest on the amount of gratuity so withheld.” 7. On having considered the matter, we are in agreement with the submission made by the learned counsel appearing for the appellant-Bank insofar as withholding of gratuity is concerned. The language of the relevant Rule i.e. Rule 46 of the 1995 Rules is clear and unambiguous. The mandate of the Rule is such that it operates as a bar insofar as the Bank is concerned, as regards the release of gratuity to an employee against whom the departmental or judicial proceedings were pending on the date such LPA No.1950 of 2011 (O&M) 5 employee attains the age of superannuation. The Rule stipulates that such withheld amount of gratuity would become payable only upon conclusion of the proceedings. Admittedly, judicial proceedings were pending against the respondent on the date of his superannuation i.e. 31.10.1996 and concluded only upon his acquittal vide order dated 31.10.2009. The amount viz. gratuity has since been released on 13.2.2010 and interest thereupon has also been paid for the period 31.10.2009 till the date of payment. We, accordingly, hold that respondent No.1 is not entitled to any interest for the period 31.10.1996 till the conclusion of the trial and his acquittal i.e. 31.10.2009 on the withheld amount of gratuity. 8. Learned counsel has sought to justify the withholding of amount towards leave encashment by placing reliance on a circular dated 4.3.1997 issued by the Indian Bank's Association and it has been contended that in terms of such circular, the retiral benefits are not to be released to an employee against whom disciplinary or judicial proceedings stood initiated at the point of his retirement. We are unable to accept such submission. The 1995 Rules hold the field insofar as withholding of a retiral benefit in relation to an employee against whom departmental or judicial proceedings are pending on the date of retirement. Rule 46 of the 1995 Rules permits withholding of gratuity alone. The circular dated 4.3.1997 cannot be read and construed so as to enlarge the scope of the 1995 Rules and thereby to vest discretion with the appellant-Bank to withhold retiral benefits of an employee including leave encashment against whom departmental or judicial proceedings were pending on his date of retirement. We are unable to take cognizance of such circular dated 4.3.1997 relied upon by the appellant-Bank. LPA No.1950 of 2011 (O&M) 6 9. In view of the reasons recorded above, the present appeal is partly allowed and the impugned judgment dated 4.5.2011 passed by the learned Single Judge is modified to the extent that the appellant-Bank is held not liable to pay any interest on the amount of gratuity which already stands released to the respondent. However, the directions as regards payment of interest @ 8% per annum on the withheld amount of leave encashment from the date the same was due towards the respondent i.e. 31.10.1996 till the actual date of payment are affirmed. Keeping in view the fact that the respondent retired from service almost 15 years back, it is directed that the payment of interest as held hereinabove on the component of leave encashment be released within a period of four weeks from the date of receipt of a certified copy of this order. 10. Letters Patent Appeal is disposed of accordingly. ( PERMOD KOHLI ) ( TEJINDER SINGH DHINDSA ) JUDGE JUDGE November 29, 2011 SRM Note: Whether referred to the Reporter? Yes/No