SCA/11470/2003 1/11 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 11470 of 2003 For Approval and Signature: HONOURABLE MR.JUSTICE JAYANT PATEL ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= HILL MEMORIAL HIGH SCHOOL & 1 - Petitioner(s) Versus DISTRICT EDUCATION OFFICER & 1 - Respondent(s) ========================================================= Appearance : MR NIRZAR S DESAI for Petitioner(s) : 1 - 2. GOVERNMENT PLEADER for Respondent(s) : 1, MS MAMTA R VYAS for Respondent(s) : 2, ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL Date : 07/05/2008 ORAL JUDGMENT 1. The short facts of the case appears to be that the respondent No.2 was working as the Head SCA/11470/2003 2/11 JUDGMENT Clerk in the petitioner School. It is the case of the petitioners that respondent No.2 was allotted quarter in his capacity as an employee of the School and as the respondent No.2 retired from service on 31.10.2002, he had to vacate the quarter. Since the quarter was not vacated, it was decided by the General Body of the petitioner School that the papers for retiral dues of the respondent No.2 shall not be signed by the Principal. It appears that thereafter, respondent No.2 approached to the petitioner for preparation of the papers of retiral dues. However, the papers were not signed and the respondent No.2 approached to the DEO by making complaint. Based on the same, respondent No.1 herein issued show-cause notice dated 13.05.2003. The pertinent aspect is that, in the said show-cause notice, it was mentioned for reduction of 10% of the grant and the petitioners were called upon to show cause as to why the action should not be taken. Ultimately, the respondent No.1 passed the order on 27.04.2003, after hearing the petitioner as well as the respondent No.2 and directed for withholding of 25% of the grant and it is under these circumstances, the petitioner has approached to this Court by preferring the present petition. 2. Heard Mr.Desai, learned counsel appearing for the petitioners, Ms. Patel, learned AGP for SCA/11470/2003 3/11 JUDGMENT respondent No.1 and Ms. Mamta Vyas, learned counsel for respondent No.2. 3. It is the contention of the learned counsel for the petitioners that the petitioners had allotted quarter to respondent No.2 in the capacity as the employee and therefore, if the insistence is made for vacating of the quarter, such an approach cannot be said as unreasonable. It was also submitted that the respondent No.2 declined to vacate the quarter and therefore, the papers were not signed pursuant to the Resolution passed by the General Body of the School. It was also submitted that the DEO in any case, had issued show cause notice for deduction of 10% of the grant whereas in the final order, grant is ordered to be withheld for 25%. Therefore, he has travelled beyond the show-cause notice. Mr. Desai, lastly submitted that pursuant to the interim order passed by this Court on 04.09.2003, the petitioners have forwarded pension papers to the authorities and pension is sanctioned and the respondent No.2 is receiving the pension regularly. He therefore, submitted that this Court may set aside the order passed by the DEO of withholding of the grant. 4. On behalf of the respondent No.1, the learned AGP contended that since the pension papers were not signed or rather refused to sign, the DEO SCA/11470/2003 4/11 JUDGMENT was justified in taking action against the school management and therefore, decision for deduction of the grant either 25% or 10% cannot be said as unjust and arbitrary and therefore, the order passed by the DEO be maintained. 5. Whereas on behalf of the respondent No.2, the learned counsel submitted that the premises was allotted to the respondent No.2 not in the capacity as the employee, but was as the tenant and the suit for eviction was also pending and no orders were passed by the Civil Court for vacating thereof. The petitioners wanted to bring undue pressure and declined to sign the pension papers and therefore, the respondent No.2 had to move the application in the present proceedings and this Court vide order dated 04.09.2003 had granted conditional stay of forwarding the papers and thereafter, the pension is sanctioned. However, the learned counsel for the respondent No.2 submitted that as there was delay in sanctioning of the pension, the respondent No.2 has preferred the application being No.394/03 before the Tribunal for recovery of the interest from the school management and the principal and therefore, it was submitted that irrespective of the aspects of imposition of the penalty of withholding of the grant or otherwise, the rights of the respondent No.2 for recovery of the interest towards the loss caused to him which is subject SCA/11470/2003 5/11 JUDGMENT matter of the proceedings before the Tribunal be kept open. It was also submitted by the respondent No.2 that the Eviction Suit No.1627/99 is pending in the Civil Court and the rights and contentions of both the sides in such proceedings may also be kept open. 6. It deserves to be recorded that had it been a case where the quarters were allotted to respondent No.2 in capacity as an employee and upon his retirement, the employer wanted to insist for vacation of the quarter and had declined to sign the pension papers and other retiral dues, it might stand on different footing. However, it appears from the pendency of the Civil Suit that the claim of respondent No.2 in the premise was as that of the tenant, whereas the petitioner claimed that there was no authority with the defendant therein to occupy as the tenant or licencee of the premises. It is an admitted position that the Civil Suit No.1627/99 was pending much prior to the retirement of respondent No.2. There was no order passed by the Civil Court for giving declaration and therefore, it could be said that the dispute about the capacity in which the premises was occupied was very much in existence at the time when the respondent No.2 retired from the petitioner School. The aforesaid is coupled with the circumstance that in the proceedings of Civil Application No. 6065/02 in SCA/11470/2003 6/11 JUDGMENT Special Civil Application No. 11470/03, various receipts are produced showing the payment of amount as the rent. Whether the status of the respondent No.2 or the defendant in the suit was as the tenant or not or as the licensee or not would be the aspects which may be adjudicated in the proceedings of Civil Suit no. 1627/99. However, the record shows that the petitioner was not justified in withholding of the papers for retiral dues or was not justified in insisting the vacation of the premises which was subject matter of the aforesaid suit. It may be recorded that keeping in view the aforesaid aspects, this Court on 04.09.2003 had passed the following order: “1. The contention raised on behalf of the petitioner is that respondent No.2 was working as the employee and since he has retired he has not vacated the premises which was in his occupation and, therefore, the petitioner has withheld the retiral benefits. It has also been submitted by Mr.Oza, learned Counsel appearing with Mr.Desai on behalf of the petitioner that as such the District Education Officer (DEO) has no power to withhold or deduct the grant in view of the dispute between the management and its employee and he has also submitted that the show-cause notice was for 10% of the grant, whereas the final order is for deduction of 25% of the grant and, therefore, he submitted that the final order is passed beyond the scope of the show-cause notice. 2. On behalf of respondent No.1, Mr.Desai, learned AGP submitted that since the pension papers were not sent the show-cause notice was issued and, thereafter the order is passed and it has been submitted that since the retirement dues of the employee on retirement are not processed further the order is passed. 3. On behalf of respondent No.2, the contention is that respondent No.2 is never allotted quarter as an employee, but he was given premises on rental basis and respondent is in possession of rent receipts from 1974 SCA/11470/2003 7/11 JUDGMENT onwards. Even in the suit which was filed in the year 1999 by the petitioner Trust, against the son of the respondent and other person a statement is made in the Court proceedings that the premises is given on rental basis. 4. Having considered the above, I find that the matter requires consideration. Hence RULE. Mr.Desai, learned AGP waives service of rule on behalf of respondent No. and Ms.Vyas, learned Counsel waives service of rule on behalf of respondent No.2. 5. So far as interim relief is concerned, it prima facie appears that the status of respondent No.2 is that of the tenant of the premises and not as that of the employee who has been allotted quarter. Had the quarter been allotted by the petitioner to respondent No.2 there would not have been collection of rent and also rent receipts. Therefore, prima facie, it appears that the petitioner is not justified in withholding the payment or processing of the retiral dues of respondent No.2 and when any employee retires, it would be the duty of the employer to see that the dues are paid to the employee at the earliest. Therefore, prima facie, the attempt on the part of the petitioner appears to be to strangulate the position and take undue benefits for compelling respondent No.2 to get quarter vacated. However, there is some substance in the contention raised by Mr.Oza that the notice was initially for deduction of 10% of the grant, whereas the final order was for deduction of 25% of the grant and, therefore, so far as the deduction of the grant of 15% more is concerned, there was no opportunity for the petitioner to defend the notice. Under these circumstances, I am inclined to pass the following order: 5.1 There shall be stay against the impugned order on condition that the petitioner processes the papers of retirement dues of respondent No.2 within a period of 15 days from today and it is further clarified that in the event the petitioner fails to forward the papers duly signed for the retiral dues of respondent No.2, the impugned order shall operate qua deduction of 10% of the grant. 5.2 It is clarified that the observations made by this Court in this order are only for the purpose of considering the deduction of the grant and the trial Judge before whom the suit is pending against the tenant which is filed in the year 1999 shall be at liberty to take independent view. In view of the order passed in the main order, no order in SCA/11470/2003 8/11 JUDGMENT the Civil Application and the Civil Application is disposed of accordingly.” 7. It is an admitted position that thereafter, as the petitioner school wanted to enjoy the benefit of the interim order against withholding of the grant by way of compliance to the order, the requisite papers were forwarded and the pension of the respondent No.2 is also sanctioned. Therefore, as such, the order for withholding of the grant has remained stayed on account of compliance of condition by the petitioners. 8. The principal challenge in the present petition as such is against the order passed by the DEO for withholding of the grant on account of non- signing of the papers for retiral dues of the respondent No.2. 9. Considering the facts and circumstances, it appears that the petitioner School was not justified in declining to sign the papers for retiral dues until the quarter was vacated by respondent No.2. In such circumstances, it cannot be said that the DEO was not at all justified in exercising the power. At the time when the pension papers were not signed or retiral dues were not paid, initially, the show cause notice was for withholding 10% of the grant, whereas, the final order came to be passed for withholding of 25% of the grant. Therefore, so far as the order passed by DEO for SCA/11470/2003 9/11 JUDGMENT withholding of the grant exceeding 10% is concerned, the same on the face of it runs beyond the scope of the show-cause notice and consequently, in breach of principles of natural justice. Therefore, the impugned order passed by the DEO in any case cannot be sustained for imposition of the penalty of withholding of grant exceeding 10%. 10.However, for examining the legality and validity of the order passed by DEO for imposition of the penalty of withholding of grant to the extent of 10% is concerned, in normal circumstances, such order could not be said as unreasonable or arbitrary, if any school/management has unauthorisedly withheld the pension papers due to any extraneous consideration of an employee who has retired from service. But it appears that in the present case, after the order passed by this Court on 04.09.2003, the pension papers are forwarded and the pension is also sanctioned to the respondent No.2. Therefore, keeping in view the aforesaid aspects of compliance of the order passed by this Court on 04.09.2003 by the petitioners and the subsequent event that the pension is now made available to the respondent No.2, it would be just and proper for the DEO to consider the question on the aspects of proportionality of the penalty for withholding of the grant. SCA/11470/2003 10/11 JUDGMENT 11.What will be the quantum of the penalty, whether 10% or the lesser amount or any other mode are the aspects which may be required to decide by the DEO keeping in view the aspects which are germane to the exercise of powers. I find it proper to leave the matter at that stage without concluding on the said grounds since the DEO will be required to examine the matter in light of the subsequent events as have transpired pending the petition. 12.The aforesaid in any case, shall be without prejudice to the rights and contentions of the respondent No.2 in the proceedings before the Educational Tribunal in Application No.349/03 as well as the rights and contentions of both the sides in the proceedings of Civil Suit No.1627/99 which is pending before the Civil Court at Vadodara. 13.In view of the aforesaid discussions and observations, the impugned order passed by the DEO is quashed and set aside so far as it relates to imposing the penalty exceeding 10% of the grant. Further the impugned order so far as it relates to withholding of 10% of the grant is also set aside, but with the direction that the DEO shall reconsider the matter in light of the observations made by this Court hereinabove and after giving opportunity of hearing to the petitioners and shall pass afresh order in SCA/11470/2003 11/11 JUDGMENT accordance with law as early as possible preferably within a period of 6 months from the receipt of the order of this Court. 14.Petition is allowed to the aforesaid extent. Rule made absolute accordingly. No order as to costs. (JAYANT PATEL, J.) *bjoy