HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.12277 of 2000 ORDER: Yet another unfortunate case where the retiral benefits and the gratuity payable to an employee has been withheld for the past more than a decade. The petitioner was hitherto employed as an Assistant Manager in the respondent-Bank. He retired from service on 30.09.1999 at Kotubommali branch, Srikakulam. His pensionary benefits, including gratuity, were withheld. The petitioner would state that he was informed, vide memo, dated 16.02.2000, that, when he was working at the Palasa Branch, he had failed to submit crop insurance proposals for the 1997 Kharif season to the General Insurance Corporation for which disciplinary action was being initiated. The petitioner claims to have submitted his explanation thereto. He would submit that no action was taken thereafter; there were no charges or allegation against him at the time of his retirement from service; there were no cases pending against him; the allegation that he, along with two others, had failed to submit crop insurance proposals was without basis since, during the period 23.02.1998 to 22.06.1998, he was not on duty and some other officer was incharge; and the respondent-bank had no power to withhold his retiral benefits as no cases were pending against him at the time of his retirement. The petitioner would also assert that no surcharge proceedings were initiated; the respondent-bank had no authority to attach gratuity, as attachment is prohibited under Rule 52(5)(o) of the A.P. Cooperative Societies Rules, 1964 (for short ‘the Rules’); he had three sons and a daughter; his son died due to blood cancer requiring him to spend huge amounts for treatment; and it is difficult for him to survive without terminal benefits being paid. In the counter affidavit filed on behalf of the respondent- bank, it is stated that the petitioner had lost a bunch of important keys for which an enquiry was held; punishment of lowering the pay by two increments was imposed; the Bank had to incur expenses for changing the locker system; since the petitioner was due to retire, the respondent-bank had ordered that his gratuity and leave salary be withheld till the account was settled; the bank gave notice dated 30.07.1999 to the petitioner calling upon him to submit his explanation; the bank had incurred Rs.23,300/- for changing the entire locking system; and it was entitled to recover the loss caused due to the petitioner’s negligence in misplacing the bunch of keys relating to the bank lockers etc. They would refer to the letters dated 28.02.1998 and 16.03.1998 submitted by the petitioner to contend that it was at his request that the entire amount is sought to be recovered; while working as the Branch Manager at Palasa Branch in the year 1997, certain irregularities had been committed by the petitioner for which four consumer disputes were raised and were pending before the District Consumer Forum, Srikakulam, wherein the claim was for Rs.2,33,700/-; and till the pending disputes were finalized it was not possible to settle the gratuity; and, after explanation was submitted by the petitioner, further action would be taken. Sri V.Manohar Rao, Learned Counsel for the petitioner, would assert that, since the contract of employment between the respondent-bank and the petitioner ceased on his retirement from service, the respondent-bank was not entitled to take disciplinary action thereafter; mere pendency of disputes before the Consumer Redressal Forum did not entitle the respondent-bank to retain the provident fund, gratuity and other terminal benefits due and payable to the petitioner; and that the respondent-bank ought to be mulcted with interest for illegally retaining the amounts legitimately due to the petitioner. Sri Koka Raghava Rao, Learned Senior Counsel appearing for the respondent-bank, would fairly state that the respondent- bank, at the time of admission of the Writ Petition, had paid the gratuity in its entirety by crediting the amount to the petitioner’s account. Learned Senior Counsel would submit that, since an enquiry has already been initiated for failure of the petitioner to submit proposals for crop insurance, it is only on the loss being determined on completion of the enquiry, could the balance amount, if any, be paid to him; and the petitioner is not entitled to claim payment of his terminal benefits in the interregnum. Rule 52(5)(o) of the Rules provides that the movable properties exempted from attachment, under the proviso to Section 60 of the Code of Civil Procedure, 1908 (CPC), shall not be liable to attachment or sale. The proviso to Section 60 details certain immovable properties which are not liable for attachment or sale. Under Clause (g) thereunder, stipends and gratuities allowed to pensioners of any other employer is not liable to attachment or sale. This Court, in Balasa Rama Rao v. General Manager, District Cooperative Central Bank Limited, Srikakulam[1], observed that, while gratuity could not be withheld pending surcharge proceedings, the amount payable towards encashment of leave could be withheld. Likewise, Section 10(1) of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 provides that the amount standing to the credit of any member in the provident fund shall not be liable for attachment under any decree or order of any Court in respect of any debt or liability incurred by the member. In as much as Section 60 CPC does not bar attachment of amount payable towards encashment of leave, the question is whether the respondent-Bank was justified in doing so. The two letters, which the respondent-Bank relies on to contend that the amount was retained at the petitioner’s request, are the letters dated 28.02.1998 and 16.03.1998. In his letter dated 28.02.1998, the petitioner informed the respondent-Bank that, vide proceedings dated 23.02.1998, he was directed to remit Rs.40,000/- towards replacement and repair charges of lockers since he had lost the keys; his son had died of blood cancer in March, 1997, and his annual ceremony was performed on 02.03.1998, for which he had to incur expenditure; and with great difficulty, he had remitted Rs.10,000/- on 28.02.1998. The petitioner informed the General Manager that the expenditure incurred by the bank, on account of change of locker keys, may be recovered from his salary in instalments or from his retirement benefits. The letter dated 16.03.1998 refers to the lockers and chest keys which the petitioner had lost while travelling in an auto rickshaw. In the said letter, the petitioner states that he had paid Rs.10,000/- to the respondent-bank, and the bank could recover the balance amount either from his monthly salary or provident fund or gratuity payable to him. Both these letters were addressed by the petitioner prior to his retirement and they relate only to the cost which the respondent-Bank was required to incur for replacement of the locker keys. There is no mention in either of these letters of the loss which the respondent-Bank allegedly sustained on account of the petitioner having failed to submit proposals for crop insurance. Admittedly no enquiry was held nor was any punishment imposed on the petitioner in this regard prior to his retirement. It is debatable whether the respondent-Bank could have continued disciplinary action after the petitioner’s retirement since the contract of employment ceases to remain in force on the retirement of an employee. It is, however, not necessary to dwelve further in this regard since the disciplinary action initiated against the petitioner is not under challenge in this Writ Petition. Suffice to observe that, since there is neither an order of attachment passed by any Court nor was any punishment imposed on the petitioner enabling the respondent-Bank to recover the amount due towards the alleged failure of the petitioner to submit proposals for crop insurance, the respondent-Bank is wholly unjustified in not paying the terminal benefits to the petitioner. Mere pendency of the consumer dispute or a civil dispute would not justify the inaction of the respondent-Bank in paying the amounts due to the petitioner towards his terminal benefits, more so in the absence of any order of attachment passed by the Competent Court/Tribunal. The only amount which the respondent-Bank was entitled to recover from the petitioner, in accordance with the order of punishment imposed on him earlier and in terms of the petitioner’s two letters aforementioned, is the loss which it sustained for replacement of the locker keys. The respondent-Bank cannot expect its employees to wait indefinitely for it to determine or quantify the amount of loss which they may have incurred in this regard. The very fact that the petitioner has not been paid the terminal benefits due to him, for the past more than a decade, is proof of the respondent-Bank’s indifference to the petitioner’s plight. I consider it appropriate, in such circumstances, to direct the respondent-Bank to quantify the amount, payable by the petitioner towards the cost incurred by them for replacement of the lockers and its keys, within one month from the date of receipt of a copy of this order. On determination of such amount, the respondent-Bank shall deduct the cost incurred by them and pay the remaining terminal benefits due and payable to the petitioner within two weeks thereafter. Since the respondent-Bank has retained the amounts, legitimately due to the petitioner, for more than a decade, they are directed to pay the terminal benefits payable to the petitioner, after adjusting the amounts aforementioned, with interest at 12% p.a. The Writ Petition is, accordingly, disposed of. However, in the circumstances, without costs. RAMESH RANGANATHAN,J Date:22.07.2010 usd [1] 1995(3) ALT 556