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Monday, January 1, 2018

Important Orders Of Court

Supreme Court's Orders regarding addition of 5 years' qualifying
service to the Officers who were recruited as Specialists

In terms of the Pension Regulation No.26 applicable to the Bank Officers, those who were recruited as Specialists are eligible for addition of qualifying service up to 5 years, if they are retired on superannuation prior to completion of 33 years' service. But they are being denied the benefit up-till-now.

Let us praise few Officers of Bank of Baroda and their Associations, who fought and won legal battle in High Courts and then in both the stages of the Supreme Court. Soft copies of the relevant judgments by the Apex Court are forwarded herewith.

We are expressing our opinion as under.
  1. Those retired Specialist Officers of Bank of Baroda, who were party to the petitions / appeals, will have to be given benefit of the judgments
  2. However, it is not certain whether the Banks will part with such benefits to other similarly situated Officers of all the Banks.
  3. Anyhow, at present, those retired / retiring Officers should submit Representations to their Banks' MD & CEO citing these judgments of the Supreme Court. The representations should be sent by Registered or Speed Post AD.
  4. Then they should wait for a couple of months to see whether the Indian Banks' Association gives instruction to all the Public Sector Banks to part with the benefit of the judgments to all the similar retired Specialist Officers.
  5. If no such positive decision is taken by the Indian Banks' Association, the concerned Pensioners should file Writ Petitions in their respective High Courts. The Courts, at the stage of single judge, will certainly award judgments in favor of the concerned Officers. The Banks' appeals, even if filed, before the Division Benches of the High Courts or the Supreme Courts will not be heard thereafter. 
      The Officers getting the benefits should thank the Officers of Bank of Baroda and their Association who fought such a long legal battle.

Yours sincerely,
B.G.Raithatha,
General Secretary



Goutam Nandi Vs. United Bank of India
and Ors. - Court Judgment

LegalCrystal Citation
legalcrystal.com/109834

Court
Kolkata High Court
Decided On
Apr-13-2017
Judge
Arijit Banerjee
Appellant
Goutam Nandi
Respondent
United Bank of India and Ors.
Excerpt:
.....the nature of mandamus commanding the respondents to act in
accordance with law and to release the leave encashment of 240
days with interest for delayed payment which the petitioner
entitled of bank rate of 11.5% per annum. (b) a rule in the nature
of mandamus commanding the respondents to pay interest amounting
to rs.1,87,560.80p on gratuity amount for delayed payment at bank’s
rate of 11.5% per annum for 1410 days. (c) a rule in the nature of
mandamus commanding the respondents to consider the 2nd option
of the writ petitioner for availment of pension as per bank’s pension
regulation/circular and release the pension with interest at bank’s rate.

(2) when the petitioner was a scale-ii officer of the respondent bank,
he was issued a charge-sheet. a domestic enquiry followed. he.....
Judgment:
In the High Court At Calcutta Constitutional Writ Jurisdiction
Original Side WP585of 2014 Goutam Nandi -Vs.United Bank of
India & ORS.Before : The Hon’ble Justice Arijit Banerjee For the petitioner : Mr.M.R.
Sarbadhikari, Adv.For the respondents : Mr.R.N.
Majumder, Adv.Heard On : 29.09.2016, 04.10.2016, 08.11.2016,
11.11.2016 17.11.2016, 24.11.2016 CAV On : 01.12.2016 Judgment
On : 13.04.2017 Arijit Banerjee, J.: (1) In this writ application
the petitioner, an erstwhile employee of the respondent Bank,
claims the following reliefs: (a) A Rule in the nature of Mandamus
commanding the Respondents to act in accordance with law and
to release the Leave Encashment of 240 days with interest for
delayed payment which the petitioner entitled of Bank rate of
11.5% per annum.
(b) A Rule in the nature of Mandamus commanding the Respondents
to pay interest amounting to Rs.1,87,560.80p on Gratuity amount for
delayed payment at Bank’s rate of 11.5% per annum for 1410 days.
(c) A Rule in the nature of Mandamus commanding the Respondents
to consider the 2nd option of the Writ Petitioner for availment of Pension
as per Bank’s Pension Regulation/Circular and release the Pension
with interest at Bank’s rate.
(2) When the petitioner was a Scale-II Officer of the respondent
Bank, he was issued a charge-sheet.
A domestic enquiry followed.
He was dismissed from service of the Bank on 24 August, 2007.
The petitioner’s appeal against the order of the Disciplinary
Authority was dismissed and the order of termination of his
service was confirmed by the Appellate Authority by an order
dated 2 January, 2008.
The petitioner challenged the said orders before this Court
by filing WP120of 2008.
By a judgment and order dated 24 February, 2010 Debasish Kar Gupta,
J., set aside the order of dismissal.
The operative portion of the said judgment and order reads as follows:“
In view of the above settled principles of law I quash and set aside the
impugned punishment.
I further direct the disciplinary authority to pass the final order of
punishment against the petitioner by inflicting punishment other
than the punishment of ‘dismissal which shall ordinarily be
disqualification for future employment’ upon the petitioner in the
light of the above discussion.
The writ petition succeeds to the extent as discussed and directed
hereinabove.” (3) The respondent filed an appeal against the order
of the learned Single Judge.
The said appeal was, however, not pressed subsequently and was
dismissed as not pressed by an order of the Division Bench dated
30 August, 2010.
This was in view of the fact that by an order dated 11 August, 2010,
the Bank had imposed the lesser punishment of compulsory retirement
on the petitioner in accordance with the Learned Single Judge’s order.
(4) In the above factual background, the present writ application has
been filed.
As would appear from the prayers in the writ petition extracted above,
the petitioner’s claim is on three accounts.
Firstly, he claims interest on the delayed payment of gratuity.
Secondly, he claims leave encashment of 240 days with interest.
Finally, he prays for an order directing the respondent Bank to
consider his case for availing of pension as per the Bank’s Pension
Regulations/CirculaRs.I will deal with each issue separately.
Re: Interest on Gratuity:(5) It is not in dispute that the bank
released the Provident Fund and gratuity amounts to the petitioner
on 2 August, 2012.
The Bank has paid interest on the delayed payment of provident
fund amount but has not paid interest on the delayed payment of gratuity.
The petitioner claims interest on the gratuity amount for the period
24 August, 2007 to 2 August, 2012 amounting to Rs.1,87,560/- as per
calculation shown in annexures P-18 and P-19 to the writ petition.
Learned Counsel for the petitioner submitted that interest at a
reasonable rate is payable for delay in releasing the gratuity amount
and other retiral benefits.
In this connection he referred to a Full Bench decision of the Patna
High Court in the case of Champaran Sugar Go.
Ltd.-Vs.-The Joint Labour Commissioner, 1987 (35) BLJR104
He also relied on a decision of the Hon’ble Apex Court in the
case of Devaki Nandan Prasad-Vs.-State of Bihar, AIR1983SC1184
(6) Learned Counsel then referred to Secs.
7 (3) and (3A) of the Payment of Gratuity Act, 1972 which read as
follows:“S.
7(3) The employer shall arrange to pay the amount of gratuity
within thirty days from the date it becomes payable to the person
to whom the gratuity is payable.
(3A) If the amount of gratuity payable under sub-Section (3) is not
paid by the employer within the period specified in sub-Section (3).
the employer shall pay, from the date on which the gratuity becomes
payable to the date on which it is paid, simple interest at such rate,
not exceeding the rate notified by the Central Government from time
to time for repayment of long term deposits, as that Government may,
by notification specify: Provided that no such interest shall be payable
if the delay in the payment is due to the fault of the employee and the
employer has obtained permission in writing from the controlling authority
for the delayed payment on this ground.” Reference was also made to Secs.
4(1) and 4(2)(b) of the Interest Act, 1978 which read as follows:“S.”
4. Interest payable under certain enactments.-(1) Notwithstanding
anything contained in Section 3, interest shall be payable in all cases
in which it is payable by virtue of any enactment or other rule of law
or usage having the force of law.
(2) Notwithstanding as aforesaid, and without prejudice to the generality
of the provisions of sub-Section (1).the Court shall, in each of the following
cases, allow interest from the date specified below to the date of institution
of the proceedings at such rate as the Court may consider reasonable,
unless the court is satisfied that there are special reasons why interest should
not be allowed, namely:(a) Where money or other property has been deposited
as security for the performance of an obligation imposed by law or contract,
from the date of deposit; (b) Where the obligation to pay money or restore
any property arises by virtue of a fiduciary relationship, from the date of the
cause of action:” (7) Learned Counsel for the respondent Bank strongly
disputed the petitioner’s entitlement to receive interest on gratuity.
Learned Counsel submitted that there is no provision for payment of
interest on delayed payment of gratuity in the service regulations of the
respondent Bank unlike Secs.
7 and 8 of the Payment of Gratuity Act.
Learned Counsel also relied on Regulation 46(1) of the UBI (Officers’)
Service Regulations, 1979, in resisting the petitioner’s claim.
(8) In my opinion, the petitioner’s claim for interest on delayed payment
of gratuity must succeed.
Law is now well-settled that retiral benefits of an employee are payable
immediately upon his superannuation.
If there is a delay in releasing such benefits for which the employee
cannot be blamed, he is entitled to receive interest at a reasonable rate.
It is now well-established that the right of a retired employee to get his
retiral dues on the date of attaining superannuation is a valuable right
which accrues in his favour on the date of his attaining superannuation.
Further, gratuity is no more considered to be a bounty to be doled out by
the employer at its whim.
It is not charity.
An employee has a statutory right to receive gratuity upon retirement.
If the employer delays in payment of the gratuity amount, he is obliged
to pay interest to the retired employee.
This is compensatory in nature.
In the present case, the order dismissing the petitioner was set aside
by this Court by its judgment and order dated 24 February, 2010.
The appeal preferred by the Bank against such order was dismissed
as not pressed by the Appeal Court’s order dated 30 August, 2010.
The punishment of dismissal imposed by the respondent Bank on the
petitioner was thus found to be unsustainable in law.
Hence, the same could not have been a justification for withholding the
gratuity of the petitioner.
The punishment of dismissal from service having been quashed by this
Court, the respondent Bank passed an order dated 11 August, 2010
compulsorily retiring the petitioner from service with effect from 24 August, 2007.
Hence the employer – employee relationship between the Bank and
the petitioner stood severed notionally from 24 August, 2007.
He should, therefore, be entitled to interest on the gratuity amount
from that date.
(9) In the Full Bench decision of the Patna High Court referred to by
learned Counsel for the petitioner, the Court observed that under Sec.
4 of the Payment of Gratuity Act, gratuity becomes payable to an
employee on the termination of his employment after he has rendered
continuous service for not less than five yeaRs.on his superannuation or
on his retirement or resignation or on his death or disablement due to
accident or disease.
The Act now confers a statutory right on the employee.
If the requisite conditions are satisfied, gratuity becomes mandatorily
payable to him and it becomes so payable on the very date of his superannuation
or retirement or resignation or death or disablement as the case may be.
Sec.
7 prescribes the time period within which such gratuity is to be paid and Sec.
8 provides the sanction for such payment and procedure for its recovery
with interest for the delay in payment caused by the default of the employer.
The Act provides that in cases of default, the Controlling Authority would
recover the gratuity with compound interest at the rate of 9 per cent per
annum by issuance of a certificate recoverable as arrears of land revenue
by the Collector.
Thus, payment of interest is the mandate of law itself and does not depend
on any express claim made by the employee for such interest.
In Devaki Nandan Prasad (supra).the Hon’ble Apex Court also expressly
recognized the retired employee’s right to receive interest on delayed
payment of pensionary benefits.
(10) Regulation 46 (1) of the UBI (Officers’) Service Regulations, 1979
reads as follows:“46.
Gratuity: (1) Every officer, shall be eligible for gratuity on :(a) Retirement;
(b) Death (c) Disablement rendering him unfit for further service as certified
by a medical officer approved by the Bank; (d) Resignation after completing
ten years of continuous service; or (e) Termination of service in any other way
except by way of punishment after completion of 10 years of service;”
The punishment of dismissal that was imposed by the Bank on the petitioner
was found by this Court to be unsustainable in law.
Accordingly the same was set aside.
Pursuant to the leave granted by this Court to impose a lesser punishment,
the petitioner was compulsorily retired.
However, the respondent Bank took a conscious decision to release the gratuity
amount in favour of the petitioner.
Thus, Regulation 46, even as understood by the Bank did not stand in the
way of paying the gratuity benefit to the petitioner.
Hence, had the petitioner been compulsory retired instead of being dismissed,
in the fiRs.place, he would have been entitled to receive the gratuity amount
on the date of termination of his service.
The delay in paying the gratuity to the petitioner was occasioned by dismissal
of the petitioner by the Bank which was found to be legally unsustainable.
Thus, the delay was not because of any fault on the part of the petitioner.
Viewing the matter from this angle also the petitioner should be entitled to
interest on delayed payment of gratuity by way of compensation.
(11) In view of the aforesaid, the petitioner’s prayer for interest on delayed
payment of gratuity is allowed.
Re: Leave Encashment:- (12) Learned Counsel for the petitioner submitted
that in spite of repeated representations made to the Bank for releasing leave
encashment, the Bank remained silent.
My attention was drawn to letters dated 7 August, 2012 and 30 July, 2013
written by the petitioner to the Bank.
Learned Counsel relied on a circular issued by the Head Office of the
respondent Bank bearing No.PD/DIR/16/2003 dated 11 June, 2003 which
is reproduced hereunder:“ UNITED BANK OF INDIA DISCIPLINARY
& INDUSTRIAL RELATIONS DIVISION HEAD OFFICE : KOLKATA
Circular Letter No.PD/DIR/16/2003 2003 11 th.
June All Disciplinary Authorities Sub:- Entitlement to different Terminal
Benefits Of the Officer Employees and Award Staff Inflicted with the
punishment/on case of Their retirement etc.Attention of all concerned
is hereby invited to this office earlier Circular Letter No.PD/DICS/08/89
dated 20-05-1999 wherein it has been mentioned under Clause – 1 that on
compulsory retirement of officers by way of punishment, no encashment of
leave would be admissible as leave lapses in terms of Regulation 38 of
United Bank of India (Officers’) Service Regulation 1979.
As there was no mention regarding eligibility of leave encashment in case
of compulsory retirement by way of punishment in the United Bank of
India (Officers’) Service Regulation 1979, the matter was referred to Indian
Banks’ Association.
In reply to our such reference, Indian Banks’ Association has informed
under their letter dated 14- 06-1997 that on officer who has been compulsorily
retired would be eligible to receive benefits as available to the officers who
retired from service after reaching the date of superannuation.
Accordingly, the encashment of Privilege Leave may be permitted to such
officers who have been awarded punishment of compulsory Retirement from service.
In view of the above decision of Personnel Committee of Indian Banks’
Association, the leave encashment benefits would also be admissible to
the officers who have been awarded punishment of Compulsory Retirement
at par with those officers who retire from service after reaching
superannuation age.
This will come into retrospective effect from 14th June, 1997.
General Manager Sd.— (Personnel)” (13) Learned Counsel for the petitioner
also relied on a circular dated 11 May, 2015 issued by the Indian Banks’
Association pertaining to encashment of leave on compulsory retirement,
the relevant portion whereof reads as follows:“Based on the various
representations received from banks in the matter, quoting the court’s
decision and Government of India decision, the HR Committee at its
meeting held on 6.4.2015 discussed the issue and was of the view that the
officers/employees in Public Sector Banks may be permitted for encashment
of privilege leave to their credit on compulsory retirement in view of the
similar provisions in SBI/Government of India.
The matter was placed before the Managing Committee at its meeting
held on April 30, 2015.
The Committee deliberated the matter and approved the recommendations
of the HR Committee and decided to permit encashment of PL for compulsory
retired employees/officeRs.Member banks may kindly note the above decision
of the HR Committee/Managing Committee of IBA and be guided accordingly.
The date of effect of the above decision will be from the date of the decision
of the Managing Committee, i.e.April 30, 2015.” (14) Learned Counsel has relied
on as many as ten decisions of various High Courts and the Apex Court in
support of his submission that an employee who is compulsorily retired is
entitled to leave encashment.
The decisions are as follows:(i) Deepak Sapra-vs.-Panjab National Bank
(Delhi High Court Division Bench) – Judgment dated 18 September, 2013
delivered in LPA693of 2013.
(ii) Satish Chandra Kumar-vs.-Syndicate Bank (P & H High Court) –
Judgment dated 4 September, 2013 delivered in CWP No.16416 of 2011.
(iii) Sreeram Ramamurthy-vs.-Andhra Bank (Andhra Pradesh High Court) –
Judgment dated 22 March, 2012 delivered in WP No.9069 of 2011.
(iv) Andhra Bank-vs.-Sreeram Ramamurthy (Andhra Pradesh High
Court Division Bench) – Judgment dated 8 August, 2013 delivered in WA No.905 of 2012.
(v) Oriental Bank of Commerce-vs.-Jinder Singh (P & H High Court) –
Judgment dated 13 July, 2011 delivered in LPA No.1147 of 2011.
(vi) D.
Kalaichelvan-vs.-Union Bank of India (Madras High Court) –
Judgement dated 25 July, 2012 delivered in WP No.27311 of 2010.
(vii) Jyotirmay Roy-vs.-Punjab National Bank (Calcutta High Court) –
Judgment dated 3 April, 2012 delivered in WP No.1562 of 2010.
(viii) Surinderjit Singh-vs.-Punjab and Sind Bank (P & H High Court) –
Judgment dated 16 July, 2015 delivered in CWP No.4816 of 2012 –
Upheld by the Division Bench and the Supreme Court.
(ix) Bank of India-vs.-Sr.Sribrata Deb (Calcutta High Court) –
Judgment dated 8 September, 2016 delivered in MAT698of 2016.
(x) UCO Bank-vs.-Anju Mathur (P & H High Court) –
Judgment dated 7 March, 2013 delivered in LPA No.566 of 2012.
(15) Learned Counsel for the Bank referred to Regulation 4 of the
United Bank of India Officer Employees’ (Discipline and Appeal)
Regulations, 1976 and submitted that punishment of compulsory
retirement is a major penalty.
Learned Counsel also relied on a circular dated 27 November, 2000
issued by the Indian Banks’ Association which, inter alia, stated that
an officer whose services are terminated or is compulsory retired as a
punishment as per Regulation 4 of the Officer Employees’ (Discipline and Appeal)
Regulations will not be entitled to leave encashment on retirement.
He submitted that the petitioner has no legally enforceable right to
claim leave encashment benefits on the basis of the respondent Bank’s
circular dated 11 June, 2003 as the said circular was issued inadvertently
overlooking the provisions of Regulation 38 of the UBI Officers’ Service
Regulation 1979 read with the Indian Banks’ Association circular dated
27 November, 2000.
Learned Counsel then referred to a circular dated 19 October, 2012
issued by the respondent Bank, inter alia, to the effect that an officer
who has been discharged, dismissed or terminated or has been compulsory
retired after imposition of punishment as per Regulation 4 of the United
Bank of India Officer Employees’ (Discipline and Appeal) Regulations
1976 will not be entitled for leave encashment.
Learned Counsel then relied on a decision dated 17 December, 2012
delivered by a Division Bench of this Court in APO284of 2012 (Punjab
National Bank-vs.Jyotirmay Roy) wherein it was held that a compulsory
retirement cannot be equated with ordinary retirement and thus a
compulsorily retired officer is not entitled to the benefit of leave encashment.
Learned Counsel submitted that although a subsequent Division Bench
of this Court in the case of Bank of India-vs.-Sr.Sribrata Deb (supra) agreed
with the view of the Delhi High Court in Deepak Sapra (supra) and although
the Special Leave Petition against the Delhi High Court’s judgment in Deepak
Sapra (supra) has been dismissed by the Hon’ble Apex Court, the Hon’ble
Apex Court has kept the question of law open.
He submitted in view of the conflict between the two judgments of two Division
Benches of this Court, the issue should be referred to a Larger Bench.
(16) Rule 38 of the United Bank of India (Officers’) Service Regulations,
1979 reads as follows:“R.38.
Save as provided below, all leave to the credit of an officer shall lapse on
resignation, retirement, death, discharge, dismissal or termination for any
reason whatsoever; Provided that where an officer retires from the Bank’s
service in terms of Regulation 19 of these Regulations or seeks voluntary
retirement on or after 1st November, 1993 in terms of United Bank of India
(Employees’) Pension Regulations, 1995 he shall be eligible to be paid a sum
equivalent to the emoluments of any period not exceeding 240 days of
privilege leave that he had accumulated; Provided further than where an
officer dies while in service there shall be payable to his legal representative
sums which would have been payable for the period not exceeding 240 days
of privilege leave to his credit as on the date of his death.” (17) This Rule
pertaining to the entitlement of Bank Officers to leave encashment is the
same or substantially similar in case of most of the Nationalized Banks.
In Deepak Sapra-vs.-Punjab National Bank (supra).the Punjab National
Bank contended by placing reliance on


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