IN THE HIGH COURT AT CALCUTTA

Civil Appellate Jurisdiction

Original Side

Present:

The Hon’ble Justice Debasish Kar Gupta
                              And
The Hon’ble Justice Shekhar B. Saraf

A.P.O. No.490 of 2017

G.A. No.3356 of 2017
With
W.P. No.379 of 2017
United Bank of India
Versus
Rana Mazumder & Ors.

For the appellant : Mr. Moloy Basu,

Ld. Senior Advocate,
Mr. R.N. Mazumder,
Ld. Senior Advocate,
Mr. Sourav Chakraborty,
Mr. Supratim Bhattacharjee

For the respondent : Mr. Arindam Moitra,

Mr. Soumya Mazumder,
Mr. Manik Ganguly

Heard on : 07/11/2017, 23/11/2017, 28/11/2017, 05/12/2017 & 07/12/2017

Judgment on: 22/12/2017

Shekhar B. Saraf, J. :

1. This is an application arising out of an appeal under clause 15 of

the letters patent from the original order dated 18th July, 2017,
 passed in W.P. No. 379 of 2017 (Rana Mazumder –v- United Bank
of India and Ors.) read with modification order dated 12th
September, 2017, filed by the respondent bank in the original writ
petition. The above writ application was disposed of directing the
respondent bank to release the entire sum lying to the credit of
the petitioner on account of gratuity positively within two weeks
from the date of communication of this order with interest at the
rate of 10 per cent per annum, payable from the date after the
expiry of 30 days from the date of superannuation of the petitioner
which has been notionally decided by the bank.

2. The facts giving rise to this application are as follows:

(i) The appellant is a nationalised bank constituted under the

Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1970.

(ii) During the tenure of service as Chairman of Bangiya Gramin

Vikash Bank (BGVB) from 20th April, 2010 to 3rd November,
2012, the respondent had allegedly committed various irregular
acts and thereby failed to take all possible steps to ensure and
protect the interest of the appellant bank, allegedly failed to
discharge his duties with utmost integrity, honesty, devotion and
diligence and accordingly acted in contravention of Regulation
3(1) and 3(3) of United Bank of India Officer Employees’
(Conduct) Regulations 1976 (hereinafter referred to as ‘said
Regulations’) constituting misconduct in terms of Regulation 24
of the said Regulations.

(iii) Accordingly, the Executive Director and Disciplinary Authority,

issued a charge sheet bearing No. PD/DIR/BGVB/
 2613/5896/2014 dated 26th March, 2014, containing 21 charges
against the respondent. Subsequently on 4th August, 2014 the
Executive Director and Disciplinary Authority issued certain
additional charges containing four articles of charge. The
respondent submitted his defence to the charges and thereafter
the enquiry officer completed the said enquiry on 1st December,
2015. The said enquiry report was forwarded to the respondent
on 15th December, 2015. The respondent submitted his written
submissions to the enquiry officer’s report on 6th February,
2016.

(iv) The Executive Director and Disciplinary Authority vide his order
bearing reference no. PD/DIR/2613/752/2016 dated 7th May,
2016 passed the final order, the operative portion is delineated
below:

“After considering the facts and circumstances in the matter and

gravity of the proved misconduct and after considering your
submission and also after applying my mind independently, I
hereby impose upon you the Major Penalty of “Removal from
Service which will not be a disqualification for future
employment” in terms of Regulation 4(i) of United Bank of India
Officer Employees’ (Discipline & Appeal) Regulations, 1976, with
immediate effect, would be just and proper and commensurate
with the irregularities committed by you.

Please note, save and except what has already been paid to you
as your own contribution to Provident Fund and provisional
pension till date of issuance of this order, you will not be entitled
to any other terminal benefit as enumerated below:

1. Pension / Commutation of Pension in terms of Regulation 22,

read with Regulation 46 of United Bank of India (Employees’)
Pension Regulation, 1995.

2. Gratuity in terms of Regulation 46(i)(e) of United Bank of

India Officers’ Service Regulations, 1979.

3. Encashment of accrued leave as on notional date of

superannuation in terms of Regulation 38 of United Bank of
India Officers’ Service Regulations, 1979.
 This apart, it shall be open for the Bank to recover the
aforementioned financial loss from you in accordance with law.”

(v) The respondent preferred an appeal against the above order

dated 7th May, 2016 before the statutory appellate authority on
10th June, 2016.

(vi) During the pendency of the above appeal before the statutory
appellate authority a writ petition was filed by the respondent
seeking a direction upon the appellant bank to release the
gratuity and the leave encashment in favour of the petitioner,
amongst other prayers. The Learned Single Judge by an order
dated 7th December, 2016, disposed of the said writ petition with
the following directions:

“(a) That the Managing Director and Appellate Authority of

qua the petitioner of UBI, being the respondent no. 2 to this
writ petition, shall decide the appeal of the petitioner
appearing at pages 30 to 92 of the writ petition expeditiously
in accordance with law and preferably not later than a
period of twelve weeks from the date of communication of
this order. The reasoned decision of the Appellate Authority
shall reach the petitioner and the Appellate Authority shall
be entitled to, as necessary, issue consequential orders
based on such reasoned decision;

(b) The appropriate authority of the bank shall consider the

prayer of the writ petitioner for leave encashment in the light
of Regulation 38 of the 1976 Regulations as interpreted by
the circular of the bank dated 21st July, 2015 appearing at
page 100 of the writ petition.

Such exercise shall be completed by the authority of the

bank within a period of four weeks from the date of
communication of this order.”

(vii) Thereafter, the aforesaid statutory appeal was rejected by an

order dated 19th January, 2017. Assailing the entire disciplinary
proceedings, orders passed by the authority and the forfeiture of
the gratuity in terms of Regulation 46(i)(e) of the said
 Regulations, the respondent filed the writ application being W.P.
No. 379 of 2017.

(viii) After hearing the parties, the Learned Single Judge passed the
impugned order dated 18th July, 2017, giving directions for filing
of affidavits. The Learned Single Judge further passed an interim
order directing the appellant to immediately release the gratuity
within two weeks from the date of communication of the order.
The operative portion of the order is provided below:

“This is a case which calls for treating it as an exception to

the generally held view of not passing a mandatory order at the
very early stage. The petitioner had retired in the year 2014. In
three years’ time he had not been favoured with any retrial
benefit except his own share of Provident Fund contribution.
The respondents are not releasing his pension in view of the
fact that he is not entitled to pension under the relevant law.
This is a case where justice demands that for the
sustenance of the petitioner, who had retired from the post of
Deputy General Manager of the Bank, the bank should be
directed to release the gratuity in favour of the petitioner within
a period two weeks from the date of communicating this order.
I have considered this case to be coming under one of the
recognised exceptions to the general injunction in passing an
order of mandatory injunction at the initial stage. In such view
of it I direct the respondent bank to release the entire sum
lying to the credit of the petitioner on account of gratuity
positively within two weeks from the date of communication of
this order with interest at the rate of 10 per cent per annum,
payable from the date after the expiry of 30 days from the date
of superannuation of the petitioner which has been notionally
decided by the bank.

With the above observation the writ petition is disposed of.

There shall be no order as to costs.”

3. Mr. Moloy Kr. Basu, Senior Advocate appearing on behalf of the

appellant bank submitted that the Learned Single Judge has
proceeded on a wrong notion that the disciplinary authority in the
final order had failed to quantify any amount suffered by the
appellant bank on account of the alleged acts on the part of the
respondent. He further submitted that the legal finding of the
 Learned Single Judge that the issue of the right of the appellant
bank to forfeit the gratuity of a delinquent employee is no longer res-
integra and the same has been settled by various judicial
pronouncements is contrary to law.

4. Mr. Moloy Kr. Basu submitted that apart from the Regulation
46(1)(e) of the said Regulations, Section 4(6) of the Payment of
Gratuity Act, 1972 also makes a similar provision for forfeiture of the
gratuity of an employee when services have been terminated by any
act of wilful negligence or causing any loss or destruction of a
property belonging to the employer to the extent of the loss and
damage caused. He submitted that the Learned Single Judge erred
in law by passing a mandatory injunction directing the appellant
bank to pay the gratuity to the delinquent employee at the interim
stage, and by doing so, has already decided on one of the main
prayers in the writ petition. The above order directing payment of
gratuity to the employee when directions for affidavits have been
given in the writ petition and the fact that the writ petition is still to
be heard is against the principles established by law and the law laid
down by the Supreme Court in various judicial pronouncements in
relation to issue of interim mandatory injunctions. He relied upon a
judgment of the Supreme Court in Dorab Cawasji Warden -v-
Coomi Sorab Warden reported in AIR 1990 S.C. 867.

5. Mr. Majumder appearing on behalf of the respondent submitted that

the Learned Trial Judge had come to a conclusion that gratuity
becomes payable immediately upon superannuation and the same
cannot be withheld on any account whatsoever except on the specific
grounds in Section 4(6) of the Payment of Gratuity Act, 1972. He
placed reliance on two judgments passed by the Division Bench of
this High Court as follows:
 “(i) M.A.T. 1298 of 2012 with C.A.N 7976 of 2012 (UCO Bank & Ors.
–v- Nityananda Paul & Anr.)

(ii) F.M.A No. 2129 of 2016 with C.A.N 9017 of 2017 (Oriental Bank
of Commerce –v- The Deputy Chief Labour Commissioner
(Central), Kolkata & Ors.”

1. Mr. Majumder relied on the above two judgments to buttress his

argument that as the writ petitioner had superannuated before the
date of passing of the final order, there was no way in which the
payment of gratuity could be forfeited by the appellant bank. He
further submitted that as the order passed on 7th May, 2016 used
the term “with immediate effect”, the same was prospective in nature
and would have no impact on the respondent as the respondent had
retired in the year 2014 itself. He submitted that upon his
retirement he had become eligible to obtain the gratuity within a
period of 30 days from the date of his retirement and withholding of
the same was legally untenable. He further submitted that as the
final order was passed subsequent to his retirement, the same being
prospective, the action of the appellant bank was in violation of the
judgments passed by the Division Bench as mentioned above.

2. Mr. Majumder also submitted that as no exemption had been sought

for by the appellant bank under the provisions of Section 5 of the
Payment of Gratuity Act, 1972 to make the provisions of the said
Regulations applicable with regard to the payment of gratuity, the
action of the appellant bank in forfeiting the gratuity is
unsustainable.

3. With regard to the issue of passing the interim mandatory

injunction, Mr. Majumder submitted that the Learned Trial Judge
 had considered various judgments and had come to a conclusion
that the payment of gratuity could not have been withheld under any
circumstances by the appellant bank and therefore, a prima facie
case having been made out by the writ petitioner, an order of
mandatory injunction was necessary, as justice demanded that the
writ petitioner who had retired in the year 2014 had not been
favoured with any retirement benefits except his own share of
provident fund contribution.

4. Mr. Majumder relied on paragraph 15 of the Supreme Court

judgment in Dorab Cawasji Warden (Supra) submitting that being
essentially an equitable relief, the grant or refusal of an interlocutory
mandatory injunction shall ultimately rest in the sound judicial
discretion of the court to be exercised in the light of the facts and
circumstances in each case.

5. Having heard counsels appearing on behalf of both the parties, the

first issue that comes up for determination is as to whether the
appellant bank had quantified the loss that may have resulted from
the actions of the respondent. On examination of the charge sheet
dated 26th March, 2014 it is clear from the penultimate paragraph
that the appellant bank had quantified an amount of Rs. 2396.71
lakhs as the estimated loss to the appellant bank. Secondly, the final
order passed by the Executive Director and Disciplinary Authority
dated 7th May, 2016 stated that the loan accounts in the original
charge sheet appearing from serial no. 1 to 19 became Non
Performing Assets (NPA) and the aggregate outstanding balance of
those NPA accounts came to Rs. 2396.71 lakhs, due to the irregular
acts of the writ petitioner and accordingly the appellant bank had
been exposed to sustain financial loss to that extent plus applicable
interest.
6. With reference to the charges under the addendum charge sheet, the
final order stated that the bank had suffered a financial loss of Rs.
23,42,415/- on account of waiver as the bank had to compromise
and settle for a lesser payment. After examining the enquiry report,
the Executive Director and Disciplinary Authority came to a final
conclusion as below:

“In the aforesaid context, there is no doubt that you had committed
irregularities and the Bank has been exposed to a financial loss as
stated in the aforesaid letter of charge dt. 26.03.2014 & addendum
thereto dt. 04.08.2014. Out of the 21 charges of the initial charge
sheet, I consider as under:-

(i)Charge Nos. 19 & 21 as ‘Not proved’,

(ii)Charge Nos. 4, 6, 9, 12, 16, 17, 18 & 20 as ‘Proved’,

(iii)Charge Nos. 1, 2, 3, 5, 7, 8, 10, 11, 13, 14, & 15 as ‘Partially

proved’ as the sub charges regarding non-obtaining Opinion sheet in
IBA prescribed format, non-compliance of KYC norms, could not be
substantiated in the enquiry, and

(iv)All four charges of addendum charge sheet are ‘Proved’.”

7. In the order of the appellate authority at page 5 also, the appellate

authority stated as follows:

“The charges levelled against the appellant are seen duly proved in
the enquiry and the lapses established during the course of
departmental enquiry contribute to an aggregate loss of Rs. 23.96
Crores plus applicable interest therein.”

8. In view of the above findings in the final order and the order passed
by the statutory appellate authority, it is clear that the loss suffered
 by the appellate bank was quantified and the finding of the Learned
Single Judge that in the final order passed by the Disciplinary
Authority the bank had not specifically quantified any amount
suffered by the appellant bank on account of any alleged act on the
part of the petitioner, seems to be an incorrect and perverse finding.
The Learned Single Judge has proceeded in granting the mandatory
injunction for release of gratuity to the writ petitioner based upon
the above incorrect finding.

9. In the case of UCO Bank and Ors. -v- Nityanand Paul and another
(Supra), relied upon by the respondent, the Division Bench had
come to a finding that neither at the time of issue of show cause
notice to the employee nor on submission of the enquiry report, the
bank had mentioned any loss caused to the bank.

10. In the case of Oriental Bank of Commerce, The Deputy Chief

Labour Commissioner (Central), Calcutta and Ors. (Supra), the
factual matrix was that there was a judicial proceeding pending
before a criminal court subsequent to the retirement of the employee
and the bank was desirous of withholding the gratuity payment till
the conclusion of the criminal proceedings.

11. In both these cases, the Learned Trial Judge had passed orders for
payment of gratuity at the final stage and not at an interim stage.
Furthermore, the above two cases do not come to the assistance of
Mr. Majumder as the facts in the instant case are that an order of
forfeiture of gratuity has already been passed and the charge sheet,
the enquiry report, the final order and the appellate authority’s
orders all state and quantify the amount of loss caused to the
appellant bank due to the irregular, illegal actions of the delinquent
employee.
12. It is true that the final order imposing the punishment of forfeiture
was passed subsequent to the superannuation of the delinquent
employee, the disciplinary enquiry having been commenced before
the said superannuation. The challenge in the writ petition was
against such final order and the appellate authority order in relation
to the terminal benefits including forfeiture of the gratuity.

13. It may be noted that the Supreme Court in the case of Chairman-
Cum-Managing Director Mahanadi Coalfield Limited –v-
Rabindranath Choubey, reported in (2013) 16 SCC 411, has delved
into the very issue with regard to whether gratuity could be withheld
by the employer even after superannuation of an employee where
departmental proceedings were pending at the time of
superannuation. The Supreme Court on consideration of two
divergent views of the Supreme Court in the matters of Jaswant
Singh Gill –v- Bharat Coking Coal Ltd., reported in (2007) 1 SCC
663 and SBI –v- Ram Lal Bhaskar, reported in (2011) 10 SCC
249, referred the matter to a Larger Bench of three Judges. The
relevant paragraphs are delineated below:

“22. The issue which confronts us in the instant appeal is as to

whether gratuity can be withheld in the wake of Rule 34 of the CDA
Rules when examined in justaposition with the provisions of the
Gratuity Act. To put it otherwise, whether in the scheme of the
Gratuity Act, gratuity has to be necessarily released to the employee
concerned on his retirement even if departmental proceedings are
pending against him. We find that Jaswant Singh Gill case directly
answers this question, that too in the context of these very CDA
Rules. However, it is because of the reason that the said judgment
proceeds on the basis that after the retirement of an employee,
penalty of dismissal cannot be imposed upon the retired employee. If
this view is not correct and the imposition of penalty of dismissal is
still permissible, the employer will get the right to forfeit the gratuity
of such an employee in the eventualities provided under Sections
4(1) and 4(6) of the Payment of Gratuity Act which read as under:
 “4.Payment of gratuity.-(1) Gratuity shall be payable to an
employee on the termination of his employment after he has
rendered continuous service for not less than five years-

(a) On his superannuation, or

(b) On his retirement or resignation, or

(c) On his death or disablement due to accident or disease:

Provided that the completion of continuous service of five

years shall not be necessary where the termination of the
employment of any employee is due to death or disablement:
Provided further that in the case of death of the
employee, gratuity payable to him shall be paid to his nominee or, if
no nomination has been made, to his heirs, and where any such
nominees or heirs is a minor, the share of such minor, shall be
deposited with the controlling authority who shall invest the same
for the benefit of such minor in such bank or other financial
institution, as may be prescribed, until such minor attains majority.
Explanation.- For the purposes of this section,
disablement means such disablement as incapacitates an employee
for the work which he was capable of performing before the accident
or disease resulting in such disablement.
(6) Notwithstanding anything contained in sub-section
(1)-
(a) the gratuity of an employee, whose services have been
terminated for any act, wilful omission or negligence causing any
damage or loss to, or destruction of, property belonging to the
employer, shall be forfeited to the extent of the damage or loss so
caused:
(b) the gratuity payable to an employee may be wholly or
partially forfeited-
(i) if the services of such employee have been terminated
for his riotous or disorderly conduct or any other act of violence on
his part, or
(ii) if the services of such employee have been terminated
for any act which constitutes an offence involving moral turpitude,
provided that such offence is committed by him in the course of his
employment.”
Thus for invoking clause (a) or (b) of sub-section 6 of Section 4, the
necessary precondition is the termination of service on the basis of
departmental enquiry or conviction in a criminal case. This
provision would not get triggered if there is no termination of
services.
23. It is the case of the appellant that in the charge-sheet served
upon the respondent herein, there are very serious allegations of
misconduct alleging dishonesty causing coal stock shortage
amounting to Rs. 31.65 crores, and thereby causing substantial loss
to the employer. If such a charge is proved and punishment of
dismissal is given thereupon, the provisions of Section 4(6) of the
Payment of Gratuity Act would naturally get attracted and it would
be within the discretion of the appellant to forfeit the gratuity
 payable to the respondent. As a corollary one can safely say that the
employer has right to withhold the gratuity pending departmental
inquiry. However, as explained above, this course of action is
available only if disciplinary authority has necessary powers to
impose the penalty of dismissal upon the respondent even after his
retirement. Having regard to our discussion above of Jaswant Singh
Gill and Ram Lal Bhaskar, this issue needs to be considered
authoritatively by a larger Bench. We, therefore, are of the opinion
that the present appeal be decided by a Bench of three judges.”

14. In view of the Supreme Court judgment in Mahanadi Coalfield Ltd.

–v- Rabindranath Choubey (Supra) it is clear that the issue with
regard to forfeiture of gratuity after the superannuation of the
delinquent employee has been referred to a larger Bench of the
Supreme Court and accordingly the above issue is very much res-
integra.

15. The challenge before us in this appeal is specifically with the

mandatory injunction directing the respondent bank to release the
entire sum on account of gratuity. We find force in the submissions
made by Mr. Basu, learned Senior Advocate appearing for the
appellants that the principles in relation to issue of such a
mandatory injunction have been succinctly discussed in the
Supreme Court judgment of Dorab Cawasji Warden (Supra) and the
relevant portion of the above judgment is quoted below:-

“14. The relief of interlocutory mandatory injunctions are thus granted

generally to preserve or restore the status quo of the last non-
contested status which preceded the pending controversy until the
final hearing when full relief may be granted or to compel the undoing
of those acts that have been illegally done or the restoration of that
which was wrongfully taken from the party complaining. But since the
granting of such an injunction to a party who fails or would fail to
establish his right at the trial may cause great injustice or irreparable
harm to the party against whom it was granted or alternatively not
granting of it to a party who succeeds or would succeed may equally
cause great injustice or irreparable harm, courts have evolved certain
guidelines. Generally stated these guidelines are :

(1) The plaintiff has a strong case for trial. That is, it shall be of a
higher standard than a prima facie case that is normally required
for a prohibitory injunction.
 (2) It is necessary to prevent irreparable or serious injury which
normally cannot be compensated in terms of money.

(3) The balance of convenience is in favour of the one seeking such

relief.

15. Being essentially an equitable relief the grant or refusal of an

interlocutory mandatory injunction shall ultimately rest in the
sound judicial discretion of the Court to be exercised in the light of
the facts and circumstances in each case. Though the above
guidelines are neither exhaustive or complete or absolute rules,
and there may be exceptional circumstances needing action,
applying them as pre-requisite for the grant or refusal of such
injunctions would be a sound exercise of a judicial discretion.”

16. We are unable to agree with the Learned Single Judge that the issue
in relation to forfeiture of gratuity has been settled, and, is no longer
res integra as the same has been referred to a larger Bench of the
Supreme Court as indicated above. Further, the issue whether the
exception u/s 4(6) would apply and the gratuity may be forfeited has
to be examined in the facts of each case. Different facts situations
would result in different conclusions and it could not be stated that
in all cases gratuity has to be paid immediately upon
superannuation of the delinquent employee. In the present case, as
the loss had been quantified by the appellant bank in the show
cause notice and in the final order, Section 4(6) of the Payment of
Gratuity Act comes into play. In our view, the respondent had failed
to make out a prima facie case for a mandatory injunction at the
interim stage.

17. Secondly, the writ petition did not disclose the irreparable loss or
serious injury that could have been caused to the respondent that
could not have been compensated in terms of money.
23. Thirdly, the balance of convenience and the balance of inconvenience
necessarily have to be in favour of the person seeking the relief – in
the present case that does not seem to be the case as the respondent
would have gained undue advantage by having received the gratuity
amount without having succeeded in the writ petition. In the event,
the appellant bank succeeded in the writ petition, irreparable loss
would have been caused to them as they would have been out of
pocket with regard to the gratuity amount paid as per the interim
order.

24. In the light of the above, the portion of the impugned order dated 18th
July, 2017, in so far as it relates to grant of a mandatory injunction
order at the interim stage, is set aside with a request to the Learned
Single Judge to expeditiously hear out the writ petition. All points
which are involved in the writ application are kept open for final
adjudication in the writ application.

25. Since no purpose shall be achieved by keeping the appeal pending,

the appeal is also treated as on the day’s list, that is, 7th December,
2017 and is accordingly disposed off.

26. No order as to costs.

I agree.

(Debasish Kar Gupta, J.) (Shekhar B. Saraf, J.)