'Crossed All Boundaries': P&H HC Imposes ₹5 Lakh Cost On CONFED For Withholding Deceased Employee's Pension, Seeking Recovery Of Losses From Widow

The Punjab & Haryana High Court has imposed a cost of Rs. 5 lakh on the Haryana State Federation of Consumers Co-Operative (CONFED) for not releasing the retiral benefit of an accountant who retired in 2015 upon finding that the actions against him were "atrocious" and violative of right to livelihood under Article 21 of the constitution. 

It was stated that three chargesheets were issued by the CONFED against the employee on allegations of shortfall due to less moisture gain in the stocks.

It was ordered that his retirement dues would be released after the finalization of the pending proceeding, and he passed away in 2017. Thereafter, it is stated that the State body directed the widow to pay over Rs. 1.11 crore to recover the losses allegedly caused by her husband.

The Court however found that neither any enquiry officer was appointed nor was there any ascertainment of liability or loss based upon any evidence or any finding by any authority.

While imposing a cost of Rs.5 lakh Justice Jasgurpreet Singh Puri said, that the action "had not only infracted the Fundamental Rights under Article 21 of the Constitution of India and the Constitutional Rights under Article 300-A of the Constitution of India, besides the Statutory Rules but the action of the respondent-CONFED was also atrocious. A poor widow having two children got treated her husband for his renal failure and as per her representation, she spent Rs.20-25 lacs and thereafter, the husband of the petitioner died in the year 2017 but no retiral benefits of her husband were paid to the petitioner by failing to discharge their duties in accordance with law. In this way, this Court deems it fit and proper to impose exemplary costs upon the respondent-CONFED."

The Court noted that an amount of over Rs. 1.11 crore was put on a dead man to be recovered from his widow without any notice, enquiry or any order of ascertainment of liability when the husband of the petitioner was alive.

"The respondents crossed all the boundaries of illegality, perversity and arbitrariness when the aforesaid amount was directed to be recovered from the retiral benefits and for balance amount, civil suit against legal heirs was directed to be filed," it added.

It said that if the right to livelihood is not treated as a part of the Constitutional Right of life, the easiest way of depriving a person of his right to life would be to deprive him of his means of livelihood to the point of abrogation, opined the judge.

These observations came in response to the plea of a widow who had been awaiting the retiral benefit of her husband since 2017.

According to CONFED, the husband of the petitioner, an accountant in the Federation, while he was in service was accountable for the loss due to less moisture gain in the stock stored and since the loss has been caused to the State Exchequer, the liability was to be fastened for the purpose of compensating the State Exchequer.

After hearing the submissions, the Court noted that both the aforesaid charge sheets were pertaining to the time when the husband of the petitioner was in service but admittedly neither any Enquiry Officer was appointed nor the same was further continued nor any order was passed at all at any point of time.

With respect to the third charge sheet which was submitted in 2016, the Court noted that the same was issued to the husband of the petitioner after his retirement i.e. on 21.03.2016 for an event which pertains to the year 2011-2012 and for this also neither any Enquiry Officer was appointed nor it further continued nor any order was passed nor there was any establishment of any fact or ascertainment of any liability by any authority at all.

It was held that in this way, all the aforesaid three charge sheets did not progress at all and no order at all was passed in any of the three charge sheets nor any Enquiry Officer was appointed nor was there any ascertainment of any liability or loss based upon any evidence or any finding by any authority whatsoever.

"In the absence of any enquiry or any finding or any order to that effect, no recovery could have been effected from the retiral benefits of the husband of the petitioner", the Court opined.

The judge also pointed out that the third charge sheet was issued after the retirement of the husband of the petitioner and it pertains to an event which was more than four years preceding the issuance of the charge sheet dated March 21, 2016.

"There is an express bar created under Rule 60 as reproduced above. As per the aforesaid Rule, no departmental proceedings could have been initiated in respect of an event which took place more than four years before the institution of such proceedings. Therefore, there was a clear cut violation of the provisions of the aforesaid Statutory Rules and there was an express bar for even instituting any disciplinary proceeding /charge-sheet against the petitioner after his retirement," the Court said.

The Court added that after retirement, the master and servant relationship ceases to exist and action can be taken only when there is a specific power under the Rules. Therefore, the issuance of charge-sheet against the husband of the petitioner was unsustainable and violative of the aforesaid Statutory Rules.

Justice Puri said that apart from the above, the allegations in all the aforesaid charge- sheets were pertaining to loss caused due to less moisture gain. This issue as to whether when the foodgrains are stored in a godown and whether an employee can be burdened with the aforesaid loss due to less moisture gain in the absence of any norms to that effect has been so well settled by the High Court  Court. 

Furthermore, the Court noted that the impugned order was based on the advice of the Legal Remembrancer but the advice was never reproduced in the show-cause notice probably to mislead.

Adding that the action of the Managing Director (MD) was "arbitary", the Court said that there was no evidence on the record to prove the allegations and the impugned order was passed against a widow for recovery of an amount from the retiral dues of a dead person.

It was stated that even otherwise the advice of the Legal Remembrancer was merely recommendary in nature and it was the duty of the Managing Director to have applied his own mind as well which was never done in the present case.

"It is very strange to see and read the impugned order which actually shocks the conscience of this Court. It is so directed by the Managing Director that the representation of the petitioner dated 06.07.2019 is decided keeping in view all the pros & cons of the case and advice of the LR, Haryana and that is the only direction issued without being backed by any reason at all," the Court said.

The Court noted that an amount of Rs. 1,11,85,976 was put on a dead man to be recovered from his widow without any notice, enquiry or any order of ascertainment of liability when the husband of the petitioner was alive and that the respondents crossed all the boundaries of illegality, perversity and arbitrariness when the aforesaid amount was directed to be recovered from the retiral benefits and for balance amount, a civil suit against legal heirs was directed to be filed.

The judge highlighted that it is ex facie clear that the respondent- CONFED while passing the impugned order has not only violated the statutory provisions but also directly violated Articles 21 and 300-A of the Constitution of India since the right to life guaranteed under Article 21 of the Constitution of India includes the right to livelihood.

Consequently the Court set aside the chargesheet and the impugned order and directed CONFED   to pay the petitioner all the retiral benefits accrued to her husband from the date of retirement of her husband along with interest @ 6% per annum within a period of two months.

While noting the "plight of a poor widow," the Court imposed an exemplary cost of Rs. 5 lakhs upon CONFED, that would be in nature of compensation.

Dhiraj Chawla, Advocate, for the petitioner.

Hitesh Pandit, Advocate, for the respondent.

Citation: 2024 LiveLaw (PH) 93 

Title: Anjana v. Haryana State Federation of Consumers Co-operative Wholesale Stores Ltd.

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