Departmental Proceedings Under PGA Can Be Initiated Against An Employee Even After His Retirement: Delhi HC [Read Judgment]

Dismissing a writ petition, the Delhi High Court held that an employer was empowered to commence departmental proceedings against the employee even after his retirement to determine the existence of conditions of Section 4(6) of the Payment of Gratuity Act, 1972.

The Petitioner, who was a teacher and a Bursar in Kirori Mal College (the College), was aggrieved by the order of governing body of the College alleging him of misconduct whereby departmental proceedings were initiated against him and his retirement benefits were withheld.

The case of the Petitioner was that an ad-hoc committee constituted by the Respondent to probe into Petitioner's guilt only pointed out negligence on part of the petitioner, but did not find him guilty of any financial irregularity/embezzlement. Further, he submitted that he retired from the services in normal course of the duty performed by him without any imputation. The departmental proceedings were initiated against him after his retirement and the Respondent was not empowered to do the same.

As per the Petitioner, the Payment of Gratuity Act had no provision to initiate or continue departmental enquiry against an employee post retirement or for that matter, to withhold the gratuity pending departmental enquiry. He also contended that the provisions of Statute 28-A of the Delhi University were inapplicable to him because of Section 14, the non-obstante clause of Payment of Gratuity Act. He further contended that even if the said Statute were applicable to him, it only conferred the power to withhold payment of gratuity in case of resignation, dismissal or removal for misconduct, insolvency, insufficiency, which wasn't the case herein.

Dismissing the aforesaid arguments, the court was convinced by the Respondents case that if the Payment of Gratuity Act is applicable, then the department may initiate or continue with departmental proceedings under Section 4(6) of the Payment of Gratuity Act, even after retirement of employees subject to the fact that such proceedings are not disciplinary proceedings but are enquiries/departmental proceedings to determine the existence of conditions of Section 4(6).

Section 4(6) of the Act the states that gratuity of an employee, whose services have been terminated for any act, willful 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

Justice Suresh Kumar Kait relied on Prof. Marmar Mukhopadhyay v. Union of India & Ors., W.P.(C) No. 2566/2007, and held that an employer was entitled to continue with the departmental proceedings even after retirement of the employee. This ruling was in line with the Supreme Court verdict in M. Narasimachar v. The State of Mysore, (1960) 1 SCR 981, wherein the court held that merely because a Government servant retired from service on attaining the age of superannuation, he could not escape the liability for misconduct and negligence or financial irregularities which he may have committed during the period of his service.

Petitioner was represented by Advocate Ishan Jain and the Respondent by Advocates Santosh Kumar, Manav Gill and Mohinder J S Rupal.

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