CHAIRMAN-CUM-MANAGING DIRECTOR, MAHANADI COALFIELDS LIMITED versus SRI RABINDRANATH CHOUBEY

CHAIRMAN-CUM-MANAGING DIRECTOR, MAHANADI COALFIELDS LIMITED versus SRI RABINDRANATH CHOUBEY

Where disciplinary proceedings were initiated while an employee was in service, Rule 34.2 of the CDA Rules lawfully deems the employee to continue in service for the limited purpose of continuing and concluding the inquiry; accordingly the disciplinary authority can impose any penalty provided under the service rules, including major penalties such as dismissal, and the employer may withhold gratuity during the pendency of such proceedings and recover or forfeit gratuity under Rule 34.3 read with Section 4(6) of the Payment of Gratuity Act, 1972.

Parties
Appellant Employer: CHAIRMAN-CUM-MANAGING DIRECTOR, MAHANADI COALFIELDS LIMITED; Respondent Employee: SRI RABINDRANATH CHOUBEY
Jurisdiction
India
Judgment Date
27 May 2020
Procedural Posture
Civil Appeal / Disposed by Supreme Court (judgment Dated May 27, 2020)
Outcome
Appeal allowed in part
Legal Topics
Disciplinary Inquiry, Superannuation, Gratuity Forfeiture, Withholding Gratuity, Continuation of Inquiry After Retirement
Service Law Employment Law Administrative Law Labour Law Disciplinary Inquiry Superannuation Gratuity Forfeiture Withholding Gratuity +1 more

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Parties

CHAIRMAN-CUM-MANAGING DIRECTOR, MAHANADI COALFIELDS LIMITED

Appellant Employer

SRI RABINDRANATH CHOUBEY

Respondent Employee

Procedural Posture

Civil Appeal / Disposed by Supreme Court (judgment Dated May 27, 2020)

Legal Issues

  1. 1 Whether an employer may withhold payment of gratuity after an employee's superannuation because of the pendency of disciplinary proceedings against him
  2. 2 Where a departmental enquiry was instituted while an employee was in service and continued after he attained superannuation, whether the punishment of dismissal can be imposed if misconduct is found

Ratio Decidendi

Where disciplinary proceedings were initiated while an employee was in service, Rule 34.2 of the CDA Rules lawfully deems the employee to continue in service for the limited purpose of continuing and concluding the inquiry; accordingly the disciplinary authority can impose any penalty provided under the service rules, including major penalties such as dismissal, and the employer may withhold gratuity during the pendency of such proceedings and recover or forfeit gratuity under Rule 34.3 read with Section 4(6) of the Payment of Gratuity Act, 1972.

Court Disposition

Appeal allowed in part

Orders

  • Impugned judgment and order of the Orissa High Court dated 17.07.2013 quashed and set aside
  • Order passed by the Controlling Authority under the Payment of Gratuity Act is restored