Manager, Amreli Jilla Madhyasth Sahakari Bank Ltd. vs Meghjibhai Mohanbhai Sagar

R.M. Doshit, J.—This Appeal preferred under Clause 15 of the Letters Patent arises from the judgment and order dated 10th December, 2007 passed by the learned Single Judge in above Special Civil Application No. 29813 of 2007. The appellant before this Court is the Amreli Jilla Madhyasth Sahakari Bank Limited [hereinafter referred to as the Bank], the writ petitioner before the learned Single Judge. The respondent is the former employee of the Bank.

The subject matter of dispute is the amount of gratuity payable to the respondent employee of the Bank on termination of his service on 26th November, 1999. On termination of the service of the respondent, he was paid the terminal dues including the amount of gratuity payable under the Payment of Gratuity Act, 1972 [hereinafter referred to as the Act of 1972] of Rs. 2,31,927/- the amount of gratuity payable under the Act of 1972, the respondent was paid a sum of Rs. 34,484/-, after deducting Rs. 1,97,443/-, the outstanding dues of the respondent to the Bank and the Credit Cooperative Society of the Staff of the Bank.

Feeling aggrieved, the respondent approached the controlling authority, Junagadh under the Act of 1972 in Gratuity Application No. 27 of 2006. By order dated 27th October, 2006 made by the controlling authority, the Bank is directed to pay to the respondent the aforesaid sum of Rs. 1,97,443/- with interest at the rate of 10% per annum. The said order was confirmed by the appellate authority in appeal No. 81 of 2006.

Feeling aggrieved, the Bank preferred above Special Civil Application No. 29813 of 2007. The learned Single Judge has dismissed the petition. Therefore, the present Appeal.

Learned advocate Mr. Vasavada has appeared for the Bank. He has submitted that the authorities below have erred in entertaining the claim made by the respondent after expiry of period of limitation. He has also submitted that the above referred sum of Rs. 1,97,443/- was the outstanding dues of the respondent against the loan borrowed by the respondent from the Bank as well as the Credit Cooperative Society. Section 50 of the Gujarat Cooperative Societies Act, 1961 enjoins the employer, the Bank in the present case, to recover such dues from the salary or the wages of the employee. The Bank was, therefore, under a statutory obligation to deduct the said outstanding dues from the amount of gratuity payable to the respondent.

On perusal of the record, it appears that on the date of termination of his service, the respondent owed a sum of Rs. 5,708/- to the Bank being the amount outstanding against the loan borrowed from the Bank and a sum of Rs. 1,91,735/- being the amount outstanding against the loan borrowed from the Credit Cooperative Society. Rule 10 of the Payment of Gratuity (Gujarat) Rules, 1973, inter alia, empowers an employee to approach the controlling authority within 90 days of the occurrence of the cause of action. The proviso thereto empowers the controlling authority to accept any application made under that sub-rule after the expiry of the specified period. Thus, the controlling authority has power to entertain a claim made before it even after the expiry of the specified period of 90 days. The order of the controlling authority, therefore, cannot be said to have been made after the expiry of period of limitation, without the authority of law.

As to the authority of the Bank to deduct the amount of outstanding dues to the Credit Cooperative Society, we are unable to accept the contention raised by Mr. Vasavada. Section 50 of the Cooperative Societies Act does not govern the situation which is before us. In absence of a specific authority given by the respondent, the Bank could not have deducted the above referred sum of Rs. 1,91,735/-, outstanding dues of the respondent to the Credit Cooperative Society from the amount of gratuity payable by the Bank to the respondent.

Learned advocate Ms. Chitalia has appeared for the respondent workman. She has candidly agreed that the respondent''s dues to the Bank may be recovered by the Bank from the amount of gratuity payable to the respondent.

In above view of the matter, the Appeal is partly allowed. The respondent be paid Rs. 1,91,735/-, the amount deducted against the outstanding dues to the Credit Cooperative Society, with interest at the rate of 10% from the date of his retirement. The order of the controlling authority, Junagadh dated 27th October, 2006 made in Gratuity Application No. 27 of 2006 be modified to the above extent.

Ms. Chitalia has submitted that the sum of Rs. 34,484/- which was offered by the Bank as payment of the gratuity was not accepted by the respondent at the relevant time. If that be so, the respondent may approach the Bank for payment of the said sum of Rs. 34,484/-. If such application is made to the Bank, the Bank shall pay the said sum of Rs. 34,484/- to the respondent forthwith.

Civil Application stands disposed of. Ad-interim relief stands vacated. The parties will bear their own cost.