Recovery from retired employee' gratuity not permissible when suit already dismissed: SC

New Delhi: Supreme Court has said the recovery of an amount from the gratuity paid to a retired employee was not permissible, when a separate suit filed for taking back another tranche of the money by the state authorities already stood dismissed.

A bench of Justices Prashant Kumar Mishra and N V Anjaria allowed an appeal filed by Kamlesh Tuteja against the Punjab and Haryana High Court's judgment which dismissed a writ petition filed by the appellant due to delay and laches.

After hearing advocates Dushyant Parashar and Manu Parashar for the appellant, the court said, "The High Court was not correct in holding that the present writ petition suffered from delay and laches.''

The bench said, if the action initiated by then state authorities for recovery of the remaining amount of Rs 5,74,280 has already been rejected by the High Court, it is now concluded in between the parties that the recovery of the amount from the gratuity paid to the appellant was not permissible.

As per facts of the matter, when the appellant retired on April 30, 2010 from the post of Manager, Punjab Small Industries & Export Corporation Ltd, the appellant was entitled to receive gratuity.

The maximum limit of gratuity was Rs 3.50 lakhs which came to be increased to Rs 10 lakhs by an order passed by the Government of Punjab on August 17, 2009.

The dispute arose between the parties over the date of implementation of the order of the government of Punjab. The appellant claimed it became effective from August 17, 2009 and on the other hand, the respondent-State referring to the order of July 05, 2010 contended that the enhanced maximum limit of gratuity has been made effective from May 24, 2010.

At the time of superannuation, the appellant was paid an amount of gratuity of Rs 6.50 lakhs, out of which, the subject disputed amount of Rs 75,720 was recovered from his other dues and for the remaining amount of Rs 5,74,280 together with interest, a separate suit was filed in the Court of a Civil Judge (Junior Division), Chandigarh.

The suit was dismissed by judgment and decree in 2015, against which, a first appeal and, thereafter, a regular second appeal preferred by the State of Punjab had also been dismissed.

It thus became final that the state authorities could not have recovered any amount from the gratuity paid to the appellant.

The single judge and the division bench of the High Court dismissed the petition on the ground of delay and laches.

"We are satisfied that the High Court has clearly erred in rejecting the writ petition on the ground of delay and laches. The right to sue, in the present writ petition, first occurred on the date of recovery of Rs 75,720 which continued and remained sub-judice before the Civil Court and, eventually, it got crystalized giving fresh cause of action when the suit proceedings attained finality upon dismissal of the regular second appeal,'' the bench said.