Patna High Court
Rai Yatish Chandra SharmaversusThe Uttar Bihar Gramin Bank through its Chairman,
- Decided
- Disposal
- DISPOSED
Holding
A disciplinary authority cannot levy recovery from gratuity or leave encashment where the charge memo does not specify a pecuniary loss, and interest at 7% must be paid on the amount wrongly deducted.
Summary
The petitioner, a former Branch Manager of Uttar Bihar Gramin Bank, challenged a disciplinary order that deducted Rs. 14,42,454 from his gratuity and leave encashment on the ground that the charge memo did not specify any pecuniary loss. The Single Judge set aside the disciplinary and appellate orders and directed the bank to pay the withheld benefits, but did not award interest. On appeal, the High Court held that where a charge memo fails to allege a pecuniary loss, the bank cannot attach gratuity or leave encashment, and that the amount deducted must attract interest at 7% from the date of the disciplinary order. The Court relied on the Uttar Bihar Gramin Bank (Officers & Employees) Service Regulations, 2010 and the Payment of Gratuity Act, and cited the Supreme Court decision in M.V. Bijlani. Consequently, the appeal by the bank was dismissed and the petitioner was awarded interest on the deducted sum.
Issues considered
- Whether a disciplinary authority can recover amounts from gratuity and leave encashment when the charge memo does not disclose any pecuniary loss.
- Whether the provisions of the Uttar Bihar Gramin Bank (Officers & Employees) Service Regulations, 2010 and the Payment of Gratuity Act prohibit attachment of gratuity.
- Whether interest is payable on the amount deducted from gratuity for the period of unlawful withholding.
- Whether the appellate order upholding the disciplinary order was legally valid.
Legislation cited
Subjects
- gratuity
- leave encashment
- disciplinary proceedings
- pecuniary loss
- service regulations
- interest
- attachment of gratuity
- bank employee
- departmental inquiry
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Letters Patent Appeal No.886 of 2024
In
Civil Writ Jurisdiction Case No.14867 of 2015
======================================================
Rai Yatish Chandra Sharma, Son of late Jagnath Rai Sharma, Resident of
Mohalla- Basant Vihar Sariswa Road, Police Station- Majahaulia, District-
Bettiah, West Champaran.
... ... Appellant/s
Versus
1. The Uttar Bihar Gramin Bank through its Chairman, Head Office
Kalambagh Chowk, Muzaffarpur.
2. The Board of Directors, Uttar Bihar Gramin Bank, Head Office, Kalambagb
Chowk, Muzaffarpur.
3. The General Manager, Uttar Bihar Gramin Bank, its Head Office at
Kalambagb Chowk, Muzaffarpur.
... ... Respondent/s
======================================================
with
Letters Patent Appeal No. 699 of 2024
In
Civil Writ Jurisdiction Case No.14867 of 2015
======================================================
1. The Uttar Bihar Gramin Bank through its Chairman Head Office
Kalambagh, Chowk, Muzaffarpur.
2. The Board of Directors, Uttar Bihar Gramin Bank Head Office Kalambagh,
Chowk, Muzaffarpur.
3. The General Manager Uttar Bihar Gramin Bank, its Head Office at
Kalambagh Chowk, Muzaffarpur.
4. The Chief Manager, Uttar Bihar Gramin Bank, Muzaffarpur Head Office,
Kalambagh Chowk, Muzaffarpur.
... ... Appellant/s
Versus
Rai Yatish Chandra Sharma Son of late Jagnath Rai Sharma, Resident of
Mohalla- Basant Vihar Sariswa Road, Bettiah (West Champaran).
... ... Respondent/s
======================================================
Appearance :
(In Letters Patent Appeal No. 886 of 2024)
For the Appellant/s : Mr. Dipak Kumar, Advocate
For the Respondent/s : Mr. Prabhakar Jha, Advocate
(In Letters Patent Appeal No. 699 of 2024)
For the Appellant/s : Mr. Prabhakar Jha, Advocate
For the Respondent/s : Mr. Dipak Kumar, Advocate
======================================================
Patna High Court L.P.A No.886 of 2024 dt.02-02-2026
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CORAM: HONOURABLE MR. JUSTICE BIBEK CHAUDHURI
and
HONOURABLE MR. JUSTICE DR. ANSHUMAN
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE BIBEK CHAUDHURI)
Date : 02-02-2026
Since both the appeals challenge the final judgment
passed in C.W.J.C No. 14867 of 2015, we have heard both the
appeals analogously. We are now Going to pass the following
judgement.
2. The appellant of L.P.A. No. 886 of 2024 filed
C.W.J.C. No. 14867 of 2015 for following reliefs:-
(i) Issuance of an order, direction or writ in
the nature of Certiorari quashing the order
dated 19.10.2013 contained in
HO/DAD/06/13-14/No 525 as well as
consequential administrative order dated
19.10.2013 contained in HO/DAD/06/13-
14/No 526, by which the disciplinary
authority has awarded the penalty of recovery
of Rs. 1442454/- (fourteen lakh forty two
thousand four hundred fifty four) only, from
the amount of gratuity and leave
enchashment, payable to the petitioner, as a
part of pecuniary of loss of Rs. 2116251/-
only caused to the Bank by the petitioner in
terms of Regulation 39(I) (a) (iv) of Uttar
Bihar Gramin Bank (Officers & Employees)
Services Regulation, 2010.
(ii) Issuance of an order, direction or writ in
the nature of Certiorari quashing the
appellate order dated 04.03.2014 contained
Patna High Court L.P.A No.886 of 2024 dt.02-02-2026
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in letter no. HO/DAD/06/13-14/838, whereby
and where under petitioner’s appeal dated
25.11.2013 against the order of Disciplinary
Authority has been upheld.
(iii) Issuance of an order, direction or writ in
the nature of Mandamus commanding the
respondent authorities to refund the amount
of gratuity payable to the petitioner.
(iv) Any other relief or reliefs to which the
petitioners may be found entitled to in the
facts and circumstances of the case.
3. The Hon’ble Single Judge disposed of the above-
mentioned writ petition vide an order dated 11th March, 2024
by passing the following order:-
10. I have gone through the entire records
and it was found that in the memo of charge
no pecuniary loss was mentioned and the
authority concerned has passed the order by
which the recovery has been ordered from the
amount of gratuity and leave encashment of
the petitioner. It appears that the authority
concerned without appreciating the fact, the
pecuniary loss was not the subject matter of
the present proceeding and no pecuniary loss
was mentioned in the memo of charge passed
the order of recovery.
11. In view of the aforesaid the order dated
19.10.2013 (Annexure-11) and 04.03.2014
(Annexure-13) are set aside and the
respondent-bank is directed to pay all the
consequential benefits to the petitioner
within a period of eight weeks from the date
Patna High Court L.P.A No.886 of 2024 dt.02-02-2026
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of the receipt/production of the copy of the
order.
12. The writ petition is allowed.
4. The writ petitioner has preferred L.P.A. No. 886 of
2024 on the ground that while disposing of the writ petition, the
Hon’ble Single Judge directed the respondent-bank to pay all
consequential benefits to the appellant/petitioner but no order
was passed for payment of interest despite the fact fact that the
benefits were illegally withheld for a period of eleven years.
5. The respondent, namely. Uttar Bihar Gramin Bank
filed L.P.A. No. 699 of 2024 assailing the judgment passed by
the Hon'ble Single Judge.
6. We have heard the learned counsels for the parties at
length. It is found from the documents filed in the writ petition
that when the appellant/petitioner was posted as a Branch
Manager of the respondent-bank, he was directed to file reply to
the show cause notice dated 2nd July, 2010 regarding financial
irregularities in contrasting a building spending approximately a
sum of Rs. 35 lakhs. The appellant/petitioner submitted a reply
on 7th July, 2010 denying all such allegations. It was also
submitted by him that he constructed a residential house at
Haribatikachowk, Bettiah in the name of his wife who was, at
the relevant point of time, a lecturer in the Department of
Patna High Court L.P.A No.886 of 2024 dt.02-02-2026
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History Mahanth Ramrup Goswami College, Bettiah, West
Champaran. He also stated that for construction of residential
house, he took loan of Rs. 1,50,000/- (Rupees One Lakh Fifty
Thousand) at the relevant point of time. The petitioner also
denied the allegation of criminal misappropriation of sum of Rs.
10,000,/-(Rupees Ten Thousand) and 12,000/-(Rupees Twelve
Thousand) while disbursing K.C.C. loan.
7. Subsequently, the Vigilance Officer submitted a
report on 9th February, 2011 stating, inter alia, that the
appellant/petitioner sanctioned and disbursed K.C.C. loan to
borrowers by an act prejudical to the interest of the bank with
some ulterior motives.
8. Subsequently, a departmental proceeding was
initiated against the appellant/petitioner, he was served with
memorandum of charge. The appellant/petitioner submitted
statement of defence and during the continuation of
departmental proceeding, the appellant/petitioner retired from
service w.e.f. 31st August, 2012 on superannuation.
9. In August, 2013, the inquiry report was submitted.
The Inquiry Officer held that four charges against the
appellant/petitioner were proved. Three charges were partially
proved and three charges were not proved. However, the
Patna High Court L.P.A No.886 of 2024 dt.02-02-2026
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appellant/petitioner was saddled with the punishment by the
disciplinary authority in the departmental inquiry for recovery
of Rs. 14,42,454/-(Rupees Fourteen Lakhs Forty Two Thousand
Four Hundred and Fifty Four) from the amount of gratuity and
leave encashment, as part of pecuniary loss of Rs. 21,16,251/-
(Rupees Twenty One Lakhs Sixteen Thousand Two Hundred
and Fifty One) only to the bank in terms of Regulation 39(1)(a)
(iv) of Uttar Bihar Gramin Bank (Officers & Employees)
Service Regulations, 2010. The petitioner preferred an appeal
against the order of the disciplinary authority but the appellate
authority vide an order dated 4th March, 2014 dismissed the said
appeal.
10. It is contended on behalf of the appellant/petitioner
that in the charge memo, the bank authority did not disclose the
pecuniary loss of the bank sustained due to the alleged wrongful
act by the appellant/petitioner.
11. By passing the impugned judgment, the Hon’ble
Single Judge allowed the C.W.J.C. No. 14867 of 2015 by setting
aside the order dated 19th October, 2013 and 4th March, 2014
directing the bank to pay all the consequential benefits to the
petitioner within a period of eight weeks from the date of
receipt/production of the copy of the order.
Patna High Court L.P.A No.886 of 2024 dt.02-02-2026
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12. It is further submitted by the learned counsel on
behalf of the appellant/petitioner that the respondent-bank duly
complied with the order passed by the Hon’ble Single Judge by
making payment of gratuity and leave encahsment to the
appellant/petitioner. However, the Hon’ble Single Judge while
disposing of the writ petition did not grant any interest on the
amount which was not paid to the appellant/petitioner after his
retirement. Therefore, the prayer of the petitioner is limited only
to the interest allegedly entitled by him over the gratuity and
leave encashment.
13. In L.P.A. No. 699 of 2024, the Uttar Bihar Gramin
Bank has assailed the impugned judgment dated 11th March,
2024 passed by the Hon’ble Single Judge in C.W.J.C. No. 14867
of 2015.
14. The Hon’ble Single Judge rightly held that the
memo of charge dated 22nd July, 2013 does not speak about any
allegation as to the pecuniary loss. The authority without
considering the nature of charges leveled against the
appellant/petitioner directed recovery of an amount of Rs.
14,42,454/-(Rupees Fourteen Lakhs Forty Two Thousand Four
Hundred and Fifty Four) from the gratuity and leave
enchashment of the appellant/petitioner of L.P.A. No. 886 of
Patna High Court L.P.A No.886 of 2024 dt.02-02-2026
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2024. The appellate authority failed to consider that amount of
gratuity cannot be attached as per the Service Regulation as well
as provisions of Payment of Gratuity Act. When pecuniary loss
was not alleged in the memo of charge, no amount can be
deducted from the retiral benefit of the appellant/petitioner. The
learned Writ Court considered the judgment of the Hon’ble
Supreme Court passed in M.V. Bijlani Vs. Union of India &
Ors reported in (2006) 5 SCC 88.
15. On due consideration of the entire materials
available on record, we do not find nay scope of interfere
against the impugned judgment.
16. Accordingly, L.P.A. No. 886 of 2024 is allowed.
17. Since a sum of Rs. 14,42,454/-(Rupees Fourteen
Lakhs Forty Two Thousand Four Hundred and Fifty Four) was
deducted from the gratuity and leave encashment of the
appellant/petitioner by the bank, he is entitled to get interest @
7% over the said amount from the date of passing of the order
by the disciplinary authority till the date of actual payment.
18. The appeal filed by the bank is dismissed on
contest.
19. The bank is directed to make payment of the
interest amount over the gratuity and leave encashment which
Patna High Court L.P.A No.886 of 2024 dt.02-02-2026
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has been deducted from the retiral benefit of the
appellant/petitioner within eight weeks from the date of this
order.
(Bibek Chaudhuri, J.)
( Dr. Anshuman, J.)
Jyoti Kumari/-
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