Holding

The Payment of Gratuity Act, 1972, being a statutory code, prevails over the non‑statutory Coal India Conduct Discipline and Appeal Rules, and forfeiture of gratuity is invalid as the conditions of Section 4(6) are not satisfied.

Summary

Jaswant Singh Gill, a chief general manager of Bharat Coking Coal Ltd., faced departmental proceedings for alleged shortage of coal. While the disciplinary inquiry was pending, he retired and applied for gratuity under the Payment of Gratuity Act, 1972, which was denied on the ground that his gratuity was forfeited by the disciplinary authority. The authority ordered forfeiture without terminating his service or quantifying any loss, relying on the Coal India Executives' Conduct Discipline and Appeal Rules, 1978. The Supreme Court held that the Rules are non‑statutory and cannot override the statutory scheme of the Gratuity Act; forfeiture under Section 4(6) requires termination of service and a quantifiable loss, which were absent. Consequently, the order of forfeiture was set aside and the appellant was entitled to his gratuity.

Issues considered

The provisions of the Payment of Gratuity Act, 1972, whether they prevail over the Coal India Executives' Conduct Discipline and Appeal Rules, 1978.
Whether gratuity can be forfeited under Rule 27/34.3 of the Rules when the employee has retired and the disciplinary authority has not terminated service or quantified loss.
Whether the disciplinary authority had jurisdiction to withhold gratuity in the present circumstances.

Legislation cited

Companies Act, 1956
Payment of Gratuity Act, 1972s. 3, s. 4, s. 4(6)(a), s. 4(6)(b), s. 7(3), s. 7(3A)

Subjects

Payment of Gratuity Actforfeiture of gratuitydisciplinary proceedingsstatutory rightCoal India Rulesretirementtermination of servicenon‑obstante clausestatutory vs. non‑statutory rules

Judgment

A JASWANT SINGH GILL
v.
MIS. BHARAT COKING COAL LTD. AND ORS.

NOVEMBER I0, 2006

B [S.B. SINHA AND MARKANDEY KATJU, JJ.]

Payment of Gratuity Act, 1972:

C Section 4(6)(a) and (b)-Allegation of shortage of stock-Disciplinary
proceeding commenced during pendency of which employee retired-
Disciplinary Authority found him guilty-Order of forfeiture of gratuity--
Correctness of-Held: Not correct as the disciplinary authority neither
terminated him nor quantified the loss or damage caused to employer as
required under Sections 4(6)(a) and (b)-Coal India Executives' Conduct
D Discipline and Appeal Rules, 1978-Rules 27, 34.2 and 34.3
Statutory Right:

Statutory right accrued cannot be impaired by reason of a rule which·
does not have the force of the statute.
E
Departmental proceedings were commenced against appellant on the
allegation of shortage of coal, during pend ency of which he was allowed to
retire. His claim for payment of gratuity under the Payment of Gratuity Act,
1972 was dismissed. Disciplinary Authority found him guilty and passed order
of forfeiture of his gratuity. On application filed by the appellant, Assistant
F Labour Commissioner held that the appellant was not terminated for offence
mentioned under Section 4(6)(a) and (b) of the Act, hence order of forfeiture
of gratuity was not tenable.

On appeal, appellate authority held that the punishment order did not
G state that the services were terminated nor there is anything about extent/
quantification of damage or loss, hence question of forfeiture of gratuity does
not arise as per Section 4(6). High Court upheld the order of the Appellate
Authority.

In appeal to this Court, appellant contended that the provisions of the
H 1064
JASWANT SINGH GILL v. BHARATCOKING COAL LTD. 1065
Payment of Gratuity Act, 1972 shall prevail over the rules framed by Coal A
India Limited, the holding company of Respondent No. 1, known as Coal India
Executives' Conduct Discipline and Appeal Rules, 1978.

Allowing the appeal, the Court
HELD: 1. The Coal India Executives' Conduct Discipline and Appeal B
Rules, 1978 framed by Coal India Limited are not statutory rules. They have
been made by the holding company of Respondent No. 1. The provisions of the
Payment of Gratuity Act, 1972 therefore, must prevail over said Rules.
[1071-C)
2.1. Rule 27 of the Rules provides for recovery from gratuity only to
the extent of loss caused to the company by negligence or breach of orders or C
trust. Penalties, however, must be imposed so long an employee remains in
service. Even if a disciplinary proceeding was initiated prior to the attaining
of the age of superannuation, in the event, the employee retires from service,
the question of imposing a major penalty by removal or dismissal from service
would not arise. Rule 34.2 no doubt provides for continuation of a disciplinary D
proceeding despite retirement of employee if the same was initiated before
his retirement but the same would n<'t mean that although he was permitted
to retire and his services had not been extended for the said purpose, a major
penalty in terms of Rule 27 can be imposed. [1071-D-E)
2.2. Power to withhold penalty contained in Rule 34.3 of the Rules must
be subject to the provisions of the 1972 Act. Gratuity becomes payable as E
soon as the employee retires. The only condition is rendition of five years
continuous service. A statutory right accrued, thus, cannot be impaired by
reason of a rule which does not have the force of a statute. The Rules in any
event do not provide for withholding of retrial benefits or gratuity.
[1071-F-G]
F
3.1. The 1972 Act is a complete code covering the essential provisions
of a scheme for a gratuity. It not only creates a right to payment of gratuity
but also lays down the principles for quantification thereof as also the
conditions on which he may be denied therefrom. Sub-section (6) of Section
4 of the Act contains a non-obstante clause vis-a-vis sub-section (1) thereof.
As by reason thereof, an accrued or vested right is sought to be taken away, G
the conditions laid down thereunder must be fulfilled. The provisions
contained therein must, therefore, be scrupulously observed.
ll071-H; 1072-A-B}
3.2. Clause (a} of Sub-section (6) of Section 4 of the Act speaks of
termination of service of an employee for any act, willful. omission or H
1066 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R.

A negligence causing any damage. However, the amount liable to be forfeited
would be only to the extent of damage or loss caused. The disciplinary
authority has not quantified the loss or damage. It was not found that the
damages or loss caused to Respondent No. 1 was more than the amount of
gratuity payable to the appellant [1072-B-C]
B 3.3. Clause (b) of Sub-section (6) of Section 4 of the Act also provides
for forfeiture of the whole amount of gratuity or part in the event his services
had been terminated for his riotous or disorderly conduct or any other act of
violence on his part or if he has been convicted for an offence involving moral
turpitude. Conditions laid down therein are also not satisfied. Termination of
services for any of the causes enumerated in Sub-section (6) of Section 4 of
C the Act, therefore, is imperative. [1072-C-D]

Balbir Kaur and Anr. v. Steel Authority ofIndia Ltd. and Anr., (2000) 6
SCC 493 and Bhagirathi Jena v. Board ofDirectors, 0.S.F.C. & Ors., [1999)
3 sec 666, referred to.

D 4. The controlling authority was exercising a power under a statute and,
therefore, it having ~een authorised to administer the provisions of the Act
was entitled to determine as to whether any case has been made out to deny
the right of the appellant to obtain the amount of gratuity in accordance with
the provisions thereof. He, thus, did not exceed his jurisdiction.
[1073-H; 1074-A]
E
Mis. Bharath Gold Mines Ltd. v.. The Regional Labour Commissioner
(Central), Bangalore and Ors., (1986) Lab. I.C. 1976, held inapplicable.
D. V. Kapoor v. Union ofIndia and Ors., [1990) 4 SCC 314, distinguished.

Management of Tournamulla Estate v. Workmen, [1973) 3 SCR 762,
F referred to.

CIVIL APP~LLATE JURISDICTION: Civil Appeal No.4770 of2006.

From the final Judgment and Order dated 26-9-2003 of the High Court
of Jharkhand at Ranchi in Letters Patent Appeal No.309/2002.
G
C.M. Khanna and Rameshwar Prasad Goyal, for the Appellant.

Ajit Kumar Sinha, for the Respondent.

The Judgment of the Court was delivered by
H
.. JASWANT SINGH GILL v. BHARAT COKING COAL LTD. [S.B. SINHA, J.] 1067

S.B. SINHA, J. Leave granted. A
Respondent Bharat Coking Coal Limited is a government company
incorporated and registered under the Companies Act, 1956. Appellant herein
joined as a Chief General Manager. He was working in a coking coal mine
which vested in the Bharat Coking Coal Limited pursuant to an appropriate
notification issued by the Central Government either under Section 7 of the B
Coking Coal Mines (Nationalisation) Act, 1972 or Section 5 of the Coal Mines
(Nationalisation) Act, 1973.

A chargesheet was issued against him on the allegation of shortage of
stock of coal in Lodna area of Respondent No. l. During pendency of the
departmental proceeding, thie appellant was allowed to retire. He applied for C
payment of gratuity under the Payment of Gratuity Act, 1972 (for short "the
Act") in the year 1998 which was denied. He, therefore, filed an application
before the Additional Labour Commissioner, Dhanbad for payment of gratuity
on 4.01.2000. Notices having been issued by the said authority, Respondent
No. l filed reply thereto inter alia contending that the gratuity amount D
payable to the appellant had been withheld for the purpose of making of
adjustment, in the event recovery from the said amount is directed to be made
in the disciplinary proceedings. The controlling authority on the said premise
allowed the disciplinary authority to proceed in the matter. Upon conclusion
of the departmental enquiry, the disciplinary authority by an order dated
5.07.2000 opined: E
"Whereas the undersigned has gone through the chargesheet dated
24.02.97 issued to Shri Gill, enquiry proceedings and report oflnquiring
Authority dated 18.08.99 and other documents related to the case
placed before him. After careful consideration of all the documents F
placed in the case file, the undersigned, is convinced that Shri Gill had
a major role in causing the-shortages in the coal stock and conniving
with the measurement team in concealing the shortages at the time of
annual measurement.

Now, therefore, the undersigned, Chairman-cum-Managing Director, G
Coal India Limited being the Disciplinary Authority in exercise of
power conferred by the Conduct Discipline and Appeal Rules, 1978
ofCIL, considering the seriousness of the offence would have imposed
the punishment of dismissal from the service of Shri J.S. Gill, the. then
Chief Generai Manager, BCCL, but for his superannuation. The
undersigned also hereby orders forfeiture of his gratuity." H
1068 SUPREME COURT REPORTS (2006) SUPP. 8 S.C.R. -
A The Assistant Labour Commissioner (Central), Dhanbad in the application
filed by the appellant under the Act, on the other hand, by an order dated
11.04.2001 held:

"It is clear that Shri J.S. Gill retired on superannuation as per notice
for retirement w.e.f. 30.4.98, therefore, he is entitled for the payment
B of gratuity under the P.G. Act, 1972. As per section 4(6)(a) & 4(6)(b)
. of the P~G. Act, 1972, gratuity can be forfeited partially or wholly when
the service of the employee is terminated for any act, which constitute
an offence involving moral turpitude provided that such offence is
committed by him in the course of employment. In the instant case,

c the services of Sri J.S. Gill has not been terminated for the offence
mentioned under4(6)(a) & 4(6)(b) of the P.G. Act, 1972. Therefore, the
order of forfeiture of gratuity of Sri J. S. Gill issued by the C.M.D. and
Disciplinary Authority of CIL is not tenable. The basic requirement
of termination of service for any of the misconduct as enumerated
under section 4(6)(a) & 4(6)(b) of the P.G. Act, 1972 has not been
D fulfilleq before the issue of order of forfeiture of gratuity."

On an appeal preferred by Respondent No. 1, the appellate authority
held:

"3. The appellant has appealed against the direction of the Cor.trolling
E Authority directing to pay the gratuity to the respondent on the
ground that it was beyond his jurisdiction for enter into merit of the
forfeiture of the gratuity amount by the competent authority under
Section 4(6) of the Act for the reasons mentioned therein. On the
other hand the respondent had also filed an appeal about not allowing
interest by the Controlling Authority for delayed payment of gratuity
F which is numbered as P.G. Appeal/(53)/2001. Since the matter of
appeal filed by the Appellant and the respondent is against the same
direction of the controlling authority hence both cases heard jointly
and their oral argument were heard and hearing was concluded on that
date.
G
4. *** ***
5. From perusal of the case record of the Controlling Authority it is
observed that the respondent submitted an application in form N on
5.1.2001 after his superannuation from 30.4.1998 wheri the appellant
did not pay the gratuity amount. It is observed from the decision/
H
JASWANT SINGH GILL v. BHARAT COKING COAL LTD. [S.B. SINHA, J.] 1069

direction of the Controlling Authority that he has rightly determined A
the amount of gratuity as well as correctly interpreted Section 4(6) of
the Payment of Gratuity Act, 1972. For Application of Section 4(6) it
is pre-condition that the service should have been terminated for any
act. For the purpose of section 4(6)(a) such act should be about
Willful omission or negligence causing any damage or loss to, or
destruction of, property belonging to the employer, shall be forfeited B
to the extent of the damage or loss so caused and for the purpose of
sub-section 4(6)(b) the gratuity can be forfeited wholly or partially
only if the services of such employee have been terminated for his
riotous or disorderly conduct or any other act of violence etc. on his
part. It is observed from the punishment order that the services have C
not been terminated and rather could not have been terminated and
also does not indicate the extent of damage of loss. Since neither the
service terminated nor there is anything about extent/ quantification
of damage or loss in punishment order, question of forfeiture of
gratuity does not arise as per Section 4(6)."
D
Aggrieved by and dissatisfied with the orders of the authority under
the Act as also the appellate authority, a writ petition was filed by Respondent
No. 1 in the High Court of Jharkhand at Ranchi which was marked as W.P.(C)
No. 5957 of200l. By a judgment and order 13.12.2001, a learned Single Judge
of the said refused to interfere therewith and dismissed the writ petition. In E
an intra-court appeal preferred by Respondent No. 1, a Division Bench of the
said Court, however, set aside the judgment and order of the learned Single
Judge opining:

"In our opinion, the Controlling Authority under the Act being not
the appellate or the Competent Authority against the order dated F
5.7.2000 passed by the CMD-cum-Disciplinary Authority inflicting
punishment of forfeiture of gratuity against the respondent No. 3 the
comments on the said order as well as interference therewith either by
him or the Appellate Authority under section 7(7) of the Act is
unwarranted and without jurisdiction."
G
The appellant is, thus, before us.

The short question which arises for consideration in this appeal is as
to whether the provisions of the said Act shall prevail over the rules framed
by Coal India Limited, holding company of Respondent No. 1, known as Coal
India Executives' Conduct Discipline and Appeal Rules, 1978 (forshort "the H
1070 SUPREME COURT REPORTS (2006) SUPP. 8 S.C.R.
..
A Rules"). Indisputably, the appellant was governed by the Rules. Rule 27
provides for the nature of penalties including 'recovering from pay or gratuity
of the whole of or part of any pecuniary loss caused to the company by
negligence or breach of orders or trust'. Major penalties prescribed in Rule
27, however, include reduction to a lower grade, compulsory retirement, removal
B from service; and dismissal. Rule 34 provides for special procedure in certain
cases stating:

"34 .2 Disciplinary proceeding, if instituted while the employee was in
service whether before his retirement or during his re-employment
shall, after the final retirement of the employee, be deemed to be
proceeding and shall be continued and concluded by the authority by
c which it was commenced in the same manner as if the employee had
continued in service.

34.3 During the pendency of the disciplinary proceedings, the
Disciplinary Authority may withhold payment of gratuity, for ordering
--.
the recovery from gratuity of the whole or part of any pecuniary loss
D
caused to the company if have been guilty of offences/ misconduct
as mentioned in Sub-section (6) of Section 4 of the Payment of
Gratuity Act, 1972 or to have caused pecuniary loss to the company
by misconduct or negligence, during his service including service
rendered on deputation or on re-employment after retirement. However,
E the provisions of Section 7(3) and 7(3A) of the Payment of Gratuity
Act, 1972 should be kept in view in the event of delayed payment, in
the case the employee is fully exonerated."

The Act was enacted with a view to provide for a scheme for payment
of gratuity to employees engaged inter alia in mines. Section 3 of the Act
F provides for appointment of an officer to be the controlling authority.
Controlling authority is to be responsible for administration of the act. Different
authorities, however, may be appointed for different areas. Section 4 of the
Act entitles an employee to gratuity after he ha~ rendered continuous service
for not less than five years inter alia on his superannuation. Sub-section
G (6) of Section 4 contains a non-obstante clause stating:

"(a) the gratuity of an employee, whose services have been terminated
for any act, wilful 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;
H
JASWANT SINGH G'LL v. BHARAT COKING COAL LTD. [S.B. SINHA,J.] 1071
(b)the gratuity payable to an employee may be wholly or partially A
forfeited

(i)if the services of such employee have been terminated for his
riotous or disorderly conduct or any other act or violence on his part,
or
B
(ii)if th• services of such employee have been terminated for any act
which constitutes an offence involving moral turpitude, provided that
such offence is committed by him in the course of his employment."

The Rules fra'lled by the Coal India Limited are not statutory rules.
They have been made by the holding company of Respondent No. 1. C
The provisions of the Act, therefore, must prevail over the Rules. Rule
27 of the Rules provides for recovery from gratuity only to the extent of loss
caused to the company by negligence or breach of orders or trust. Penalties,
however, must be imposed so long an employee remains in service. Even if
a disciplinary proceeding was initiated prior to the attaining of the age of D
superannuation, in the event, the employee retires from service, the question
of imposing a major penalty by removal or dismissal from service would not
arise. Rule 34.2 no doubt provides for continuation of a c!isciplinary proceeding
despite retirement of employee ifthe same was initiated before his retirement
but the same would not mean that although he was permitted to retire and E
his services had not been extended for the said purpose, a major penalty in
terms of Rule 27 can be imposed.

Power to withhold penalty contained in Rule 34.3 of the Rules must be
subject to the provisions of the Act. Gratuity becomes payable as soon as
the employee retires. The only condition therefor is rendition of five years F
continuous service.

A statutory right accrued, thus, cannot be impaired by reason of a rule
which does not have the force of a statute. It will bear repetition to state that
the Rules framed by Respondent No. I or its holding company are not
statutory in nature. The Rules in any event do not provide for withholding G
of retrial benefits or gratuity.

The Act provides for a closely neat scheme providing for payment of
gratuity. It is a complete code containing detailed provisions covering the
essential provisions of a scheme for a gratuity. It not only creates a right to
H

...
1072 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A payment of gratuity but also lays down the principles for quantification
thereof as also the conditions· on which he may be denied therefrom. As
noticed hereinbefore, sub-section (6) of Section 4 of the Act contains a non-
obstante clause vis-a-vis sub-section ( 1) thereof. As by reason thereof, an
accrued or vested right is sought to be taken away, the conditions laid down
B thereunder must be fulfilled. The provisions contained therein must, therefore,
be scrupulously observed. Clause (a) of Sub-section (6) of Section 4 of the
Act speaks of termination of service of an employee for any act, Willful
omission or negligence causing any damage. However, the amount liable to
be forfeited would be only to the extent of damage or loss caused. The
disciplinary authority has not quantified the loss or damage. It was not found
C that the damages or loss caused to Respondent No. 1 was more than the
amount of gratuity payable to the appellant. Clause (b) of Sub-section (6) of
Section 4 of the Act also provides for forfeiture of the whole amount of
gratuity or part in the event his services had been terminated for his riotous
or disorderly conduct or any other act of violence on his part or if he has
been convicted for an offence involving moral turpitude. Condiiions laid
D down therein are also not satisfied.

Termination of services for any of the causes enumerated in Sub-
section (6) of Section 4 of the Act, therefore, is imperative.

In Balbir Kaur and Anr. v. Steel Authority of India Ltd and Anr., [2000]
E 6 sec 493, this Court opined:

" ... As regards the provisions '.Jfthe Payment of Gratuity Act, 1972 (as
amended from time to time) it is no longer in the realm of charity but
a statutory right provided in favour of the employee ... "

F Interpreting Section 4(1) of the Act, it was held:

" ... We shall come bar'.k to the deposit of the provident fund but as
regards the gratuity amount, be it noted that there is a mandate of the
statute that gratuity is to be paid to the employee on his retirement
or to his dependants in the event of his early death the introduction
G of the Family Pension Scheme by which the employee is compelled to
deposit the gratuity amount, as a matter of fact runs counter to this
beneficial piece of legislation (Act of 1972). The statutory mandate is
unequivocal and unambiguous in nature and runs to the effect that
the gratuity is payable to the heirs of the nominees of the employees
H concerned but by the introduction of the Family Pension Scheme, this
JASWANT SINGH GILL"· BHARA TCOKING COAL LID. [S.B. SINHA, J.] 1073
mandate stands violated and as such the same cannot but be termed A
to be illegal in nature. We do find some substance in the contention
as raised, a mandatory statutory obligation cannot be trifled with by
adaptation of a method which runs counter to the statute. It does not
take long to appreciate the purpose for which this particular Famiiy
Pension Scheme has been introduced by deposit of the provident
fund and the gratuity amount and we are not expressing any opinion B
in regard thereto but the fact remains that statutory obligation cannot
be left high and dry on the whims of the employer irrespective of the
factum of the employer being an authority within the meaning of
Article 12 or not."

We may notice that this Court in Bhagirathi Jena v. Board ofDirectors,
c
O.S.FC. & Ors., [1999] 3 SCC 666 was concerned with interpretation of
Regulation 17 of the Orissa State Financial Corporation Employees' Provident
Fund Regulations, 1959. This Court noticed the relevant Regulations and
opined that therein no specific provision existed for deducting any amount
frotn the provident fund consequent to any misconduct determined in D
departmental enquiry, nor was there any provision for continuance of
departmental enquiry after superannuatiOn. rt was in the aforementioned
situation opined :

"In view of the absence of such a provision in the abovesaid
regulations, it must be held that the Corporation had no legal authority E
to make any reduction in the retiral benefits of the appellant. There
is also no provision for conducting a disciplinary enquiry after retirement
of the appellant and nor any provision stating that in case misconduct
is established, a deduction could be made from retiral be.1efits. Once
the appellant had retired from service on 30-6-1995, there was no
F
authority vested in the Corporation for continuing the departmental
enquiry even for the purpose of imposing any reduction in the retiral
benefits payable to the appellant. In the absence of such an authority,
it must be held that the enquiry had lapsed and the appellant was
entitled to full retiral benefits on retirement.''
G
These aspects of the matter although have been considered by the
authority under the Act as also the appellate authority wherewith the learned
Single Judge agreed, the Division Bench posed unto itself a wrong question
and, thus, misdirected itself while passing the impugned judgment. The
controlling authority was exercising a power under a statute and, therefore,
H
0

1074 SUPREME COURT REPORTS [2006) SUPP. 8 S.C.R.

A it having been authorised to administer the provisions of the Act was entitled
to determine as to whether any case has been made out to deny the right of
the appellant to obtain the amount of gratuity in accordance with the
provisions thereof. He, thus, did not exceed his jurisdiction.

Reliance has been placed by Mr. Rana Mukherjee, learned counsel
B appearing on behalf of Respondent No. 1 on Management of Tournamulla
Estate v. Workmen [1973] 3 SCR 762. In that case, this Court was concerned
with a scheme of gratuity. The scheme contained a provision which was in
pari materia with Section 4(6)(b) of the Act. The said scheme was upheld
stating:
c "Although the provisions of this statute would not govern the decision
of the present case, the importance of the enactment lies in the fact
that the principle which was laid down in the Delhi Cloth Mills case
with regard to forfeiture of gratuity in the event of commission of
gross misconduct of the nature mentioned above, has been
D incorporated in the statute itself. Even otherwise, such a rule is
conducive to industrial harmony and is in consonance with public
policy."

Reliance has also been placed upon a decision of Karnataka High Court
in Mis. Bharath Gold Mines Ltd v. Th! Regional Labour Commissioner
E (Central), Bangalore and Ors., (1986) Lab. l.C. 1976. In that case it was held
that before the amount of gratuity can be directed to be forfeited, an opportunity
of hearing must be given. The said decision may not have any application
to the fact of the pre!sent case as opportunity of hearing was given both to
the employer as also the employee by the authority.

F Reliance placed by Mr. Mukherjee on a decision of this Court in D. V.
Kapoor v. Union of India and Ors., [ 1990] 4 SCC 314 is misplaced. Therein
having regard to "ihe provisions of the Civil Services and Conduct Rules, it
was held that a departmental proceeding can be continued even after allowing
the delinquent employee to voluntarily retire .. However, therein the rules
G provided for withholding or withdrawing pension permanently. In that case
itself, it was opined:

" ... The right to gratuity is also a statutory right. The appellant was not
charged with nor was given an opportunity that his gratuity would be
withheld as a measure of punishment. No provision of law has been
H brought to our notice under which, the President is empowered to
... JASWANT SINGH GILL v. BHARATCOKINGCOAL LTD. [S.B. SINHA, J.) 1075
withhold gratuity as well, after his retirement as a measure of A
punishment. Therefore, the order to withhold the gratuity as a measure
of penalty is obviously illegal and is devoid of jurisdiction."

The said decision, thus, was rendered having regard to the rule which
was in operation.
B
For the reasons aforementioned, the impugned judgment cannot be
sustained which is set aside accordingly. The appeal is allowed. The appellant
shall also be entitled to costs. The counsel's fee assessed at Rs. 25,000/-.

D.G. Appeal allowed.