Sh. Pranab Mukerjee
President of India
President Office
Govt. of India
New Delhi
R/Sir
Reg: Settlement of Terminal Benefits (PF/Gratuity) and, Completion of Formalities.
Kindly refer to your letter dated on 03 feb PNB LDM OFFICE HOSHIARPUR, Punjab. In this connection it is submitted that you have made payment of terminal dues without my consent.
I want to get my housing loan account transferred to public housing loan scheme. Moreover excess amount has been adjusted against my terminal dues. I want to bring it into your kind notice that provident fund cannot be attached even by court orders.
You have adjusted even loan accounts against the outstanding balance lying in my PF Account.
It is requested to transfer my outstanding housing loan account into public housing loan scheme and deduct it from my monthly pension. It is also requsted to release my full PF without any adjustment along with up to date interest
Thanking you,
Yours faithfully,
Baldev Raj Mahi,
S/o Sh. Ram Asra,
Nawanshahar (Pb)
Ex-Manager,
Baba Deep Singh Nagar,
Saloh Road,
Backside K.C.Palace, Nawanshahr (Punjab)
DATE 03 Oct
Attach This Judgement of Supreme Court and Punjab and Haryana High Court With Unauthorised Terminal Dues Deducted from my provident fund own contribution which has violated the Supreme Court Rule.
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
Civil Writ Petition No.8966 of 2009 (O&M)
Date of decision: 09.05.2012
Dr. Iqbal Singh Dhillon (Retired Director, Youth Welfare), son of
Shri Thakur Singh, R/o House No.510, Milk Colony, Dhanas,
Chandigarh.
...Petitioner
versus
Panjab University, Chandigarh, through its Vice Chancellor, Sector
14, Chandigarh, and another.
...Respondents
CORAM: HON’BLE MR. JUSTICE K. KANNAN
&-
Present: Mr. Karambir Singh Chawla, Advocate,
for the petitioner.
Mr. Deepak Sibal, Advocate, for the respondents.
&-
1. Whether reporters of local papers may be allowed to see the
judgment? Yes.
2. To be referred to the reporters or not? Yes.
3. Whether the judgment should be reported in the digest? Yes.
&-
K.Kannan, J.
1. The writ petition is at the instance of a retired Director,
Youth Welfare, who claims that the provident fund and all the other
retiral dues have been denied on a specious ground that he had not
accounted for the advances that he had taken for conduct of several
youth festivals during his service. The liability had not been
determined upto his retirement and after he was allowed to be
retired, the entire terminal benefits have been withheld on the
Civil Writ Petition No.8966 of 2009 (O&M) - 2 -
ground that the liability of the petitioner to the respondent-
University is much more than the amount due to him. The
petitioner's grievance is that for an amount which has not been
ascertained and without holding an enquiry therefor to fix the
liability, the non-payment of terminal benefits was clearly untenable.
The issue, therefore, that what fall for consideration is whether the
amount due and payable for the accumulation of provident fund
could be denied by setting off the petitioner's entitlement against
alleged liability by him for advances received by him and which had
not been duly accounted for. Some more facts would be necessary
to come to the grips of the problem that is posed through this writ
petition.
2. The petitioner had joined the services as Director and
Head of the Department, Youth Welfare, Chandigarh, on 31.03.1978
and retired from the services on 30.04.2005. It is an admitted fact
that the petitioner had drawn advances from time to time from the
respondent-University in the capacity of the Director of the
Department of the Youth Welfare from 1978 to 2005. Grants and
subsidies appear to have been given to the petitioner for onward
disbursement to the Colleges for holding youth festivals etc. Out of
several advances which had been given to the petitioner, the audit
had an objection to 33 advances along with 25 subsidies that
remained unadjusted and unaccounted. The petitioner had been
served with several notices to reconcile the accounts and finalize the
Civil Writ Petition No.8966 of 2009 (O&M) - 3 -
same by duly accounting for the advances made to him. The
petitioner would contend that he had given all the explanations and
the Vice Chancellor of the University had himself given post-facto
sanction approval in respect of two objections pertaining to
expenditure/utilization of about Rs.1, 40, 000/- on 08.04.2000. With
respect to 31 other advances, the petitioner would claim that the
copies of sufficient proofs from official records including the copies
of the Dispatch Registers had been given with full details of fund
utilization, accounts adjustment and expenditure reports from time
to time. The petitioner would rely on several communications which
he had with the Accounts Department and full details which he had
furnished to the University and when on a particular incident on
20.01. the office of the Registrar rejected the explanations and
proofs given by the petitioner by letter dated 20.01. the
petitioner had sought to give a clarification for the doubts raised
through his letter dated 16.02.2004 giving the necessary
documents/information for accounts adjustments.
3. The truth is that respondents were demanding due
accounting for the advances received by the petitioner and the
receipt of the advances were themselves not denied. The
justification for the non-payment of the provident fund amount by
the University is by its reliance on Regulation 6 of the Provident
Fund of the University Employees Regulation, which is reproduced
hereunder:-
Civil Writ Petition No.8966 of 2009 (O&M) - 4 -
“A deduction from the Fund, of an amount not
exceeding the amount of University contribution, with
interest, can be made from the subscriber in respect of
dues unde a liability to the University.”
The point that would fall consideration is whether the deduction
could be made in respect of the amount which has not been
determined yet. Assuming that the amount was drawn by an
employee and not duly accounted during his service, would it be
possible for the employee to deny the payment due to him and treat
the liability cast on the employee as finalized, although the
employee objects to the deductions? The answer to the question is
straight and simple. The entitlement to a provident fund is assessed
by the employee's own contribution to the organization during his
service coupled with the contributions made by the employer by way
of statutory mandates. The amount is a statutory entitlement and if
any liability were to be deducted on the retirement of an employee, it
could be drawn only with reference to the amounts which are
ascertained by a due process.
4. It must be noticed in this case that the liability cast on
the petitioner is not for any amount received on the eve of his
retirement, but these advances purport to be during the entire period
of service for over 20 years. The employer, at all times, shall
conduct his finances in such a way that for an amount which is
advanced to an employee for which the employee is responsible and
Civil Writ Petition No.8966 of 2009 (O&M) - 5 -
duty bound to account, the demand for such accounting should be
secured and the liability finalized during the service itself. There are
two options open when the liability is not admitted: (i) not to allow
the employee to retire, constitute an enquiry and finalize the liability
of the employee to the employer; (ii) invoke any special provisions
that allow for constitution of an enquiry subsequent to the retirement
in the manner that the rules provides for. In a situation where the
amount sought to be deducted is disputed by the employee, it shall
be impermissible for the employer to assume the amounts to be
finally assessed. This would lead to arbitrary exercises of an
employer completely defeating an employee's retiral benefits in the
evening years of his life. The reliance on Regulation 6 should be
possible only in situations where the liability is clearly admitted. If
the liability is denied, without engaging a proper adjudication and a
final determination of such liability, the employer shall not defeat
the employee from claiming the entire retiral dues.
5. The denial to the petitioner's demand is made on a plea
by the respondent-University through its letter dated 08.09.2008 that
the amount would not be paid till the compliance of audit
requirements. I find this reply itself to be irresponsible. The
petitioner could have no control over when the audit will close its
queries. When the queries are raised by the Audit Department and
in the perception of the employer, the employee is not able to give
satisfactory replies, it must move towards a final process of either
Civil Writ Petition No.8966 of 2009 (O&M) - 6 -
constituting an enquiry or press for an adjudicatory mechanism in
the manner contemplated by rules or by resort to a common law
remedy of an institution of a suit to finalize the liability. If the
liability is not finalized, there is no manner by which the employer
can treat the liability as ascertained at its own whims.
6. The University has given a list of unadjusted advances
under R-1. I am not impressed by a mere reference to several entries
which have not been finalized. The receipt of amounts themselves
are not in denial. It is the statement of the petitioner's claims that
they have been expended which is denied by the University. They
surely could not have been resolved by merely engaging the
employee in a long drawn volley of communications. The
communications must have stopped and an adjudicatory process
started.
7. There have been several judicial approaches about how
serious the issue is when it comes to the duty of an employer to
make the disbursals of the retiral benefits. It is true that adjustments
against the provident fund accumulations themselves would not be
possible for any liability during his service unless there are specific
provisions allowing for such adjustments. In this case, Regulation 6
duly makes possible such adjustments. I see no need to refer to
several decisions which the learned counsel for the petitioner has
cited where adjustments of liability against provident fund dues have
been quashed, where there were no regulations or rules providing for
Civil Writ Petition No.8966 of 2009 (O&M) - 7 -
such adjustments. There are also decisions which hold that no part
of the amount due for the provident fund could be a subject of
attachment. We are not dealing with such like situations and I would
not, therefore, find a reason to apply them. In Gorakhpur
University and others Versus Dr. Shitla Prasad Nagendra and
others-AIR 2001 Supreme Court 2443, an attempt to adjust the
pension and retiral dues against liability of a retired teacher, who
was continuing to occupy the official quarter, was found to be
illegal, on a reasoning that the pension and gratuity were no longer
matters of any bounty to be distributed by Government but are
valuable rights acquired and property in their hands and any delay in
settlement and disbursement whereof should be viewed seriously.
The Supreme Court held that lethargy shown by the authorities in
not taking any action according to law to enforce their right to
recover possession of the quarters from the respondent or fix
liability or determine the so-called penal rent would itself deny them
the right to adjustment. I would apply the same logic in this case,
for, an employee, who denies his liability, cannot be fastened with
such liability in the absence of pro-active approach to have the
liability determined through a proper legal process. More so, in this
case, the liability that was sought to be fastened, was not for an
advance that was received at or just before the retirement but for the
advances made over a period of 20 years during his service.
Civil Writ Petition No.8966 of 2009 (O&M) - 8 -
8. I find the attitude of the employer in making deductions
from the provident fund without engaging in any form of
adjudicatory process admissible by rules to be indefensible. The
non-release of the provident fund dues on alleged adjustments
against liability which is not determined, is untenable. The petitioner
shall be paid the provident fund dues forthwith with simple interest
at 18% per annum. The petitioner has claimed damages of Rs.2
lakhs for the unjust denial of his entitlements. Having regard to the
award of interest, I decline damages as a separate head of claim.
9. The writ petition is, therefore, allowed directing the
respondents to release the provident fund with simple interest at
18% per annum with cost assessed at Rs.10, 000/-.
(K.KANNAN)
JUDGE
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