PNB Regulations | Bank Can’t Withhold PF & Gratuity Without Proving Actual Loss Caused By Employee: Supreme Court
Case: Jyotirmay Ray v. Field General Manager, Punjab National Bank
Coram: Justices JK Maheshwari and Justice K.V. Vishwanathan
Case No.: CIVIL APPEAL NO. 6611 OF 2015
Court Observation: The Single Judge was right in observing that the Board of Directors has not afforded an opportunity to the appellant on the issue of causing loss or damage to the Bank, prior to the passing of the resolution of appropriation of the contribution of the Bank from the provident fund account of the appellant.
“The explanation as given in clause 14(1)(a) of the said Circular clarifies that in case of termination after at least 10 years of service in the Bank, if such termination is not by way of punishment as dismissal or removal, the gratuity may be paid. In the said explanation, the denial of gratuity to an employee, who is inflicted with the major penalty of compulsory retirement, has not been included. Therefore, the gratuity is payable to the appellant under the 1979 Regulations in terms of the explanation under the said Circular.”
“No doubt, the irregularities committed by the respondent may have exposed the Bank to such losses. However, that is entirely different from the loss having been suffered by the bank. It is for this reason that it was incumbent upon the appellant Bank to mention specifically the actual loss having been suffered, if it suffered, in the show cause notice itself with particulars of that loss to enable the respondent to meet the same. We are, therefore, of the opinion that the show cause notice or the final orders passed, forfeiting the gratuity, do not meet the legal requirements and have to be set aside.”
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PNB Regulations, Supreme Court
