Skip to content


S.S. Viswanathan Vs. Union of India, Madras - Court Judgment

LegalCrystal Citation
SubjectService
CourtChennai High Court
Decided On
Case NumberLetters Patent Appeal No. 41 of 1964
Judge
Reported inAIR1968Mad87
ActsConstitution of India - Article 226
AppellantS.S. Viswanathan
RespondentUnion of India, Madras
Cases ReferredMotipur Zamindari Co. v. Their Workers
Excerpt:
.....establishment code - whether appellants could institute action for recovery of special provident fund contribution - in view of unsatisfactory record of service of appellants railway authorities exercised their discretion under sub-rule (5) of rule 1314 by contributing only sixty percent of amount due under formula relating to special provident fund contribution - held suit instituted by appellants not maintainable. - - i, if a subscriber, being a non-gazetted officer, retired, and 'the controlling officer is satisfied that the service of the subscriber has been good, efficient and faithful, the controlling officer may order that in addition to the contribution credited under the rules 1311 to 1313 the subscriber's provident fund account shall be credited with a special..........madras, for recovery of an amount of rs. 1,582-12-0, being the arrears of salary and provident fund contribution, and for costs, against the general manager, southern railway, madras. the suit was originally dismissed and it went up in appeal to the learned first additional judge of the city civil court, who thought that the plaintiff was entitled to the decree and he decreed the suit. the matter came up before kunhamed kutti j. in s.a. no. 418 of 1961, and the learned judge allowed the second appeal by the union of india, represented by the general manager, southern railway, madras, and held that the claim for special provident fund contribution ought not to have been decreed. to the extent to which the second appeal was allowed, the learned judge granted leave.(2) hence, the only.....
Judgment:

M. Anantanarayanan, C.J.

(1) The Letters Patent Appeal has been instituted by one S.S. Viswanathan, who filed O.S. No. 544 of 1957 in the City Civil Court, Madras, for recovery of an amount of Rs. 1,582-12-0, being the arrears of salary and provident fund contribution, and for costs, against the General Manager, Southern Railway, Madras. The suit was originally dismissed and it went up in appeal to the learned First Additional Judge of the City Civil Court, who thought that the plaintiff was entitled to the decree and he decreed the suit. The matter came up before Kunhamed Kutti J. in S.A. No. 418 of 1961, and the learned judge allowed the second appeal by the Union of India, represented by the General Manager, Southern Railway, Madras, and held that the claim for special provident fund contribution ought not to have been decreed. To the extent to which the second appeal was allowed, the learned Judge granted leave.

(2) Hence, the only point involved in this Letters Patent Appeal by the plaintiff (S.S. Viswanathan) is the question whether, under the circumstances of the case, he could institute such as action in common law for recovery of the special provident fund contribution, which the Railway declined to contribute.

(3) Before proceeding to the question whether such a remedy could possibly lie, the admitted rules governing this may be briefly referred to. Under Rule 1314 of the Indian Railway Establishment Code, Vol. I, if a subscriber, being a non-gazetted officer, retired, and 'The Controlling officer is satisfied that the service of the subscriber has been good, efficient and faithful, the Controlling officer may order that in addition to the contribution credited under the rules 1311 to 1313 the subscriber's provident fund account shall be credited with a special contribution calculated in the manner prescribed below.'

There is, admittedly, a formula to be employed, where this special contribution to the provident fund is being made by the Railway authorities, on the retirement of a subscriber, like the appellant, of the class referred to. But there is a further discretion in the Railway management, vested under the rules, neither to make the total contribution nor to decline to make the total contribution, but to make a reduced contribution. This is clear from sub-rule (5) of rule 1314, which is to the effect that 'the amount of special contribution calculated in accordance with sub-rule (3) or sub-rule (4) may in any particular case be withheld or reduced by the Controlling Officer'.

(4) In the present case, the admitted facts are that in view of the somewhat unsatisfactory or at any rate not consistently good record of service of the subscriber, the Railway authorities exercised their discretion under sub-rule (5) of rule 1314, by contributing only sixty per cent of the amount due, under the formula relating to the special provident fund contribution; they declined to contribute the balance of the forty per cent.

(5) On this part of the suit, which is alone the matter that has survived for our scrutiny, this is an action in common law for recovery of the unpaid contribution which the Railway authorities failed to contribute to the special provident fund. The main argument of learned counsel for the appellant (Sri Ramachandran) is that, as will be clear from the judgment of the Supreme Court in Motipur Zamindari Co. v. Their Workers, 1965 2 Lab LJ 139, a gratuity is not paid to an employee merely as gratuity is not paid to an employee merely as a matter of boon, but is paid for services rendered. On the facts of that case, a particular condition was struck down by the Supreme Court, which provided that no gratuity shall be payable to workman dismissed for misconduct involving moral turpitude. The Supreme Court observed that a workman should not be wholly deprived of the benefit earned by long and meritorious service, merely because, at the end of such service, he was found guilty of misconduct.

The case, in the form in which it came up for adjudication and was decided, has really very little relevance to the present situation. It is very clear that the matter arose out of an industrial dispute, with reference to a particular clause in a gratuity scheme, and the Supreme Court was not deciding the question whether, with regard to a contribution in the nature of a gratuity to a special provident fund, the Railway authorities would not be entitled to exercise a discretion, concerning the proportion of their contribution depending on the record of service of the employee concerned. The decision is helpful to the appellant only to this degree, that it shows that in one context, the Supreme Court considered that a gratuity was not merely a boon or an unmerited reward, but was more of the character of a just reward for prior meritorious service.

(6) The other argument stressed by Sri Ramahcandran, for the appellant can be very simply stated. Under rule 1702 of the same Code, we find the penalties listed, and item 10 is 'withholding of the value or part of provident fund contribution of gratuity in accordance with the provisions...... ' There is a note (Note 5) confined to this item of the section, which is to the effect that where a non-gazetted Railway servant resigned, non-payment of the special contribution fell within the purview of the penalty listed as item 10 of this rule. But, whether that note, which relates to non-acceptance of a resignation of an employee, will be equally applicable to the act of contributing only a part of the special contribution, because the record of service did not merit the full contribution, is a matter which has to be decided upon the relevant date; we do not see how we can decide this matter, within the scope of the present proceeding. All that can be safely stated is that, if the withholding in this case is also of the nature of the penalty listed as item 10 is rule 1702, the principles of natural justice would certainly appear to require that the concerned subscriber, whose interests are thus affected by the imposition of a penalty, should be given notice of the penalty sought to be imposed, and should have been heard.

(7) Learned counsel for the Railway establishment does not concede that the withholding of a portion of the special contribution, within the scope of the discretionary power vested in the Railway authorities, is a penalty at all. If that is not a penalty, and as the subjective satisfaction of the Railway authorities is to be the sole criteria, then the question of the infringement of any principles of natural justice, by not issuing a notice to the subscriber may not arise. As we stated earlier, we are not deciding this matter, within the ambit of this appeal. For, it seems to be clear to us that the appeal must necessarily fail, on a shorter and more decisive ground.

(8) As we stated at the outset itself, this action is for recovery of the withheld amount, precisely as though it is a common law liability; in other words, an obligation arising out of contract which the Railway authorities might be compelled to fulfil, by the means of an action at common law, for recovery of a debt or anything in the nature of a debt. We are totally, unable to see how such an action would lie and, indeed, in Mullalh's C. P. Code, 13th Edn., Vol I, p. 36, under S. 9, a catena of authorities of several Courts will be found, setting forth the dictum that suits for recovery of gratuity are not suits of a civil nature. Indeed, the proposition could hardly be disputed. Sri Ramachandran attempts to contend that the necessary facts are there, and that, in any event, his client could be granted a declaration under the Specific Relief Act, that he would be entitled to this sum, because the penalty was not imposed after giving him notice an after his case was heard. As we pointed out earlier, the Railway authorities do not admit that this is a penalty. Even if it be penalty, and even if notice had to be given, that is not matter which could be agitated in the form of a suit for recovery of a debt or liability, as in this case. If a declaration is now to be granted, the reliefs and the phraseology of the plaint will have to be entirely changed, a fresh written statement will have to be filed, and new issues settled and tried; in other words, a quite different suit would have to be engrafted upon the present action.

(9) We can see no justification for this. We may also further point out that where a person claims that a principle of natural justice has been infringed, and that a statutory duty has not been performed by quasi-Government authority, the more appropriate remedy would appear to be the remedy provided for under Art. 226 of the Constitution.

(10) In the light of these observations, we are clear that an action of this kind will not at all lie for recovery of the amount in a Civil Court, as a debt or liability recoverable under the common law. For this reason, the Letters Patent Appeal will have to be dismissed. We make no further observation on the respective rights of the parties, or the defences that might be open to the Railway authorities, if the appellant pursues his remedy under Art. 226 of the Constitution. No order as to costs.

(11) Appeal dismissed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //