- 1 - NC: 2025:KHC:9495 WP No. 43774 of 2011 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE R. NATARAJ WRIT PETITION NO. 43774 OF 2011 (S-DIS) BETWEEN: SRI L S DINAMANI, S/O DR. L.S. SRINIVASAN, AGED ABOUT 59 YEARS, R/AT NO.1381, SAI RAGHAVENDRA NILAYA, 4TH CROSS, 1ST STAGE, 2ND PHASE, CHANDRA LAYOUT, BANGALORE-40. …PETITIONER (BY SRI R NAGENDRA NAIK, ADVOCATE ) AND: THE MANAGEMENT OF CANARA BANK, (GOVERNMENT OF INDIA UNDERTAKING), INDUSTRIAL RELATIONS SECTION, PERSONNEL WING, HEAD OFFICE, NO.112, J.C.ROAD, BANGALORE-2, REP. BY ITS CHAIRMAN AND MANAGING DIRECTOR …RESPONDENT (BY SRI J PRADEEP KUMAR, ADVOCATE FOR M/S KASTURI ASSTS.,) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING (a) TO QUASH ANNEXURE-E BEARING NO.PWPM 9671226 DATED 28.03.2011 PASSED BY THE RESPONDENT AND (b) DIRECT THE RESPONDENT TO RELEASE THE PROVIDENT FUND PAYABLE TO THE PETITIONER WITH INTEREST AT THE RATE OF Digitally signed by SUMA Location: HIGH COURT KARNATAKA - 2 - NC: 2025:KHC:9495 WP No. 43774 of 2011 18% P.A. THEREON, W.E.F 27.01.2009, THE DATE OF DISMISSAL. THIS PETITION, COMING ON FOR HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE R. NATARAJ ORAL ORDER The petitioner has challenged a communication bearing No.PWPM:9671226 dated 28.03.2011 forfeiting the gratuity and provident fund payable to him consequent to his dismissal from service. The petitioner has also sought for a writ in the nature of mandamus to direct the respondent to release his contribution to the provident fund along with interest at the rate of 18% per annum from 27.01.2009. 2. The respondent had issued articles of charge accusing the petitioner of misconduct, consequent to which, a domestic enquiry was conducted and the inquiring authority submitted his report holding that the charges against the petitioner was proved. The disciplinary authority concurred with the findings of the inquiring authority and passed an order dismissing the petitioner from service on 27.01.2009. The petitioner contends that he was entitled to provident fund and - 3 - NC: 2025:KHC:9495 WP No. 43774 of 2011 gratuity. However, the respondent issued a show-cause notice on 02.12.2009 forfeiting the gratuity. In the same notice, the respondent ordered that in view of Regulation No.19 of the Canara Bank Staff Provident Fund Regulations, it was entitled to forfeit its contribution to the provident fund. The petitioner contends that in the order dismissing him from service, there was no ascertainment of loss suffered by the bank and hence, the respondent was not justified in forfeiting the gratuity. He also contended that the respondent had initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and recovered a sum of Rs.1.90 crores and hence, the bank did not suffer any loss. He also contended that as per the statement of account furnished by the bank, the total amount of provident fund payable to the petitioner was Rs.9,22,779.22. Though he claimed the said amount, the respondent - Bank did not pay it, which compelled the petitioner to file an application before the Controlling Authority under Section 7(4)(b) of the Payment of Gratuity Act, 1972. However, he contends that since the Controlling Authority had no power to pass any orders regarding payment of provident fund, he has filed this petition - 4 - NC: 2025:KHC:9495 WP No. 43774 of 2011 challenging the order forfeiting the gratuity as well as the provident fund. 3. The learned counsel for the petitioner while reiterating the above contentions, fairly submitted that the petitioner has been convicted in Spl.C.C.No.36/2009 for the offences punishable under Section 120B read with Sections 468, 471, 420 of IPC and therefore, the petitioner is not entitled to gratuity. However, in so far as the provident fund is concerned, he contends that under Regulation No.19 of the Canara Bank Staff Provident Fund Regulations, the bank is entitled to forfeit only its contribution to the fund and not the contribution of the petitioner. In support of his contentions, he relied upon the Regulation No.19 of the Canara Bank Staff Provident Fund Regulations, which reads as follows: "19. If a member causes financial loss to the Bank by misconduct, fraud, gross negligence or other conduct of like nature and is dismissed from the service of the Bank or is permitted to leave the service of the Bank in consequence of such misconduct, fraud, gross negligence or other like conduct, the amount of such financial loss sustained by the Bank shall be deducted by the Trustees from - 5 - NC: 2025:KHC:9495 WP No. 43774 of 2011 the Bank's contribution out of the amount due to the member and be paid to the Bank." He therefore, contends that the petitioner is entitled to his contribution to the provident fund. 4. The petition is opposed by the respondent who has filed a detailed statement of objections referring to the articles of charge framed against the petitioner as well as the particulars of the criminal case filed against him. The respondent admitted that the petitioner was eligible for gratuity of Rs.3,50,000/- and provident fund of Rs.9,10,503/-, which was the contribution made by it. However, it contended that in view of the dismissal of the petitioner for the misconduct committed by him and in view of his conviction in Spl.C.C.No.36/2009, he was not entitled to the gratuity. However, in so far as provident fund is concerned, it is contended that the respondent had suffered loss on account of the misconduct committed by the petitioner, which was much more than what the petitioner was entitled to and therefore, it was entitled to forfeit the amount not only contributed by it but also contributed by the petitioner. - 6 - NC: 2025:KHC:9495 WP No. 43774 of 2011 5. Learned counsel for the respondent reiterated the above contentions. 6. I have considered the submissions of the learned counsel for the petitioner as well as the learned counsel for the respondent. 7. Since the petitioner is convicted for the offences mentioned above in Spl.C.C.No.36/2009, as rightly contended by the learned counsel for the petitioner and the learned counsel for the respondent, the petitioner was not entitled to any gratuity in view of Section 4(6) of the Payment of Gratuity Act, 1972. However, in so far as provident fund to which the petitioner was entitled to, Regulation No.19 of the Canara Bank Staff Provident Fund Regulations enabled the bank to deduct any amount contributed by it to adjust any loss caused by the act of the employee. However, it did not authorize the bank to forfeit the amount contributed by the employee. In that view of the matter, the petitioner is entitled to a limited relief of a direction to the respondent to refund the amount contributed by the petitioner to the provident fund along with applicable interest. - 7 - NC: 2025:KHC:9495 WP No. 43774 of 2011 8. In that view of the matter, the following:- ORDER (i) This writ petition is allowed in part. (ii) The respondent is directed to release the petitioner's contribution to the provident fund along with interest as applicable for the delayed payment of provident fund from the date of dismissal of the petitioner from service till the date of payment. (iii) This shall be complied within a period of three months from the date of receipt of a certified copy of this Order. Sd/- (R. NATARAJ) JUDGE PMR List No.: 1 Sl No.: 35