24.01.2025 Sl. No.4 Ct. No.15 S.A. WPA 2325 of 2024 Md. Ashadul Haque -vs- The State of West Bengal & Ors. Mr. Dhiman Kumar Sengupta Ms. Farhin Mustaque …for the petitioner Mr. Arnab Roy …for respondent nos.3, 4 & 5 Mr. P. K. Roy Ms. Rituparna Maitra Mr. Asis Dutta …for the Registrar, Cooperative Societies The petitioner, by filing this writ petition, seeks the release of his retiral dues, including leave encashment, provident fund dues, and gratuity. At the time of his retirement, the petitioner held the position of Assistant General Manager (Accounts) at Birbhum District Central Cooperative Bank Limited. It is an undisputed fact that no disciplinary proceedings were initiated against the petitioner during his tenure of service. The petitioner retired on January 31, 2013, and more than four years later, for the first time, the bank filed a written complaint before the Officer-in-Charge of Suri Police Station, Birbhum, alleging, inter alia, the petitioner's involvement in a financial defalcation exceeding Rs. 49,00,000 (Rupees forty-nine lakh) while holding the post of Assistant General Manager. 2 It is also acknowledged that, following the investigation, the police submitted a charge-sheet before the jurisdictional Magistrate on September 16, 2019, under Sections 406/409/419/420/ 466/ 468/ 120B and 34 of the Indian Penal Code against the petitioner. The said criminal proceedings are still pending. The bank, however, has not initiated any disciplinary proceedings against the petitioner after his retirement. In this context, the primary question that arises for consideration before this Court is whether the petitioner’s retiral dues can be withheld on the grounds of the pending criminal proceedings against him. The learned advocate for the petitioner vehemently contends that, since no disciplinary proceedings were initiated prior to the petitioner’s retirement, the bank is not entitled to initiate any disciplinary action post-retirement. Therefore, he argues that petitioner’s withheld retiral dues should be released by the bank. To support his argument, the learned advocate has relied upon the judgment reported in 2024 SCC Online SC 3369 (State Bank of India v. Navin Kumar Sinha). He denies the allegations of financial 3 defalcation and submits that the petitioner has been falsely implicated in the criminal case. The bank does not dispute the withholding of the petitioner’s retiral dues but maintains that the dues remain unpaid due to the ongoing criminal proceedings against him. It has been submitted by the bank that the financial defalcation was detected only after the petitioner’s retirement. The relevant bank suffered a closure order from the Reserve Bank of India on May 15, 2014, and was subsequently reopened on September 12, 2016, after restoring its banking license. The delays in taking necessary steps are attributed to these developments. To substantiate its position, the bank has referred to the judgment reported in AIR Online 2022 Cal 1206 (Milan Kumar Ghosh v. Union of India). There is no dispute with the proposition that, following retirement, an employee cannot be subjected to disciplinary proceedings at the instance of the employer. The petitioner has rightly relied upon the judgment in Navin Kumar Sinha (supra). However, I am of the opinion that the case of the petitioner is covered by the judgment delivered in Milan Kumar Ghosh case. The judgment holds that 4 an employer may withhold an employee’s gratuity during the pendency of judicial proceedings, when the relevant organization is governed by the Banking Regulation Act, 1949. The pertinent part of the judgment is as follows: “9. The bank has justified its action on the basis of its regulations of 1995. Regulation 46 of the banking regulations lay down the following:- Provisional Pension. 1. An employee who has retired on attaining the age of superannuation or otherwise and against whom any departmental or judicial proceedings are instituted or where departmental proceedings are continued, a provisional pension, equal to the maximum pension which would have been admissible to him, would be allowed subject to adjustment against final retirement benefits sanctioned to him, upon conclusion of the proceedings but no recovery shall be made where the pension finally sanctioned is less than the provisional pension or the pension is reduced or withheld etc., either permanently or for a specified period. 2. In such cases the gratuity shall not be paid to such an employee until the conclusion of the proceedings against him. The gratuity shall be paid to him on conclusion of the proceedings subject to the decision of the proceedings. Any recoveries to be made from an employee shall 5 be adjusted against the amount of gratuity payable. Explanation:- In this chapter. a) The expression “serious crime” includes a crime involving an offence under Official Secrets Act, 1923 (19 of 1923): b) The expression “grave misconduct” includes the communication or disclosure of any secret official code or password or any sketch, plan, model, article, note, documents or information, such as is mentioned in Section 5 of the Official Secrets Act, 1923 (19 of 1923) which was obtained while holding office in the Bank so as to prejudicially affect the interests of the general public or the security of the State. c) The expression “fraudulently” shall have the meaning assigned to it under Section 25 of the Indian Penal Code, 1860 (45 of 1860), d) The expression “criminal breach of trust” shall have the meaning assigned to it under Section 405 of the Indian Penal Code, 1860 (45 of 1860); e) The expression “forgery” shall have the meaning assigned to it under Section 463 of the Indian Penal Code, 1860 (45 of 1860). 17. Applying the ratio of the above Supreme Court decisions, in an employment governed by the Banking 6 Regulations of 1995 or any similar enactments having statutory sanction, an employer can withhold the gratuity and additional retiral benefits of an employee against whom a judicial proceeding is pending, till its conclusion. This action seems to be justified even if no grounds exist under sub-section 6 of Section 4 of the Payment of Gratuity Act, 1972 to withhold his gratuity. The justification seems to be this. Suppose in a judicial proceeding a finding is entered that an employee has caused a quantified monetary damage to the employer which is recoverable from him. This amount can be recovered from the withheld gratuity and other retiral benefits.” The Banking Regulation Act, 1949 applies to Birbhum District Central Cooperative Bank Limited by virtue of Section 56 of the said Act. The relevant provisions are quoted below: “56. Act to apply to Co-operative Societies subject to modifications (c) in section 5 – (i) after clause (cc), the following clauses shall be inserted, namely, - (cci) “Co-operative Bank” means a State Co-operative Bank, a Central Co-operative Bank and a primary Co- operative Bank;” It is not in dispute that Birbhum District Central Cooperative Bank Limited is a Central Co- operative Bank within the meaning of the Banking Regulation Act, 1949. In light of this, Section 56 of the Banking Regulations of 1949, as quoted in the judgment 7 passed in the Milan Kumar Ghosh case, applies in the present matter. Though no disciplinary proceedings have been initiated against the petitioner, it remains the case that a criminal proceeding is pending against him. The learned advocate for the petitioner has vigorously argued that the criminal case was initiated only four years after the petitioner’s retirement, and therefore, the pendency of the criminal case cannot justify withholding his retiral dues. However, I am unable to accept this contention. While there may be restrictions on initiating or continuing disciplinary proceedings after an employee's retirement, no such limitation exists concerning the initiation of criminal proceedings as involved in this case. Therefore, I am not inclined to direct the release of the petitioner’s gratuity until the disposal of the criminal case against him. However, the leave encashment and provident fund dues should be released immediately. The bank is directed to take the necessary steps to release the provident fund and leave encashment dues, subject to compliance with required formalities by the petitioner, within one month from the date of communication of this order. Accordingly, WPA 2325 of 2024 is disposed of. 8 Urgent certified photocopy of this order, if applied for, be supplied to the parties on compliance of usual legal formalities. (Kausik Chanda, J.)