Forfeiture of Gratuity: Offence Involving Moral Turpitude Must Be Established In Court
Forfeiture of gratuity amount for the offence committed by the employee must be established in the court by the employer, Mere proof of misconduct by an internal inquiry is not enough to deprive the employee of gratuity under the Payment of Gratuity Act, 1972.
Held in Case Bearing Number Civil Writ Petition No. 6006 of 2016
Coram: MANISH PITALE, J.
Facts of the case :
Mr. Manohar Fulzele Joined services with Western Coal Fields Limited in 1990 and he was regularized in general Mazdoor Category-I in January 1992. In 2002 a complaint was received by the petitioner stating that Fuzele’s actual date of birth was 01/07/ 1953, and he had entered service by falsely claiming his date of birth as 1/07/ 1960.
A charge sheet was issued against Fuzele for giving false information for the purpose of securing employment with the petitioner. The misconduct of having given false information regarding his date of birth was proved against Mr.Fuzele in the departmental enquiry and his service was terminated on 28 March 2013.
Mr.Fuzele submitted a form for claiming Gratuity under the provisions of the Payment of Gratuity Act, 1972 on the basis of his continuous service of 22 years 6 months and 8 days. The Controlling Authority passed an order holding that the Respondent 2 was entitled to receive the gratuity for such continuous service and directed the petitioner to pay the amount of Rs.4,25,557/- along with 10% simple interest w.e.f 28/3/2013 till the actual date of payment.
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The petitioner deposited the said amount and filed an appeal under the provisions of the said Act before the Appellate Authority contending that it was entitled to forfeit gratuity amount payable to the Respondent No. 2 by exercising power under Section 4 (6) (b) (ii) of the said Act, as service was terminated for providing false information regarding date of birth, which constituted an offence involving moral turpitude. It was concluded by the Appellate Authority that the petitioner cannot forfeit Gratuity payable to Respondent no.2. The appeal was dismissed and the order passed by the Controlling Authority was confirmed.
Aggrieved by the said order, the petitioner filed the writ petition.
Court Observations: Forfeiture Gratuity Moral Turpitude
The Bombay High Court observed that the Appellate Authority considered the facts of the case and concluded that even if service of the Respondent No.2 was terminated on misconduct defined under the standing order, “misconduct” was distinct from “offence”.
It was held that since Section 4(6)(b)(ii) of the said Act pertains to an offence involving moral turpitude, merely because the service of the Respondent no.2 was terminated for misconduct of having given false information, it could not be said that the provision applied for the petitioner to forfeit gratuity payable to respondent No.2.
It was submitted that the authorities below wrongly held that unless criminal proceedings were initiated and the offence was registered against Respondent No.2 for the said conduct on his part and then the conviction was rendered against him, that gratuity could be fortified.
In the present case, the question is whether such an act, which was proved in a departmental enquiry by the petitioner would constitute an offence involving moral turpitude, justifying forfeiture of his gratuity under the said Act.
For an employer to deprive an employee of gratuity under Section 4(6)(b)(ii) of the said Act, would necessarily require initiation of criminal proceedings that would culminate in a conviction for an “offence”.
The Appellate Authority has reached findings in favour of Respondent No.2. Since Section 4(6)(b)(ii) of the said Act empowers an employer to forfeit Gratuity wholly or partially, it is in the form of an exception to the general rule under this Act regarding payment of gratuity to an employee, who otherwise satisfies the requirements specified in Section 4 of the said Act. Gratuity is an amount paid to an employee in consideration for continuous service that is put in by such an employee for years together. There is no doubt about the fact that in the present case the Respondent No.2 had completed 22 years 6 months and 8 days continuous service with the petitioner. Therefore, on the basis of the number of years of service put in by Respondent No.2, he was clearly eligible for payment of gratuity under the provisions of the said Act, particularly Section 4 thereof.
Therefore, the contentions raised on behalf of the petitioner cannot be accepted and the concurrent orders passed by the authorities cannot be said to be erroneous. Forfeiture Gratuity Moral Turpitude
Held: Forfeiture Gratuity Moral Turpitude
Hence, the Hon’ble Supreme Court laid down its opinion regarding Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972, while deciding the specific question framed in the facts and circumstances of that case. Therefore, the said opinion of the Hon’ble Supreme Court is binding on this court.
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Thus, the Court dismissed the writ petition.
Conclusion: Forfeiture Gratuity Moral Turpitude
It was held that in order to forfeit the gratuity that an employee is entitled to, an offence involving moral turpitude must be established in a court of law, mere proof of misconduct by an internal inquiry is not enough to deprive the employee of gratuity under the Payment of Gratuity Act, 1972.
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