An employer cannot forfeit an employee's gratuity without quantifying the financial loss or providing reasons for the finding of financial loss, as per Regulation 12 of the Canara Bank Employees' Gratuity Fund Rules and Regulations.

JUDGMENT/ORDER

ALOK ARADHE, J. - This intra Court appeal has been filed against an order dtd. 3/8/2021 passed by the learned Single Judge by which the writ petition preferred by the appellant assailing the orders dtd. 10/2/2012 and 11/3/2013 passed by the Controlling Authority as well as the Appellate Authority under the provisions of Payment of Gratuity Act, 1972 (hereinafter referred to as 'the Act') has been dismissed.

2. Facts giving rise to filing of this appeal in a nut shell are that respondent No.3 (hereinafter referred to as 'the employee'), at the relevant time, was posted as Manager in Shanthinagar Branch, Bangalore by the appellant - Bank. During the period between 22/3/2001 to 23/8/2004, the employee was alleged to have committed misconduct in respect of certain accounts, flouting the norms and procedures of the appellant - Bank. The employee was subjected to disciplinary proceeding under the Canara Bank Officer Employees' (Discipline and Appeal) Regulations, 1976. A charge sheet was served to the employee and an enquiry was conducted against him. The Disciplinary Authority, by an order dtd. 31/1/2009, imposed the penalty of removal from service. The employee thereafter filed an appeal which was dismissed by the Appellate Authority by an order dtd. 1/10/2009.

3. The employee thereafter filed a petition under the provisions of the Act on 29/7/2010. The appellant filed objections to the same. The Controlling Authority under the Act, by an order dtd. 10/2/2012, allowed the application preferred by the employee. Against the aforesaid order, the appellant filed an appeal before the Appellate Authority which was dismissed by the Appellate Authority by an order dtd. 11/3/2013. Thereafter, the appellant challenged the aforesaid order in the writ petition. The writ petition preferred by the appellant has been dismissed by the learned Single Judge by an order dtd. 3/8/2021. In the aforesaid factual background, this appeal arises for our consideration.

4. Learned counsel for the appellant, while inviting the attention of this Court, to the order dtd. 31/1/2009 passed by the Disciplinary Authority, submitted that the Disciplinary Authority has recorded a finding that financial loss has been caused to the Bank. While inviting the attention of this Court to Regulation 12 of the Canara Bank Employees' Gratuity Fund Rules and Regulations, it is submitted that under the aforesaid Regulation, the appellant has the authority to recover the amount from the gratuity of the employee, to the extent of the financial loss caused to the Bank.

5. On the other hand, learned counsel for the employee has supported the order passed by the learned Single Judge.

6. We have considered the submissions made on both sides and have perused the record. Regulation 12 of the Canara Bank Employees' Gratuity Fund Rules and Regulations reads as under: "12. Notwithstanding anything contained in the preceding clauses where an employee has been dismissed for misconduct and such misconduct has caused financial loss to the Bank, he shall not be eligible to receive the gratuity to the extent of the financial loss caused to the Bank."

7. Thus, from perusal of the aforesaid Regulation, it is evident that in case an employee has been dismissed for a misconduct and such a misconduct has caused financial loss to the Bank, he shall not be eligible to receive the gratuity to the extent of the financial loss caused to the Bank. Thus, under Regulation 12 of the aforesaid Regulations, the appellant has the authority to recover the financial loss from the amount of gratuity of the employee to the extent of financial loss caused to it.

8. In the instant case, the Disciplinary Authority, while imposing the penalty of removal from service, has recorded the following finding: "Thus, the records reveal that Sri. T.N. Anginthaya, CSO has not exercised due diligence which has resulted in financial loss to the Bank. Hence, the replies submitted by the CSO are not tenable."

9. Thus,