Gratuity forfeiture requires a conviction for moral turpitude; without such conviction, an employee remains entitled to gratuity despite termination for misconduct.

JUDGMENT :

V KAMESWAR RAO, J.

The present intra-court appeal has been filed by the Karnataka Gamin Bank challenging the order dated 11.01.2024 passed by the learned Single Judge in W.P.No.15460/2023, whereby the learned Single Judge has dismissed the petition filed by the appellant herein by stating in Paragraphs-17, 18 & 19 as under:-

“17. The Apex Court in the case of C.G. Ajay Babu , stated supra, has held at paragraph Nos.17 and 18 as under:-

"17. Though the learned Counsel for the appellant-Bank has contended that the conduct of the respondent employee, which leads to the framing of charges in the departmental proceedings, involves moral turpitude, we are afraid the contention cannot be appreciated. It is not the conduct of a person involving moral turpitude that is required for forfeiture of gratuity but the conduct or the act should constitute an offence involving moral turpitude. To be an offence, the act should be made punishable under law. That is absolutely in the realm of criminal law. It is not for the Bank to decide whether an offence has been committed. It is for the Court. Apart from the disciplinary proceedings initiated by the appellant Bank, the Bank has not set the criminal law in motion either by registering an FIR or by filing a criminal complaint so as to establish that the misconduct leading to dismissal is an offence involving moral turpitude. Under sub-Section (6)(b)(ii) of the Act, forfeiture of gratuity is permissible only if the termination of an employee is for any misconduct which constitutes an offence involving moral turpitude, and convicted accordingly by a Court of competent jurisdiction.

18. In Jaswant Singh Gill v. Bharat Coking Coal Limited and others [ (2007)1 SCC 663 ], it has been held by this Court that forfeiture of gratuity either wholly or partially is permissible under sub- Section (6)(b)(ii) only in the event that the termination is on account of riotous or disorderly conduct or any other act of violence or on account of an act constituting an offence involving moral turpitude when he is convicted. To quote paragraph- 13:

"13. The Act provides for a close- knit scheme providing for payment of gratuity. It is a complete code containing detailed provisions covering the essential provisions of a scheme for a gratuity. It not only creates a right to payment of gratuity but also lays down the principles for quantification thereof as also the conditions on which he may be denied therefrom. As noticed hereinbefore, sub-section (6) of Section 4 of the Act contains a non obstante clause vis-à-vis sub-section (1) thereof. As by reason thereof, an accrued or vested right is sought to be taken away, the conditions laid down thereunder must be fulfilled. The provisions contained therein must, therefore, be scrupulously observed. Clause (a) of sub-section (6) of Section 4 of the Act speaks of termination of service of an employee for any act, willful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of damage or loss caused. The disciplinary authority has not quantified the loss or damage. It was not found that the damage or loss caused to Respondent 1 was more than the amount of gratuity payable to the appellant. Clause (b) of sub - section (6) of Section 4 of the Act also provides for forfeiture of the whole amount of gratuity or part in the event his services had been terminated for his riotous or disorderly conduct or any other act of violence on his part or if he has been convicted for an offence involving moral turpitude. Conditions laid down therein are also