2019 Supreme(Bom) 2321

IN THE HIGH COURT OF JUDICATURE AT BOMBAY AT AURANGABAD BENCH
Ravindra V. Ghuge, J.
Maharashtra Gramin Bank Through Its Chairman - Appellant
Versus
Bharatibai Ramesh Kambale - Respondent
Writ Petition No. 12405 of 2019, 9672 of 2018, 9674 of 2018, 9675 of 2018, 9676 of 2018, 9739 of 2018, 10642 of 2018, 10643 of 2018, 10644 of 2018, 10645 of 2018, 10646 of 2018, 10647 of 2018, 10648 of 2018, 11344 of 2018, 11345 of 2018; Civil Application No. 12139 of 2019, 12140 of 2019
Decided On : 16-12-2019

The burden of proof of misconduct rested with the employer, and the employer could invoke Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 to pass an order of forfeiture of gratuity if the offence committed by an employee involved moral turpitude. The employer had the prerogative to decide whether to partially or wholly forfeit the gratuity amount based on the gravity of the offence and the quantum of gratuity that would have normally been payable.

Headnote:

Gratuity Forfeiture - Employment Misconduct - Payment of Gratuity Act, 1972 - Sections 2A, 4, 4(6)(b)(ii), 7(3-A) - The court dismissed the petitions challenging the judgments delivered by the Controlling Authority and the Appellate Authority under the Payment of Gratuity Act, 1972. The issues raised included whether the misconduct proved against the respondents amounted to moral turpitude, whether their gratuity for moral turpitude could be forfeited, and whether the period of temporary employment should be considered for computing completion of five years of employment. The court held that even part-time employment or employees working for shorter durations had to be considered as having worked in the employment of the employer. The court also discussed the requirement for gratuity payment after completion of five years in continuous employment, and the entitlement for gratuity after 30 days of severing employer-employee relationship if the employee satisfies the relevant sections of the Payment of Gratuity Act. The court emphasized that the burden of proof of misconduct rested with the employer and that the employer could invoke Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 to pass an order of forfeiture of gratuity if the offence committed by an employee involved moral turpitude. The court also highlighted the employer's prerogative to decide whether to partially or wholly forfeit the gratuity amount based on the gravity of the offence and the quantum of gratuity that would have normally been payable. The court concluded that the Controlling Authority and the Appellate Authority had not decided the matters with proper application of mind and allowed the writ petitions, quashing the impugned judgments and allowing the employer to withdraw the deposited amounts with accrued interest.

Fact of the Case:

The petitioner bank/management challenged the judgments delivered by the Controlling Authority and the Appellate Authority under the Payment of Gratuity Act, 1972. The respondents/employees were subjected to disciplinary proceedings under the standing orders applicable to the petitioner bank and were awarded punishments. Some challenged their dismissal from service. The issues raised included whether the misconduct proved against the respondents amounted to moral turpitude, whether their gratuity for moral turpitude could be forfeited, and whether the period of temporary employment should be considered for computing completion of five years of employment. The court also considered the entitlement for gratuity after 30 days of severing employer-employee relationship if the employee satisfied the relevant sections of the Payment of Gratuity Act.

Finding of the Court:

The court dismissed the petitions challenging the judgments delivered by the Controlling Authority and the Appellate Authority under the Payment of Gratuity Act, 1972. The court held that the burden of proof of misconduct rested with the employer and that the employer could invoke Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 to pass an order of forfeiture of gratuity if the offence committed by an employee involved moral turpitude. The court also highlighted the employer's prerogative to decide whether to partially or wholly forfeit the gratuity amount based on the gravity of the offence and the quantum of gratuity that would have normally been payable. The court concluded that the Controlling Authority and the Appellate Authority had not decided the matters with proper application of mind and allowed the writ petitions, quashing the impugned judgments and allowing the employer to withdraw the deposited amounts with accrued interest.

Issues: The issues raised included whether the misconduct proved against the respondents amounted to moral turpitude, whether their gratuity for moral turpitude could be forfeited, and whether the period of temporary employment should be considered for computing completion of five years of employment.

Ratio Decidendi: The burden of proof of misconduct rested with the employer, and the employer could invoke Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 to pass an order of forfeiture of gratuity if the offence committed by an employee involved moral turpitude. The employer had the prerogative to decide whether to partially or wholly forfeit the gratuity amount based on the gravity of the offence and the quantum of gratuity that would have normally been payable.

Final Decision: The court concluded that the Controlling Authority and the Appellate Authority had not decided the matters with proper application of mind and allowed the writ petitions, quashing the impugned judgments and allowing the employer to withdraw the deposited amounts with accrued interest.