2021 Supreme(Bom) 1087

IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD
Ujjal Bhuyan, M.G. Sewlikar, JJ.
Nagesh - Appellant
Versus
State Of Maharashtra - Respondent
Writ Petition No. 6077 of 2016
Decided On : 07-05-2021

1. Departmental proceedings cannot be continued and a penalty cannot be imposed after an employee has ceased to be in service, in the absence of a specific provision for continuation of the proceedings post superannuation. 2. Forfeiture of gratuity under Section 4(6)(a) of the Payment of Gratuity Act, 1972 requires quantification of the damage or loss caused due to the misconduct of the employee, and an opportunity of hearing must be given to the employee. 3. Forfeiture of gratuity under Section 4(6)(b)(ii) of the Act on the ground of moral turpitude requires application of mind and a finding that the misconduct falls within the ambit of 'moral turpitude'. The employee must be put on notice and heard before gratuity is denied.

Headnote:

PAYMENT OF GRATUITY ACT, 1972 - SECTION 4(6)(A)(B)(II) - MAHARASHTRA CIVIL SERVICES (DISCIPLINE AND APPEAL) RULES, 1979 - SERVICE JURISPRUDENCE - DISTINCTION BETWEEN REMOVAL FROM SERVICE AND DISMISSAL FROM SERVICE - RETIREMENT ON ATTAINING THE AGE OF SUPERANNUATION - CONTINUATION OF DEPARTMENTAL PROCEEDINGS POST SUPERANNUATION - WITHHOLDING OR FORFEITURE OF GRATUITY - MORAL TURPITUDE - QUANTIFICATION OF DAMAGE OR LOSS - OPPORTUNITY OF HEARING - SECTION 14 OF THE ACT - INTEREST ON DELAYED PAYMENT OF GRATUITY - SECTION 7(3-A) OF THE ACT.

Fact of the Case:

Petitioner, an employee of respondent no.2, was issued a show cause notice for alleged financial irregularities. A departmental enquiry was conducted and a charge-sheet was issued. Petitioner challenged the notice and the charge-sheet in the Labour Court and the Industrial Court. While the proceedings were pending, petitioner retired on attaining the age of superannuation. The writ petitions filed by the petitioner were disposed of as infructuous. Subsequently, respondent no.2 passed an order dismissing the petitioner from service with retrospective effect from the date of superannuation and forfeited his gratuity and leave encashment.

Finding of the Court:

1. The order of dismissal from service passed after the petitioner's retirement is unsustainable in law as there is no provision in the Maharashtra Civil Services (Discipline and Appeal) Rules, 1979 or the Maharashtra Civil Services (Pension) Rules, 1982 for continuation of departmental proceedings or extension of service post superannuation for the purpose of completing disciplinary proceedings. 2. Forfeiture of gratuity under Section 4(6)(a) of the Payment of Gratuity Act, 1972 requires quantification of the damage or loss caused due to the misconduct of the employee, and an opportunity of hearing must be given to the employee. 3. Forfeiture of gratuity under Section 4(6)(b)(ii) of the Act on the ground of moral turpitude requires application of mind and a finding that the misconduct falls within the ambit of 'moral turpitude'. The employee must be put on notice and heard before gratuity is denied. 4. In the instant case, there was no quantification of damage or loss, no deliberation on the aspect of petitioner's misconduct falling under the category of moral turpitude, and no opportunity of hearing was given to the petitioner before withholding and forfeiting his gratuity and leave encashment.

Issues: 1. Whether the order of dismissal from service passed after the petitioner's retirement is sustainable in law? 2. Whether forfeiture of gratuity under Section 4(6)(a) of the Payment of Gratuity Act, 1972 is permissible without quantification of damage or loss and an opportunity of hearing to the employee? 3. Whether forfeiture of gratuity under Section 4(6)(b)(ii) of the Act on the ground of moral turpitude is permissible without application of mind, a finding that the misconduct falls within the ambit of 'moral turpitude', and an opportunity of hearing to the employee?

Ratio Decidendi: 1. The order of dismissal from service passed after the petitioner's retirement is unsustainable in law as there is no provision in the Maharashtra Civil Services (Discipline and Appeal) Rules, 1979 or the Maharashtra Civil Services (Pension) Rules, 1982 for continuation of departmental proceedings or extension of service post superannuation for the purpose of completing disciplinary proceedings. 2. Forfeiture of gratuity under Section 4(6)(a) of the Payment of Gratuity Act, 1972 requires quantification of the damage or loss caused due to the misconduct of the employee, and an opportunity of hearing must be given to the employee. 3. Forfeiture of gratuity under Section 4(6)(b)(ii) of the Act on the ground of moral turpitude requires application of mind and a finding that the misconduct falls within the ambit of 'moral turpitude'. The employee must be put on notice and heard before gratuity is denied.

Final Decision: The impugned order dismissing the petitioner from service and forfeiting his gratuity and leave encashment is set aside and quashed. Respondent no.2 is directed to release the admissible gratuity and leave encashment to the petitioners (legal heirs of the original petitioner) with interest under Section 7(3-A) of the Act within a period of eight weeks from the date of receipt of a copy of the order.