Termination of employment for alleged misconduct involving moral turpitude does not automatically justify gratuity forfeiture without proven loss or prosecution.

JUDGMENT :

Rohit W. Joshi, J.

Heard the learned Advocates appearing for the parties.

2. Respondent No.1 was in employment with the petitioner-bank as Regional Manager, Zonal Office, Goa. A departmental enquiry was initiated against him by issuing charge-sheet dated 30/10/2013. He was placed under suspension on 07/12/2013. While the enquiry was pending, respondent No.1 attained the age of superannuation on 31/12/2013. However, the enquiry continued even after his retirement and punishment of compulsory retirement was imposed on respondent No.1 vide order dated 29/04/2016.

3. The controversy in the present petition pertains to the claim of gratuity of respondent No.1. The petitioner had forfeited gratuity of respondent No.1 vide order dated 29/04/2016. Respondent No.1 approached the Controlling Authority under the Payment of Gratuity Act, 1972 (hereinafter referred to as the “Act” for short) challenging the action of the petitioner denying his claim for gratuity. The Controlling Authority allowed the application filed by respondent No.1 vide order dated 06/12/2019 holding that respondent No.1 was entitled to receive gratuity amount of Rs.10.00 lakhs with interest for the delayed payment and, accordingly, directed the petitioner to pay the said amount to respondent No.1 with accrued interest thereon. Aggrieved by the aforesaid order dated 06/12/2019, the petitioner preferred an appeal before the Appellate Authority under the Act. The said appeal came to be dismissed vide order dated 30/08/2021. The aforesaid orders are the subject matter of challenge in the present petition.

4. The learned Controlling Authority has held that the petitioner had failed to prove that it had suffered any loss on account of misconduct by respondent No.1 and, therefore, gratuity payable to respondent No.1 could not be forfeited. It is also held that the action to forfeit gratuity was taken without following due process of law and principles of natural justice. It is held that after the punishment was imposed on respondent No.1 in disciplinary enquiry, it was necessary to afford further opportunity of hearing to determine the quantum of actual loss suffered by the petitioner-bank on account of misconduct by respondent No.1. The learned Appellate Authority has held that since respondent No.1 was not prosecuted for the offence involving moral turpitude, the amount of gratuity payable to him could not be forfeited invoking Sections 4 (6)(a) and 4(6)(b)(ii) of the Act.

5. Perusal of the order forfeiting gratuity will demonstrate that the petitioner had invoked Sections 4 (6)(a) and 4(6)(b)(ii) of the Act. Section 4 (6) of the Act reads as under:

“(6) Notwithstanding anything contained in sub-section (1) -

(a) the gratuity of an employee, whose services have been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.

(b) the gratuity payable to an employee may be wholly or partially forfeited-

(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or (ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.”

6. Thus, the decision to forfeit the amount of gratuity is taken on the ground that services of respondent No.1 were terminated for acts on his part, which caused loss to the petitioner-employer and also on the ground that his services were terminated for acts committed during the course of employment, whic