In employment governed by statutory banking regulations, an employer can withhold gratuity and additional retiral benefits of an employee against whom a judicial proceeding is pending, even if no grounds exist under Section 4 of the Payment of Gratuity Act, 1972.

JUDGMENT :

I.P. Mukerji, J.

1. On 1st November, 1977, the appellant writ petitioner was appointed as Agriculture Officer in the respondent bank. He joined service and was posted at its Purulia branch. On 6th March, 1996 for alleged acts of misconduct he was placed under suspension. This suspension order was revoked on 28th January, 1997. In this intervening period disciplinary proceedings were started against him on the said charge of misconduct and continued till 2nd June, 1999 when the disciplinary authority imposed the punishment of reduction of his pay scale by three stages with cumulative effect.

2. In 2013 the appellant superannuated. On his retirement, out of the retirement financial benefits that he was entitled to, i.e. regular monthly pension, gratuity, own contribution to provident fund, leave encashment, additional retirement benefits, the appellant received all, except gratuity and additional retirement benefits. These were withheld by the bank. On 3rd November, 2013 they informed him that those amounts could not be released to him as a criminal case which was started by the Central Bureau of Investigation (CBI), was pending against him.

3. This withholding of gratuity and additional benefits by the bank was the subject matter of the writ application preferred by the appellant (WP No. 28123 (W) of 2014).

4. By a detailed judgment and order dated 11th January, 2019, the learned single judge was pleased to dismiss the writ application.

5. Hence, this appeal.

6. A point of some interest has arisen for consideration.

7. The Payment of Gratuity Act, 1972 applied to the service of the appellant. Section 4 of the Act provides that on termination of employment after continuous service for not less than 5 years gratuity would be payable to an employee. Sub-section 6 of Section 4 provides the circumstances when gratuity is to be forfeited. It is in the following terms:-

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

(a) the gratuity of an employee, whose services have been terminated for any act, wilful 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 17 [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.”

8. Unquestionably, none of the grounds in sub-section 6 is attracted to the case of the appellant. The service of the appellant was never terminated for any of the acts mentioned in the sub-section. Pendency of the criminal case against him at the instance of the CBI is certainly not one of the grounds in sub-section 6, for withholding of his gratuity. The bank has justified its action on the basis of its regulations of 1995. Regulation 46 of the banking regulations lay down the following:-

“Provisional Pension.

1. An employee who has retired on attaining the age of superannuation or otherwise and against whom any departmental or judicial proceedings are instituted or where departmental proceedings are continued, a provisional pension, equal to the maximum pension which would have been admissible to him, would be allowed subject to adjustment against final retirement benefits sanctioned to him, upon conclusion of the proceedings but no recovery shall be made where the pension finally sanctioned is less than the provisional pension or the pension is reduced or withheld etc., either permanently or for a specified period.

2. In such cases the gratuity shall not be paid to such an employee until the conclusion of the proceedings against him. The gratuity shall be paid to him on conclusion of the proceedings subject to the decision of the