1. The petitioner, who had put in 36 years of service in the Government and public sector, was appointed, in the State Trading Corporation of India Ltd (Respondent No. 1 herein and referred to, hereinafter, as “STC”), as Director (Finance), vide Department of Commerce Office Memorandum, dated 23rd July, 2002, for a period of 5 years from the date of taking charge of the post or till superannuation, or further orders, which was earlier. The petitioner assumed charge of the post of Director (Finance) on 1st August, 2002, and retired, on 31st July, 2006, on attaining the age of superannuation, vide Office Order dated 12th May, 2006.

2. On 28th July, 2006, a charge-sheet was issued, to the petitioner, proposing holding of an enquiry, against him, under Rule 27 of the Employees’ (Conduct, Discipline & Appeal) Rules, 1975 (hereinafter referred to as “the Rules”). Though learned counsel for the petitioner has not made any submissions regarding the merits of the charges against his client, the Articles of Charge may, for the sake of completion of the recital, be reproduced thus:

“Article-I

That the said Shri Vijay Krishan while working as Director (Finance) of State Trading Corporation of India Limited, New Delhi failed to ensure proper examination of the business proposal from finance angle of the STC Metal Scrap Division for grant of financial assistance of Rs.150 crore to M/s Metro Machinery Traders for purchase of old plant & Machinery from M/s Neyveli Lignite Corporation submitted on 28.04.2005 for consideration of the STC Committee of management.

Article-II

That the said Shri Vijay Krishan failed to critically evaluate the financial viability of the NLC Project before submitting Viability Report dated 29.04.2005 by Fax from Mumbai.

Article-III

That the said Shri Vijay Krishan failed to exercise due diligence by neither questioning the wide variations in the estimated values of individual items of plant & machinery of two valuation reports arranged by applicant party while approving the proposal dated 28.04.2005 initiated by Metal Scrap Division for seeking reliable estimation of worth of the plant & machinery in question through independent third party evaluation before considering the proposal.

Article-IV

That the said Shri Vijay Krishan failed to ensure compliance with the provisions of STC’s Circular No.CMD/STC/03/990 dated 19th August, 1999 issued by CMD and Circular No. 173 dated 27th July, 2000 issued by Company Secretary while approving the proposal dated 28.05.2005 of Metal Scrap Division for financial assistance to the tune of Rs.15.38 crore to M/s A.G. Agro Pvt. Ltd. for purchase of old process steam plant of M/s Neyveli Lignite Corporation Ltd.

The above acts of omission and commission as detailed in Articles I to IV above on the part of Shri Vijay Krishan constitute misconduct as per rules 4(1) (i) & (ii) and Rule 5 (5) & (9) of the STC Employees (Conduct, Discipline, Appeal) Rules, 1975.”

3. A disciplinary inquiry was held, culminating in Inquiry Report dated 14th November, 2008. The disciplinary authority, finally, passed the impugned order, dated 20th May, 2009, imposing, on the petitioner, the penalty of deduction of 100% of the gratuity payable to him.

Rival Submissions

4. Mr. V. K. Singh, learned counsel for the petitioner, chose not to address any submissions regarding the merits of the charges against his client, or the findings of the IO and the DA thereon. He restricts his submissions to the following:

(i) Deduction of 100% gratuity was contrary to Section 4(6) of the Payment of Gratuity Act, 1972 (hereinafter referred to as “the Act”) under which termination of employment was the sine qua non for passing an order for forfeiture of gratuity. Sub-section (6) of Section 4 of the Act may, for ready reference, be reproduced thus:

“(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 damag