K. Vinod Chandran, J.

1. The short question that arises in the appeal is whether the appellant-Company, in whose employment the 1st respondent was, could recover from the gratuity; leave salary paid and salary in lieu of notice prescribed for resignation. On facts, suffice it to say that, the 1st respondent applied for long leave for the period 15.01.2003 to 14.04.2003 for the purpose of visiting his friends and relatives abroad, and then later applied for special leave for two years from 01.02.2003 to 31.01.2005. Admittedly the three months leave initially applied for was allowed by the Company. When subsequently special leave for two years was applied for, for the purpose of taking up employment in United Arab Emirates (UAE), the Company woke up to the fact that the 1st respondent had not complied with a circular applicable to the employees while undertaking foreign travel.

2. Since the conditions in the circular were alleged to have been not complied with, disciplinary proceedings were initiated and the 1st respondent was also directed to report for duty, failing which the disciplinary proceedings were to be continued ex parte.

The 1st respondent did not report for work within the time stipulated, but sent a letter dated 18.02.2003, tendering his resignation.

3. The Company slept over the matter for three months and as is evident from Exhibit P1, communicated the acceptance of the resignation subject to settlement of dues, as per letter dated 19.05.2003, referred as item No.2 in Exhibit P1. The rider was provided by Exhibit P1 in so far as determining the leave salary paid to the 1st respondent as also salary in lieu of the notice period; as amounts due to the Company. Recovery was also threatened from the gratuity payable.

4. The 1st respondent then approached the statutory authority, being the controlling authority under the Payment of Gratuity Act, 1972 (for brevity "Gratuity Act"), who declined the relief sought for by Exhibit P4. However on appeal, the appellate authority by Exhibit P7 held that the forfeiture of the gratuity by the management-Company was improper and directed to pay the balance amount with 10% interest for the period from 18.02.2003. This order was challenged by the appellant-Company in writ proceedings before this Court.

5. The learned counsel appearing for the Company before the learned Single Judge and also before us strenuously contended that the 1st respondent had acted in violation of the specific directions contained in the circular regarding foreign travel. It is also obvious that the 1st respondent had gone abroad in search of employment and on procuring the same, had sought for special leave and subsequently on not being granted such leave, tendered his resignation. The appellant, hence initiated disciplinary proceedings against the 1st respondent; but later took a lenient view and accepted his resignation. The leave salary paid as also the salary in lieu of notice period, according to the appellant-Company, are amounts due to the Company and the appellant is perfectly justified in adjusting the same from the gratuity amounts payable. The learned counsel would specifically point out that there was no forfeited gratuity as has been found by the appellate authority under the Gratuity Act.

6. We look at the Gratuity Act. Sub-section (6) of Section 4 reads as under:

"S.4(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 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