Gratuity under the Payment of Gratuity Act cannot be withheld on the basis of dues unless misconduct is established prior to retirement.

JUDGMENT :

R.K.PATTANAIK, J.

1. Instant writ petition is filed by the petitioner challenging the impugned decision by the order under Annexure-12 under the Payment of Gratuity Act, 1972 (hereinafter referred to the ‘Act’) followed by dismissal of appeal vide Annexure-14 on the grounds inter alia that the direction of payment of full gratuity without directing recovery of dues as illegal and perverse, hence, therefore, the same are liable to be interfered with and set aside in the interest of justice.

2. In fact, opposite party No.2 as the Controlling Authority under the Act passed the order dated 30th January, 2009 (Annexure-12) in P.G.Case No.31 of 2008 and thereafter, the order dated 15^th January, 2011 by the learned Appellate Authority under Payment of Gratuity Act-Cum-Deputy Labour Commissioner, Cuttack in P.G.(A) Case No.31 of 2008, which are under challenge at the behest of the petitioner with respect to a direction to pay back opposite party No.1, the gratuity with interest as per Section 7 (3) of the Act and later on dismissal of appeal on merit and due to non-compliance of (7) of the Act thereby confirming the order of opposite party No.2 in awarding the balance amount payable towards gratuity.

3. According to the petitioner, the amount of gratuity was paid to opposite party No.1 on 12th May, 2008 on the basis of an undertaking dated 24^th April, 2001 to recover the dues from him and the same is permissible under law. The contention is that opposite party No.1 having received leave salary of Rs.1,31,624/-, on the basis of such an undertaking to the effect that recovery may be made from the gratuity, the amount due is recoverable.

4. The Orissa Forest Development Corporation is a Government of Orissa undertaking. As to opposite party No.1, he entered into service of the Corporation on 16^th April, 1967 and retired on 31^st March, 2001. It is not in dispute that opposite party No.1 after his retirement on 31^st March, 2001 submitted a request with an application dated 24^th April, 2001 (Annexure-1) for release of his unutilized leave salary with an undertaking that any outstanding dues lying against him shall be adjusted from the gratuity payable to him. It is also not disputed that opposite party No.1 again submitted an application dated 20^th June, 2001 (Annexure-2) requesting release of leave salary. On the basis of the aforesaid applications under Annexures-1 and 2, the unutilized leave salary for 223 days was sanctioned by the petitioner vide Order dated 21st June, 2001 (Annexue-3) with an undertaking that any such outstanding amount shall be recovered from the gratuity before its disbursement. Later to such recovery, opposite party No.1 approached opposite party No.2 in P.G.Case No.31 of 2008, which was disposed of by the order under Annexure-12 and the same was challenged in appeal, which stood dismissed vide Annexure-14.

5. Heard Mr. Pattnaik, learned counsel for the petitioner and Mr. Mishra, learned counsel for opposite party No.1 besides Mr. Rout, learned AGA for the State.

6. It has been pleaded by the petitioner that opposite party No.1 is not an employee within the meaning of Section 2 (e) of the Act.

7. Mr. Mishra, learned counsel for opposite party No.1 submitted that opposite party No.1 is an employee as defined under Section 2 (e) of the Act, which is clear and unambiguous and after an amendment with effect from 1^st July, 1984, an employee, even if engaged in a managerial or administrative capacity is included and has been brought within the purview of the Act and so therefore, opposite party No.3 rightly referring to the decision of Gujarat High Court in the case of Lalit Kum