Forfeiture of gratuity is premature when dismissal is under appeal and criminal proceedings are pending, emphasizing the need for adherence to natural justice.

JUDGMENT

Alok Mathur, J.

Heard Sri. Birendra Prasad Singh, learned counsel for petitioners as well as Sri. Ashwani Kumar Singh, learned counsel for respondent Nos. 1 & 2 and Sri. Ankit Pandey, Advocate has appeared on behalf of respondent No. 3.

2. The petitioner, a nationalized bank has approached this Court assailing the order dated 29.11.2023 passed by the appellate authority under the Payment of Gratuity Act, 1972 i.e. Deputy Chief Labour Commissioner (Central), Kanpur whereby while deciding the appeal preferred by the employee i.e. respondent No. 3, the petitioner has been directed to deposit entitled gratuity amount of Sri. K. Mohammad Hafeez/respondent No. 3 before the Controlling Authority within a time from the date of receipt of the said order subject to outcome of the investigation of the criminal proceedings.

3. The brief facts of the present case are that the employee had joined the Syndicate Bank now Canara Bank as a clerk and was subsequently promoted as an officer of on 30.05.1999 and further to the post of General Manager till he was dismissed from service on 16.12.2019. Certain irregularities were noticed wherein respondent No. 3 has disbursed large amount of loans and for the said action he was placed under suspension on 17.05.2017 and also served with a charge-sheet on 23.11.2018 under the Regulation of the Syndicate Bank Officers Employees' (Discipline & Appeal) Regulations, 1976 wherein he is alleged to have granted loans on the basis of fake documents in violation of the guidelines of the Bank. After due inquiry, he was found guilty of the charges and he was dismissed from service by order dated 16.12.2019.

4. Against the order of dismissal dated 16.12.2019, respondent No. 3 has preferred a departmental appeal and as per the impugned order, the departmental appeal is still pending. The petitioner has also lodged a first information report against respondent No. 3 and a chargesheet has been filed in the court of competent jurisdiction and the trial is also pending. In the aforesaid circumstances, the petitioner had issued a notice to the employee under section 4(6)(a) of the Payment of Gratuity Act, 1972 asking him to show cause as to why the gratuity may not be forfeited. The said notice is dated 10.01.2020 and as per the receipt of the speed post annexed along with the said document, it is indicated that the same was dispatched on 14.01.2020. The said notice was sent under the signatures of the Regional Manager, Syndicate Bank, Lucknow and lastly by means of order dated 28.01.2020 the claim of the respondent No. 3 for gratuity was rejected in terms of Regulation 46)(1)(e) of Syndicate Bank (Officers) Service Regulations, 1979 and Section 4(6)(a) and Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972.

5. Learned counsel for petitioner has submitted that there were serious allegations against the petitioner whereby loans of over 1400 crores were disbursed by the employee contrary to the guidelines of the bank for which a dismissal order has been passed and because of the loss suffered by the bank, the petitioner is entitled to pass an order under Section 4 Sub Clause 6 of the Act of 1972 and forfeit the gratuity. He further submits that opportunity of hearing was given to the employee inasmuch as a show cause notice was sent to him on 10.01.2020 and as no response was received, the petitioner proceeded to pass an order of forfeiture of gratuity on 28.01.2020. He submits that the appellate authority has held that just merely because the appeal against the order of dismissal is pending and a trial against him is also pending and therefore the order of forfeiture of gratuity was premature and should not have been passed. He submits that there is no provision under Section 4 Sub-Clause 6 of the Act of 1972 providing for passing of the order of forfeiture only after confirmation of the order of dismissal on conviction for offence for which the employee is charged by the court of competent jurisdiction.

6.