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2026 Supreme(Cal) 38

IN THE HIGH COURT AT CALCUTTA
SHAMPA DUTT (PAUL), J.
West Bengal Gramin Bank & Anr. – Petitioners 
Versus
The Learned Deputy Chief Labour Commissioner (Central) & Ors. – Respondents
WPA 23753 of 2019
Decided On : 15-05-2026

Advocates Appeared:
For the Petitioners: Ms. Senjuti Sengupta, Ms. Chitra Bhanu Gupta.
For the UOI : Ms. Aparna Banerjee.
For the Respondents no.3: Mr. Debabrata Saha Ray, Sr. Adv., Mr. Indranath Mitra, Mr. Pingal Bhattacharyya, Mr. Subhankar Das.

Gratuity cannot be forfeited for employee misconduct without specifically quantifying the financial loss caused to the employer. Any forfeiture under statutory provisions requires adherence to natural justice, ensuring the employee has an opportunity to contest the extent of the loss before it is deducted from retiral benefits.

Headnote:(A) Payment of Gratuity Act - Section 4(6) - Forfeiture of gratuity - Requirement to quantify loss - An employer cannot forfeit gratuity based on internal service regulations if the loss resulting from an employee's actions is not quantified - The statutory provisions of the gratuity law prevail over inconsistent internal service regulations - Forfeiture is only permissible to the extent of the damage or loss specifically proved and quantified. (Paras 26, 36, 37)

(B) Principles of Natural Justice - Opportunity of hearing - Essential prior to forfeiture of gratuity for alleged loss or damage - Failure to provide an opportunity to the employee to contest the alleged loss prior to forfeiture results in a violation of natural justice. (Para 21, 22)

Facts of the case:
The employee was dismissed from service following a disciplinary proceeding initiated for alleged misconduct. The employer invoked internal service regulations to forfeit the entire gratuity amount. The employee challenged this forfeiture, as no financial loss was quantified during the disciplinary proceedings or the subsequent dismissal order. The authority under the gratuity law allowed the payment, observing that the employer failed to establish any specific loss warranting the full forfeiture of gratuity.

Findings of Court:
The court observed that the forfeiture of gratuity without prior quantification of loss is contrary to the requirements of the governing legislation. The court held that the employer cannot claim an exemption from the statutory provisions governing gratuity payments simply by relying on internal service regulations. The principles of natural justice require the employee to be put on notice regarding the specific financial loss claimed so that an opportunity to respond is provided.

Issues: 1. Whether an employer can forfeit the entire gratuity based solely on internal service regulations despite statutory provisions requiring quantification of loss. 2. Whether the failure to quantify the loss during the disciplinary process and provide an opportunity of hearing renders the order of forfeiture invalid.

Ratio Decidendi: The employer is obligated to quantify the actual financial loss or damage caused to the organization as a condition precedent for any forfeiture of gratuity. A mere assertion of misconduct without quantification, or a failure to provide the employee an opportunity to respond to such loss, precludes the employer from invoking forfeiture under the governing statute. The statute overrides internal regulations where there is a direct inconsistency regarding the protection of employee benefits.

Result: Writ application dismissed.

Table of Content
1. petitioner's appeal against gratuity disbursement based on internal service regulations. (Para 1 , 2 , 3 , 4 , 5 , 16)
2. applicability of payment of gratuity act over internal bank regulations. (Para 6 , 7 , 27 , 39)
3. chronology of disciplinary actions and statutory appeals by the respondent. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15)
4. necessity of quantifying financial loss as a condition precedent for gratuity forfeiture under section 4(6). (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35)
5. forfeiture requires due process and quantification of loss per section 4(6) of the gratuity act. (Para 26 , 36 , 37 , 38)
6. court upholds payment of gratuity while restricting the authority's scrutiny of disciplinary proceedings. (Para 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47)

JUDGMENT :

SHAMPA DUTT (PAUL), J.

1. The writ application has been preferred challenging orders dated 15th November, 2018 passed by the controlling authority in Application No. 48(7)/2017/ALC-S and 18th October, 2019 vide 48/(10)/2019.E.Dy.CLC(C) passed by the appellate authority.

2. It is the case of the petitioners that as per Clause 72 (2) (e) of the Banks Service Regulation being the Uttarbanga Kshetriya Gramin Banks Service Regulation that every officer shall be eligible for the gratuity except for reasons of being terminated by way of punishment. In this case, The Respondent No. 3 (Sri. Tapan Kumar Dey) has been admittedly terminated by way of punishment and as such as per the said regulation he is debarred to receive any Gratuity from the said Bank. The Petitioner Bank through its General Manager, issued the administrative order vide no. A&V/39/2014-2015/629/F-T.Dey on 04/08/2014 wherein the Respondent No. 3 (Sri. Tapan Kumar Dey) since dismissed was awarded with the punishment that is "Dismissal” which shall ordinarily be a disqualification for future employment as per Clause 39.1 (B) (V) of the Uttarbanga Kshetriya Gramin Bank Service (Officers and Employees) regulations, 2010: and “Forfeiture of the Gratuity” of the Applicant Sri. Tapan Kumar Dey as per clause 72 (e) of the Uttarbanga Kshetriya Gramin Bank Service (Officers and Employees) regulations, 2010.

3. During the tenure of the service of the Respondent No. 3 (Sri.Tapan Kumar Dey), in pursuance to a grave offence, a Charge Sheet was issued against him being Charge Sheet No. A&V / 37 / 2012-2013 / 327 / F-T.Dey dated 19/09/2012. A disciplinary proceeding was also pending against him at that time. Under that circumstances the Petitioner Bank represented by its Competent Authority being the Chairman, invoked Regulation 45 of the Uttarbanga Kshetriya Gramin Bank Service (Officers and Employees) Regulations, 2010 which led to a rejection of the receipt of the allowances as laid down therein under in the said regulation. As such this allegation being proved and the punishment been drawn against him, he has been given his retiral benefits within the purview of the said Act. Admittedly the Respondent No.3 (Sri Tapan Kumar De) never ever challenged his dismissal / award of punishment. He has not approached any higher forum against the said punishment. As such till date the said Termination is standing unchallenged Admittedly again he never ever disputed the Petitioner / Bank's payment of the retiral benefits.

4. It is stated that after a lapse of 3 years, the Respondent No. 3 is barred from challenging the actions taken by the Petitioner Bank particularly when he has already accepted the actions of the bank without challenging the same before the higher forum. Admittedly again, he had approached the Respondent No. 2 after a lapse of 3 years.

5. The petitioners further state that the Respondent No. 3 (Sri.Tapan Kumar Dey) has been awarded a punishment by following a proper departmental procedure. This departmental procedure has not been challenged till date. So that deems to be correct. The order passed in that procedure has not been challenged and therefore it

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