Petitioners have filed this petition under Article 227 of the Constitution of

India challenging order dated 26.07.2021 passed by Appellate Authority i.e.

respondent No.2 and order dated 13.10.2020 passed by the Controlling

Authority i.e. respondent No. 3 under Payment of Gratuity Act, 1972.

2. Learned Senior Counsel appearing for the petitioners submitted that

respondent No. 1 was serving as Assistant General Manager-cum-Regional

Head of Bank's Regional Office, Indore. He committed serious misconduct

resulting into financial losses to the bank of Rs. 717.52 lacs. He was served

with charge -sheet and disciplinary enquiry was conducted against him and

major penalty of compulsory retirement was imposed upon him vide order

dated 16.10.2003. Thereafter, gratuity amount of Rs. 3,50,000/-, which is

payable to respondent No. 1, was forfeited vide order dated 29.10.2007.

Respondent No. 1 filed an application under Section 7 of the Payment of

Gratuity Act, 1972 on 27.03.2018. There is delay of 11 years in filing

application under Section 7 of the Payment of Gratuity Act, 1972. No

application for condonation of delay was filed. Controlling Authority without

taking into consideration the reply submitted by the bank and without

consideration of provisions of the Payment of Gratuity Act, 1972 and Bank's

Gratuity Funds Rules, on hypothetical figures directed the bank to pay forfeit

gratuity amount of Rs. 3,50,000/- and also Rs. 4,22,220/- which was 10%

interest for entire period.

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3. Learned Senior Counsel appearing for the petitioners submitted that

respondent No. 1 had never challenged the penalty order nor order of forfeiture

of gratuity amount before higher forum. Controlling Authority as well as

Appellate Authority committed an error of law in passing impugned orders

dated 13.10.2020 and 26.07.2021. In aforesaid circumstances, learned Senior

Counsel appearing for the petitioners made a prayer for quashing of said orders

being illegal and without jurisdiction. Learned Senior Counsel also submitted

that as per Section 7(7) of the Payment of Gratuity Act, any person aggrieved

by order under sub-section (4) ought to have filed an application before

Controlling Authority within a period of 90 days as per Rule 10 of Payment of

Gratuity (Central) Rules, 1972 and if application is filed beyond said period,

then it is to be accompanied by application for condonation of delay. It is

further submitted that as per Clause 3 of Schedule A of Bank's Gratuity Fund

Rules, 1975, disciplinary/competent authority is empowered to forfeit the

gratuity to the extent of damages or losses caused to the bank. Therefore,

order is within jurisdiction of competent authority. Further, reliance is place on

Regulation 46 and it was argued that respondent No.1 is not entitled to gratuity

as per Regulation 46. In view of aforesaid submission, prayer is made for

allowing the writ petition and quashing the impugned orders.

4. Counsel appearing for respondent No.1 submitted that Regulation and

Rules of the bank, which are contrary to the provisions of Payment of Gratuity

Act, 1972, cannot be relied for setting aside the order of payment of gratuity.

He placed reliance on Section 14 of the Payment of Gratuity Act, 1972, which

is quoted as under :

"14. Act to override other enactments, etc. The provisions

of this Act or any rule made there under shall have effect

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notwithstanding anything inconsistent therewith contained in

any enactment other than this Act or in any instrument or

contract having effect by virtue of any enactment other than

this Act."

5. It is submitted that Payment of gratuity are mandatory in nature have

overriding effect over rules and regulations of bank, which are contrary to the

provisions of the Act of 1972. Counsel for the respondent No. 1 further argued

that as per Section 4(6) of Payment of Gratuity Act, gratuity of an employee

can be forfeited. Provisions of Section 4(6) is quoted as under :

"(6) Notwithstanding anything contained in sub-section

(1),

(a) the gratuity of an employee, whose service