Birendra Narayan Sinha v. Union of India through the Appellate Authority under the P. G. Act, 1972
2019-08-26
RAJESH KUMAR
body2019
DigiLaw.ai
JUDGMENT : 1. Heard learned counsel for the parties. 2. The present writ petition has been filed against the order dated 28.09.2015 passed by the Appellate Authority and the order dated 17.11.2014 passed by the Original Authority whereby the petition filed by the petitioner-employee for grant of gratuity under the Payment of Gratuity Act, 1972 has been denied. 3. From pleading and argument, it appears that the petitioner has joined the service of the respondent company as a Junior Executive at Jealgora Commercial Department on 14.06.1971. In 1994, a criminal case has been registered by the CBI vide RC-23(A)/94 (D) wherein allegation has been made for criminal conspiracy with M/s R.K. Steel Industry, Jharia, Dhanbad during the year 1992-93. 4. Concerning the above case, petitioner has been taken into judicial custody on 04.05.1997. Subsequently, he has been released on bail and has been allowed to resume his duty. It further appears that for the period of absentism, a departmental proceeding has been initiated in which only the note of displeasure has been passed against the employee on 05.11.2013. The concerned employee has been convicted by the CBI Court vide judgment dated 19.08.2015 and sentenced to imprisonment. 5. This fact has been admitted but for reason best known to the petitioner, in spite of order of this Court, order of criminal court has not been brought on record. It has been orally submitted that against the order of conviction, an appeal has been filed, which is pending till date. 6. From perusal of the record, it appears that the petitioner is a blue eye boy of the respondent. For criminal conspiracy, he has been taken into custody and convicted by the criminal court, but only displeasure has been shown by the respondents. No punishment order has been passed. Petitioner has been allowed to retire from service w.e.f. 30.11.2012. 7. On specific query, it has been admitted by the parties that conviction involves moral turpitude. This field is covered by Section 4 of the Payment of Gratuity Act, 1972. Section 4(1) and section 4(6) of Payment of Gratuity Act, 1972 is quoted hereinunder: 4.
Petitioner has been allowed to retire from service w.e.f. 30.11.2012. 7. On specific query, it has been admitted by the parties that conviction involves moral turpitude. This field is covered by Section 4 of the Payment of Gratuity Act, 1972. Section 4(1) and section 4(6) of Payment of Gratuity Act, 1972 is quoted hereinunder: 4. Payment of Gratuity-(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,- (a) on his superannuation, or (b) on his retirement or resignation, (c) on his death or disablement due to accident or disease: Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement: [Provided further that in case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is minor, the share of such minor, shall be deposited with the Controlling Authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority]. (6) Notwithstanding anything contained in sub-section (i),- (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 1[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 constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. Sections 4(1) contemplate that if petitioner gets superannuated or retires or resign or due to death or accident if the service stands terminated, the concerned employee is entitled for gratuity, if he has completed five years of service.
Sections 4(1) contemplate that if petitioner gets superannuated or retires or resign or due to death or accident if the service stands terminated, the concerned employee is entitled for gratuity, if he has completed five years of service. Thus, completion of five years of service is the only requirement and upon fulfillment of such requirement, every employee is entitled to get gratuity without any caveat. Exception has been created by sub clause (6) which contemplates three situations. Firstly, if the concerned employee is terminated and the order of termination is due to loss or damage cause to the employer then to the extent of loss, the gratuity can be forfeited. Secondly, if the service is terminated, due to riotous or disorderly conduct or any other act of violence, by departmental proceeding then gratuity can be forfeited by employer. Thirdly, if on account of an act constituting an offence involving moral turpitude, he is convicted, then the entire gratuity amounts stands forfeited. Above two situations contemplate and gives power to the employer to act upon in pursuance of the punishment given in the departmental enquiry. Third situation is not at the option of the employer. If an employee is convicted by a competent criminal court of law involving moral turpitude then the forfeiture of gratuity is automatic and not at the option of the employer. The order of competent criminal court of law has to be obeyed and has to be given effect to by the employer. 8. In the present case petitioner-employee has been taken into custody in the year 1997. The criminal case has been lodged by the CBI in the year 1994. In spite of such criminal case and arrest, only displeasure has been shown by the employer. Thus, it appears that employers were gratuitous towards the employee. Reference can be made to the judgment reported in 2014 4 JCR 55 (Jhr) in the case of General Manager, Western Washery Zone of M/s Bharat Coking Coal Ltd. Vrs. Brajendra Kumar Choubey. Relevant para-15 of the said judgment is quoted hereinunder: “15. Section 4(6)(b) of the Payment of Gratuity Act stipulates that the gratuity payable to an employee may be wholly or partially forfeited if the services of such employee have been terminated for any act, which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.
Section 4(6)(b) of the Payment of Gratuity Act stipulates that the gratuity payable to an employee may be wholly or partially forfeited if the services of such employee have been terminated for any act, which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. We are of the view that in terms of Section 4(6)(b) of the Payment of Gratuity Act, when there is a conviction for the offence involving moral turpitude, the gratuity is automatically forfeited. We are also fortified by the judgment of the Division Bench of this Court reported in the case of Manohar Singh Neech( Tak) Vs. The Regional Labour Commissioner(Central) Dhanbad-cum-Appellate Authority & Ors. [ 2004 (4) JCR 320 (Jhr). In the said case, the Appellate Authority allowed the appeal of the employee and directed payment of gratuity on the ground that there was no specific or separate order for forfeiting the gratuity and thus ordered the payment of the gratuity. The writ petition filed by the Management was allowed by the learned Single Judge holding that in terms of Section 4(6)(b) of the Act, when the employee was guilty of misconduct involving moral turpitude, the employee automatically forfeited his right of Payment of Gratuity . In the Letters Patent Appeal filed by the employee, confirming the order passed by the learned single Judge, the Division Bench held as under: “3. It is argued on behalf of the appellant that unless there was a separate proceeding leading to forfeiting the gratuity that may be paid, the appellant would be entitled to gratuity whatever might be the misconduct for which he was dismissed from service. We find it difficult to accept the submission. In our view, the learned single Judge has rightly interpreted the scope of Section 4, sub-section (6)(b) of the Act, and has rightly come to the conclusion that in view of the misconduct, the appellant was found guilty of and the order of dismissal which was upheld by the Division Bench, he was not entitled to claim gratuity. It was contended that the appellant was acquitted in a criminal case, as can be seen from Annexure 5, the order in Revision and, in view of that, gratuity could not be denied. We find no merit of this submission.
It was contended that the appellant was acquitted in a criminal case, as can be seen from Annexure 5, the order in Revision and, in view of that, gratuity could not be denied. We find no merit of this submission. It is not for us to comment on the nature of judgment of the proceeding in the revisional court, but the mere fact that he was acquitted in a criminal case does not at all affect the dismissal from service for gross misconduct automatically dis-entitling him to gratuity in terms of the Act.” 9. Reference can be made to the judgment rendered by the Apex Court in the case of Union Bank of India and Ors. Vs. C.G. Ajay Babu and Anr. reported in (2018) 9 SCC 529 wherein Rule 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 has been explained. Para 17 to 19 of the said judgment are quoted hereinbelow: “17. Though the learned Counsel for the appellant-Bank has contended that the conduct of the respondent-employee, which leads to the framing of charges in the departmental proceedings involves moral turpitude, we are afraid the contention cannot be appreciated. It is not the conduct of a person involving moral turpitude that is required for forfeiture of gratuity but the conduct or the act should constitute an offence involving moral turpitude. To be an offence, the act should be made punishable under law. That is absolutely in the realm of criminal law. It is not for the Bank to decide whether an offence has been committed. It is for the court. Apart from the disciplinary proceedings initiated by the appellant-Bank, the Bank has not set the criminal law in motion either by registering an FIR or by filing a criminal complaint so as to establish that the misconduct leading to dismissal is an offence involving moral turpitude. Under sub-Section (6)(b)(ii) of the Act, forfeiture of gratuity is permissible only if the termination of an employee is for any misconduct which constitutes an offence involving moral turpitude, and convicted accordingly by a court of competent jurisdiction. 18.
Under sub-Section (6)(b)(ii) of the Act, forfeiture of gratuity is permissible only if the termination of an employee is for any misconduct which constitutes an offence involving moral turpitude, and convicted accordingly by a court of competent jurisdiction. 18. In Jaswant Singh Gill v. Bharat Coking Coal Limited and others, it has been held by this Court that forfeiture of gratuity either wholly or partially is permissible under sub-Section (6)(b)(ii) only in the event that the termination is on account of riotous or disorderly conduct or any other act of violence or on account of an act constituting an offence involving moral turpitude when he is convicted. To quote paragraph-13: (SCC p. 670) “13. The Act provides for a close-knit scheme providing for payment of gratuity. It is a complete code containing detailed provisions covering the essential provisions of a scheme for a gratuity. It not only creates a right to payment of gratuity but also lays down the principles for quantification thereof as also the conditions on which he may be denied therefrom. As noticed hereinbefore, sub-section (6) of Section 4 of the Act contains a non obstante clause vis-à-vis sub-section (1) thereof. As by reason thereof, an accrued or vested right is sought to be taken away, the conditions laid down thereunder must be fulfilled. The provisions contained therein must, therefore, be scrupulously observed. Clause (a) of sub-section (6) of Section 4 of the Act speaks of termination of service of an employee for any act, wilful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of damage or loss caused. The disciplinary authority has not quantified the loss or damage. It was not found that the damages or loss caused to Respondent 1 was more than the amount of gratuity payable to the appellant. Clause (b) of subsection (6) of Section 4 of the Act also provides for forfeiture of the whole amount of gratuity or part in the event his services had been terminated for his riotous or disorderly conduct or any other act of violence on his part or if he has been convicted for an offence involving moral turpitude. Conditions laid down therein are also not satisfied.” 19. In the present case, there is no conviction of the respondent for the misconduct which according to the Bank is an offence involving moral turpitude.
Conditions laid down therein are also not satisfied.” 19. In the present case, there is no conviction of the respondent for the misconduct which according to the Bank is an offence involving moral turpitude. Hence, there is no justification for the forfeiture of gratuity on the ground stated in the order dated 20.04.2004 that the “misconduct proved against you amounts to acts involving moral turpitude”. At the risk of redundancy, we may state that the requirement of the statute is not the proof of misconduct of acts involving moral turpitude but the acts should constitute an offence involving moral turpitude and such offence should be duly established in a court of law.” By above judicial pronouncements, the issue has been settled that once a person is convicted by a competent criminal court of law involving moral turpitude then the forfeiture of gratuity is automatic as a consequence of the conviction. The employer has not been given any option rather gratuity stands forfeited as a consequence of conviction by the Criminal Court. 10. In view of above discussion and judicial pronouncement, this Court finds no infirmity in the impugned order dated 28.09.2015 passed by the Appellate Authority and order dated 17.11.2014 passed in Original Authority under the Payment of Gratuity Act, 1972. Accordingly, the present writ petition stands dismissed.