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2021 DIGILAW 1574 (BOM)

Air India Ltd v. Dharman K. Patil

2021-11-23

G.S.KULKARNI

body2021
JUDGMENT G.S. Kulkarni, J. - The Controlling Authority under Payment of Gratuity Act, 1972 (for short "the Act") by an order dated 11 January, 2019 allowed the application as filed by the respondent directing the petitioner to make payment of gratuity to the respondent of an amount of Rs. 4,72,845/-. Such order passed by the Controlling Authority was assailed by the petitioner before the Appellate Authority, who by the impugned order dated 29 April, 2021 in dismissing the petitioners appeal, has confirmed the Controlling Authoritys order. 2. The respondent was in the employment of the petitioner. He joined the petitioners establishment on 24 November, 1983. On 29 November, 2012 which is after 29 years of service, the respondent was issued a charge-sheet by the petitioner under Clause 19(2) (xxii) of the Certified Standing Orders, alleging that respondent no. 1 at the time of seeking employment had willfully furnished false information on his age. It was alleged that respondent no. 1s actual date of birth was 1 January, 1950, however, he had submitted documents depicting his date of birth to be 1 January, 1956. On such charges, an enquiry was conducted which resulted in the disciplinary authority passing an order dated 26 June, 2013 against the respondent interalia of dismissal. By such order, the amount of gratuity payable to the respondent was also directed to be forfeited. To seek approval of the respondents dismissal, the petitioner has already approached the Central Government Industrial Tribunal (CGIT) under Section 332B of the Industrial Disputes Act, 1947. 3. The respondent aggrieved by the gratuity being forfeited under the dismissal order, approached the Controlling Authority under Payment of Gratuity Act, 1972, by filing an application dated 23 May, 2014 which was filed in Form-N, as per the provisions of Rule 10(1) of the Payment of Gratuity Central Rules. The respondent prayed for directions to be issued to the petitioner for payment of the gratuity as per the provisions of the Act amounting to Rs.4,72,845.15. 4. The Controlling Authority, after hearing the parties on the respondents application, passed the impugned order holding that the respondent is entitled to receive payment of gratuity amounting to Rs.4,72,845/-, for the period of continuous service rendered by him from 24 November, 1983 to 4 July, 2013. The operative part of the order can be noted, which reads thus: "ORDER (i) Application of the applicant is allowed. The operative part of the order can be noted, which reads thus: "ORDER (i) Application of the applicant is allowed. (ii) The applicant is entitled to receive payment of gratuity amounting to Rs.4,72,845.00 (Rupees Four lakhs Seventy Two Thousand Eight Hundred Forty Five only) for the period of continuous service rendered by him from 24.11.1983 to 04.07.2013 with the opponent employer. (iii) The applicant is also entitled for simple interest @10% p.a on the said payment of gratuity of Rs.4,72,845.00 w.e.f. 04.07.2013 till the date of actual payment to the applicant by the opponent employer. (iv) The opponent employer is hereby directed to pay the gratuity as well as interest as per the above order at (ii) and (iii) above within 30 days of receipt of this order. (v) The parties shall bear their own costs." 5. Mr. Dsouza, learned counsel for the petitioner in assailing the impugned order has limited submissions. His contention is that the very appointment of the respondent was illegal, as it was obtained on the basis of a false documents relating to his date of birth, which according to him was an established position, as revealed in the enquiry initiated against the respondent. It is hence submitted that the respondent was not entitled to make a demand for payment of gratuity. It was thus appropriate for the disciplinary authority to forfeit payment of the gratuity amount. Mr. Dsouza submits that the Controlling Authority in passing the impugned order has overlooked the clear factual position that when the employment itself was illegally obtained, there was no question of the respondent being rewarded by payment of gratuity. In support of his submission, Mr. Dsouza has placed reliance on the decision of the Supreme Court in R. Vishwanatha Pillai vs. State of Kerala & Ors., reported in 2004 Lab. I.C. 556 and more particularly the observations made in paragraph 17, which reads thus: "17. The point was again examined by a Full Bench of the Patna High Court in Rita Mishra vs. Director, Primary Education, Bihar, AIR 1988 Patna 26. The question posed before the Full Bench was whether a public servant was entitled to payment of salary to him for the work done despite the fact that his letter of appointment was forged, fraudulent or illegal. The Full Bench held: "13. The question posed before the Full Bench was whether a public servant was entitled to payment of salary to him for the work done despite the fact that his letter of appointment was forged, fraudulent or illegal. The Full Bench held: "13. It is manifest from the above that the rights to salary, pension and other service benefits are entirely statutory in nature in public service. Therefore, these rights including the right to salary, spring from a valid and legal appointment to the post. Once it is found that the very appointment is illegal and is non est in the eye of law, no statutory entitlement for salary or consequential rights of pension and other monetary benefits can arise. In particular, if the very appointment is rested on forgery, no statutory right can flow it." 6. Apart from the above submission, there are no other submissions in assailing the order, as according to Mr. Dsouza, the submission urged by him would go to the root of the matter to test the legality of the order passed by the Controlling Authority. 7. On the other hand, Mr. Shetty, learned counsel for the respondent in supporting the impugned order, has referred to the respondents reply affidavit. Mr. Shetty submits that this is a case fully covered by the provisions of sub-section (6) of Section 4 of the Payment of Gratuity Act, 1972. His principal submission is that the contentions as urged on behalf of the petitioner find no place in the conditions which are set out in sub-clause (b) of sub-section (6) of section 4, to entail any forfeiture of gratuity under the said provisions, as rightly observed by the Controlling Authority, in allowing the respondents application. He would accordingly submit that the petition be dismissed. 8. Having heard the learned counsel for the parties and having perused the record and the impugned order, I am unable to agree with the contentions as urged on behalf of the petitioner, for more than one reason. The following discussion would aid the conclusion. 9. It would be necessary to refer to the statutory confines governing the forfeiture of payment of gratuity and/or the entitlement of an employee to the payment of gratuity, relevant to the context in hand. Sub-section (6) of Section 4 of the Act is the relevant provision, which reads thus; "4. The following discussion would aid the conclusion. 9. It would be necessary to refer to the statutory confines governing the forfeiture of payment of gratuity and/or the entitlement of an employee to the payment of gratuity, relevant to the context in hand. Sub-section (6) of Section 4 of the Act is the relevant provision, which reads thus; "4. Payment of Gratuity (6) Notwithstanding anything contained in sub-section (1)- (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 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." 10. On a bare reading of sub-clause (a) of sub-section (6) of Section 4 of the Act, it is limpid that the gratuity of an employee, whose services have been terminated "due to negligence causing damage or loss to or destruction of the property belonging to the employer", shall be forfeited to the extent of the damage or loss caused to that extent. Sub-clause (b) of sub-section (6) provides for two eventualities under which gratuity payable to an employee may be wholly or partially forfeited, firstly, when the services of such employee have been terminated "for his riotous or disorderly conduct or any other act of violence" on his part and secondly, 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. 11. It is manifestly clear that the provisions of sub-section (6) of Section 4 do not permit inclusion of any circumstances relating to the appointment/employment being obtained illegally by an employee. If such contention as urged on behalf of the petitioner is accepted, it would amount to reading something in the said provision, which has not been provided and/or is excluded by the legislature. If such contention as urged on behalf of the petitioner is accepted, it would amount to reading something in the said provision, which has not been provided and/or is excluded by the legislature. This apart, there would be innumerable circumstances touching the issues of appointment and employment. To read such alien attributes within the specific conditions incorporated in clauses (a) and (b) of sub-section (6) would be nothing but tinkering with the plain meaning, object and intention of the said provision. It is for such reason, that the legislature has avoided the inclusion of any such eventuality, to be a ground on which the gratuity payable to the employees can be forfeited. 12. A common thread running through clauses (a) and (b) of sub-section 6 of Section 4 as discernable, is that these provisions target a wrongful act of an employee which would cause damage, loss or destruction of the property belonging to the employer and/ or the services of the employee having been terminated for his riotous or disorderly conduct and/or for any act which constitutes an offence involving moral turpitude, if committed during the course of employment. Such acts of an employee in no manner can be compared to an allegation that an employee had illegally obtained an employment, which would be subjective and far different from the category of acts which are set out in clauses (a) and (b) of sub-section 6 of Section 4. Thus, to remedy a situation that the employment has been obtained illegally, it is always incumbent for the employer to be vigilant on such issue and to conduct a lawful enquiry at the appropriate time, which in the present case has happened belatedly after the respondent rendered 29 years of service. However, for the aforesaid reasons, such termination cannot be a ground for forfeiture of gratuity to which the employee would be entitled for the services rendered by him, when his conduct for the purposes of the enquiry held against him fell outside clauses (a) and (b) of sub-section (6) of section (4). 13. In regard to the eligibility of an employee to payment of gratuity and in the said context the interpretation of sub-section (6) of Section 4 of the Act as made in some of the decisions, a useful reference can be made to the following decisions:- In Union Bank of India & Ors. 13. In regard to the eligibility of an employee to payment of gratuity and in the said context the interpretation of sub-section (6) of Section 4 of the Act as made in some of the decisions, a useful reference can be made to the following decisions:- In Union Bank of India & Ors. vs. C.G. Ajay Babu & Anr., AIR 2018 SC 3792 , the Supreme Court in interpreting the provisions of Section 4(6)(a) & (b) held that under sub-section (6)(a), gratuity can be forfeited to the extent of damage or loss caused to the Bank. In case, the termination of the employee is for any act or willful omission or negligence causing any damage or loss to the employer or destruction of property belonging to the employer, the loss can be recovered from the gratuity by way of forfeiture. It is held that whereas under sub-Clause (b) of sub-Section (6), the forfeiture of gratuity, either wholly or partially, is permissible under two situations (i) in case the termination of an employee is on account of riotous or disorderly conduct or any other act of violence on his part, (ii) if the termination is for any act which constitutes an offence involving moral turpitude and the offence is committed by the employee in the course of his employment. The Supreme Court thus held that sub-Clause (a) and sub-Clause(b) of sub-Section (6) of Section 4 of the Act operate in different fields and in different circumstances. In the said case, there being no conviction of the respondent therein, for any misconduct involving moral turpitude, it was held that there was no justification for the forfeiture of gratuity. It was held that forfeiture of gratuity is not automatic on dismissal from service and it is subject to sub-Sections (5) and (6) of Section 4 of The Payment of Gratuity Act, 1972. 14. In Jaswant Singh Gill vs. Bharat Coking Coal Ltd. & Ors., (2007) 1 SCC 663 , the Supreme Court held 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. The Supreme Court in such context in paragraph 13 observed that: "13. The Supreme Court in such context in paragraph 13 observed that: "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--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, willful 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 sub-section (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." 15. A reference to the decision of the learned Single Judge of the Chhattisgarh High Court in General Manager, UCO Bank, Kolkata & Anr. vs. Jitendra Kumar Shrivastava s/o. Late Shri A.K. Shrivastava, 2016 II CLR 289, also needs to be made. Mr. Justice Sanjay K. Agrawal speaking for the Bench, in a similar situation, analysed the provision of Section 4(6)(b)(ii) of the Act and held thus: "17. vs. Jitendra Kumar Shrivastava s/o. Late Shri A.K. Shrivastava, 2016 II CLR 289, also needs to be made. Mr. Justice Sanjay K. Agrawal speaking for the Bench, in a similar situation, analysed the provision of Section 4(6)(b)(ii) of the Act and held thus: "17. Thus, on the basis of above-stated analysis, it can be safely deduced that in order to invoke Section 4(6)(b)(ii) of the PG Act to forfeit an amount of gratuity payable to an employee, the condition precedent is that terminated employee must be convicted for an offence for the time being in force and that offence must be an offence involving moral turpitude. Unless the aforesaid two conditions are fully established by an employer, mere termination or dismissal of an employee concerned would not ipso facto constitute an offence that too an offence involving moral turpitude to attract Section 4(6)(b)(ii) of the PG Act and an employer would have no jurisdiction to invoke the provision contained in Section 4(6)(b)(ii) of the PG Act to forfeit gratuity payable to an employee under the PG Act." 16. Thus adverting to the principles of law as laid down in the aforesaid decisions in their application to the facts of the present case, it is crystal clear that none of the circumstances as falling within the purview of clauses(a) and (b) exists in the present case, which can authorise the petitioner to forfeit the gratuity amount payable to the respondent. 17. Now coming to Mr. Dsouzas reliance on the decision in R. Vishwanatha Pillai (supra), in my opinion, is not well founded. As clearly seen from the observations made by the Court in paragraph 17 of the judgment, the case before the Court pertained to a false caste certificate being submitted by the employee. An appointment on a reserved post being sought on a false caste certificate stands on a completely different footing. Such appointment has been held to be a fraud on the Constitution, thereby depriving the legitimate entitlement of a reserved category candidate to such appointment. This decision is also not an authority in the context of the provisions of Payment of Gratuity Act. Thus, the ratio of this decision would not be applicable in the facts of the case. 18. For the above reasons, the impugned order passed by the learned Controlling Authority and as confirmed by the appellate authority are passed in accordance with law. Thus, the ratio of this decision would not be applicable in the facts of the case. 18. For the above reasons, the impugned order passed by the learned Controlling Authority and as confirmed by the appellate authority are passed in accordance with law. There is no perversity or any illegality warranting interference in exercise of the writ jurisdiction of this Court under Articles 226 and 227 of the Constitution. The Writ Petition is accordingly dismissed. No costs.