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2021 DIGILAW 744 (KAR)

General Manager (P), Canara Bank v. Appellate Authority Under Payment of Gratuity Act, 1972 and Deputy Chief Labour Commissioner (Central)

2021-07-08

P.B.BAJANTHRI

body2021
ORDER : In the instant petition petitioner has assailed the order of the Appellate Authority (respondent No.1) (vide Annexure-A) dated 22.12.2020. 2. Respondent No.2-P. Rajendra was appointed as a clerk with the petitioner-Bank on 24.7.1981 under Schedule Tribe Category. In that regard, he had furnished caste certificate dated 19.7.1978. The petitioner -Bank initiated enquiry by framing charges and issuing charge sheet on 12.3.1990 on the allegations that respondent No.2 is alleged to have submitted Schedule Tribe Certificate which is not a genuine one. Charge Sheet was not proceeded with in terms of the direction issued in W.P. No.2387/1990(as stated in the memorandum of Writ Petition). Thereafter, there were certain internal communications relating to verification of caste certificate whether respondent No.2 belongs to Yadav Community (Golla Community) and such caste would fall under the Schedule Tribe category or not? Consequently, caste certificate dated 19.7.1978 was cancelled in a proceedings dated 7.9.2017 initiated by the District Caste and Income verification Committee. On 27.09.2017, services of respondent No.2 were terminated while canceling the order of appointment of respondent No.2. Thereafter, respondent No.2 submitted representation for settlement of terminal benefits and it was rejected on 13.12.2017. He has rendered 36 years 3 months of service. He had submitted Form-1 claiming payment of gratuity and it was rejected by the petitioner/bank on 26.11.1970. Thus respondent No.2 filed an application before the Controlling Authority in respect of payment of gratuity. Application of respondent No.2 was rejected vide order dated 20.08.2020. Feeling aggrieved by the order of Controlling Authority, respondent No2 preferred an appeal before the Appellate Authority under Section 7(7) of the Payment of Gratuity Act, 1972 (for short ‘the Act, 1972). Appeal filed by the respondent No.2 i.e. Appeal No.36(479) 2019-B1 was allowed in favour of respondent No.2 while setting aside the order of the Controlling Authority dated 20.8.2020 and direction was issued to the petitioner-Bank to pay respondent No.2 Rs.10,00,000/-along with interest @ 10% per annum from the date it became due till the actual date of payment. Feeling aggrieved and dissatisfied of the order of Appellate Authority dated 22.12.2020, petitioner -Bank has presented this petition. 3. Feeling aggrieved and dissatisfied of the order of Appellate Authority dated 22.12.2020, petitioner -Bank has presented this petition. 3. Learned counsel for the petitioner -Bank vehemently contended that the petitioner-Bank has cancelled the order of appointment issued to respondent No.2 and terminating his services on 27.09.2017 with reference to the cancellation of caste certificate dated 19.7.1978 issued in favour of respondent No.2 in view of the letter of the District Caste and Income Verification Committee dated 07.09.2017. Learned counsel for the petitioner submitted that once the services of respondent No.2 is terminated pursuant to cancellation of caste certificate, respondent No.2 is not entitled to gratuity. It is submitted that petitioner is not entitled to have the benefit of gratuity in view of Section 4(6)(b)(ii) of the Act, 1972. In support of the aforesaid contention, he relied on the following three decisions furnished along with the memo. 1. AIR 2004 SC 1469 (R. Vishwanath Pillai Vs State of Kerala and Ors) dated 07.01.2004. 2. AIR 2017 SC 3271 (Chairman and Managing Director, FCI and Ors. V. Jagdish Balaram Bahira and Ors. 3. High Court of Judicature at Madras judgment dated 04.06.2014-N. Balu Vs. The Chairman, State Bank of India, Mumbai & Others (Writ Petition No.13346 & 19055 of 2013 & M.P. No.1 and 1 of 2013) 4. Heard the learned counsel for the petitioner-Bank. 5. Question for consideration in the present petition is ‘Whether respondent No.2 is entitled to gratuity under the Payment of Gratuity Act, 1972 or not?’ 6. Undisputed facts are that respondent No.2 was appointed with the petitioner -Bank as a clerk under the Schedule Tribe Category r/w the Caste Certificate dated 19.7.1978. Petitioner-Bank initiated disciplinary proceedings in order to find out the genuineness of the Caste Certificate dated 19.7.1978. Thereafter, enquiry is stated to have been abandoned by petitioner. Further, there were correspondences among petitioner and state authorities in respect of genuineness of the caste certificate dated 19.7.1978 furnished by respondent No.2. Caste Certificate dated 19.07.1978 was cancelled on 7.9.2017 by the District Caste & Income Verification Committee. Pursuant to the cancellation of caste certificate of respondent No.2, petitioner-Bank proceeded to terminate the services of respondent No.2 and cancelled the order of appointment issued to him on 1.7.1981. Section 4(6)(b)(ii) of the Act, 1972 reads as under: 4. Caste Certificate dated 19.07.1978 was cancelled on 7.9.2017 by the District Caste & Income Verification Committee. Pursuant to the cancellation of caste certificate of respondent No.2, petitioner-Bank proceeded to terminate the services of respondent No.2 and cancelled the order of appointment issued to him on 1.7.1981. Section 4(6)(b)(ii) of the Act, 1972 reads as under: 4. Payment of gratuity.-XXXX (1) to (5) XXXXXX (6) Notwithstanding anything contained in sub-Section (1),- (a) the gratuity of an employee, whose services have 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 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. Section 4(6)(b)(ii) of the Act, 1972 is in respect of moral turpitude of an employee with reference to such offence committed while he was in the course of his employment. Respondent No.2 was appointed with petitioner-Bank on 1.7.1981. In order to obtain appointment, he had furnished Schedule Tribe Category Certificate dated 19.7.1978 that means he had committed misconduct prior to 1.7.1981(order of appointment) and not during the course of employment and such offence is to be proved in the Court of law. Petitioner-Bank has not launched criminal proceedings. If an employee has committed offence involving moral turpitude during the course of employment, in that event, such employee is not entitled to gratuity amount. 7. The decisions relied by the learned counsel for the petitioner-Bank are in respect of terminal benefits and is not in relation to provisions of Act, 1972. In the present case, question is ‘Whether respondent No.2 is entitled to gratuity with reference to the aforesaid provisions of the Act, 1972 or not? 8. Moral turpitude of respondent No.2 would not fall under Section 4(6)(b)(ii) of the Act, 1972. Moreover, the cited decisions are distinguishable in view of the provisions of the Act, 1972 cited supra & offence is to be proved in a Court of law. 8. Moral turpitude of respondent No.2 would not fall under Section 4(6)(b)(ii) of the Act, 1972. Moreover, the cited decisions are distinguishable in view of the provisions of the Act, 1972 cited supra & offence is to be proved in a Court of law. Apex Court in the case of Nair Service Society vs. T. Beermasthan reported in (2009) 5 SCC 545 held as under: 48. Several decisions have been cited before us by the respondents, but it is well established that judgments in service jurisprudence should be understood with reference to the particular service rules in the State governing that field. Reservation provisions are enabling provisions, and different State Governments can have different methods of reservation. There is no challenge to the Rules, and what is challenged is in the matter of application alone. In our opinion the communal rotation has to be applied taking 20 vacancies as a block. 9. The decision of the Apex Court cited supra is in respect of particular statute. In other words, each case depends upon the relevant statute which is required to be taken into consideration. The provisions of payment of Gratuity Act, 1972 are crystal clear that an employee should have committed offence involving moral turpitude in the course of his employment. Undisputedly, respondent No.2 has not committed any moral turpitude/offence during the course of his employment. On the other hand, before joining the petitioner-bank, he has obtained the Caste Certificate. 10. The Hon’ble Supreme Court in the case of Union Bank of India and others Vs C.G. Ajay Babu and another reported in (2018) 9 SCC 529 interpreted Sub-Section 6 (a) & (b) of Section 4 of Act, 1972 Paras 15 to 18 are reproduced here under: “15. Under sub-section (6)(a), also the gratuity can be forfeited only to the extent of damage or loss caused to the Bank. In case, the termination of the employee is for any act or wilful 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. In case, the termination of the employee is for any act or wilful 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. Whereas under 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. Thus, clause (a) and clause (b) of sub-section (6) of Section 4 of the Act operate in different fields and in different circumstances. Under clause (a), the forfeiture is to the extent of damage or loss caused on account of the misconduct of the employee whereas under clause (b), forfeiture is permissible either wholly or partially in totally different circumstances. Clause (b) operates either when the termination is on account of: (i) riotous, or (ii) disorderly, or (iii) any other act of violence on the part of the employee, and under clause (ii) of sub-section (6)(b) when the termination is on account of any act which constitutes an offence involving moral turpitude committed during the course of employment. 16. “Offence” is defined, under the General Clauses Act, 1897, to mean “any act or omission made punishable by any law for the time being in force” [Section 3(38)]. 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. 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. In Jaswant Singh Gill v. Bharat Coking Coal Ltd. [Jaswant Singh Gill v. Bharat Coking Coal Ltd., (2007) 1 SCC 663 : (2007) 1 SCC (L&S) 584], 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 para 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, subsection (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. 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 damage 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.” The aforesaid principle is applicable to the present case. 11. The petitioner Bank has not launched criminal proceedings so as to prove offence in the Court of law. Termination and cancellation of appointment order of 2nd Respondent is with reference to cancellation of caste certificate. Therefore, sub-section 6(b) (ii) of Section 4 of Act, 1972 is not attracted so as to deny gratuity amount to the 2nd respondent. Therefore, there is no infirmity in the order of Appellate Authority dated 22.12.2020. Hence, petitioner-Bank has not made out a case so as to interfere with the impugned order dated 22.12.2020 passed by the Appellate Authority vide Annexure-A. Hence, the following: ORDER Writ Petition stands dismissed at the admission stage itself. Petitioner-Bank is hereby directed to release the gratuity amount to respondent No.2 in terms of the order of the Appellate Authority dated 22.12.2020 vide Annexure -A to the writ petition within a period of two months from the date of receipt of this order.