Case Note & Summary
The petitioner, Western Coalfields Ltd., challenged the orders of the Controlling Authority (Assistant Commissioner, Labour, Chandrapur) dated 21.10.2015/30.10.2015 and the Appellate Authority dated 29.4.2016/2.5.2016, which had set aside the forfeiture of gratuity of the respondent, Narayan Karu Dahekar, a former Security Guard. The respondent was appointed as a Badli Worker on 13.3.1982 and later as a Security Guard on 7.6.1990, for which the qualification was education up to 8th standard. He submitted a school certificate claiming he had passed 8th class. The employer received anonymous information that the certificate was false, initiated a departmental enquiry, and dismissed the respondent on 30.1.2014. Thereafter, the employer issued a show-cause notice dated 1/2.2.2014 for forfeiture of gratuity on grounds of moral turpitude, and after considering the respondent's reply, forfeited the gratuity via communication dated 28.2.2014 in Form 'M'. The respondent approached the Controlling Authority by filing Form 'N' on 13.3.2014. The Controlling Authority and Appellate Authority held that the forfeiture was not justified. The High Court examined the provisions of Section 4(6) of the Payment of Gratuity Act, 1972, which allows forfeiture of gratuity wholly or partially if the employee's service has been terminated for any act of moral turpitude. The court found that the respondent's act of submitting a false school certificate to obtain employment constituted moral turpitude, as it involved dishonesty and fraud. The court distinguished between clauses (b)(i) and (b)(ii) of Section 4(6), noting that clause (b)(i) requires damage to the employer, which was not established, but clause (b)(ii) only requires an act of moral turpitude. The court held that the lower authorities erred in setting aside the forfeiture and allowed the writ petition, quashing their orders and upholding the employer's forfeiture of gratuity.
Headnote
A) Gratuity - Forfeiture - Moral Turpitude - Section 4(6)(b)(ii) Payment of Gratuity Act, 1972 - The employer forfeited gratuity of a dismissed employee who had submitted a false school certificate to obtain appointment as a Security Guard. The controlling authority and appellate authority set aside the forfeiture. The High Court held that the act of submitting a forged document amounts to moral turpitude, and the employer was justified in forfeiting gratuity under Section 4(6)(b)(ii) of the Act. The orders of the lower authorities were quashed. (Paras 1-10)
B) Gratuity - Forfeiture - Wilful Omission - Section 4(6)(b)(i) Payment of Gratuity Act, 1972 - The court noted that the forfeiture under Section 4(6)(b)(i) requires a finding of wilful omission or negligence causing damage to the employer. Since the employer did not establish such damage, forfeiture under that clause was not applicable. However, forfeiture under Section 4(6)(b)(ii) for an act of moral turpitude was valid. (Paras 7-9)
Issue of Consideration
Whether the forfeiture of gratuity under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 is justified when an employee is dismissed for submitting a false school certificate, constituting an act of moral turpitude.
Final Decision
The High Court allowed the writ petition, quashed the orders of the Controlling Authority dated 21.10.2015/30.10.2015 and the Appellate Authority dated 29.4.2016/2.5.2016, and upheld the employer's forfeiture of gratuity.
Law Points
- Gratuity forfeiture
- moral turpitude
- misconduct
- fraudulent document
- Payment of Gratuity Act
- 1972 Section 4(6)(b)(ii)
- departmental enquiry
- controlling authority
- appellate authority
Case Details
2020 LawText (BOM) (01) 133
WRIT PETITION NO. 7016 OF 2016
Shri S.C. Mehadia for Petitioner, Shri N.B. Meshram for Respondent
The Sub-area Manager, Sasti Open Cast Mines, Western Coalfields Ltd.
Shri Narayan Karu Dahekar
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Nature of Litigation
Writ petition challenging orders of Controlling Authority and Appellate Authority under Payment of Gratuity Act, 1972 which set aside forfeiture of gratuity.
Remedy Sought
Petitioner (employer) sought quashing of orders dated 21.10.2015/30.10.2015 and 29.4.2016/2.5.2016 passed by Controlling Authority and Appellate Authority respectively, and restoration of forfeiture of gratuity.
Filing Reason
The employer forfeited gratuity of the respondent employee who was dismissed for submitting a false school certificate. The lower authorities set aside the forfeiture, leading to the writ petition.
Previous Decisions
Controlling Authority (Assistant Commissioner, Labour, Chandrapur) by order dated 21.10.2015/30.10.2015 set aside the forfeiture. Appellate Authority by order dated 29.4.2016/2.5.2016 upheld the Controlling Authority's order.
Issues
Whether the forfeiture of gratuity under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 is justified when an employee is dismissed for submitting a false school certificate, constituting an act of moral turpitude.
Whether the lower authorities erred in setting aside the forfeiture.
Submissions/Arguments
Petitioner argued that the respondent's act of submitting a false school certificate amounted to moral turpitude, justifying forfeiture under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972.
Respondent argued that the forfeiture was not justified as the act did not cause damage to the employer and did not amount to moral turpitude.
Ratio Decidendi
Under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972, gratuity can be forfeited if the employee's service has been terminated for any act of moral turpitude. Submitting a false school certificate to obtain employment constitutes moral turpitude as it involves dishonesty and fraud. The forfeiture does not require proof of damage to the employer under clause (b)(i); clause (b)(ii) is independent and only requires an act of moral turpitude.
Judgment Excerpts
The petitioner is aggrieved by the judgment and order delivered by the Controlling Authority – Assistant Commissioner, Labour, Chandrapur, dated 21.10.2015/30.10.2015 and the order passed by the appellate authority dated 29.4.2016/2.5.2016, by which the respondent has been granted gratuity under the Payment of Gratuity Act, 1972.
The respondent had tendered a school certificate which indicated that he had passed his 8th class.
By order dated 30.01.2014, he was dismissed from service.
The petitioner management issued a communication dated 28.2.2014 in form ‘M’ and rejected the reply and directed the forfeiture of the gratuity.
Procedural History
The respondent was dismissed from service on 30.1.2014 after a departmental enquiry for submitting a false school certificate. The employer issued a show-cause notice for forfeiture of gratuity on 1/2.2.2014, and after considering the reply, forfeited gratuity on 28.2.2014. The respondent filed Form 'N' before the Controlling Authority on 13.3.2014. The Controlling Authority set aside the forfeiture on 21.10.2015/30.10.2015. The employer appealed to the Appellate Authority, which upheld the Controlling Authority's order on 29.4.2016/2.5.2016. The employer then filed the present writ petition.
Acts & Sections
- Payment of Gratuity Act, 1972: Section 4(6), Section 4(6)(b)(ii), Section 4(6)(b)(i)
