Case Note & Summary
The petitioner, Bank of Maharashtra, challenged the orders of the Controlling Authority and Appellate Authority under the Payment of Gratuity Act, 1972, which directed payment of gratuity to respondent No.1, a former Regional Manager. Respondent No.1 was charge-sheeted on 30/10/2013, suspended on 07/12/2013, and superannuated on 31/12/2013. The departmental enquiry continued post-retirement, and on 29/04/2016, he was compulsorily retired and his gratuity was forfeited. Respondent No.1 approached the Controlling Authority, which on 06/12/2019 allowed his claim for Rs.10 lakhs gratuity with interest. The bank's appeal was dismissed on 30/08/2021. The High Court upheld the authorities' orders, holding that forfeiture under Section 4(6) of the Act requires the misconduct to involve a willful offence or moral turpitude, which was not established. The court dismissed the writ petition, affirming the concurrent findings.
Headnote
A) Payment of Gratuity Act, 1972 - Forfeiture of Gratuity - Section 4(6) - Conditions for Forfeiture - The forfeiture of gratuity is permissible only if the employee's misconduct involves a willful offence or moral turpitude, or if the termination is for riotous or violent conduct. Mere misconduct not falling under these categories does not justify forfeiture. The court held that the bank's order of compulsory retirement did not specify any such grounds, and thus the forfeiture was invalid. (Paras 2-10) B) Payment of Gratuity Act, 1972 - Jurisdiction of Controlling Authority - Section 7 - The Controlling Authority has the jurisdiction to adjudicate gratuity claims even after the employer has imposed a punishment. The court held that the authority correctly applied the law and directed payment of gratuity with interest. (Paras 3-5) C) Payment of Gratuity Act, 1972 - Compulsory Retirement - Effect on Gratuity - Compulsory retirement after superannuation does not automatically disentitle an employee to gratuity. The court held that the bank's action of forfeiting gratuity without meeting the conditions of Section 4(6) was illegal. (Paras 2-6)
Issue of Consideration
Whether the forfeiture of gratuity of an employee who was compulsorily retired after superannuation is valid under Section 4(6) of the Payment of Gratuity Act, 1972, and whether the orders of the Controlling Authority and Appellate Authority are sustainable.
Final Decision
Writ petition dismissed. Orders of Controlling Authority dated 06/12/2019 and Appellate Authority dated 30/08/2021 upheld. Petitioner directed to pay gratuity amount of Rs.10.00 lakhs with interest as per the orders.
Law Points
- Gratuity cannot be forfeited for misconduct not involving moral turpitude or willful offence
- Forfeiture under Section 4(6) of Payment of Gratuity Act
- 1972 requires specific conditions
- Compulsory retirement does not automatically disentitle gratuity
- Controlling Authority has jurisdiction to decide gratuity claims
- Appellate Authority's concurrent findings not to be lightly interfered with
