Case Note & Summary
The petitioner, Shivaji Kerba Paikrao, was employed with the Life Insurance Corporation of India (LIC) initially as an Assistant and later as a Higher Grade Assistant. He was terminated from service on 30 June 2005 on charges of fraud: he had purchased a policy in the name of his son, falsely claimed the son's death, and misused his position to obtain Rs. 3 lakh from LIC. The petitioner did not challenge the termination order but filed a writ petition under Articles 226, 14, 16, and 21 of the Constitution seeking two reliefs: (1) payment of gratuity, and (2) benefit of revised pay scale from 1 August 2002 to 30 June 2005 with arrears. The petitioner's counsel relied on the Supreme Court's decision in Jaswant Singh Gill v. Bharat Coking Coal Ltd., (2007) 1 SCC 663, where it was held that gratuity cannot be forfeited without a termination order under Section 4(6) of the Payment of Gratuity Act, 1972. The court noted that the petitioner was terminated but no order under Section 4(6) was passed, and the LIC's rules could not override the general Act. Therefore, the court directed LIC to pay gratuity to the petitioner. However, regarding the revised pay scale, the court held that since the petitioner was terminated on 30 June 2005 and did not challenge the termination, he was not entitled to any benefits after that date, including the revised pay scale. The petition was partly allowed.
Headnote
A) Gratuity - Forfeiture - Section 4(6) Payment of Gratuity Act, 1972 - Termination Order Requirement - Petitioner was terminated for fraud but no order under Section 4(6) was passed - Following Jaswant Singh Gill v. Bharat Coking Coal Ltd., (2007) 1 SCC 663, gratuity cannot be forfeited without a termination order under the general Act - Held that petitioner is entitled to gratuity (Paras 3-5). B) Service Law - Pay Revision - Post-Termination Benefits - Petitioner terminated on 30-6-2005 and did not challenge termination - Claim for revised pay scale from 1-8-2002 to 30-6-2005 - Since termination was not challenged and petitioner was not in service after termination, no entitlement to pay revision - Held that petitioner is not entitled to revised pay scale (Paras 5-6).
Issue of Consideration
Whether the petitioner is entitled to gratuity despite termination for fraud, and whether he is entitled to revised pay scale benefits after termination.
Final Decision
Petition partly allowed. LIC directed to pay gratuity to the petitioner. Claim for revised pay scale and arrears rejected.
Law Points
- Gratuity cannot be forfeited without termination order under Section 4(6) of Payment of Gratuity Act
- 1972
- Employee terminated for misconduct not entitled to post-termination pay revision
