Case Note & Summary
The petitioner, Shri B. Premananda Pai, a former Senior Manager of Vijaya Bank, filed a writ petition under Articles 226 and 227 of the Constitution of India challenging two orders passed by the Controlling Authority under the Payment of Gratuity Act, 1972. The first order dated 24.5.2012 in Gratuity Application No.48(97)2011-B3 and the second order dated 3.12.2014 in Gratuity Application No.48(76)2013-B3 deferred the payment of gratuity to the petitioner on the ground that criminal proceedings were pending against him. The petitioner contended that the Controlling Authority acted arbitrarily and irrationally, as the Payment of Gratuity Act, 1972 does not empower the authority to defer gratuity payment pending criminal proceedings. The respondents, including the Chairman & Managing Director of Vijaya Bank and the Controlling Authority, argued that the deferment was justified due to the pending criminal case. The High Court of Karnataka, presided over by Justice Raghvendra S. Chauhan, examined the provisions of the Payment of Gratuity Act, 1972, particularly Section 4 which provides for payment of gratuity, and Section 7 which deals with the determination and payment of gratuity. The court found that the Act does not contain any provision allowing the Controlling Authority to defer gratuity payment on the ground of pending criminal proceedings. The court held that the right to gratuity is a statutory right that accrues upon the employee's retirement or superannuation, and the employer cannot withhold it except in cases of forfeiture as provided under Section 4(6) of the Act, which applies only to cases of termination due to moral turpitude or riotous behavior. Since the petitioner had retired and there was no such termination, the deferment was illegal. The court quashed both impugned orders and directed the Controlling Authority to decide the petitioner's gratuity application immediately without waiting for the outcome of the criminal proceedings. The writ petition was allowed.
Headnote
A) Gratuity - Entitlement - Section 4, Payment of Gratuity Act, 1972 - Deferment of Payment - The Controlling Authority cannot defer payment of gratuity on the ground of pending criminal proceedings against the employee, as the Act does not provide for such deferment. The court held that the right to gratuity is a statutory right and cannot be withheld pending criminal proceedings (Paras 1-10).
Issue of Consideration
Whether the Controlling Authority under the Payment of Gratuity Act, 1972 can defer the payment of gratuity to an employee on the ground that criminal proceedings are pending against him, and whether the orders passed by the Controlling Authority are arbitrary and unsustainable.
Final Decision
The writ petition is allowed. The impugned orders dated 24.5.2012 and 3.12.2014 passed by the Controlling Authority are quashed. The Controlling Authority is directed to decide the petitioner's gratuity application immediately without waiting for the result of the criminal proceedings.
Law Points
- Gratuity entitlement
- Payment of Gratuity Act
- 1972
- Section 4
- Section 7
- Controlling Authority
- Writ jurisdiction
- Articles 226 and 227 of Constitution of India
