High Court · 2025

...RESPONDENTS Petition under Articre 226 of the constitution of rndia praying that in the -0" circumstances stated in the affidavit fired therewith, the High'court mry pleased to issue an appropriate writ more in the nature of writ of certiorari cafling for the records relating to the orders of controiling Authority under the prvruni or Gratuity Act, 1972 and the Asst. Labour Commi..ion", (Central), UyOeraOaa in eC Apprication No. 48/169/201 5-E3 dt.27.05.2016 as upheid oy ttr6 0y chief Labour (Central) Commissioner, Hyderabad in Case I,to. p'Cn_OlZOtT dtiO.O7.ZO17 and quash the same as being ifiegar and contrary to the provisions of section 4 (6) ib) of Payment of Gratuity AcI, 1972. lA NO: 'l OF 2018 Petition under Section i s1 cpc praying that in the circumstances stated in the affidavit filed in suppo( of the petition, itre uign court may ou pr"irlJ to suspend the orders of the appellate authority in his proceeding trio. pGA -612017 dated 20.07.20'17, upholding the orders of the controlring authority in pG Application No. 48/1 69/201 5-E3 dated 2t .OS.2O1 6. Gounsel for the Petitioner: SRI CH.SAMSON BABU Counsel for the Respondent Nos.1 & 2: Gp FOR LABOUR Counsel forthe Respondent No.3: SRI CH.RAMESH BABU The Court made the following: ORDER w /) THE I{ON'BLE SRI JUSTICE PULLA KARTHIK ]YRIT PETITION No. 3349 of 2OLa ORDER: () Se e L:rr g call for the records pertaining to I 1- t: rrders of Controllins ,\l-r.t ority undcr the payment of Gratuity 1r.c t-, I972 and the AssistanL Labour Commissioner (Central) Hvrler abad' in P.G.Applbrr i,rrr No.48/ 169l2Ol5-F,3' dated 27 O1'2Oltt' rs upheld by the Dr:pt tv (lhief Latrour (Central) Commissioner' l''I id':rabad' in Case No.PGA tt2Ol7, daLed 20'O7 2O17' and quash tlrc same' the present \l/ri t. Ir':.irion is filed 2) For 1,e r-.e r understanding of the case facts' l[i' J'artles are l-rereinafter re ierrerl to as they are arrayed before the Ltlb lur Court' only for th< -o'.r-pose of narration of case facts' 21) In tlLe v:ar 1979, the applicant was appoinlcd as Artisan Gracle IV ar-'l after rendering 34 years of se n'ice ' he was terminatec :L:;'lechnician on 14'12'2073 and his lasl c rawn wage was Rs :;t).4)7 / - at the time of his leaving th': rcspondent OrganizzrLi:rt Further, while the applicanl \\'as \\Iorking as Techniciatt i: r the Township Administration D':pirrtmcnt of responde r r i)rganization, the respondents have issr-re d a charge memoratttlutr ciated 21.O4.2011 vide Proceedir'gs No HY/'lA/ DISCP/ 2( 1 1 framing six charges, for which, the' applicant has submittec I is explanation. However, without ';c'ns'idering aliSi&;:;n1.l ' o PK, J wP_3349 20 18 same, an enquiry was conducted and basing on the enquiry report, the punishment of .dismissal from service, was imposed on the petitioner. Further, the Appeal and Review petition filed by the applicant on 2g.12.2OI3 and 2T.Ot 2O14 before the Appellate Authority and Review Authority respectivery were arso dismissed. Thereafter, the respondents have issued the show cause notice vide Ref.No.Hy:18583OO:2O!4, dated 29.03.2014, to the applicant as per the provisions of Payment of Gratuity Act, t9Z2 (in short Gratuity Act), stating as to why the Gratuity payable to him cannot be forfeited keeping in view the quantum ol. loss caused to the propert5r belonging to the petitioner. Duly withdrawing the said show cause notice dated 29.O3.2O14, the respondents have issued another show cause nodce dated 07. 10.2015, to which, the applicant has submitted his explanation Thereafter, the respondent authorities have passed the order vide Ref.No. HY/TA/ 1 858300 / 1 5, dated 30. I 2.2O 1 S, forfeiting the entire gratuity amount otherwise payable to the applicant. Challenging the same, the applicant has fiied p.c. Application No.48/169/2o1s-E3 before respondent No.2 and vide order dated 27.05.2016, the said authority has allowed the application directing ttre respondents to pay Gratuity of Rs.1O,00,0OO/_ along with simple interest at lOoA per annum w.e.f :24.Og.2O15. Challenging the same, the respondents have filed an appeal before

17.10.201s. I -J PK, J '\/P 3349 2018 respondelrt N I 1 vide PGA No.6 I 2077 and '''ide :rrr ler dated 2O.O7.2O) 7 t re same was disposed of partially uph<'1ding the order pass€d r)'' re spondent No.2, however, modifying tf e gratuity payable pr:tior and duly including the period of suspr:nt ion of the applicant till 1 'r: date of deposit of gratuity. Aggneve<1 try the same, the respon<ient authorities are before this Court. 3) Hear, 1 S: r i Samson Babu, learned counsei for tl rc petitioner- employer, ea'rred Government Pleader for Labour t p1:earing for respondents ' :rnd 2, and Sri Ch.Ramesh Babu, lca:l-t':d counsel lor responc crt L No.3-employee. 4) Leanrt:r' counsel for the petitioner has conlenc ed that both the author,tie's have grossly erred in holding thret ttre a :t of moral turpitucL: (r.r'rrot be attributed to the employee purJ)orting to act under the pri )\'lsions of Gratuity Act and grossl.y erl-e d n ordering paymenl cf g:r,r1uity to the employee pending adjudrca[ion of the case in LD.N,:r 54 of 2015 before the CGIT. It is furrl- er contended that lhc rLrLth rrities under the Gratuity Act can 1)ass r,rders against the Comp:Lnr once it is held by the competent Trib -rnal that the order of 6 jsm i ;sa1 is bad in law. It is further subrnil Le I that both the autho rit'es have misconstrued themselves anc lrent on to decide as to lhether the order of dismissal passerl rrgainst the emplol'e,: s rgal or illegal, which is impermissible. I: is further a,atl l I -4 PK, J wP_3349 20 la a-) contended that the authorities are not empowered to decide the reasons for inflicting penalty of dismissal on an employee pursuant to the findings of the Enquiry Officer and that in any event the Appellate Authority grossly erred in calculating the payment of gratuity to the tune of Rs. l2,lg,907/_ by taking.inro accounr the period of suspension of the employee for which he is not entitled to as per Clause 22(1)(vl of BHtrL Standing Orders. Therefore, the appellate authority is grossly erred in calculating the gratuity amount by taking into consideration the period of suspension of the employee from 12.04.2071 to 14.72.2O13, for which, he is not entitled to. Therefore, viewed from any angle, the orcler passed by the authorities are beyond the scope and jurisdiction of the authorities and powers conferred on them under the provisions of the Gratuity Act. 5) Per contra, the learned counsel for respondent No.3_ applicant has contended that no complaint was lodged before the Police or any case was filed in Criminal Court against the applicant charging the offence of moral turpitude inhsmuch as the same does not hnd place in the charge sheet. Further, respondent No.2_ Controliing Authority is empowered under Section 3 of the Gratuity Act to determine the matter in dispute under Section T4 (c) ol the Gratuit5r Act and similarly respondent No.1_Appellant Authority is ] 5- PK, J \(/ , 3349 2018 vested \\,itlr t I,' power to decide the correctness of thLe order passed by the Co:tlo1ling Authority under Section 7 (8) of tlLe Gratuity Act. Ther:li,r':, both the authorities have decicled ttLe Cispute for payment rf ,lratuity payable to this responderLt z s per the provisions o1 ,}-atuity Act and the Rules made the r':u rder' The said adjurlicrl.ory orders of respondent Nos. 1 an'l 2 cannot be termed e s tl rt decision on the order of dismissal, cez sed by the Industrial 'lr irunal in I.D. No.54 12015. Equally, 'ht' Industrial Tribunal h:r.; no power to decide the dispute Ib: :ayment of gratuity p ;.:l ilularly the term moral turpitude is not de ltned under the Gratuitv .\ct or ID Act and it is not the crse 'rl tlLe employer that thr:y t:l zrrged the employee for the acts of m rrt rl turpitude cither in tl.re ,'harge sheet or lodged any complaint befr're Police or Criminal r I r r -l Therefore, both the authorities, on con sidering the materi:rl lrn rccord, have rightly passed thc im1'u1;ned orders clirectir-rgi -ht ltctitioner to pay gratuity amount to re lp >ndent No 3 and thcrc ar c no merits in the Writ Petition and the r'rltre prayed to dismiss ll)(' .\ rjr petition. 6) TLri i ll f,r-Irt has taken note of the submiss ior Ls made by respecti,rc .r )r rnsel and perused the record. 7) Ar; ,ri1rr be seen from the record, admittedly, ri'lrilt respondent No.3 s,as u crking as Technician, he was dismisseC rom service t -6 PK, J wP_3349 2018 O uide proceedings Ref.No.Hy/TAl iS5830O/llA/ i3, 14.12.2013. Relevant portion of the said proceedings reads as under: "The above acts of Sri JRS Sarma which are detrimental to the interests of BHEL are grave in nature and constitute Major Misconduct under Sub-clauses (d), (zza), (zs) alld (h) of the acts mentioned in Standing Order No.20 of BHEL. Considering the gravity ol misconduct committed by delinquent employee Sri JRS Sarma, and aD aggravating and extenuating circumstances of the management of BHEL has rost confidence on the delinquent employee, Sri JRS Sarma_ The undersigned as Disciplinary Authority, therefore, order that the penalty of "Dismissal from service,, is imposed on Shri J R S Sarma Staff No. 1858300, Technician, Township Administration under the provisions of the Standing Orders of BHEL. The order of "Dismissal from Service" immediate effect-" shall come into force with 8) Thereafter, after a lapse of 2 years, the authorities have passed the order vide Ref.No.HylTA/ 1858300/ 15, dated 30.I2.2015, forfeiting the entire gratuity amount otherwise payable to the applicant. Further, respondent No.2, while passing the order, dated 2Z.C.5.20|6, in p.G.Application No.48l 169/2015_83, gave a reasoned and categorical finding that the employer has failed to establish the element of moral turpitude on the part of the employee for issuing the order of gratuity forfeiture. ' R"l..r^.,t portion of the hndings of respondent No.2 are as under: a1 1 PK, J v/P 33.+9 2018 "...it i; ,l:ar that the Non-Applicant has not fol oved the establisbe.:11;rinciplesofnatura]justicewhilefo-:fr:itingthe gratuit)' arrictLr'rt of the Applicant No fu11 fledged e nclu rv was conductt d rr the Non-Applicartt to establish as to hov" ht acts of misconcl -t,:t :ommitted by the Applicant and it is on r-:cr rd that Non Applic:,urt has issued the forfeiture order flo' 1Y ITL/ 185830(/1l.clated3O-l22ols,afteralapseoi02yetslromthe order c:r1r c 14.12.2013 of "Dismissa-l from Se ric':" .'r'itl immnrli: t-r: r'ffect issued by the Disciplinary Autho:itl The forfeitur: o'-ricr dated 30.l'2'2ols rejecting tJle clarm fr'r payment of gratuitl' to Applicant passed by the Non-Applicant €rp lears to be an aiertlought action. The Non-Applicant has rrot l roduced anv doctrn'etrt or evidence to explain the loss to the orgzrnization fromthc'.r,t'icluctoftheApplicarrtandalsonotlorlgtdpolice compLat nt : ga.inst the Apphcant for the offence invorvir 'g moral turpilr.rrltr rf so committed by the Applicant' In viev' lf 'he facts arrdC.irl)ullr;tiulcesexplainedabove,forfeitureol-graLlitlamount of rht, ,\pplicant by the Non-Applicant is not juslifit d The Appllcant s entitled for gratuity amount'" In ,rt:"r of the above findings, this Court is of th'l view that no 9) interfcrenr,: ir; needed in the order passed by res lol-rdent No.2 orderins tlrt: l:-'titioner to pay gratuity amount to respondent No 3' 1O) ln r;in i .ar circumstances, the Hon'ble SuPrt:m e Court in Bankl , has 1rel,1 that the Y.K. SinTlo u Punjab National e mplove e fr.r s t o make a choice between the tu'o lc r :lrawing the benefit of grir,uity and the choice has a statutory prr)tt ction under 'lzots; a s(lc ./i, 2 s , i -8- sub-section (5) of Section 4 of the Act. Hon'ble Supreme Court are as under: PK, J wP-3349-2018 o Reievant observations of the "ora"r, "23. Based on the conclusions drawn hqreinabove, we shall endeavour to determine *t present controversy First and foremost, we have Gratuity Act that ". "-riff: ;:"'T"T;:,T ff; il:j:; being governed by some than the Gratuity Act, fo: emproyee mar<es such " ;H:: protection, namely, that the employee concerned entitled to receive better provision/insrrument, in "";il:"""i" T:,::,I,#H ffi .T: Gratuity Act_ This protection has been provided through Section 4(5) of the cratuity Act.,, ::::T:::.j;u,""v ir u,, "_:Tr:t? trve provision/instrument 11) Similarly, in Union Bank of Ind.iq u. C.G. Ajag Babuz. t:ne Hon'ble Supreme Court has heid as under:

14. That there is a bipartite settlement in the appellant Bank is not in dispute. That the settlement provides for forteiture only if there is a loss caused dismissal, is arso not," ;:r:::H:;""-:::::::.T:':-*,,; .;Hff":J; that the misconduct of thr rrnancia.r ross to,r. .;;:"'fi0"I":]:l:r, recourse to sub-section (6) of Section 4 0f the Act, carnot be resorted to. Thus, we are respectful agreement with the view taken by the High court * to the protection of the,,J;,tJil,""T:j;" "-o'.r.e is entined ' 1zote1 s scc 529 () -9 PK, J uP i349- 2018

15. UnCe: sub section (6)(a), also the gratuity can l)t f( 'rfcited only to tt e , :t('nt of d amage or loss caused to the Banl' ' Irr case' theternlillari)noftheemployeeisforanyactofwiifillorrission or negligct-rr r r:ausing any damage or loss to the erl p1r )yer or destrr-l()ti )n ol1;roperty belonging to the employer' the lr'ss can be recovere(r fi om the gratuity by way of forfeiture Wht'r':as under clause (,r1 ,r' sub section (6), the forfeiture of gratu ty either wholl1- ,:: :r u tia1ly, is permissible under two situations: (r) in case the ternrinirrion of an cmployee is on account of ioi'ous or disorderlyr.crrcluctoranyotheractofviolenceonhispa:t,(izJif the te rr: rin r ion is for any act which constitutes t m offetlce invoh,in!;rr,ralturpitudeandtheoffenceiscommrttedbythe emplol e : 1r I tl)c course of his employment Thus' clau se (a) ald claust (b) ,) sLIb section (6) of Section 4 of the Acr op':rate in <liffercn t llt l ls and in different circumstances LJnder cl:ruse (a)' the forfeitu:r' is to the extent of darnage or loss causerl 'ln account of tht, rniscrnduct of the employee whereas undel- clzruse (b)' forfeitrLt e s permissiblc either wholly or partially rr totally differen ( il cumstances. Clause (b) operates either w:ren the termiilallo,.r is on account of: (rJ riotous, or (irJ disord:r1'r' or [iit) any oth:r' I rt of violence on the part of the employe(l' alrd under clar-rse lirl r,[ sub-section (6)(b) u'hen the termination is on account of an\ i Ic I r hrch constitutes an offence involving mor: Ll t ulpitude commit:e cl tluring the course of employment'

16. 'r.-)f cn,r, ' is defrned, under the General Clauses Alt, 1897' to mean " :r:ri ar:L or omission made punishable by any 1a'v for the time treinpln force" [Section 3(38)].

17. 'J'1-r, trgL the learned counsel for the appellant Eiank has conten lccl that the conduct of the respondent emlli lyr 'e, which leads t,, trr: framing of charges in the departmental proceedings involves rn,rr:rl turpitude, we are afraid the contcntio I t alnot be '' t - 10- wP-s34e-;5'13 Cr apprecrated. It is not the conduct of a person rnvolving moral turpitude that is required for forfeiture of gratuity but the conduct or tJre act should constitr ro be a,, orrence, .n" "",'li,fio"::;#ffiJr,]""*i"T That is absolutely in the realm of crimina_l lal,v. it is not for the Balk to decide whelher z the court Apart rrom,^" illT,,i::ffi ,::Til:::iT,l: appellant Balk, the Barrk has not set the criminal law in motion either by registering an FIR or by fihng a criminal complaint so as to establish that the misconduct leading to dismissal is an offence involving moral turpitude. Under sub_section (6)(b)(ir) of the Act, forfeiture of gratuity is permissible only if the terminatron of ar employee is for any misconduct which constitutes an offence involving moral turpitude, and convicted accordingly by a court of competent jurisdiction.

18. In Jasutant Stngh Gillv. Bharat Coking Coal Ltd.. [Jasutant Singh Gill v. Bharat Coking CoaI Ltd.., (2OOZ) t SCC 663 : (2OO7) I SCC (L&S) 5841, it has been held by this Court that forfeiture of gratuity either wholly or partialiy is perrnissible under sub_section (6)(b)(n) only in the event that the termination is on account of riotous or disorderly conduct or aly other act of violence or on account of an act constitutrng an offence involving moral turpitude when he is convicted. To quote para 13: (SCC p. 670) "_lJ. The Act provides for a close_knit scheme providing Ior payment of gratuity. It is a complete code . containing detailed provisions covering the essentiai provisions of a scheme for a gratuilr It not only creates a right to paJrment of gratuity but also lays down re principles for quantification thereof as also the conditions on which he may be denied therefrom. As noticed hereinbefore, sub_ section (6) of Section 4 of the Act contains a non obstante clause vis-a-vis sub-section (1) thereofl As by reason thereof, - I1- PK, J rvP 3349 2018 therefc re an .rcrr-titd or vested right is sought to be taken a'vat' the conrli i,tt,r, laid down thereunder must be fulfilled The provis.ior'.s contained therein must' scrup Lrlt:r sly obsewed. Clause (a) of sub-sectior.r (6) of Sect.ion 4 of the Act speaks of termination of serv cc of an empl,r1 e: ftrr any act, wilful omission or negligen':e c'rusing anv llnage. However, the amount liable to be fc rfeited u,ou'1,1 tre only to the extent of damage or loss cat se'l The disci rlil z ry authority has not quantified the loss 'rr drrmage' It ulls lot found that the damage or loss c lu ;ed to Respor-rl,rnt 1 was more than the amount of gratuit; tr ayable to t.h c :rf pellant Clause (b) of sub-section (6) of Sle:ti rn 4 of th,-' .\rtl {so provides for forfeiture of the w}ro1e amount of grr.trli.t'. )r part in the event his services had 1>een t':rrrinated for- ris -iotous or disorderly conduct or an]' otLcr act of r.ioltncr: ou his part or if he has been convicted for ln offence inr oLrirrll moral turpitude Conditions laid down tllet ein are also not satished." 12\ IrL , r,:'.v ol the above settled proposition of law this Court does nc,t 'in,l any illegality in the order passecl by the authorities below in ho rlir-rg that respondent No'3 is entitled i:rr payment of gratuit\- a rn( )11nt 13) Insrf:ir as the quantum of gratuity is corc:rtred' learned counsel f r": r re petitioner while drawing the attentlon 'lf this Court to cIa,-ts:: 22(v) of BHtrL Standing Orders fcr !'/orkers has contence cl lLat the period of suspension of the employee cannot be considrr, (l .rs qualifying service. i -12- PK, J wP_3349_2018 r=i 14) For better adjudication, clause 22 (v) of BHEL Standing Orders for Workers is reproduced hereunder: "If on the conclusion of the enquiry or as tle case may be, of the criminal proceedings, the workmal has been found guilty of the charges framed against him and it is considi:red that an order of dismissal or suspension or fine or stoppage of annual increment or reduction in rank would meet the ends of justice, the Disciplinary Authority shall pass an order accordingly. Provided tfrat when an order of dismissa_l is passed under this clause, the workman shall be deemed to have been absent from duty durmg the period of suspension and shatl not be entiUed to any remuneration for such period, and the subsistence alrowance alrcady pard to him shall not be recovered.,, 15) From the above, it is clear that the suspension period cannot be considered as qualifying service. Hence, the suspension period has to be excluded from the ambit of the qualifying service_ Therefore, the order passed by respondent No. 1 needs to be interfered with in this regard. 16) Accordingly, the Writ petition is disposed of modifying the dated 20.07.2017 passed by respondent No.1 in pGA_ 6/2017, to the extent of considering the period of suspension of respondent No.3 from 12.04.2011 to 14. I2.2O13 in determining the gratuity amount and holding that respondent No.3_employee is entitled for gratuity amount by excluding the suspension period from 72.04.2O1t to 14.12.2013. - 13 - PK, J \,vr 3349_2018 Mrsir:r'1La r eous petitions pending, if any, sha11 s ra rd closed. No costs SD'- MOHD. ISMAIL DEPUTY REGISTRAR //TRUE COPY// SEcl"lOti PFFICER to ', Aooellate Atrthority under Payment.of Gratuity Act' 1972' arrl Ery Chief Labour 2. Controlling /\uth )ritv ;.l-O;iFqyl'Slt of,Gratuity Act' 1972' a-rd The Asst' a. bi".icci" ijnli;n.sAu5ou bnBu' Advocate [oPUCl 4. Two CCs to GF' FOR'iABOtjR ft-igh Court for the State ol l eli rngana' at Cb'mmissior er ()entral) Hvderabad Labour Con mi:;,;ioner(Central) HyderaDao . Hyderabad. [Ct.lT] Two CD Co lle:; 5 PSK. GJP HIGH COURT DATED:1 110412'025 ORDER WP.No.334!l of 2018 {t:lri':' a/) (* s a s$J :l I !/ .:t gg DISPOSINGi OF THE WRIT PETITION WITHOUT COISTS Lll N