High Court
Legal Reasoning
1 of 6 936-WP.3596.2024IN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABAD936 WRIT PETITION NO. 3596 OF 2024MAHARASHTRA STATE ROAD TRANSPORT CORPORATIONTHROUGH ITS DIVISIONAL CONTROLLERVERSUSRATNAKAR VISHWANATH VISPUTE DIED THROUGH LRS SHOBHARATNAKAR VISPUTE AND OTHERS...Mr. Dnyaneshwar Suresh Bagul, Advocate for the Petitioner.,AGP for RespondentsMr. Sandesh R. Patil, Advocate for Respondent Nos.1 to 5. ...CORAM : R. M. JOSHI, J.DATE :19th SEPTEMBER, 2025P.C.:-1.By consent of both sides, heard finally at the stage ofadmission. 2.For sake of convenience, parties are referred as “employee”and “MSRTC” for brevity. 3.Admittedly, the employee has been in service for about 30years, and his otherwise entitlement to receive gratuity is not indispute. The termination of his services was on account ofmisappropriation and, therefore, MSRTC claims that gratuity is notpayable to him. An application for seeking amount of gratuity hasbeen filed nearly 18 years after such termination.
Legal Reasoning
2 of 6 936-WP.3596.20244.Section 4(6)(a) and (b) of the Payment of Gratuity Act,Clause No.I deals with situation wherein the services of an employeehas been terminated for his riotous or dis-ordinarily conduct or anyother act of violence on his part and in such circumstances, it would beopen for the employer to forfeit the gratuity wholly or in part. 5.However, for the purpose of application of Clause (ii) underSection 4(6)(b), the services of an employee must have beenterminated for an act constituting an offence involving moral turpitude.Therefore, the act leading to termination must not only amount tomisconduct but should also constitute an offence under the Penal Codeor any other law, and such offence must involve moral turpitude.6.According to learned Counsel for MSRTC, the position of lawwith regard to the actual proof of such offence before the criminalCourt is changed, in view of the judgment of the Hon’ble SupremeCourt in the case of Western Cold Fields Limited Vs. Manohar GovindaFulzele & Anr. in Civil Application No.2608 of 2025, wherein it is heldthat statutory provision does not makes it a requirement that themisconduct alleged and proved in a departmental inquiry should notonly constitute an offence involving moral turpitude, but also should beestablished in a Court of law. He also made reference to para 10 of thesaid judgment. Apart from this reliance is placed on judgment of Co- 3 of 6 936-WP.3596.2024ordinate Bench of this Court in case of Maharashtra Gramin Bankthrough its Chairman & Ors. Vs. Bharatibai Ramesh Kambale & Ors.,reported in 2020 (5) Bom. C.R. 62. 7.Learned Advocate for employee has placed reliance on thejudgment of coordinate bench of this Court in case of Sharad BaburaoPote Vs. MSRTC in Writ Petition No.889 of 2022, wherein relying uponthe judgment in the case of Union Bank of India & Ors. Vs. C. G. AjayBabu & Anr., reported in AIR 2018 SC 3792, it is held that to qualify asan offence, the act must be made punishable under law, which fallsstrictly within the realm of criminal law. It is also argued that there isno order passed by MSRTC forfeiting the gratuity. 8. At this stage it would be appropriate to take note ofobservations of Hon’ble Supreme Court in case of Western Cold FieldsLimited (supra) wherein it is held that;“10. As has been argued by the learned Solicitor General andthe learned Counsel appearing for MSRTC, sub-clause (ii) ofSection 4(6)(b) enables forfeiture of gratuity, wholly or partially, ifthe delinquent employee is terminated for any act whichconstitutes an offence involving moral turpitude, if the offence iscommitted in the course of his employment. An ‘Offence’ asdefined in the General Clauses Act, means ‘any act or omissionmade punishable by any law for the time being’ and does not callfor a conviction; which definitely can only be on the basis ofevidence led in a criminal proceeding. The standard of proofrequired in a criminal proceeding is quite different from thatrequired in a disciplinary proceeding; the former being regulated 4 of 6 936-WP.3596.2024by a higher standard of ‘proof beyond reasonable doubt’ while thelatter governed by ‘preponderance of probabilities’. The provisionof forfeiture of gratuity under the Act does not speak of aconviction in a criminal proceeding, for an offence involvingmoral turpitude. On the contrary, the Act provides for suchforfeiture; in cases where the delinquent employee is terminatedfor a misconduct, which constitutes an offence involving moralturpitude. Hence, the only requirement is for the DisciplinaryAuthority or the Appointing Authority to decide as to whether themisconduct could, in normal circumstances, constitute an offenceinvolving moral turpitude, with a further discretion conferred onthe authority forfeiting gratuity, to decide whether the forfeitureshould be of the whole or only a part of the gratuity payable,which would depend on the gravity of the misconduct.Necessarily, there should be a notice issued to the terminatedemployee, who should be allowed to represent both on thequestion of the nature of the misconduct; whether it constitutesan offence involving moral turpitude, and the extent to whichsuch forfeiture can be made. There is a notice issued andconsideration made in the instant appeals; the efficacy of which,has to be considered by us separately.”9. From above observations, it is clear that only requirement,therefore, is that the disciplinary authority or the appointing authoritymust arrive at a finding that such misconduct would, in the ordinarycourse, amount to an offence involving moral turpitude and thatconviction of the employee for offence involving moral turpitude is nota pre-condition for forfeiture.10. A reference Can be made to the judgment of Hon’bleSupreme Court in case of C.G. Ajay Babu (Supra), wherein it is heldthat it is not merely the conduct of person involving moral turpitudethat is required for forfeiter of gratuity, but the conduct or act must 5 of 6 936-WP.3596.2024constitute an offence involving moral turpitude. It is further held thatto qualify an offence, the act must be punishable under the law whichfalls strictly within realm of criminal law. It is therefore necessary foremployer in addition to disciplinary proceedings to set criminal law inmotion by registration of F.I.R. or filing of criminal complaint. 11. As per the judgment of Western Cold Fields Limited (supra)the contention of an employee for offence involving moral turpitudemay not become a condition precedent for forfeiture of gratuity but thesame does not dispense with the condition of registration of offence orfiling of criminal case. Herein this case not only that there is no offenceregistered against the employee nor any criminal complaint is filed butthere is no order of forfeiture of the gratuity passed by MSRTC. Thereis nothing on record to indicate any application of mind by MSRTC andconsequent order of forfeiture of gratuity. Needless to say that therecannot be automatic forfeiture of gratuity and unless employer appliesmind to the facts and comes to the conclusion that the amount ofgratuity in full or part payable to employee needs forfeiture, the nonpayment of the gratuity could not be justified. 12. The factum of non payment of gratuity for consideration ofcontrolling authority which dealing proceeding under Section 7 of theAct. In the facts of the case, the order passed by controlling authority in 6 of 6 936-WP.3596.2024Appeal (PGA) No. 41/2018 and confirmed by appellate authority inAppeal (PGA) No. 2/2023 cannot be faulted with. 13.The judgment in the case of Maharashtra Gramin Bank v.Bharatibai Ramesh Kambale, which pertained to an employee workingin a banking institution, cannot be equated with the case of anemployee serving in the MSRTC, as the nature of duties,responsibilities, and the degree of trust reposed in the two categories ofemployment stand on a different footing.14. In view of this, there is no merit in the petition, petition isdismissed. (R. M. JOSHI, J.)Tauseef