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TMI Blog2018 (8) TMI 934X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the respondent for the misconduct which according to the Bank is an offence involving moral turpitude. Hence, there is no justification for the forfeiture of gratuity on the ground stated in the order dated 20.04.2004 that the “misconduct proved against you amounts to acts involving moral turpitude” - the requirement of the statute is not the proof of misconduct of acts involving moral turpitude but the acts should constitute an offence involving moral turpitude and such offence should be duly established in a court of law. Forfeiture of gratuity is not automatic on dismissal from service; it is subject to sub-Sections (5) and (6) of Section 4 of The Payment of Gratuity Act, 1972. Appeal dismissed - decided against appellant. - CIVIL APPEAL NO. 8251 OF 2018 - - - Dated:- 14-8-2018 - Mr. Kurian Joseph and Mr. Sanjay Kishan Kaul, JJ. JUDGMENT Leave granted. 2. Whether forfeiture of gratuity, under The Payment of Gratuity Act, 1972 (hereinafter referred to as the Act ), is automatic on dismissal from service, is the issue for consideration in this case. 3. The respondent was an employee of the appellant-Bank. While serving as a Branch Manager, disciplina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re this Court. 8. Heard the learned Counsel appearing for the Bank and the respondent-employee. 9. Section 4 of the Act, to the extent relevant, reads as follows: 4 Payment of gratuity .-(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,- (a) on his superannuation, or (b) on his retirement or resignation, or (c) on his death or disablement due to accident or disease: Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement: Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority. Explanation .- For the purposes of this section, disablement means such disabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion cannot be appreciated. The statute provides for better terms of gratuity under any award or agreement or contract which means all terms of the contract. The choice is between the award or agreement or contract and the statute, but not partially of either. 13. In Beed District Central Coop. Bank Ltd. v. State of Maharashtra and others - (2006) 8 SCC 514 , it has been held that the expression terms as appearing under sub-Section (5) of Section 4 of the Act must ordinarily mean all terms to the contract and that the employee is not entitled to best terms of both the statute and the contract. Paragraph-14 reads as follows: 14 . Applying the golden rule of interpretation of statute , to us it appears that the question should be considered from the point of view of the nature of the scheme as also the fact that the parties agreed to the terms thereof. When better terms are offered, a workman takes it as a part of the package. He may volunteer therefor, he may not. Sub-section (5) of Section 4 of the 1972 Act provides for a right in favour of the workman. Such a right may be exercised by the workman concerned. He need not necessarily do it. It is the right of individua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in respectful agreement with the view taken by the High Court that the respondent-employee is entitled to the protection of the bipartite settlement. 16. Under sub-Section (6)(a), also the gratuity can be forfeited to only to the extent of damage or loss caused to the Bank. In case, the termination of the employee is for any act or wilful omission or negligence causing any damage or loss to the employer or destruction of property belonging to the employer, the loss can be recovered from the gratuity by way of forfeiture. Whereas under sub-Clause (b) of sub-Section (6), the forfeiture of gratuity, either wholly or partially, is permissible under two situations (i) in case the termination of an employee is on account of riotous or disorderly conduct or any other act of violence on his part, (ii) if the termination is for any act which constitutes an offence involving moral turpitude and the offence is committed by the employee in the course of his employment. Thus, sub-Clause (a) and sub-Clause (b) of sub-Section (6) of Section 4 of the Act operate in different fields and in different circumstances. Under sub-Clause (a), the forfeiture is to the extent of damage or loss caused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of gratuity. It is a complete code containing detailed provisions covering the essential provisions of a scheme for a gratuity. It not only creates a right to payment of gratuity but also lays down the 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- -vis sub-section (1) thereof. As by reason thereof, an accrued or vested right is sought to be taken away, the conditions laid down thereunder must be fulfilled. The provisions contained therein must, therefore, be scrupulously observed. Clause (a) of sub-section (6) of Section 4 of the Act speaks of termination of service of an employee for any act, wilful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of damage or loss caused. The disciplinary authority has not quantified the loss or damage. It was not found that the damages or loss caused to Respondent 1 was more than the amount of gratuity payable to the appellant. Clause (b) of subsection (6) of Section 4 of the Act also provides for forfeiture of the whole amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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