Recent Judgement on Gratuity Forfeiture
In a very recent judgement in Vithal Rangnath Darekar Vs New India Insurance Company Ltd [2012 LLR 1027], the Bombay High Court has ruled that the right to receive gratuity is a statutory right and the gratuity cannot be forfeited due to conviction by a criminal court for an offence (i.e., kidnapping a girl) since such an act does not come under the purview of section 4(6)(b) of the Payment of Gratuity Act, 1972.
Understanding Section 4(6)(b) of the Payment of Gratuity Act, 1972
Section 4(6)(b) deals with the forfeiture of gratuity and it reads as follows:
“The gratuity payable to an employee may be wholly or partially forfeited -
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.”
Case Details and High Court's Observation
In the instant case, the petitioner was a sub-staff of the respondent company and he was convicted for an offense of kidnapping a girl under section 363 and 344 of the Indian Penal Code, directing him to undergo rigorous imprisonment for four years together with a fine. On the ground of his conviction by a criminal court, his services were terminated by the employer. He had rendered a service of 19 years and 2 months. He moved an application for gratuity before the Controlling Authority which, in turn, was rejected on the ground that the applicant has been convicted for an offence involving moral turpitude. He then challenged the decision before the High Court.
The High Court observed that the act of kidnapping a girl has nothing to do with the act of employment. The expression in section 4(6)(b)(ii) clearly suggests that such an act involving moral turpitude must be caused in the 'course of employment'. An employee is acting in the course of employment only when he is doing something in discharge of a duty imposed upon him by his contract of service.
Regards,
Madhu.T.K
From India, Kannur
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4526In a very recent judgement in Vithal Rangnath Darekar Vs New India Insurance Company Ltd [2012 LLR 1027], the Bombay High Court has ruled that the right to receive gratuity is a statutory right and the gratuity cannot be forfeited due to conviction by a criminal court for an offence (i.e., kidnapping a girl) since such an act does not come under the purview of section 4(6)(b) of the Payment of Gratuity Act, 1972.
Understanding Section 4(6)(b) of the Payment of Gratuity Act, 1972
Section 4(6)(b) deals with the forfeiture of gratuity and it reads as follows:
“The gratuity payable to an employee may be wholly or partially forfeited -
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.”
Case Details and High Court's Observation
In the instant case, the petitioner was a sub-staff of the respondent company and he was convicted for an offense of kidnapping a girl under section 363 and 344 of the Indian Penal Code, directing him to undergo rigorous imprisonment for four years together with a fine. On the ground of his conviction by a criminal court, his services were terminated by the employer. He had rendered a service of 19 years and 2 months. He moved an application for gratuity before the Controlling Authority which, in turn, was rejected on the ground that the applicant has been convicted for an offence involving moral turpitude. He then challenged the decision before the High Court.
The High Court observed that the act of kidnapping a girl has nothing to do with the act of employment. The expression in section 4(6)(b)(ii) clearly suggests that such an act involving moral turpitude must be caused in the 'course of employment'. An employee is acting in the course of employment only when he is doing something in discharge of a duty imposed upon him by his contract of service.
Regards,
Madhu.T.K
From India, Kannur
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Thank you for sharing the information. Does this mean a person can commit any crime outside of their employment and still be entitled to gratuity? I have learned that gratuity is awarded for the meritorious service of an individual, not solely based on the length of service.
From India, Asansol
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From India, Asansol
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In the past, such interpretations of section 4(6)(b) have also arisen. The recent judgment further supports that misconducts unrelated to employment fall outside the scope of the Gratuity Act. Therefore, no employee should be denied the benefit solely on the basis of misconduct that did not occur during the course of employment.
Regards,
Madhu.T.K
From India, Kannur
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Regards,
Madhu.T.K
From India, Kannur
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SC JUDEGEMENT ON FORFEITURE OF GRATUITY IN MORAL TURPITUDE CASES.docx