WESTERN COAL FIELDS LTD. versus MANOHAR GOVINDA FULZELE & ANR.

WESTERN COAL FIELDS LTD. versus MANOHAR GOVINDA FULZELE & ANR.

Forfeiture of gratuity under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 is permissible without a conviction in a criminal court if the disciplinary enquiry proves misconduct that, in normal circumstances, would constitute an offence involving moral turpitude; accordingly, where an appointment was obtained by suppression of actual date of birth and production of a forged certificate the entire gratuity may be forfeited, whereas in cases of misappropriation of relatively meagre amounts by MSRTC conductors the appointing authority should limit forfeiture to 25% and release the balance.

Parties
Appellant: Western Coal Fields Ltd.; Respondent: Manohar Govinda Fulzele & Anr.
Jurisdiction
India
Judgment Date
16 February 2025
Procedural Posture
Civil Appeal / Judgment of the Supreme Court (final Disposition)
Outcome
Appeals allowed with modification
Legal Topics
Forfeiture of Gratuity, Termination of Service, Misconduct, Offence Involving Moral Turpitude, Misappropriation
Labour and Employment Law Statutory Interpretation Administrative Law Forfeiture of Gratuity Termination of Service Misconduct Offence Involving Moral Turpitude Misappropriation

Case Brief

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Parties

Western Coal Fields Ltd.

Appellant

Manohar Govinda Fulzele & Anr.

Respondent

Procedural Posture

Civil Appeal / Judgment of the Supreme Court (final Disposition)

Legal Issues

  1. 1 Whether forfeiture of gratuity under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 is permissible where the employee is terminated for misconduct constituting an offence involving moral turpitude without a criminal conviction or criminal proceedings having been initiated
  2. 2 Whether the words "duly established in a Court of Law" can be read into Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972

Ratio Decidendi

Forfeiture of gratuity under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 is permissible without a conviction in a criminal court if the disciplinary enquiry proves misconduct that, in normal circumstances, would constitute an offence involving moral turpitude; accordingly, where an appointment was obtained by suppression of actual date of birth and production of a forged certificate the entire gratuity may be forfeited, whereas in cases of misappropriation of relatively meagre amounts by MSRTC conductors the appointing authority should limit forfeiture to 25% and release the balance.

Court Disposition

Appeals allowed with modification

Orders

  • Appeal allowed; in the PSU appeal the forfeiture of the employee's entire gratuity upheld
  • In the MSRTC appeals the appointing authority directed to limit forfeiture to 25% of the gratuity payable and release the balance to the respondent employees