Air India Ltd vs Dharman K. Patil
2021 Latest Caselaw 16174 Bom

                                                         28.WPL16875_2021.doc

Vidya Amin
               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                  ORDINARY ORIGINAL CIVIL JURISDICTION

                     WRIT PETITION (L) NO. 16875 OF 2021

         Air India Ltd.                                ... Petitioner
               V/s.
         Dharman K. Patil                              ... Respondent

         Mr. Lancy D'souza with Ms. Deepika Agarwal i/b. Mr. V.M. Parker for
         the petitioner.
         Mr. Ashok D. Shetty a/w. Swapnil P. Kamble, Rita K. Joshi for the
         respondent.

                                 CORAM : G.S.KULKARNI, J.

DATE : 23 November, 2021 ORAL JUDGMENT:

1. The Controlling Authority under Payment of Gratuity Act,

1972 (for short "the Act") by an order dated 11 January, 2019

allowed the application as filed by the respondent directing the

petitioner to make payment of gratuity to the respondent of an

amount of Rs. 4,72,845/-. Such order passed by the Controlling

Authority was assailed by the petitioner before the Appellate

Authority, who by the impugned order dated 29 April, 2021 in

dismissing the petitioner's appeal, has confirmed the Controlling

Authority's order.

2. The respondent was in the employment of the petitioner. He

joined the petitioner's establishment on 24 November, 1983. On 29

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November, 2012 which is after 29 years of service, the respondent

was issued a charge-sheet by the petitioner under Clause 19(2)

(xxii) of the Certified Standing Orders, alleging that respondent no.

1 at the time of seeking employment had willfully furnished false

information on his age. It was alleged that respondent no. 1's

actual date of birth was 1 January, 1950, however, he had

submitted documents depicting his date of birth to be 1 January,

1956. On such charges, an enquiry was conducted which resulted

in the disciplinary authority passing an order dated 26 June, 2013

against the respondent interalia of dismissal. By such order, the

amount of gratuity payable to the respondent was also directed to

be forfeited. To seek approval of the respondent's dismissal, the

petitioner has already approached the Central Government

Industrial Tribunal (CGIT) under Section 332B of the Industrial

Disputes Act, 1947.

3. The respondent aggrieved by the gratuity being forfeited

under the dismissal order, approached the Controlling Authority

under Payment of Gratuity Act, 1972, by filing an application dated

23 May, 2014 which was filed in Form-N, as per the provisions of

Rule 10(1) of the Payment of Gratuity Central Rules. The

respondent prayed for directions to be issued to the petitioner for

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payment of the gratuity as per the provisions of the Act amounting

to Rs.4,72,845.15.

4. The Controlling Authority, after hearing the parties on the

respondent's application, passed the impugned order holding that

the respondent is entitled to receive payment of gratuity

amounting to Rs.4,72,845/-, for the period of continuous service

rendered by him from 24 November, 1983 to 4 July, 2013. The

operative part of the order can be noted, which reads thus:

"ORDER

(i) Application of the applicant is allowed.

(ii) The applicant is entitled to receive payment of gratuity amounting to Rs.4,72,845.00 (Rupees Four lakhs Seventy Two Thousand Eight Hundred Forty Five only) for the period of continuous service rendered by him from 24.11.1983 to 04.07.2013 with the opponent employer.

(iii) The applicant is also entitled for simple interest @10% p.a on the said payment of gratuity of Rs.4,72,845.00 w.e.f. 04.07.2013 till the date of actual payment to the applicant by the opponent employer.

(iv) The opponent employer is hereby directed to pay the gratuity as well as interest as per the above order at (ii) and

(iii) above within 30 days of receipt of this order.

(v) The parties shall bear their own costs."

5. Mr. D'souza, learned counsel for the petitioner in assailing

the impugned order has limited submissions. His contention is

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that the very appointment of the respondent was illegal, as it was

obtained on the basis of a false documents relating to his date of

birth, which according to him was an established position, as

revealed in the enquiry initiated against the respondent. It is

hence submitted that the respondent was not entitled to make a

demand for payment of gratuity. It was thus appropriate for the

disciplinary authority to forfeit payment of the gratuity amount. Mr.

D'souza submits that the Controlling Authority in passing the

impugned order has overlooked the clear factual position that

when the employment itself was illegally obtained, there was no

question of the respondent being rewarded by payment of gratuity.

In support of his submission, Mr. D'souza has placed reliance on

the decision of the Supreme Court in R. Vishwanatha Pillai vs.

State of Kerala & Ors., reported in 2004 Lab. I.C. 556 and

more particularly the observations made in paragraph 17, which

reads thus:

"17. The point was again examined by a Full Bench of the Patna High Court in Rita Mishra vs. Director, Primary Education, Bihar, AIR 1988 Patna 26. The question posed before the Full Bench was whether a public servant was entitled to payment of salary to him for the work done despite the fact that his letter of appointment was forged, fraudulent or illegal. The Full Bench held:

"13. It is manifest from the above that the rights to salary, pension and other service benefits are entirely statutory in nature in public service. Therefore, these rights including the right to salary, spring from a valid and legal appointment to the post. Once it is found that the very appointment is illegal and is non est in the eye of law, no statutory entitlement for salary or consequential

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rights of pension and other monetary benefits can arise. In particular, if the very appointment is rested on forgery, no statutory right can flow it."

6. Apart from the above submission, there are no other

submissions in assailing the order, as according to Mr. D'souza, the

submission urged by him would go to the root of the matter to

test the legality of the order passed by the Controlling Authority.

7. On the other hand, Mr. Shetty, learned counsel for the

respondent in supporting the impugned order, has referred to the

respondent's reply affidavit. Mr. Shetty submits that this is a case

fully covered by the provisions of sub-section (6) of Section 4 of

the Payment of Gratuity Act, 1972. His principal submission is that

the contentions as urged on behalf of the petitioner find no place

in the conditions which are set out in sub-clause (b) of sub-section

(6) of section 4, to entail any forfeiture of gratuity under the said

provisions, as rightly observed by the Controlling Authority, in

allowing the respondent's application. He would accordingly

submit that the petition be dismissed.

8. Having heard the learned counsel for the parties and having

perused the record and the impugned order, I am unable to agree

with the contentions as urged on behalf of the petitioner, for more

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than one reason. The following discussion would aid the

conclusion.

9. It would be necessary to refer to the statutory confines

governing the forfeiture of payment of gratuity and/or the

entitlement of an employee to the payment of gratuity, relevant to

the context in hand. Sub-section (6) of Section 4 of the Act is the

relevant provision, which reads thus;

"4. Payment of Gratuity (6) Notwithstanding anything contained in sub-section (1)-

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.

(b) 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."

10. On a bare reading of sub-clause (a) of sub-section (6) of

Section 4 of the Act, it is limpid that the gratuity of an employee,

whose services have been terminated "due to negligence causing

damage or loss to or destruction of the property belonging to the

employer", shall be forfeited to the extent of the damage or loss

caused to that extent. Sub-clause (b) of sub-section (6) provides

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for two eventualities under which gratuity payable to an employee

may be wholly or partially forfeited, firstly, when the services of

such employee have been terminated "for his riotous or disorderly

conduct or any other act of violence" on his part and secondly, 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.

11. It is manifestly clear that the provisions of sub-section (6)

of Section 4 do not permit inclusion of any circumstances relating

to the appointment/employment being obtained illegally by an

employee. If such contention as urged on behalf of the petitioner

is accepted, it would amount to reading something in the said

provision, which has not been provided and/or is excluded by the

legislature. This apart, there would be innumerable circumstances

touching the issues of appointment and employment. To read such

alien attributes within the specific conditions incorporated in

clauses (a) and (b) of sub-section (6) would be nothing but

tinkering with the plain meaning, object and intention of the said

provision. It is for such reason, that the legislature has avoided

the inclusion of any such eventuality, to be a ground on which the

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gratuity payable to the employees can be forfeited.

12. A common thread running through clauses (a) and (b) of

sub-section 6 of Section 4 as discernable, is that these provisions

target a wrongful act of an employee which would cause damage,

loss or destruction of the property belonging to the employer and/

or the services of the employee having been terminated for his

riotous or disorderly conduct and/or for any act which constitutes

an offence involving moral turpitude, if committed during the

course of employment. Such acts of an employee in no manner

can be compared to an allegation that an employee had illegally

obtained an employment, which would be subjective and far

different from the category of acts which are set out in clauses (a)

and (b) of sub-section 6 of Section 4. Thus, to remedy a situation

that the employment has been obtained illegally, it is always

incumbent for the employer to be vigilant on such issue and to

conduct a lawful enquiry at the appropriate time, which in the

present case has happened belatedly after the respondent

rendered 29 years of service. However, for the aforesaid reasons,

such termination cannot be a ground for forfeiture of gratuity to

which the employee would be entitled for the services rendered by

him, when his conduct for the purposes of the enquiry held against

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him fell outside clauses (a) and (b) of sub-section (6) of section

(4).

13. In regard to the eligibility of an employee to payment of

gratuity and in the said context the interpretation of sub-section

(6) of Section 4 of the Act as made in some of the decisions, a

useful reference can be made to the following decisions:- In Union

Bank of India & Ors. vs. C.G. Ajay Babu & Anr., AIR 2018 SC

3792, the Supreme Court in interpreting the provisions of Section

4(6)(a) & (b) held that under sub-section (6)(a), gratuity can be

forfeited to the extent of damage or loss caused to the Bank. In

case, the termination of the employee is for any act or willful

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. It is

held that 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. The

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Supreme Court thus held that 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. In the said case, there being no

conviction of the respondent therein, for any misconduct involving

moral turpitude, it was held that there was no justification for the

forfeiture of gratuity. It was held that forfeiture of gratuity is not

automatic on dismissal from service and it is subject to sub-

Sections (5) and (6) of Section 4 of The Payment of Gratuity Act,

1972.

14. In Jaswant Singh Gill vs. Bharat Coking Coal Ltd. &

Ors., (2007) 1 SCC 663, the Supreme Court held that forfeiture of

gratuity either wholly or partially is permissible under sub-Section

(6)(b)(ii) only in the event that the termination is on account of

riotous or disorderly conduct or any other act of violence or on

account of an act constituting an offence involving moral turpitude

when he is convicted. The Supreme Court in such context in

paragraph 13 observed that:

"13. The Act provides for a close-knit scheme providing for payment 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-à-vis sub-section (1) thereof. As by reason

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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, willful 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 sub- section (6) of Section 4 of the Act also provides for forfeiture of the whole amount of gratuity or part in the event his services had been terminated for his riotous or disorderly conduct or any other act of violence on his part or if he has been convicted for an offence involving moral turpitude. Conditions laid down therein are also not satisfied."

15. A reference to the decision of the learned Single Judge of

the Chhattisgarh High Court in General Manager, UCO Bank,

Kolkata & Anr. vs. Jitendra Kumar Shrivastava s/o. Late

Shri A.K. Shrivastava, 2016 II CLR 289, also needs to be made.

Mr. Justice Sanjay K. Agrawal speaking for the Bench, in a similar

situation, analysed the provision of Section 4(6)(b)(ii) of the Act

and held thus:

"17. Thus, on the basis of above-stated analysis, it can be safely deduced that in order to invoke Section 4(6)(b)(ii) of the PG Act to forfeit an amount of gratuity payable to an employee, the condition precedent is that terminated employee must be convicted for an offence for the time being in force and that offence must be an offence involving moral turpitude. Unless the aforesaid two conditions are fully established by an employer, mere termination or dismissal of an employee concerned would not ipso facto constitute an offence that too an offence involving moral turpitude to attract Section 4(6)(b)(ii) of the PG Act and an employer would have no jurisdiction to invoke the provision contained in Section 4(6)(b)(ii) of the PG Act to forfeit gratuity

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payable to an employee under the PG Act."

16. Thus adverting to the principles of law as laid down in the

aforesaid decisions in their application to the facts of the present

case, it is crystal clear that none of the circumstances as falling

within the purview of clauses(a) and (b) exists in the present case,

which can authorise the petitioner to forfeit the gratuity amount

payable to the respondent.

17. Now coming to Mr. D'souza's reliance on the decision in R.

Vishwanatha Pillai (supra), in my opinion, is not well founded.

As clearly seen from the observations made by the Court in

paragraph 17 of the judgment, the case before the Court pertained

to a false caste certificate being submitted by the employee. An

appointment on a reserved post being sought on a false caste

certificate stands on a completely different footing. Such

appointment has been held to be a fraud on the Constitution,

thereby depriving the legitimate entitlement of a reserved category

candidate to such appointment. This decision is also not an

authority in the context of the provisions of Payment of Gratuity

Act. Thus, the ratio of this decision would not be applicable in the

facts of the case.

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18. For the above reasons, the impugned order passed by the

learned Controlling Authority and as confirmed by the appellate

authority are passed in accordance with law. There is no

perversity or any illegality warranting interference in exercise of

the writ jurisdiction of this Court under Articles 226 and 227 of the

Constitution. The Writ Petition is accordingly dismissed. No costs.

                                                                      (G.S.KULKARNI, J.)
         Digitally signed
         by VIDYA
VIDYA    SURESH AMIN
SURESH   Date:
         2021.11.23
AMIN     19:33:09
         +0530