Calcutta High Court (Appellete Side)

K.B. Motors Private Limited vs The State Of West Bengal & Ors on 16 August, 2023

Form No.J(2)

                 IN THE HIGH COURT AT CALCUTTA
                CONSTITUTIONAL WRIT JURISDICTION
                         APPELLATE SIDE

Present :
THE HON'BLE JUSTICE RAJA BASU CHOWDHURY


                           WPA 15108 of 2023

                       K.B. Motors Private Limited
                                  Versus
                     The State of West Bengal & Ors.


For the petitioner             :      Mr. Supriya Chattapadhyay
                                      Mr. Sudip Kumar Maiti

For the private respondent     :      Mr. Md. Zohaib Rauf

Mr. Ajitesh Pandey

For the State : Mr. Vimal Kumar Shahi Mr. Vijay Agarwal

Heard on : 16.08.2023

Judgment on : 16.08.2023

Raja Basu Chowdhury, J:

1. The present writ application has been filed, inter alia, challenging

the order dated 13th April, 2022, passed by the Controlling Authority

under the Payment of Gratuity Act, 1972 (hereinafter referred to as

the "said Act"), as also the order dated 15th April, 2023, passed by

the Appellate Authority as provided for under the said Act.

2. The petitioner claims that the husband of the respondent no. 4 was

an employee of the petitioner. Unfortunately, by reasons of financial

irregularities, the respondent no. 4 was terminated from service on

31st July, 2012. Subsequently, on 23rd August, 2012, a complaint

was lodged with the local police station which was treated as FIR

dated 23rd August, 2012. In the said FIR, along with the respondent

no.4's husband, four other persons had been named. The complaint

based on which the aforesaid FIR was lodged has, however, not been

made part of the writ application. The same has also not been

disclosed during the hearing.

3. The husband of the respondent no. 4 (hereinafter referred to as the

"deceased employee") died on 14th March, 2014. Subsequent to his

death, the respondent no. 4, in her capacity as the nominee of the

deceased employee, had filed an application in Form-'I', requesting

the petitioner to make payment of the gratuity payable to her on

account of her deceased husband. The said application in Form-'I'

was not responded to by the petitioner. This prompted the

respondent no. 4 to file an application in Form-'J' before the

Controlling Authority, inter alia, claiming that the deceased was an

employee of the petitioner until his death, i.e., 14th March, 2014,

and that the deceased employee had already completed 10 years of

the service with the petitioner.

4. It appears that the petitioner had responded to the said notice in

Form-'J', by a communication dated 19th December, 2017,

addressed to the Controlling Authority, inter alia, claiming therein

that notwithstanding the deceased being an employee of the

petitioner, the deceased employee was terminated on 31st July, 2012

due to fraudulent activity. It was further, inter alia, notified that an

FIR had been lodged against the deceased employee on 23rd August,

2012, and the matter was pending with the Court. A Further

communication dated 9th August, 2018, appears to have been issued

by the petitioner, wherein, it had been alleged that since, the

deceased employee was terminated due to fraudulent activity and

cheating, he is not eligible for gratuity. The respondent no. 4 had,

however, disputed the said contention and had filed an objection,

inter alia, contending that her husband had died in harness on 14 th

March, 2014.

5. Before the Controlling Authority, the petitioner was represented by

its authorised representative who had also deposed on its behalf. On

contested hearing, the Controlling Authority, by an order dated 13 th

April, 2022 was, inter alia, pleased to, by rejecting the objection

raised by the petitioner, determine and direct disbursal of gratuity

payable to the deceased employee, in favour of the respondent no. 4

as the nominee of the deceased. Following the aforesaid, a notice in

Form-'R' was issued on the said date and the same was

communicated to the petitioner. Despite receipt of Form-'R', the

petitioner did not take any steps.

6. An application was later filed by the respondent no. 4 before the

Controlling Authority for issuance of a certificate in terms of Section

8 of the said Act. After receipt of such application, the Controlling

Authority by a communication in writing dated 5th September, 2022,

had called upon the petitioner to show-cause as to why a certificate

for recovery of the amount of gratuity together with compound

interest at the rate of 15 per cent per month, from the expiry of the

date mentioned in the aforesaid memo, shall not be issued against

them in terms of Section 8 of the said Act.

7. The petitioner having not responded to the show cause notice within

the time provided, a certificate dated 29th September, 2022 was

issued under Section 8 of the said Act. It was only after the issuance

of the aforesaid certificate that the petitioner had preferred an

appeal before the Appellate Authority on 9th January, 2023.

Admittedly, the appeal was barred by limitation. Despite the

aforesaid, no application praying for condonation of delay was filed.

The Appellate Authority upon hearing the parties on the delay on

23rd February, 2023 and 14th March, 2023, inter alia, was pleased to

dismiss the said appeal on 15th March, 2023, as being barred by

limitation.

8. Challenging the aforesaid order, including the order passed by the

Controlling Authority, the present writ application has been filed.

9. Mr. Chattapadhyay, learned advocate appearing for the petitioner,

submits that the deceased, although, was an employee of the

petitioner, however, since, he was involved in fraudulent activity,

inter alia, including financial irregularities, no gratuity is payable to

him. It is submitted that the Appellate Authority did not take into

consideration the aforesaid aspect of the matter and has accordingly

dismissed the appeal since the same is barred by limitation.

10. By drawing attention of this Court to the letter dated 31st July,

2012, it is submitted that the petitioner had been terminated from

service due to fraudulent activities and cheating. He says that the

statute recognises the right of an employer to forfeit the gratuity and

as such, there is no irregularity on the part of the employer in

refusing to pay gratuity. He, however, submits that the entire

gratuity subsequent to dismissal of the appeal, has already been

disbursed in favour of the respondent no. 4 and as such the

respondent no. 4 is unlikely to suffer any prejudice in the event the

petitioner is permitted to appear before the Appellate Authority and

place its case.

11. Per contra, Mr. Rauf, learned advocate appearing for the

respondent no. 4, on the other hand, submits that the letter dated

31st July, 2012, is not a valid document. By drawing attention of

this Court to the notice in Form-'I', he submits that the respondent

no. 4 had categorically stated that the deceased employee had died

on 14th March, 2014, and till such time he was in the employment of

the petitioner. The petitioner never chose to respond to the aforesaid

application. Since, the gratuity was also not disbursed in favour of

the respondent no. 4, an application in Form-'J' was filed before the

Controlling Authority. Before the Controlling Authority, the

petitioner chose not to file any formal written objection. It had only,

inter alia, claimed that the deceased employee was involved in

fraudulent activity and cheating, for which an FIR had been lodged

against him on 23rd August, 2012, and the matter was pending

before the Court. It is submitted that the petitioner did not identify

the quantum of loss allegedly suffered by them. At least there is no

such reflection in the communications dated 19th December, 2017

or 9th August, 2018.

12. Since, the deceased employee died on 14th March, 2014, no

criminal proceedings could have continued against the deceased

employee at least in the year 2018. It is still further submitted that

no proceeding has been initiated for recovery of any amount from

the deceased employee. Allegation of financial irregularity/cheating,

dismissal from service are false, the same had been made with the

sole object of denying gratuity. In the facts as stated above, it is

submitted that there is no irregularity on the part of the Controlling

Authority in determining the gratuity payable to the respondent no.

4. The petitioner never intended to contest the aforesaid findings. It

is for such reasons, despite receipt of notice in Form-'R', the

petitioner did not take any steps to challenge the said order.

13. It was only after the certificate was issued under Section 8 of the

said Act, that an appeal was filed, belatedly, after expiry of the

period of limitation without any application for condonation of delay.

The Appellate Authority had duly considered the same and had,

thereafter, by an order dated 15th March, 2023, rejected the said

appeal. The present writ application had been filed more than 3

months after the aforesaid order of rejection. There is no explanation

for the delay. In such circumstances, no relief should be afforded in

favour of the petitioner and the instant writ application deserves to

be dismissed with costs.

14. Mr. Shahi, learned advocate enters appearance on behalf of the

State and submits that there is no irregularity on the part of the

Controlling Authority in determining the gratuity payable in favour

of the respondent no. 4 as a nominee of the deceased or the

Appellate Authority, in dismissing the appeal.

15. Heard the learned advocates appearing for the respective parties

and considered the materials on record.

16. Admittedly, the deceased was in employment of the petitioner

and on the own showing of the petitioner, had worked at least up to

31st July, 2012. Although, the petitioner has contended that the

deceased employee was terminated from service with effect from 31st

July, 2012, yet from the order passed by the Controlling Authority,

it would appear that the provident fund records of the deceased

employee mentions that the deceased employee died in service where

the date of death and reason for exit are recorded as "14th March,

2014" and "death in service" respectively. The aforesaid document

based on which the above finding was reached was exhibited. The

aforesaid is enough to impeach the letter dated 31st July, 2012.

17. It would further appear from the order passed by the Controlling

Authority on 13th April, 2022, that the petitioner's authorised

representative, Mr. Punit Pandey had accepted the respondent no.4

to be the nominee of the deceased and that the petitioner was

agreeable to pay the said nominee 50 per cent of the gratuity claim

without any interest. The aforesaid also demolishes the case made

out by the petitioner that no gratuity was payable.

18. I find that the Controlling Authority, on the basis of the materials

on record, had arrived at a finding that the deceased employee was

in service at the time of death. Such finding in fact had been

reached by placing reliance on provident fund records, which has

been exhibited in the said proceedings. It also appears that the

petitioner had not quantified the loss suffered on account of alleged

fraudulent activity committed by the deceased employee. In this

context, it would be relevant to note that the provision of Sub-

section (6) of Section 4 of the said Act, sets out exceptions which

authorises the employer to withhold/forfeit gratuity. The relevant

provision is extracted hereinbelow:-

"(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."

19. From the stand taken by the petitioner, it would appear that the

petitioner till date had not been able to identify the quantum of

damage or loss suffered by the petitioner. It would further appear

from the record that the husband of the respondent no. 4 died on

14th March, 2014. As such, post the aforesaid date no criminal

proceedings could have continued against him. It is also not the

case of the petitioner that any proceedings had been initiated for

recovery of any amount, either from the deceased employee or from

the respondent no. 4, claiming her to be the legal representative of

the deceased employee.

20. Admittedly, in this case, when the notice in Form-'I' was served

on the petitioner, the petitioner did not respond to the same. In my

view, although, the provisions of the said Act provides for an

exception for forfeiture of the gratuity, such forfeiture must have

some co-relation with the extent of loss or damage suffered by the

petitioner. The petitioner in the present writ application also has not

been able to identify the extent or quantum of loss or damage

suffered by it. On the contrary, I find that that the petitioner's

representatives had volunteered to make payment of the gratuity to

the extent of 50 per cent, which had been taken note of by the

Controlling Authority. Even when the notice in Form-'R' was issued,

no steps were taken by the petitioner to challenge the order passed

by the Controlling Authority. The petitioner has also not been able to

establish the factum of termination of service of the deceased

employee.