M/S Sasta Sahitya Mandal vs Deepak Sehgal & Ors.
2010 Latest Caselaw 2094 Del

                  *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                                  WP(C) 5329/2004

%                                                  Date of decision: 21st April, 2010

M/S SASTA SAHITYA MANDAL                      ..... PETITIONER
                   Through: Mr. Rajesh Kumar Gandhi, Advocate

                                        Versus
DEEPAK SEHGAL & ORS.                        ..... RESPONDENTS
                  Through: Mr. Parvendra Kumar Sharma, Advocate
                           for Respondent no.1 with respondent
                           no.1 in person.
                           Mr. B.V. Niren, CGSC for Respondent
                           Nos.2 & 3.

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.        Whether reporters of Local papers may
          be allowed to see the judgment?                  No

2.        To be referred to the reporter or not?           No

3.        Whether the judgment should be reported          No
          in the Digest?

RAJIV SAHAI ENDLAW, J.

1. This writ petition has been preferred by the petitioner with respect to the

order dated 5th September, 2003 of the Appellate Authority under the Payment of

Gratuity Act, 1972, allowing the appeal of the respondent no.1 and directing the

Controlling Authority under the said Act to determine the gratuity due from the

petitioner to the respondent no.1. Pursuant to the said order, the Controlling

Authority under the Gratuity Act determined a sum of Rs.70,080/- as payable by

the petitioner to the respondent no.1 towards gratuity and directed the petitioner

to pay the said amount with interest at 10% per annum from the date when the

gratuity became payable and till the date of payment. The said order has also

been impugned by the petitioner in this petition. Though this Court vide order

dated 19th April, 2004, while issuing notice of the petition stayed the operation of

the orders impugned in the writ petition but it appears that the petitioner was

made to deposit a bankers cheque for a sum of Rs.88,894/- with the authorities

under the Gratuity Act in compliance of the orders impugned in this petition.

This Court vide order dated 6th May, 2004 directed that the bankers cheque be

not encashed.

2. The petitioner is a Society publishing Gandhian and allied literature. The

petitioner Society was established under the directions of Mahatma Gandhi, Sh.

Jamnalal Bajaj & Sh. G.D. Birla for the development of Hindi literature and to

make it available to the public at the cheapest possible prices. The respondent

no.1 was employed as an Assistant Accountant with the petitioner. It is the case

of the petitioner that the respondent no.1 mis-conducted and indulged in

misappropriation and embezzlement of funds of the petitioner. Dr. L.M. Singhvi,

the then President of the petitioner appointed an Enquiry Committee comprising

inter alia of Sardar Joginder Singh, IPS to examine and probe into the alleged

misappropriation of funds by the respondent no.1. An FIR was also registered

against the respondent no.1. It is the case of the petitioner that the respondent

no.1, to avoid enquiry and criminal proceedings chose to resign from the services

of the petitioner vide his letter dated 19th June, 2001.

3. The respondent no.1 subsequently claimed his gratuity from the petitioner.

The petitioner relies on certain correspondences to show that the respondent no.1

had admitted his mistakes. It is the case of the petitioner that the loss caused by

the respondent no.1 to the petitioner was much more than the amount of gratuity

due and hence the petitioner forfeited the gratuity of the respondent no.1. The

respondent no.1 then made a claim for gratuity before the Controlling Authority

under the said Act. Simultaneously, it transpires that the respondent no.1 also

raised an industrial dispute regarding termination of his services and the

following dispute was referred to the Labour Court:

"Whether Sh. Deepak Sehgal has voluntarily resigned from his service or his services have been terminated illegally and / or unjustifiably by the management, if so, to what relief is he entitled and what directions are necessary in this respect?"

4. The Controlling Authority under the Gratuity Act vide its order dated 3rd

February, 2003 held that the reference aforesaid meant that the respondent no.1

had not accepted his resignation voluntarily and has rather challenged the same

demanding reinstatement in service and thus the respondent no.1 had not till then

become entitled to claim gratuity. The claim of the respondent no.1 was thus

dismissed as pre-mature.

5. The respondent no.1 preferred an appeal against the order of Controlling

Authority. The Appellate Authority has vide order impugned in this petition held

that the issue pertaining to payment of gratuity was not subject matter of the

industrial dispute and thus directed the Controlling Authority to determine the

gratuity, as aforesaid.

6. This writ petition came up before this Court last on 19th February, 2010.

The counsel for the petitioner informed on that date that the industrial dispute

aforesaid had been decided vide award dated 4th October, 2008 in favour of the

petitioner. It was further informed that the respondent no.1 had not challenged

the said award. It was the case of the petitioner on that date that the respondent

no.1 having embezzled the funds of the petitioner, was not entitled to gratuity.

The respondent no.1 on that date sought time. The matter was as such adjourned

to today and it was made clear that if the respondent no.1 does not challenge the

award dated 4th October, 2008 till today, no further adjournment shall be given

on that ground.

7. The counsel for the petitioner has today handed over a copy of the award.

The finding returned in the award is as under:

"The reference requires this court to determine that the claimant had tendered his resignation voluntarily or his services were terminated illegally or unjustifiably. As has been held under issue no.1, the reference has been answered that services of workman were not terminated illegally or unjustifiably but the workman had himself tendered his resignation voluntarily and had brought about the end of relationship of workman and management. Hence, this issue is also decided in favour of management and against the workman. Accordingly, an award is passed in these terms."

On enquiry, the counsel for the respondent no.1, under instructions from

the respondent no.1 present in person, states that the respondent no.1 has not

challenged the award dated 4th October, 2008 of the Labour Court.

8. The question which arises is whether the respondent no.1 can be held

entitled to gratuity. The facts are not in dispute. The respondent no.1 does not

controvert initiation of enquiry proceedings or lodging of FIR against him. In

view of the award of the Labour Court, it stands established that the respondent

no.1, to avoid the enquiry and the FIR, voluntarily resigned from the

employment of petitioner. Whether in such circumstances, he should be held

entitled to gratuity? Section 4(6) of the Gratuity Act provides that the gratuity of

an employee whose services have been terminated for any act, willful 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. The same also provides for forfeiture of gratuity wholly if the services

are terminated for disorderly conduct or for conduct which constitutes an offence

involving moral turpitude in the course of his employment. The entirety of the

facts aforesaid make out a case for forfeiture by the petitioner of the gratuity

payable to the respondent no.1. The Labour Court in the award dated 4th

October, 2008 has also held that the respondent no.1 in his cross examination

admitted that there was a misappropriation of funds and same was proved by an

enquiry conducted by a senior executive. In my opinion the said admission of

the respondent no.1 before the Labour Court is sufficient ground for forfeiture of

his gratuity. The counsel for the respondent no.1 has not opposed the said

position and only contended that the respondent no.1 may still challenge the

award dated 4th October, 2008 (supra). More than one and a half year have

passed since the said award was made. No reason is given which prevented the

respondent no.1 from, if so desirous, challenging the award till now. The

decision of this petition cannot be deferred any further, merely because the

respondent no.1 may in future challenge the award.

9. This petition is accordingly allowed. The orders impugned in the petition

is set aside / quashed. It is held that the respondent no.1 is not entitled to any

gratuity from the petitioner. The bankers cheque for Rs.88,894/- submitted by

the petitioner before the authorities under the Gratuity Act and encashment

whereof was stayed by this Court is directed to be returned to the petitioner. The

petitioner shall be entitled to the refund of money thereof from its banker.

However, if the said bankers cheque stands encashed notwithstanding the order

of this Court, the petitioner is entitled to the receipt of the amount thereof and the

authorities under the Gratuity Act are directed to refund / remit the said monies

to the petitioner together with interest, if any, earned thereon. I refrain from

imposing any costs on the respondent no.1.

RAJIV SAHAI ENDLAW (JUDGE) 21st April, 2010 gsr