Mahavir Singh Tyagi vs Food Corporation Of India And Ors.
2013 Latest Caselaw 2462 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                           W.P.(C) No.11750/2006

%                                                              May 23, 2013

MAHAVIR SINGH TYAGI                                                ......Petitioner
                 Through:                    Mr. Gulab Chandra, Advocate.
                            VERSUS


FOOD CORPORATION OF INDIA AND ORS.                               ...... Respondents
                  Through: None.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    To be referred to the Reporter or not?      Yes


VALMIKI J. MEHTA, J (ORAL)

1.             By this writ petition, the petitioner prays for issuing of a writ or

direction to the respondent No.1/employer/Food Corporation of India to release

the gratuity amount of the petitioner alongwith interest.

2.             It is not disputed that against the petitioner various disciplinary

orders have been passed whereby amounts have been directed to be recovered

from his retirement benefits. The orders which are passed in this regard by the

disciplinary authority are dated 6.1.2005 (four in number) and 28.12.2004 (two

in number). Different amounts as penalties have been imposed against the



W.P.C No. 11750/2006                                                     Page 1 of 4
 petitioner. Respondent accordingly has taken action for recovery of the said

amounts from the retirement dues of the petitioner.

3.            On behalf of the petitioner, it is contended that even if orders

passed against the petitioner are final, however from the gratuity amount

payable to the petitioner, no amount can be recovered without condition of

termination of petitioner‟s services being fulfilled and as contained in Section

4(6) of the Payment of Gratuity Act, 1972 (hereinafter referred to as „the Act‟)

being satisfied. The said provision reads as under:-


     "Section4. 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, 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;
     (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."
4.            Learned counsel for the petitioner relies upon the judgment of the

Supreme Court in the case of Jaswant Singh Gill Vs. Bharat Coking Coal Ltd.

and Ors. (2007) 1 SCC 663, which holds that internal rules of a company cannot

W.P.C No. 11750/2006                                                  Page 2 of 4
 prevail over the statutory provision of Section 4(6) of the Act and unless the

conditions contained in Section 4(6) are satisfied amounts cannot be recovered

from the gratuity payable to an employee on retirement.

5.          In my opinion contention of the petitioner is correct in view of the

judgment of the Supreme Court in the case of Jaswant Singh Gill (supra) and

the writ petition has to be allowed because by the impugned orders the service of

the petitioner has not been directed to be terminated but only monetary penalties

were imposed. Once petitioner is not terminated from service then from the

gratuity amount nothing can be recovered. It is directed that the respondent

No.1 will be entitled to deduct the amounts contained in the penalty orders dated

6.1.2005 and 28.12.2004 from the retiral/superannuation payments to be made to

the petitioner except from the gratuity amount.

6.          Accordingly, respondent No.1 is now directed to calculate the

retirement dues payable to the petitioner within a period of four weeks of the

present order being communicated to it.      Petitioner will be entitled to make

representation as regards the calculations arrived at by the respondent No.1

within a period of one month thereafter. It is clarified that the respondent No.1

can adjust the penalties imposed upon the petitioner under the penalty orders

dated 6.1.2005 and 28.12.2004 from the other retirement dues of the petitioner

except the gratuity amount. The balance amount which would be payable to the
W.P.C No. 11750/2006                                               Page 3 of 4
 petitioner after adjustment of the amounts due under the penalty orders to the

respondent No.1, the said amount(if any) alongwith the gratuity payable be

released to the petitioner within a period of four months from today. Petitioner

will also be entitled to interest @ 9% per annum simple from the date of

retirement of the petitioner on 31.12.2004 and till the amount due to the

petitioner is paid in terms of present judgment.

7.           Writ petition is accordingly allowed and disposed of subject to the

aforesaid observations.



MAY 23, 2013                                       VALMIKI J. MEHTA, J.

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