Karnataka High Court
The Senior Divisional Manager vs Basavaraj D Angadi on 11 July, 2023
Bench: S.Vishwajith Shetty
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NC: 2023:KHC-D:6997
WP No. 118075 of 2019
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 11TH DAY OF JULY, 2023
BEFORE
THE HON'BLE MR JUSTICE S.VISHWAJITH SHETTY
WRIT PETITION NO. 118075 OF 2019 (L-PG)
BETWEEN:
THE SENIOR DIVISIONAL MANAGER,
LIFE INSURANCE CORPORATION OF INDIA,
DIVISION OFFICE, BASAVESHWAR CIRCLE,
GOAVES, BELAGAVI-590011.
... PETITIONER
(BY SRI. RAGHAVENDRA A PUROHIT, ADVOCATE)
AND:
1. BASAVARAJ D ANGADI S/O M. RAMA RAO,
AGE: MAJOR, OCC: NIL,
R/O: M. RAMA RAO, GENERAL SECRETARY,
DHARWAD DISTRICT BANK EMPLOYEES,
ASSOCIATIONS, NO.9 VIJAYA BANK UPSTAIRS,
BROADWAY, HUBBALLI, DIST: DHARWAD.
2. THE CONTROLLING AUTHORITY UNDER
THE PAYMENT OF GRATUITY ACT 1972 & ASSISTANT LABOUR
COMMISSIONER (CENTRAL), HUBBALLI, NEAR RAGHAVENDRA
Digitally
signed by SWAMI TEMPLE, BHAVANI NAGAR, HUBBALLI, DIST:DHARWA-
RAKESH S 580002.
RAKESH HARIHAR
S
HARIHAR Date:
2023.07.13 3. THE APPELLATE AUTHORITY UNDER
11:17:20
+0530 THE PAYMENT OF GRATUITY ACT 1972 & DEPUTY LABOUR
COMMISSIONER (CENTRAL), BENGALURU, "SHRAMASADANA"
3RD CROSS, 3RD MAIN, YESHWANTHPUR INDI, SUBURB 2ND
STAGE,
TUMKUR ROAD, BENGALURU-22.
... RESPONDENTS
(BY SRI. G N NARASAMMANAVAR, ADVOCATE FOR R1;
R2 SERVED; R3 DISPENSED WITH)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA, PRAYING TO ISSUE WRIT IN THE NATURE
OF CERTIORARI BY SETTING ASIDE DECISION AND ORDER PASSED BY THE
RESPONDENT NO.2 CONTROLLING AUTHORITY UNDER THE PAYMENT OF
GRATUITY ACT 1972 & ASSISTANT LABOUR COMMISSIONER (CENTRAL)
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WP No. 118075 of 2019
HUBALI, IN APPLICATION NO.48(18) 2018 A/H DATED 20.02.2019 AT VIDE
ANNEXURE-A & DECISION AND ORDER PASSED BY THE RESPONDENT NO.3
APPELLANT AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT 1972 &
DEPUTY CHIEF LABOUR COMMISSIONER (CENTRAL) BENGALURU IN APPEAL
NO.36(409)/2019/B1 DATED 18.10.2019 VIDE ANNEXURE-C AS NULL AND
VOID.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B'
GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
1. The petitioner has preferred this writ petition with a
prayer to quash the order Annexure-A dated 20.02.2019 issued
by the 2nd respondent and order at Annexure-C dated
18.10.2019 issued by the 3rd respondent.
2. Heard the learned counsel for the parties.
3. The 1st respondent was an employee of the
petitioner-Corporation. He was dismissed from the services of
the Corporation on 13.08.2014 on the allegation of
misappropriation of funds of the petitioner-Corporation. The
said order had attained finality. The 1st respondent had filed an
application under Section 7(3)(A) of the Payment of Gratuity
Act, 1972 (hereinafter referred to as 'the Act of 1972') for
settlement of his gratuity amount. In the said proceedings, the
3rd respondent had passed an order dated 20.02.2019,
directing the petitioner-Corporation to pay amount of
Rs.3,23,629/- along with interest at 10% from 06.09.2014 till
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WP No. 118075 of 2019
the date of actual payment. Being aggrieved, the petitioner-
Corporation had preferred an appeal before the Appellate
Authority as provided under sub-section (7) of Section 7 of the
Act of 1972 and the said appeal was dismissed by the Appellate
Authority by order Annexure-C dated 18.10.2019. Being
aggrieved by the same, the petitioner is before this Court.
4. Learned counsel for the petitioner submits that the
1st respondent had misappropriated an amount to the tune of
Rs.1,59,269/- and in the disciplinary enquiry held against the
1st respondent, there is an order for recovering the said amount
from the 1st respondent and therefore, the petitioner was
justified in withholding the aforesaid amount in the gratuity
amount that was due to be paid by the petitioner to the 1st
respondent. He submits that the Authority have failed to
appreciate this aspect of the matter and has erred in directing
the petitioner-Corporation to pay an amount of Rs.3,23,629/-
to the 1st respondent with interest at 10%. He also submits
that the Authority had not held an enquiry as prescribed under
the relevant Rules and Regulations and therefore the order
impugned cannot be sustained.
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WP No. 118075 of 2019
5. Per contra, learned counsel appearing for the 1st
respondent refers to Section 4(6) of the Act of 1972 and
submits that under only two occasions, the gratuity amount of
an employee can be forfeited. He submits that there is no
forfeiture order passed by the petitioner-Corporation as
provided under Section 4(6) of the Act of 1972 and the 1st
respondent is not convicted by the jurisdictional Criminal Court
for the alleged misconduct and therefore the petitioner has no
right to forfeit any amount from the gratuity amount of the 1st
respondent.
6. Section 4(6) of the Act of 1972 reads as follows:
"4(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
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involving moral turpitude, provided that such offence is
committed by him in the course of his employment."
7. From the reading of the above provision of law, it is
very clear that only under two occasions, the employer can
forfeit fully or partially the gratuity amount payable to the
employee. Undisputedly, the 1st respondent-employee has not
been convicted by any Criminal Court for the alleged
misconduct. The petitioner-Corporation, who is the employer of
the 1st respondent, had also not passed an order of forfeiture,
in the present case as provided under Section 4(6)(a) of the
Act of 1972. The Authority below placing reliance on the
judgment of the Hon'ble Gujarat High Court reported in 2006
LLR 390 in the case of Baroda Traders Co-op Bank Ltd
Vs.Mahendra B.Shah, wherein it has been held that gratuity
of an employee cannot be withdheld merely on the assessment
of the Bank in the absence of order of forfeiture, has directed
the petitioner-Corporation to pay amount of Rs.3,23,629/- with
interest at 10%. Under the circumstances, no fault can be
found in the orders passed by the Authorities below, which are
produced at Annexures-A and C respectively in this writ
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WP No. 118075 of 2019
petition. Therefore, I do not find any merit in this writ petition.
Accordingly, the same is dismissed.
The amount deposited, if any, before the Authority below
is permitted to be withdrawn by the 1st respondent.
Sd/-
JUDGE
Kgk/Ct:Bck
