Orissa High Court
Cuttack Central Co-Operative Bank vs The Joint Labour Commissioner on 18 September, 2025
Author: Murahari Sri Raman
Bench: Murahari Sri Raman
IN THE HIGH COURT OF ORISSA AT CUTTACK
WA No.323 of 2025
Cuttack Central Co-operative Bank .... Appellant
Ltd., Cuttack
Dr. Patanjali Tripathy, Advocate
-versus-
The Joint Labour Commissioner, .... Respondents
Bhubaneswar-cum-Appellate
Authority under Payment of
Gratuity Act, Bhubaneswar and
others
Mr. Sanjay Rath, AGA for Respondent Nos.1 to 3
Ms. S. Sunandini, Advocate for Respondent No.4
CORAM:
THE HON'BLE THE CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE MURAHARI SRI RAMAN
ORDER
Order No. 18.09.2025
03. 1. The instant writ appeal arises from a judgment dated 8 th
November, 2024 passed in WP(C) No.9493 of 2022 by the Single
Bench, wherein the writ petition filed by the appellant challenging the
judgment and order dated 28th March, 2022 passed by the Appellate
Authority under the Payment of Gratuity Act, 1972 was dismissed.
2. Undeniably, respondent no.4 was employed as Deputy Manager in
the appellant-Bank and attained the age of superannuation with effect
from 31st July, 2010. Despite having allowed to retire from service
without any blemish or disciplinary proceeding having initiated while
in employment, the retiral benefit was withheld by the appellant which
constrained the respondent no.4 to move to the authority under the
Payment of Gratuity Act, 1972 for release of the gratuity amount. The
appellant took a plea that said respondent no.4 stood as a guarantor to
a loan disbursed to the principal borrower, who failed and neglected to
pay the loan amount and, therefore, the liability to pay the amount is
coextensive. The recovery thus can be made from her and for such
reason, the amount of gratuity was not disbursed to the respondent
no.4. The authority did not find any conditions, stipulation and/or
powers conferred under the statute upon the appellant to withhold the
gratuity amount and directed the payment to be made. The order was
assailed before the Appellate Authority under the said Act, but the
appellant could not emerge successful therefrom. Ultimately, the writ
petition was filed assailing the order of the Appellate Authority
reiterating and restating the factual grounds as taken before the
original authority, but the writ Court did not find any power conferred
upon the appellant to deny the disbursement of the gratuity amount to
the respondent no.4 after she attained the age of superannuation.
3. Learned counsel for the appellant vociferously submits that since
respondent no.4 stood as guarantor to a loan disbursed to principal
borrower, any default or the liability is also imposed upon her and
unless the entire loan amount is liquidated, the gratuity amount cannot
be released in favour of the respondent no.4.
4. We find from Section 4 of the Payment of Gratuity Act, 1972 that
the power to forfeit the payment of the gratuity is conferred upon the
employer subject however to the conditions enshrined therein are
fulfilled. Sub-section (6) of Section 4 of the said Act postulates that
the gratuity of an employee shall be forfeited to the extent of damage
or loss so suffered, provided such employee has been terminated from
service for any act, wilful omission or negligence which causes the
damage or loss or destruction of the property belonging to the
employer. The said sub-section starts with the non-obstante clause
and, therefore, has an overriding effect on the preceding sub-sections
of Section 4 thereof. The legislature has restricted the applicability of
said provision only in the event of contingencies incorporated therein
and, therefore, any transgression therefrom or imbibing any other
contingencies not contemplated therein, in the action is illegal and not
sustainable in law.
4.1. The gratuity is neither a bounty nor a bonanza, but a deferred
payment of salary to an employee. It is recognition of his successful
accomplishment of the services rendered to the employer and,
therefore, is required to be paid on the date of superannuation. The
statutory sum or the amount entitled to an employee under a particular
Act cannot be forfeited nor be denied in absence of any power
conferred upon the employer. The moment the power is to be
exercised in a particular eventuality, any other eventuality cannot be
impliedly engulfed into the said provision as the authority has to travel
within the circumference of the statutory provision and cannot wriggle
out from the provisions applicable in this regard. The amount of
gratuity can only be forfeited in the event of a termination of service
for an act or the things done while in the employment causing a
damage or loss to the employer and not otherwise.
5. Admittedly, the respondent no.4 was made to retire after
achieving age of superannuation and, therefore, the incidences
encompassing the said sub-section does not invite withholding of the
gratuity amount.
6. Apart from the same, the writ Court should not interfere with the
order of the fact finding authority unless the finding appears to be
perverse, irrational, unreasonable and beyond the conferment of
powers by the statute. The statutory authorities concurrently found the
action of the appellant de hors the powers conferred in the Payment of
Gratuity Act, 1972 and the writ Court refused to entertain the writ
petition filed by the appellant. We do not find any ground warranting
interference with the impugned judgment.
7. The writ appeal, sans merit, is hereby dismissed. No order as to
costs.
(Harish Tandon)
Chief Justice
(M.S. Raman)
Judge
MRS/Laxmikant
Signed by: LAXMIKANT MOHAPATRA
Designation: Senior Stenographer
Reason: Authentication
Location: High Court of Orissa, Cuttack
Date: 20-Sep-2025 12:56:19
