M/S. Waterhealth India Private ... vs Asst Commissioner Labour Central ...
2021 Latest Caselaw 3718 Tel

THE HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI
     WRIT PETITION NOs.3807, 3812, 3818 AND 3850 OF 2021

COMMON ORDER:

        All these writ petitions are being disposed of by way of this

common order, as the issue raised in these writ petitions is one and the

same.

2.      For the sake of convenience, the facts in W.P.No.3850 of 2021

are discussed hereunder:

a)      W.P.No.3850 of 2021 is filed seeking the following relief:

           "...to pass an order or orders, direction or a Writ of
           Certiorari calling for the records pertaining to the order
           dated    09.12.2020     passed     in    P.G.Application
           No.48/18/2020 - E3 on the file of 1st respondent and

quash the same and pass such further or other orders as this Hon'ble Court deems fit and proper in the circumstances of the case."

b) It has been contended by the petitioner that it is a registered

Company under the Indian Companies Act and it is in the

establishment of Portable Water Plants. In order to do the business,

the petitioner engaged the unofficial respondent as workman. The

petitioner had further contended that the unofficial respondent

tendered resignation on 31.01.2020 and subsequently, he was engaged

as a Consultant vide agreement dated 01.02.2020; that as the unofficial

respondent was not performing duties in accordance with the terms of

the agreement, his services were terminated vide proceedings dated

07.04.2020; and that at the time of termination itself, the petitioner has

indicated that the unofficial respondent has indulged in fraud and

AKS,J W.P.No.3807 of 2021 & batch

caused loss to the petitioner Company and, on that ground, the

services of the unofficial respondent was terminated. The petitioner

further stated that the unofficial respondent filed an application, under

Section 7 of the Payment of Gratuity Act, 1972 (for short, 'the Act'),

before the 1st respondent seeking payment of gratuity, and the same

was numbered as PG Application No.48/18/2020-E3. It is also stated

that in the said application, notice was issued to the petitioner by the

1st respondent and the petitioner filed counter therein. It is stated that

in the counter filed in the said application, the petitioner denied that

the unofficial respondent is entitled for gratuity. however, it was

specifically contended that the petitioner Company has registered a

criminal case in FIR No.107 of 2021 on the file of Keesara Police

Station against the unofficial respondent, alleging that the unofficial

respondent had cheated the petitioner and caused loss to the petitioner

Company; that the police are not investigating the said crime; and that

as the police are not investigation the said crime, the petitioner

Company is not in a position to assess the actual loss caused to them,

therefore, the petitioner forfeited the gratuity to the unofficial

respondent, however, no orders to that effect have been passed by

them.

3. Heard M/s. Indus Law Firm appearing for the petitioner,

Sri G. Venkateshvarlu, Standing Counsel for the 1st respondent, and

Sri G.V.S. Ganesh, counsel for the 2nd respondent.

4. Counsel for the petitioner had contended that the 1st respondent,

without appreciating any of the contentions raised by the petitioner,

AKS,J W.P.No.3807 of 2021 & batch

had mechanically allowed the applications of the unofficial

respondents and directed the petitioner to pay gratuity amount of

Rs.8,71,657/- to the unofficial respondent in W.P.No.3850 of 2021

and likewise certain amounts towards gratuity were awarded in favour

of the unofficial respondents in the other three writ petitions. Counsel

for the petitioner further contended that in-house enquiry is going on

to ascertain the loss caused to them by the unofficial respondents and

once the said enquiry is completed, the petitioner would pass orders in

accordance with Section 4 (6) of the Act, but the 1st respondent

authority, without waiting for the petitioner to complete the enquiry,

has allowed the applications filed by the unofficial respondents,

therefore, the impugned orders passed by the 1st respondent be set

aside and let the matter be remanded back to the 1st respondent so as

to adjudicate the case afresh by giving opportunity to the petitioner to

complete the enquiry proceedings which have been initiated by them

so as to ascertain the loss caused to them by the unofficial

respondents. Counsel for the petitioner also contended that the

unofficial respondents have not resigned technically, but they

exchanged the letters of resignation among themselves and one of

them has accepted the resignation and, this aspect was not considered

by the 1st respondent authority. Counsel had further contended that the

petitioner Company terminated the Consultancy services of the

unofficial respondents vide orders dated 07.04.2020 and this fact was

not even examined by the 1st respondent authority, as such, on this

ground also, the impugned orders are liable to be set aside.

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5. Sri G.V.S. Ganesh, counsel for the unofficial respondents, had

contended that first of all, these writ petitions are not maintainable, as

against the impugned orders passed by the 1st respondent, there is a

remedy of appeal under the Act before the appellate authority, and the

petitioner filed the present writ petitions without availing the remedy

of appeal as provided under the Act. Counsel for the unofficial

respondents had further contended that in the counter filed before the

1st respondent authority, the petitioner had categorically admitted that

the unofficial respondents tendered their resignation on 31.01.2020

and they were relieved on the same day i.e., on 31.01.2020 and later,

they were re-engaged as Consultants by entering into separate

agreement on 01.02.2020 and that agreement was terminated on

07.04.2020.

6. Counsel for the unofficial respondents had further contended

that admittedly, in the present writ petitions, the unofficial

respondents have rendered more than ten years of service and they are

entitled for payment of gratuity, but when the petitioner Company has

not extended gratuity, the unofficial respondents have no other option,

except to approach the 1st respondent claiming payment of gratuity.

Counsel for unofficial respondents further contended that at the time

of accepting the resignation of the unofficial respondents itself, the

petitioner ought to have examined the aspect as to whether any loss

has been caused to the petitioner employer by the unofficial

respondents or not. Counsel also contended that even at the time of

termination of the services of the unofficial respondents as

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Consultants i.e., on 07.04.2020 also, the petitioner has not ascertained

whether any loss has been caused to them by the unofficial

respondents, and without there being any basis, the petitioner is trying

to deny payment of gratuity in terms of Section 4 (6) of the Act on the

ground that the unofficial respondents have caused loss to them,

which is not permissible at all.

7. Counsel for the unofficial respondents further contended that

before accepting the resignation of the unofficial respondents on

31.01.2020, the petitioner Company, being an employer, ought to have

ascertained as to whether any loss has been caused to them or not by

the unofficial respondents and, admittedly, in the present writ

petitions, even as on today, there is no finding by the petitioner as to

how much loss has been caused to them by the unofficial respondents

and, as such, the 1st respondent authority has rightly passed the

impugned orders in favour of the unofficial respondents by duly

taking into account the judgment rendered by the Honourable

Supreme Court in Union Bank of India and others v. C.G. Ajay

Babu and another1, wherein it was held as under:

"In the present case, there is no conviction of the respondent for the misconduct which according to the Bank is an offence involving moral turpitude. Hence, there is no justification for the forfeiture of gratuity on the ground stated in the order dated 20-4-2004 that the "misconduct proved against you amounts to acts involving moral turpitude". At the risk of redundancy, we may state that the requirement of the statute is not the

(2018) 9 SCC 529

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proof of misconduct of acts involving moral turpitude but the acts should constitute an offence involving moral turpitude and such offence should be duly established in a court of law."

8. Counsel for the unofficial respondents had further contended

that the case of the unofficial respondents stand on a better footing

than the facts dealt by the Hon'ble Supreme Court because the counsel

for the petitioner has never argued that the unofficial respondents were

involved in a criminal case involving moral turpitude; that admittedly,

as on the date of accepting the resignation i.e., on 31.1.2020 or even if

the termination is taken into account i.e., the termination of the

services of the unofficial respondents as Consultants vide proceedings

dated 07.04.2020, no where the employer has come to the conclusion

as to what is the loss caused to them by the unofficial respondents, and

in the absence of the same, the petitioner Company could not have

forfeited the gratuity or denied gratuity; and that admittedly, looked

from any angle, the unofficial respondents are entitled for payment of

gratuity in terms of Section 4(1) of the Act, therefore, there are no

merits and these writ petitions are liable to be dismissed.

9. This Court, having considered the rival submissions made by

learned counsel for respective parties, is of the considered view that

the 1st respondent authority has rightly passed the impugned orders in

favour of the unofficial respondents and if the petitioner Company is

aggrieved by any of the findings recorded by the 1st respondent

authority, they have a remedy in the form of an appeal before the

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appellate authority under the Act. Without exhausting the said

remedy, the petitioner filed the present writ petitions. Even the

contention of the petitioner that the loss caused to them by the

unofficial respondents is under investigation, cannot be accepted

because the petitioner Company is relying on the police investigation

to ascertain what is the loss caused to them. The petitioner Company

ought to have come to a definite conclusion at the time of accepting

the resignation of the unofficial respondents i.e., on 31.01.2020 as to

what is the loss caused to them by the unofficial respondents.

Admittedly, in the present writ petitions, at the time of accepting the

resignation of the unofficial respondents, the petitioner employer was

not in a position to come to a conclusion as to what is the loss caused

to them by the unofficial respondents. Even if the argument of the

petitioner Company that vide proceedings, dated 07.04.2020, they

have terminated the consultancy services of the unofficial

respondents, which was the subsequent employment of the unofficial

respondents in the form of re-engagement as Consultants vide

agreement dated 01.02.2020 after accepting their resignation by the

petitioner, is to be accepted, even at the time of termination of

consultancy services of the unofficial respondents also, the petitioner

Company has not come to a conclusion as to what is the loss caused

to them by the unofficial respondents, which would demonstrate that

the petitioner Company had terminated the services of the unofficial

respondents without there being any material and it would lead to

another issue, but for the present, we are confined about the payment

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of gratuity under the Act. If the argument of the petitioner Company

that they would be relying on criminal investigation and also on the so

called domestic enquiry, which is yet to be constituted, so as to

ascertain what is the actual loss which has been caused to the

petitioner Company by the unofficial respondents, is to be accepted, it

may lead to chaotic situation and it might take several months or years

to come to a conclusion whether the unofficial respondents have

caused any financial loss to the petitioner Company. That is not the

object of the Act. As and when an employee is terminated, the

employer must pay gratuity in terms of Section 4(1) of the Act.

Therefore, looked from any angle, these writ petitions are devoid of

merits and they are liable to be dismissed.

10. Accordingly, these writ petitions are dismissed. No order as to

costs.

Pending miscellaneous petitions, if any, shall stand closed.

______________________________ ABHINAND KUMAR SHAVILI, J 24.11.2021 Note: Mark the LR copy B/o vv