C.C.I. Limited vs The Deputy Labour Commissioner and Appellate Authority

Ram Mohan Reddy, J.—The employer, aggrieved by the order dated 12-6-2013 Annexure-A of the Appellate Authority under the Payment of Gratuity Act, 1972 (for short, ''Act''), confirming the order dated 30-3-2012 Annexure-B of the Controlling Authority, has presented these petitions. The only submission of the learned Counsel for the petitioner is that the 3rd respondent while discharging duties as Chief Executive Officer of the petitioner-organisation, was terminated from service for certain acts of misconduct by a Board Resolution dated 23-7-2009 marked as Annexure-R2 before the Authorities and therefore in the light of Section 4(6)(b)(ii) of the Act, the Authorities below ought to have held that the petitioner was entitled to forfeit the gratuity amount to the extent of damages caused to the petitioner.

Learned Counsel hastens to add that after the 3rd respondent was terminated from the post of Chief Executive Officer, though by order dated 14-9-2010, Management forfeited the entire gratuity amount, by way of damages, nevertheless, that order is not introduced in evidence before the Controlling Authority.

The question therefore is whether the petitioner had, in fact, issued notice to the 3rd respondent over the allegation of occasioning damages sustained by the petitioner, due to the misconduct committed by the 3rd respondent, entailing forfeiture of the gratuity amount in its entirety?

Admittedly, relevant material constituting substantial legal evidence of the fact of forfeiture of the gratuity is not placed by the petitioner in the proceeding before the authorities under the Act though a trial was held over the claim of the 3rd respondent for payment of gratuity. Under the provisions of the Act, gratuity amount payable to employees can be wholly or partially forfeited only on two grounds: (i) if the service of employee is terminated for his riotous or disorderly conduct or any other act of violence; and (ii) if terminated for any act which constitutes an offence involving ''moral turpitude'' and if such act is committed in the course of his employment.

In the absence of relevant material constituting substantial legal evidence to establish that the conduct of the 3rd respondent was so offensive as to constitute ''moral turpitude'' and the proceeding relating to forfeiture of the entire gratuity payable to him, the Authorities below, in my considered opinion, were fully justified in rejecting the petitioner''s plea by the orders impugned.

It is no doubt true that invoking Section 4(6)(b)(ii) of the Act, by an employer, it is not necessary that a workman should be convicted of a criminal offence since ''moral turpitude'' is based upon the nature of misconduct committed by the workman and proved, so to say, for his riotous or disorderly or violent conduct, which may constitute ''moral turpitude''.

Be that as it may, as noticed supra, there is no material whatsoever to establish that the proved misconduct of the 3rd respondent constituted an offence involving moral turpitude so as to disentitle the 3rd respondent to gratuity while entitling the petitioner to forfeit the gratuity. Petitions, devoid of merit, are rejected.