Smt. Mubeena Khan vs Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Limited & Ors.

This petition, under Article 226 of Constitution of India, has been filed seeking following relief (s):-

It is submitted by learned counsel for petitioner that petitioner's husband worked at Shajapur on the post of peon in the respondent-department and he died on 10.12.2016. Petitioner's husband was initially appointed on 30.11.1995 for a period of two years on contingency basis and after completing two years of probation, his services were regularized on the post of Peon w.e.f. 16.12.1997. In the year 2009, when petitioner's husband was posted at Shajapur, he applied for half day's leave on 5.01.2009 but due to medical condition he remained absent. Thereafter, respondents issued a show-cause notice to petitioner's husband which he did not reply and on account of that a departmental enquiry was initiated against him where he was found guilty in the said enquiry. On the basis of enquiry report, show-cause notice was issued to petitioner's husband on 18.02.2014 as to why his services should not be terminated and 15 days' time was given to file his reply. Petitioner's husband did not file any reply in response to the aforesaid show-cause notice and ultimately vide order dated 27.03.2014 services of petitioner's husband were terminated. Petitioner's husband expired on 10.12.2016. Thereafter, petitioner served a legal notice for releasing the funds and other service benefits of her deceased husband. Thereafter, respondents intimated petitioner that the services of her deceased husband were terminated on 27.03.2014 and the terminated employee would be entitled only to that amount which he had deposited in employee's provident fund and also stated that petitioner's husband was not entitled to gratuity. It is submitted that as per the provisions of Section 4(6) of Payment of Gratuity Act petitioner could not be deprived of the amount of gratuity. It is further submitted that the services of deceased were terminated on the basis of absence from service and there was no allegation of any act, willful omission or negligence that caused any damage or loss to, or destruction of, property belonging to the employer. It is submitted that even in the termination order there is no forfeiture of the gratuity of deceased and there is no damage or loss or destruction of property belonging to the respondents, therefore, petitioner is entitled to gratuity. Reliance has been placed on order dated 06.02.2018 passed by co-ordinate Bench at Principal Seat Jabalpur in WP. No.20795/2016 [The Manager, Western Coalfields Ltd. Vs. Mr. Prayag Modi]. It is submitted that without considering the aforesaid position, the respondents did not grant the benefit of gratuity.

Per contra, it is submitted by learned counsel appearing on behalf of respondents that present petition is not maintainable as petitioner is having an equally efficacious and alternative remedy to file a claim application for gratuity before the Controlling Authority under Payment of Gratuity Act. It is submitted that after departmental enquiry the services of petitioner's husband were terminated vide order dated 27.03.2014 and the said order was not challenged by deceased and once the services of deceased were terminated, he cannot be entitled to gratuity. Furthermore, it is submitted that the services of petitioner's husband were terminated from Shajapur, while he was posted in Shajapur and absconded from duty. Shajapur is not within the territorial jurisdiction of this Bench of this Court. The head office of the respondents is at Indore and the respondents do not have any office within the territorial jurisdiction of this Bench. As such, the present petition before Gwalior bench is not maintainable and even if a writ petition is maintainable, the same should be filed at Indore.

Heard learned counsel for parties and perused the record.

From perusal of record, it is gathered that petitioner's husband worked at Shajapur on the post of peon in the respondent-department and he died on 10.12.2016. Petitioner's husband was initially appointed on 30.11.1995 for a period of two years on contingency basis and after completing two years of probation, his services were regularized on the post of Peon w.e.f. 16.12.1997. In the year 2009, when petitioner's husband was posted at Shajapur, he applied for half day's leave on 5.01.2009 but due to medical condition he remained absent. Thereafter, respondents issued a show-cause notice to petitioner's husband which he did not reply and on account of that a departmental enquiry was initiated against him where he was found guilty in the said enquiry. On the basis of enquiry report, show-cause notice was issued to petitioner's husband on 18.02.2014 as to why his services should not be terminated and 15 days' time was given to file his reply. Petitioner's husband did not file any reply in the response to the said show-cause notice and ultimately vide order dated 27.03.2014 services of petitioner's husband were terminated. Petitioner's husband expired on 10.12.2016. Thereafter, petitioner served a legal notice for releasing the funds and other service benefits of her deceased husband. Then respondents intimated petitioner that the services of her deceased husband were terminated on 27.03.2014 and the terminated employee would be entitled only to that amount which he had deposited in employee's provident fund and also stated that petitioner's husband was not entitled to gratuity. As per the provisions of Section 4(6) of Payment of Gratuity Act petitioner could not be deprived of the amount of gratuity. Services of deceased were terminated on the basis of absence from service and there was no allegation of any act, willful omission or negligence that caused any damage or loss to, or destruction of, property belonging to the employer. Even in the termination order there is no forfeiture of the gratuity of deceased and there is no damage or loss or destruction of property belonging to the respondents, therefore, petitioner is entitled to gratuity.

Relevant provision of Payment of Gratuity Act reads as under:-

As per termination order, there is no allegation of causing any damage or loss or destruction of property belonging to respondents; there is no order pertaining to forfeiture of gratuity; there is no allegation of violence against deceased; there is no allegation against the deceased that he was involved in the offence pertaining to mortal turpitude; and once in the termination order no forfeiture of gratuity as per Section 4(6) of Payment of Gratuity Act is there, petitioner is entitled to gratuity.

The object behind gratuity scheme was considered by Supreme Court in Delhi Cloth and General Mills Co. Ltd. vs. Workmen & Others reported in AIR 1970 SC 919. It was laid down that the object of having a gratuity scheme is to provide retiral benefit to workmen, who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer, and it is, therefore, not correct to say that no misconduct however grave, may not be visited with forfeiture of gratuity. This judgment was again considered in (1973) 2 SCC 502 (The Management of Tournamulla Estate vs. Workmen). The Apex Court opined that misconduct could be of three kinds, (1) technical misconduct which leaves no trial of indiscipline; (2) misconduct resulting in damage to the employer's property which might be compensated by forfeiture of gratuity or a part thereof, and (3) serious misconduct such as acts of violence against the management or other employees or disorderly behavior in or near the place of the employment, which though not directly causing damage is conducive to grave indiscipline. The first should involve no forfeiture, the second may involve forfeiture of an amount equal to the loss directly suffered by the employer in consequence of the misconduct, and the third will entail forfeiture of the gratuity payable to the workman. In other words, according to this decision, if a workman is guilty of a serious misconduct of the third category, then his gratuity can be forfeited in its entirety.

So far as objection of respondents pertaining to alternative and efficacious remedy in the present case is concerned, there is no factual dispute and the only dispute is as to whether petitioner is entitled to gratuity or not. Alternative remedy is not a bar. Present petition is pending before this Court since 2018 and the only pure question of law involved in the instant petition is as to whether terminated employee is entitled to gratuity or not.

This is trite law that retiral dues/gratuity are not bounty. They are earned by employee by rendering long services to the employer. These payments are made in the December of career of employee so that he can discharge his social obligations and settle down in the life. The pension, gratuity etc. were held to be property under Article 300 A of the Constitution. This is equally settled that retiral dues cannot be withheld unless the statute enables the employer to do the same.

In this factual backdrop, it is to be seen that whether gratuity can be withheld. The M.P. High Court in 1996 (0) MPLJ 262 (Permali Wallance Ltd. vs. State of M.P. & Ors.) considered sub-section 6 of Section 4 and opined that the employer cannot forfeit the amount of gratuity without following the principles of natural justice and without determining the extent of damage/loss caused. It was taken note that extent of loss and damage was neither shown to the employee nor any opportunity was given. No enabling provision under the standing order was pointed out, which enables the employer to forfeit the gratuity.

Even no show-cause notice has been issued for forfeiture of the gratuity amount.

The various High Courts have taken constant view regarding applicability of principles of natural justice in the matter of forfeiture of gratuity. Apart from M.P. High Court in Permali Wallance Ltd. (supra), the same view was taken in the matter of Krishnaveni Textile Ltd. vs. Assistant Labour Commissioner (2002) 3 LLJ 607 (Madras). The Karnataka High Court in Bharat Gold Mines Ltd. vs. Regional Labour Commissioner ILR 1986 KAR 2755 took the same view. Similar is the view of Division Bench of Gujarat High Court in the case of Regional Manager vs. Nilaben Suresh Sanghvi. Pertinently, in this case, the High Court opined that in absence of a specific order forfeiting the gratuity, the action of withholding the gratuity cannot be countenanced. This Court in 2013 (1) MPLJ 301 (G.M.D.C. Co-operative Bank vs. Deendaya Gaud) opined that the amount of gratuity was quantified without providing any break up and behind the back of the employee and, therefore, said amount cannot be recovered under Section 4 of the Gratuity Act.

It is made clear that this Court has not expressed any opinion on the legality, validity and propriety of the order of punishment, which is subject matter of adjudication before the Competent Court/Forum. This Court has only considered the nature of allegations in the teeth of various clauses of Section 4 of the Gratuity Act in order to examine whether employer was justified in withholding the gratuity.

In nutshell, the gratuity of an employee can be withheld only as per the procedure prescribed in the Payment of Gratuity Act and to the extent such withholding/forfeiture of gratuity is permissible. The employer does not have any unfettered discretion in withholding the gratuity as per the whims and fancies. This is trite law that if a law prescribes a thing to be done in a particular manner, it has to be done in the same manner and other methods are forbidden. [See AIR 1959 SC 93 (Baru Ram vs. Prasanni and (2002) 1 SCC 633 (Commissioner of Income Tax, Mumbai vs. Anjum M.H. Ghaswala)]. The Supreme Court held that Law has reached its fines moments’, stated Douglas, J. in United States vs. Wunderlich 342 US 98 (1951), ‘ when it has freed man from the unlimited discretion of some ruler….. Where discretion is absolute, man has always suffered.’ It is in this sence that the rule of law may be said to be the sworn enemy of caprice. Discretion, as Lord Mansfield stated it in classic terms in R. vs. Wilkes (1770) 4 Burr 2527: Burr at p. 2539 ‘means sound discretion guided by law. It must be governed by rule, not by humour: it must not be arbitrary, vague, and fanciful.’

This principle is followed by Hon. Supreme Court in (2012) 10 SCC 1 (Natural Resources Allocation, In. Reference Special Reference No.1 of 2012.

So far as the question regarding jurisdiction is concerned, husband of petitioner expired on 10.12.2016. The respondent company has offices at Gwalior as well as Indore, Madhya Pradesh. Petitioner, being a widow aged about 55 years at the time of filing of the present petition, has been pursuing the matter since 2018. The respondents have already filed their reply and the only issue involved in the present petition is as to whether the deceased husband of petitioner was entitled to gratuity, which is now payable to petitioner. Therefore, the objection so raised is not tenable and the present petition is being decided by this Court in view of the aforesaid legal issue involved therein.

Consequently, present petition stands disposed of in the following manner: