Oral Judgment:
1. The Respondent No.1 â“ Dattatraya Ramchandra Gaund was an employee of the petitioner, appointed in the year 1970. On 05.07.19986, he was dismissed from service on the ground of grave misconduct of misappropriation of an amount of Rs.53,702.50. This order of dismissal was challenged before the Labour Court and the said complaint was dismissed in default. The order of dismissal has thus attained the finality. The respondent was also prosecuted in Regular Criminal Case No. 595A/1993 for the offence under Section 408 of Indian Penal Code for misappropriation of the amount. He was acquitted on 30.05.1998. The respondent No.1 moved an application for payment of gratuity on 04.01.2007 before the Controlling Authority. It was registered as Misc. ULP No. 48 of 2005. The Controlling Authority passed an order on 22.01.2009 directing payment of gratuity of Rs. 60,585/- along with 8% interest per annum. Hence, the employer is before this Court in this writ petition.
2. Shri Kadukar, the learned counsel appearing for respondent No. 1 has raised a preliminary objection that there existed right of appeal under sub-section (7) of Section 7 of the Payment of Gratuity Act, which was required to be preferred within the stipulated period and the petitioner has without availing such remedy, filed this petition challenging the order of the Controlling Authority. The petition, according to him, is, therefore, liable to be rejected on the ground of failure of the petitioner to avail the alternate statutory remedy available to challenge the order impugned in this petition. He has relied upon the decision of this Court in case of H. Jayarama Shetty vrs. The Sangli Bank Ltd reported in 2005 (3) Mh.L.J 609.
3. Shri Kankale, the learned counsel appearing for the petitioner does not dispute the existence of remedy of an appeal, but submits that the order passed by the Controlling Authority is without jurisdiction and hence the bar of alternate remedy shall not operate against the petitioner. According to him, the order of dismissal was passed on 05.07.1986 and the application was preferred under the Payment of Gratuity Act on 04.01.2007 i.e. after lapse of almost 20 years and the delay was not properly explained. He has relied upon the decision of this Court in the case of R.P.Dhanda vrs. Regional Manager, UCO Bank and anr reported in 2007 (6) ALL MR 54 for this proposition.
4. In the decision in case of R.P.Dhanda, the learned single Judge of this Court (Shri V.C.Daga, J, as he then was) has held that the Controlling Authority has no jurisdiction to consider the application for claim of gratuity beyond the period of limitation. In the decision of the another learned single Judge of this Court ( Dr. D.Y.Chandrachud, J., as he then was) in the case of H. Jayarama Shetty, it has been held that the employer cannot set up limitation as a defence on the ground that the application for payment of gratuity was not presented within thirty days. It has been held that it is the duty of the employer to pay gratuity, whether or not the application is filed. The Act is a piece of beneficial legislation and a liberal interpretation would have to be adopted since an employee may not at times be aware of his rights. It further holds that the Act imposes an obligation on the employer to pay the gratuity and it is not open for the employer to deprive its benefit on the ground of delay.
5. In the present case, the application is made after a period of almost 20 years. After going through the same, I do not find any explanation for the delay so caused in making an application for payment of gratuity. Even if it is assumed that there is no period of limitation prescribed, the application has to be made within a reasonable period. The period of 20 years cannot be said to be a reasonable period. Even if it is assumed that the employee was acquitted in criminal proceeding on 30.05.1998, the delay caused thereafter of a period of about 9 years has not at all been explained. In the absence of any such explanation, the Controlling Authority has committed an error in condoning the delay caused. In the absence of pleadings of material facts to seek condonation of delay, the Authorities could not have exercised such jurisdiction and the application should have been dismissed on the ground of delay.
6. Even on merits of the matter, the perusal of the order of dismissal which has attained the finality shows that the respondent was dismissed from service on account of misappropriation of the amount. While considering the entitlement of respondent No.1 for payment of gratuity, it is not necessary for this Court to go into the correctness and legality of the order of dismissal passed by the employer. As a matter of fact, in the present case, the order of dismissal has attained the finality. Be that as it may, that by itself is not enough to deprive an employee the claim for gratuity.
7. Sub-section (6) of Section 4 of the Payment of Gratuity Act deals with the situation where the gratuity payable to an employee can be wholly or partially forfeited.
The said provision is reproduced below.
"4. Payment of gratuity.........
(6) Notwithstanding anything contained in sub-section (1), (a) the gratuity of an employee, whose services have been terminated for any act, willful 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 involving moral turpitude, provided that such offence is committed by him in the course of his employment".
What is required to be seen to test the case of respondent No.1 on the provision of sub-section (6) of Section 4 of the said Act is to find out the ground mentioned in the order of termination/dismissal. If the order shows that the services have been terminated for any act which constitutes an offence involving moral turpitude, the gratuity payable to the employee can partially or wholly forfeited under Section 4(6) (b)(ii) of the said Act. The stand of the employer is that the gratuity has been wholly forfeited on account of termination of the services of respondent No.1 on the ground of misappropriation of the amount. In such an event, it is not necessary to issue any show cause notice for forfeiting the gratuity, wholly or partially. Hence, the employer was justified in the action taken under Section 4(6)(b)(ii) of the said Act.
8. In the decision of Western Coalfields Ltd vrs. Ramjanam Yadav, delivered in Writ Petition No. 4281 of 2011, on 18.10.2013, it has been held in para 2, as under;
"2. The Authorities below have held that it was not an act of mortal turpitude so as to attract the provision of Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972. Obviously the reason cannot be accepted. The acceptance of bribe is an act of moral turpitude. No doubt that the order of forfeiture of gratuity was not passed, but it was the defence raised in response to the application for payment of gratuity. The provision of Section 4 of the Payment of Gratuity Act, 1972 is silent about providing an opportunity of being heard in the matter by issuing show cause notice before forfeiture of the gratuity. The respondent-employee was terminated from service after holding an enquiry, which was an exparte enquiry. The order of termination was not challenged. In the facts and circumstances of the case, there is no question of issuing show cause notice to the respondent-employee" The present case is covered by the aforesaid decision. The another decision of the learned single Judge of this Court in case of Jaya Hind Industries vrs. Vilas Vithalrao Takale reported in 2011(5) Bom. C.R. 703, the court was dealing with the provision of Section 4(6)(b)(i) of the Payment of Gratuity Act and the said provision is not applicable to the facts of the present case.
9. In view of above, the Controlling Authority has committed an error of law in directing payment of gratuity to the respondent no.1 â“ employee. The order impugned cannot, therefore, be sustained. The same, therefore, needs to be quashed ans set aside.
10. In the result, the writ petition is allowed. The order impugned 22.01.2009 passed by the Controlling Authority is hereby quashed and set aside.
Rule is made absolute in these terms. No order as to cost.