Andhra Pradesh High Court - Amravati
J.S. Narayana, Visakhapatnam District vs Md, Apsrtc, Hyderabad 2 Others on 8 November, 2019
Author: C.Praveen Kumar
Bench: C.Praveen Kumar, Cheekati Manavendranath Roy
HON'BLE SRI JUSTICE C. PRAVEEN KUMAR
AND
HON'BLE SRI JUSTICE CHEEKATI MANAVENDRANATH ROY
W.P. No.30362 of 2015
ORDER :(Per Hon'ble Sri Justice C.Praveen Kumar) Disagreeing with the view expressed by a learned Single Judge of this Court in B.Mohan Rao v. The APSRTC (Hyderabad)1 on interpretation of Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972, the matter was referred to the Division Bench.
2. In order to appreciate the issue raised herein, it would be appropriate to refer to certain facts :
The petitioner herein joined as a Cleaner in APSRTC on 4.1.1979.
He was selected as Grade-II Driver on 8.1.1981 and thereafter removed from service on 7.4.1992. Challenging the order of removal, the petitioner preferred an I.D. before the Labour Court vide I.D.No.103 of 1992. By an award dated 28.6.1996, the Labour Court ordered reinstatement of the petitioner treating the same as fresh appointment for all purposes. Pursuant thereto, the petitioner was reinstated into service as a driver on 4.8.1996. In the year 2011, he was found medically unfit for the post of Driver and as such, he was posted as Shramik at Gajuwaka bus depot of APSRTC and thus worked there till 1 2015 (2) ALD 97 2 attaining superannuation on 28.2.2013. After retirement, the petitioner was given all the benefits, except the gratuity and provident fund from 4.1.1979 to the date of his removal. Though he was paid gratuity from 1996 to date of his retirement, but no gratuity was paid from 1979 to 1995 i.e., when he was removed from the service. This action of the respondents in not providing gratuity and provident fund for the period from 1979 to 1995 is challenged in the present writ petition. However, the counsel for the petitioner restricts his prayer seeking gratuity for the period 1979 to 1995.
3. Sri Nuthalapati Krishna Murthy, learned counsel appearing for the petitioner, mainly submits that, in the absence of any order of termination from the service and as the petitioner was taken back afresh, the action of the authorities in withholding gratuity on the ground that the petitioner was involved in an act of moral turpitude is illegal, improper and incorrect. Referring to the provisions of A.P. Gratuity Act, more particularly Section 4 and the Judgment of the Supreme Court in Union Bank of India v. C.G.Ajay Babu2 and the judgment of a learned Single Judge of this Court in B.Mohan Rao v. The APSRTC (Hyderabad)3, he would contend that the petitioner is entitled to gratuity, as he was worked for more than four years.
4. On the other hand, a counter came to be filed by the respondents disputing the averments made in the affidavit filed in support of the 2 (2018) 9 SCC 529 3 2015 (2) ALD 97 3 Writ Petition. It is pleaded that the petitioner, while working as a Driver at Gajuwaka depot, tried to outrage the modesty of a passenger, by name, Smt.Meenakshamma by switching off the lights in the bus at Devada point and involved in a case attracting ingredients of moral turpitude. Further, the petitioner failed to inform the authorities the cause of his arrest on 19.10.1991 and did not give any explanation or contradict the press statement reported in local dailies. It is stated that against an order of removal from service, the petitioner preferred an appeal for reinstatement before the Divisional Manager, Visakha (U) Division, which was rejected and thereafter, he approached the Industrial Tribunal, which has accepted his request in part, directing the Management to reinstate the petitioner into service, treating the same as fresh appointment for all purposes. Having regard to Section 4(6)(b)(i) and (ii) of the Payment of Gratuity Act and since he is involved in an act of moral turpitude, his gratuity was not paid for the period from 4.1.1979 to 4.8.1996. It is further pleaded that since his reinstatement was afresh, the question of payment for the past service would not arise, but, however, admits that gratuity from 1996 to 2013 i.e., till his retirement was paid.
5. A reply came to be filed by the petitioner stating that withholding or rejection of gratuity would arise only if the petitioner is involved in an act of moral turpitude and the offence has to be committed in the course of his employment. Since there is no termination and as he 4 continued in service on certain terms and conditions, withholding of gratuity in his view is totally incorrect.
6. In order to appreciate the same, it will be useful to refer to Section 4 of the Gratuity Act, to the extent relevant, as under :
"4. Payment of gratuity.--(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years--
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease :
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement :
Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.
Explanation.--For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he, was capable of performing before the accident or disease resulting in such disablement.
* * * (5) Nothing in this Section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.
(6) Notwithstanding anything contained in sub-section (1)--5
(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."
7. The counsel for the respondents mainly relied upon the distinction in Sub-Sections (5) and (6) of Section 4 of Payment of Gratuity Act. This distinction came to be explained by the Apex Court in Union Bank of India's case (supra), wherein the Apex Court while dealing with Sub-Section (5) and Sub-Section (6) held that the former is a non-obstante clause of the entire section where as the latter is only in respect of sub-section (1). In other words, the Court held that Sub- Section (5) has an overriding effect on all other sub-sections under Section 4 of the Act. The Apex Court further held that notwithstanding anything contained under Section 4 of the Act, an employee is entitled to receive better terms of gratuity under any award or agreement or contract with the employer. Insofar as Sub-Section (6) (a) of Section 4 is concerned, it has been held that in case termination of the employee is for any act or willful omission or negligence causing any damage or loss to the employer or destruction of property belonging to the 6 employer, the loss can be recovered from the gratuity by way of forfeiture. Whereas under clause (b) of sub-section (6), the forfeiture of gratuity, either wholly or partially, is permissible under two situations; firstly, in case the termination of an employee is on account of riotous or disorderly conduct or any other act of violence on his part; and secondly, if the termination is for any act which constitutes an offence involving moral turpitude and the offence is committed by the employee in the course of his employment. Thus, clause (a) and clause (b) of sub- section (6) of Section 4 of the Act operate in different fields and in different circumstances. The Apex Court held that in clause (a), the forfeiture is to the extent of damage or loss caused on account of the misconduct of the employee, whereas under clause (b), forfeiture is permissible either wholly or partially in totally different circumstances. Clause (b) operates when the termination is on account of : (i) riotous, or (ii) disorderly, or (iii) any other act of violence on the part of the employee, and under clause (ii) of sub-section (6)(b), when the termination is on account of any act which constitutes an offence involving moral turpitude committed during the course of employment.
8. As observed by us earlier, this issue fell for consideration before the Apex Court in Union Bank of India v. C.G.Ajay Babu 4, wherein the Apex interpreted Section 4(6)(b)(i) and (ii) holding that it comes into operation when the termination is on account of riotous or disorderly or any other act of violence on the part of the employee, and under clause 4 (2018) 9 SCC 529 7
(ii) of sub-Section (6)(b) when the termination is on account of any act which constitutes an offence involving moral turpitude committed during the course of employment.
9. It would be useful to refer to order under reference, which is as under :
"I have gone through the Circular as well as Section 4(6)(b)(ii) of Payment of Gratuity Act, 1972. The circular or the statutory provision is applicable to the employees, who are removed from service on the charge of mis-conduct involving moral turpitude. In the instant case, there is no doubt that the charge leveled against the petitioner involves moral turpitude. Initially he was removed from service during the course of disciplinary proceedings by the disciplinary authority and the same was confirmed by the appellate authority, but the reviewing authority modified the punishment, reverted the petitioner and posted him afresh as Mechanic Grade-II. Therefore, for all practical purposes, punishment of removal is not in existence against the petitioner. When the punishment of removal is not in existence, either the Circular or the aforesaid statutory provision relating to payment of gratuity is not applicable to the case of the petitioner. After the order passed by the reviewing authority, it cannot be said that petitioner was removed from service and it was still operating against him. Even though the petition No.14454 of 2009, which was filed by the petitioner, is pending, there is no legal bar to adjudicate the lis involved in the present writ petition since the petitioner is claiming payment of gratuity for the period from 23.05.1980 to 26.11.2001, notwithstanding the pendency of aforesaid writ petition filed by him. Hence, the writ petition succeeds and the same can be allowed."
10. Therefore, the short question that falls for consideration is with regard to interpretation of Section 4(6)(b)(ii) of Payment of Gratuity Act, 1972.
8
11. Before proceeding further, it would be useful to know that in respect of an incident which took place on 17.10.1991, a criminal case was registered against the petitioner for the offence punishable under Section 354 I.P.C. After investigation, the Police filed a charge-sheet, which was taken on file as C.C. No.656 of 1991. However, by its judgment dated 06.02.1996, the VIII Metropolitan Magistrate, Visakhapatnam at Gajuwaka acquitted the accused under Section 255 (1) Cr.P.C. holding that the prosecution miserably failed to prove the guilt of the accused.
12. That being the position it would be useful to refer to the findings given by the Apex Court in Union Bank of India's case (supra) which was also a case where one of the argument advanced by the counsel for the petitioner was the conduct of the employee which lead to framing of charge in the Departmental proceedings involving moral turpitude. The Court held that it is not the conduct of a person involving moral turpitude that is required for forfeiture of gratuity but the conduct or the act should constitute an offence involving moral turpitude. To be an offence, the act should be made punishable under law. It is not for the Bank to decide whether an offence has been committed, but it is for the court. Though disciplinary proceedings were initiated by the appellant- Bank, but the Bank has not set the criminal law in motion either by registering an FIR or by filing a criminal complaint so as to establish the misconduct leading to dismissal on the ground that the offence involves 9 moral turpitude. As observed earlier, the Apex Court also held that under sub-Section (6)(b)(ii) of the Act, forfeiture of gratuity is permissible only if the termination of an employee is for any misconduct which constitutes an offence involving moral turpitude, and convicted accordingly by a court of competent jurisdiction.
13. Similarly, in Jaswanth Singh Gill v. Bharat Coking Coal Ltd.5 while dealing with Sub-Section (6)(b)(ii) of Section 4 of the Act held as under:
"13. The Act provides for a close-knit scheme providing for payment of gratuity. It is a complete code containing detailed provisions covering the essential provisions of a scheme for a gratuity. It not only creates a right to payment of gratuity but also lays down the principles for quantification thereof as also the conditions on which he may be denied therefrom. As noticed hereinbefore, sub-section (6) of Section 4 of the Act contains a non obstante clause vis-à-vis sub-section (1) thereof. As by reason thereof, an accrued or vested right is sought to be taken away, the conditions laid down thereunder must be fulfilled. The provisions contained therein must, therefore, be scrupulously observed. Clause (a) of sub-section (6) of Section 4 of the Act speaks of termination of service of an employee for any act, wilful omission or negligence causing any damage. However, the amount liable to be forfeited would be only to the extent of damage or loss caused. The disciplinary authority has not quantified the loss or damage. It was not found that the damages or loss caused to Respondent 1 was more than the amount of gratuity payable to the appellant. Clause (b) of sub-section (6) of Section 4 of the Act also provides for forfeiture of the whole amount of gratuity or part in the event his services had been terminated for his riotous or disorderly conduct or any other act of violence on his part or if he has been convicted for an offence involving moral turpitude. Conditions laid down therein are also not satisfied."5
(2007) 1 SCC 663 10
14. In the absence of any conviction of the employee for misconduct the Apex Court held that there is no justification for forfeiture of gratuity on the ground that the misconduct involves act of moral turpitude.
15. In Jorsingh Govind Vanjari v. Divisional Controller Maharashtra, State Road Transport Corporation, Jalgaon Division, Jalgaon6 the Apex Court held that in order to deny gratuity to an employee, it is not enough that the alleged misconduct of the employee constitutes an offence involving moral turpitude as per the report of the domestic inquiry. There must be termination on account of the alleged misconduct, which constitutes an offence involving moral turpitude. Once termination itself is found unjustified, the employee shall be entitled to gratuity also.
16. In Baburam Rameshwar v. M/s.Phoenix Mills Limited and others 7 the Court was dealing with a case where the employer, after the declaration of strike moved the Labour Court, which declared the strike as illegal. Thereafter, by publication, a show cause notice was issued to all the employees. Subsequently, another notice came to be issued stating that in view of the strike, the company was becoming weak financially and as such the company will have no other alternative but to dismiss the petitioner from the services for misconduct. In the application moved before the Industrial Court the petitioner himself has 6 2017 (12) SCC 12 7 1997(0) SCJ Online (Bom) 64 11 stated that he was re-employed as a fresh employee on 6th June, 1983 i.e., 1 ½ year after the strike was declared which is 18th January, 1982. It was also a case where the provisions of Payment of Gratuity Act came up for consideration. Referring to Section 2-A of Payment of Gratuity Act, which speaks of 'continuous service', the learned Single Judge held as follows :
"Section 2-A contemplates that an employee is entitled to gratuity if he has been in uninterrupted service including services which may be interrupted as set out in the said Section. This includes interruption by strike or lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of the Act. A literal reading of the definition would, therefore, indicate that as long as the employee is in service and his service has not been terminated, then mere absence or not reporting for duty or ceasing to work for no fault of the employee, the employee is deemed to be in service."
17. From the judgments referred to above, it is evident that to make an employee disentitled for gratuity in terms of Section 6(b)(ii) of Section 4 of the Act, it is mandatory that employee should not only be involved in an act constituting moral turpitude, but the Court of competent jurisdiction should hold him guilty for the said offence. In the instant case, the petitioner though charged for the offence punishable under Section 354 I.P.C., but, after full-fledged trial, he was acquitted holding that the prosecution failed to prove the same. Therefore, we hold that the ingredients of Sub-Section (6)(b)(ii) are not satisfied. It is further to be noted here that the petitioner joined on 4.1.1979 and thereafter he was removed from service on 7.4.1992. He was reinstated afresh on 12 28.6.1996 and then retired on 28.2.2013. It is not a case where the petitioner is claiming gratuity from 4.1.1979 to 28.2.2013. He is claiming gratuity only for the period from 4.1.1979 to 7.4.1992, that is the period during which he worked as Grade-II Driver of APSRTC. It is also to be noted here that the respondent authorities have paid all the benefits including gratuity for the period 28.6.1996 to 28.2.2013. Since the case of the petitioner does not satisfy the requirement of Section 4 (6)(b)(ii) of the Act, the act of the respondents in withholding gratuity is illegal and incorrect.
18. Accordingly, the reference is answered and the Writ Petition is allowed directing the respondent-authorities to pay gratuity for the period i.e., from 1979 to 1995, leaving it open to the petitioner to agitate other issues before the appropriate forum, if permissible under law. No order as to costs.
Consequently, interlocutory applications pending, if any, shall stand closed.
_______________________________ JUSTICE C. PRAVEEN KUMAR ________________________________________________ JUSTICE CHEEKATI MANAVENDRANATH ROY Date : 08.11.2019 skmr