Chattisgarh High Court
The General Manager, Uco Bank And Anr vs Shri Jitendra Kumar Shrivastava on 4 January, 2016
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AFR
HIGH COURT OF CHHATTISGARH, BILASPUR
WPL No. 42 Of 2015
1. The General Manager, UCO Bank, Head Office-3-4 DD
Block, Sector-1, 2nd Floor, Salt Llake, Kolkata (W.B.) 700064
2. The Branch Manager, UCO Bank, Civic Centre, Bhilai, Dist-
Durg (CG) Through Dy. Zonal Head, Zonal Office, UCO
Bank, Chhattisgarh Eye Hospital Campus, 1 st Floor, Tal-
ibandha, Raipur (C.G.) 492006
---- Petitioners
Versus
Shri Jitendra Kumar Shrivastava S/o. Late Shri A.K.Shrivas-
tava, H. No.06, Kanha Homes, Shanti Nagar, P.S. Civil Lines,
Tah & Dist-Bilaspur (C.G.)
---- Respondent
For Petitioners : Mr.Ravindra Sharma, Advocate For Respondent : Mr.D.C. Verma, Advocate For Amicus Curiae : Mr.Abhishek Sinha & Mr.Gary Mukhopadhyay, Advocates Hon'ble Shri Justice Sanjay K. Agrawal C A V Order 4/1/2016
1. Renowned issue that emanates for consideration in this writ petition is whether the employer (petitioners herein) is justi- fied in forfeiting the amount of gratuity payable to the em- ployee (respondent herein) on the ground of his dismissal 2 from service without his conviction by jurisdictional criminal Court for an offence involving moral turpitude within the meaning of Section 4 (6) (b) (ii) of the Payment of Gratuity Act, 1972 (hereinafter called as "PG Act") ?
2. The above-stated question arises for consideration in the fol-
lowing factual matrix incorporated hereinbelow:-
(i) The respondent/employee of the petitioner-Bank was charge-sheeted for having unauthorizedly accessed storage data of Saving Bank Accounts of depositors with a fraudulent intention and upon conclusion of full-fledged departmental in-
quiry, disciplinary authority by its order dated 31.8.2010 reached at a finding, agreeing with enquiry report, that the employee has caused by his misconduct, irreparable damage to the repu- tation and business of the banks, there has been a deliberate perpetration of fraud involving malafide with unpardonable offence and conse- quently, inflicted apart from other punishment, dismissal from service and said order of dis- missal is said to have been attained finality. Thereafter, on 26.8.2013 the respondent herein made an application to the Controlling Authority for Payment of Gratuity under the provisions of the PG Act claiming gratuity.
(ii) The Controlling Authority issued notices in Form-O under Rule 11(1) of the Payment of 3 Gratuity (Central) Rules, 1972 asking the parties to appear before him. In reply to the notice, the petitioner-Bank submitted that the respondent herein was dismissed from service of the peti- tioner-Bank for commission of misconduct which constitutes an offence involving moral turpitude, therefore, Section 4(6) (b) (ii) of the PG Act squarely attracts and gratuity payable to the re- spondent herein stands forfeited and as such, when services of the respondent-employee have been terminated for an offence involving moral turpitude, gratuity has rightly been for- feited by the petitioner-Bank.
(iii) The Controlling Authority by its order dated 29.9.2014 holding that services of the respon- dent herein were not terminated for an offence involving moral turpitude, no prosecution was launched by the petitioner-Bank against the re- spondent herein for commission of an offence, no full-fledged inquiry was conducted before for- feiting his gratuity and held that the respondent herein is entitled for payment of gratuity of ` 5,71,478/- along with 10% simple interest per annum on the payable gratuity amount with ef- fect from 30.8.2010 up to the date of its actual payment.
(iv) Feeling aggrieved and dissatisfied against the order of the Controlling Authority directing pay- ment of gratuity, the petitioner-Bank preferred 4 an appeal before the Appellate Authority under the PG Act. The Appellate Authority by its order dated 6.2.2015 dismissed the appeal upholding the order passed by the Controlling Authority.
3. Questioning the order passed by the Appellate Authority up-
holding the order of the Controlling Authority, the instant writ petition has been filed by the petitioners under Article 226 of the Constitution of India stating inter-alia that the peti- tioner-Bank was justified in forfeiting the gratuity as the act committed by an employee for which his services have been terminated, constitutes an offence involving moral turpitude and as such, initiation of prosecution and consequent con- viction of an employee by the criminal Court is not a condi- tion precedent for forfeiting the gratuity in terms of Section 4 (6) (b) (ii) of the PG Act.
4. Return has been filed on behalf of the respondent opposing the writ petition stating inter-alia that the Controlling Authority is justified in holding that conviction of an employee for an offence involving moral turpitude by jurisdictional criminal Court is condition precedent for invoking Section 4 (6) (b) (ii) of the PG Act and in absence of conviction of terminated em- ployee for an offence involving moral turpitude, invocation of 5 the above-stated provision is absolutely bad and illegal in law.
5. Mr.Ravindra Sharma, learned counsel appearing for the peti-
tioners, would submit that order passed by the Controlling Authority holding that since the employee/respondent herein, who was terminated for his misconduct, has not been con- victed by the criminal Court in a duly launched prosecution for an offence involving moral turpitude, suffers from grave jurisdictional error, as the act committed by the respondent/employee for grave misconduct for which his services have been terminated, ipso facto would constitute an offence involving moral turpitude, therefore, Section 4 (6)
(b) (ii) of the PG Act squarely attracts and gratuity stands for- feited. He would further submit that order passed by the Controlling Authority as affirmed by the Appellate Authority is without due application of mind and as such, the writ petition deserves to be allowed and orders passed by two authorities directing payment of gratuity deserve to be quashed.
6. Mr.D.C.Verma, learned counsel appearing for the respon-
dent, would oppose the writ petition and submit that concur- rent finding recorded by two authorities holding that the re- spondent is entitled for payment of gratuity is based on ma- 6 terial available on record and as such, concurrent finding is not liable to be interfered with.
7. I have heard learned counsel appearing for the parties, also considered the rival submissions made therein and gone through the record of the case with utmost circumspection.
8. The question that cropped up for consideration is whether conviction of terminated employee for an offence involving moral turpitude is a condition precedent for forfeiting gratuity in terms of Section 4 (6) (b) (ii) of the PG Act.
9. In order to determine the controversy raised at the Bar, it would be appropriate to notice Section 4 (6) (b) (ii) of the PG Act which reads as under:-
"4. Payment of gratuity.-
(6) Notwithstanding anything contained in sub-section (1),-
(a) xxx xxx xxx
(b) the gratuity payable to an employee may be wholly or partially forfeited-
(i) xxx xxx xxx
(ii) if the services of such employee have been terminated for any act which con-
stitutes an offence involving moral turpi- tude, provided that such offence is com-
mitted by him in the course of his em-
ployment."
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10. The following condition precedent must be satisfied in order to invoke the said provision:-
"(i) Proven misconduct which is based for de-
termination for tenure of employee must be an offence under the law; and
(ii) Such misconduct which is an offence un- der the law must involve moral turpitude.
11. Section 3 (38) of the General Clauses Act, 1897 defines "of-
fence" shall mean any act or omission made punishable by any law for the time being in force.
12. Section 2(n) of the Code of Criminal Procedure, 1973 de-
fines "offence" as under:-
"offence means any act or omission made punishable by any law for the time being in force and includes an act in respect of which a complaint may be made under Section 20 of the Cattle-trespass Act, 1871 (1 of 1871)."
Thus, a common string running through all the above defini- tions is that for act or omission to constitute an offence, it must be a breach of a law or statute and such an act or omission must be punishable by any law.
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13. In the matter of Standard Chartered Bank v. Directorate of Enforcement1, Their Lordships of the Supreme Court while dealing with the word "offence" observed as under:-
"The word 'offence' is not defined in the Act. According to Concise Oxford English Dictio- nary, it means, 'an act or instance of offend- ing'. Offend means, 'commit an illegal act' and illegal means, 'contrary to or forbidden by law'. According to New Shorter Oxford Eng- lish Dictionary, an offence is "a breach of law, rules, duty, propriety, etiquette, an illegal act, a transgression, sin, wrong, misdemeanour, misdeed, fault." Thus, an offence only means the commission of an act contrary to or forbid- den by law. It is not confined to the commis- sion of a crime alone. It is an act committed against law or omitted where the law requires it and punishable by it. In its legal significa- tion, an offence is the transgression of a law; a breach of the laws established for the pro- tection of the public as distinguished from an infringement of mere private rights; a punish- able violation of law, a crime, the doing that which a penal law forbids to be done or omit- ting to do what it commands (see P. Ra- manatha Aiyar's Advanced Law Lexicon, 3rd Edn, 2005 page 3302). This Court in Depot Manager, Andhra Pradesh State Road Trans- port Corporation Vs. Mohd. Yousuf Miya [(1997) 2 SCC 699] stated that the word 'of- fence' generally implies infringement of a pub- lic duty, as distinguished from mere private rights punishable under criminal law. In Brown v. Allweather Mechanical co. [(1954) 2 QB 443], it was described as "a failure to do something prescribed by a statute may be de- scribed as an offence, though no criminal sanction is imposed but merely a pecuniary sanction recoverable as a civil debt." The ex- pression 'offence' as defined in Section 3(38) of the General Clauses Act means an act or 1 (2006) 4 SCC 278 9 omission made punishable by any law for the time being in force. 'Punishable' as noticed by this Court in Sube Singh & Ors. Vs. State of Haryana & Ors. [(1989) 1 SCC 235] is ordi- narily defined as deserving of, or capable or liable to punishment. According to Concise Oxford English Dictionary, 'punish' means, 'in- flict a penalty on as retribution for an offence, inflict a penalty on someone for (an offence)'. In the New Shorter Oxford English Dictionary (Vol. 2, 3rd ed., reprint 1993), the meaning of punishment is given as, "infliction of a penalty in retribution for an offence; penalty imposed to ensure application and enforcement of a law."
14. The question for consideration is whether proven miscon-
duct of the respondent herein in duly constituted departmen- tal proceeding initiated and culminated against him inflicting the penalty of dismissal from service can be equated to an offence which is punishable under the law. In the considered opinion of this Court, departmental proceeding is indepen- dent in character and any misconduct proved in a depart- mental proceeding cannot be said to be an offence punish- able under the law.
15. In order to invoke Section 4 (6) (b) (ii) of the PG Act at once, it is imperative that employee is terminated for proven mis- conduct and thereafter criminal prosecution is launched in jurisdictional criminal court and finding the said terminated employee guilty, he is convicted by the said criminal Court 10 holding that he has violated the provisions of law and statute. In catena of judgments, Their Lordships of the Supreme Court have held in no uncertain terms that depart- mental enquiry cannot be equated with criminal prosecution as the standard of proof in a departmental proceeding is based on preponderance of probabilities, whereas in crimi- nal cases, it is beyond reasonable doubt. (See: AIR 1984 SC 626 [Corporation of the City of Nagpur, Civil Lines, Nagpur v. Ramchandra G. Modak and (2008) 3 SCC 729 [West Bokaro Colliery (TISCO Ltd) v. Ram Pravesh Singh)
16. In the matter of Jashwant Singh Gill v. Bharat Coking Coal Ltd. and others2, Their Lordships of the Supreme Court have clearly held that under clause (b) of sub-section (6) of Section 4 of the PG Act, forfeiture of gratuity can be made only if he has been convicted for an offence involving moral turpitude and observed 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-a`-vis sub-section (1) 2 (2007) 1 SCC 663 11 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, willful 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 No. 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."
17. Thus, on the basis of above-stated analysis, it can be safely deduced that in order to invoke Section 4 (6) (b) (ii) of the PG Act to forfeit an amount of gratuity payable to an em- ployee, the condition precedent is that terminated employee must be convicted for an offence for the time being in force and that offence must be an offence involving moral turpi- tude. Unless the aforesaid two conditions are fully estab- lished by an employer, mere termination or dismissal of an employee concerned would not ipso facto constitute an of- fence that too an offence involving moral turpitude to attract 12 Section 4 (6) (b) (ii) of the PG Act and an employer would have no jurisdiction to invoke the provision contained in Sec- tion 4 (6) (b) (ii) of the PG Act to forfeit gratuity payable to an employee under the PG Act.
18. The aforesaid determination of the legal question brings me to advert to the facts of the present case as to whether the petitioner-Bank is justified in forfeiting the amount of gratuity payable to the respondent herein upon his termination from service. It is apparent that the disciplinary authority inflicted penalty of dismissal to the respondent herein from service by order dated 31.8.2010 for his proven misconduct. Thereafter, no prosecution was launched/initiated on behalf of the peti- tioner-Bank before the jurisdictional criminal Court for his proven misconduct holding it to be criminal offence and the respondent herein was not convicted by the said Court and that too not for an offence involving moral turpitude, as such conviction of terminated employee concerned for commis- sion of offence involving moral turpitude by him in course of his employment is imperative condition precedent for forfeit- ing the amount of gratuity payable to an employee, as held by Their Lordships of the Supreme Court in the matter of Jashwant Singh Gill (supra), which is absolutely missing in the factual matrix of the instant case. In view of the aforesaid 13 legal discussion, order of the Controlling Authority directing payment of gratuity to the respondent herein along with in- terest duly affirmed by the Appellate Authority would stand further reaffirmed.
19. As a fallout and consequence of the aforesaid discussion, the writ petition filed by the petitioners is liable to be and is hereby dismissed, but without imposition of cost.
20. Before parting with the records, this Court appreciates the able assistance rendered by Mr.Abhishek Sinha and Mr.Gary Mukhopadhyay, learned Amicus Curiae and excellence of their written submission as well.
Sd/-
(Sanjay K. Agrawal) JUDGE B/-
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HIGH COURT OF CHHATTISGARH, BILASPUR WPL No. 42 Of 2015 Petitioners The General Manager, UCO Bank, and another Versus Respondent Shri Jitendra Kumar Shrivastava (English) In order to forfeit gratuity of terminated employee u/s 4(6)(b)(ii) of PG Act, 1972, his conviction for an offence involving moral turpitude is mandatory.
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