Calcutta High Court
The Indian Iron And Steel Co. Ltd. vs Himangshu Bikash Sarkar And Ors. on 23 December, 2005
Equivalent citations: (2006)2CALLT89(HC), 2006(3)CHN469
Author: Girish Chandra Gupta
Bench: Girish Chandra Gupta
JUDGMENT Girish Chandra Gupta, J.
1. The subject matter of challenge in this writ petition is an order dated 6th December, 1987 passed by the Controlling Authority under the Payment of Gratuity Act, 1972 and an order passed by the Appellate Authority dated 10th January, 1994 copies whereof are annexures 'G' and 'J' to the writ petition respectively. The controlling authority held that the gratuity forfeited by the writ petitioner was payable to the workman. The Appellate Authority did not interfere. Briefly stated the facts are as follows:
2. The respondent No. 1 was charge sheeted for fraud, dishonesty, acting in a manner prejudicial to the interest of the Company and acts subversive of good conduct and behaviour. After a domestic enquiry he was dismissed from service on 22nd December, 1983. The writ petitioner forfeited the gratuity payable to the respondent No. 1 on the ground that the misconduct of the respondent No. 1 was grave and involved moral turpitude. The respondent No. 1 challenged the decision of the writ petitioner before the Controlling Authority. The Controlling Authority by the aforesaid order directed the writ petitioner to pay the gratuity along with interest amounting to a sum of Rs. 48.111/- together with interest at the rate of 9 per cent from the date the gratuity became became payable until the date of payment. The gratuity was forfeited by the writ petitioner under the provisions of Clause II of Sub-section 6 of Section 4 of the Payment of Gratuity Act, 1972 which provides as follows :
Section 4(6) "Notwithstanding anything contained in Sub-section (1)-
(a) The gratuity of an employee, whose services have been terminated, for wilful omission or negligence causing any damage or loss to, or destruction of. property belonging to the employer, shall be fortified 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.
3. The Controlling Authority in its Judgment dated 6th May, 1987 appears to have formulated the following points.
(i) Whether the charges of misconduct, resulting into applicant's dismissal, involved moral turpitude?
(ii) whether the employer was correct in forfeiting gratuity amount to which the applicant was entitled, as per Section 4(6)(b)(ii) of the Act? If not, to
(iii) what would be the gratuity amount payable?
4. The point No. 1 has been answered in the negative for two reasons: (a) the employee was not convicted by any Court of Criminal jurisdiction for any such offence and (b) no opportunity was given to the employee to explain or defend himself of an order forfeiting the gratuity.
5. Based on the answer to issue No. 1 the issues No. 2 and 3 were answered and direction for payment with interest was issued.
6. The Appellate Authority in dismissing the appeal held as follows.
Now since the Act does not define 'Moral turpitude' recourse has to be taken to judicial decisions for proper understanding of the meaning of the expression.
Since no such recourse taken as discussed above before forfeiting the gratuity, the action of the appellant company relating to forfeiture of gratuity to the Respondent in this appeal case is unreasonable, unjustified and illegal. Hence, I do not interfere with the findings of the learned Controlling Authority on this issue and fully agree with the observations of the Controlling Authority in this regard.
7. Mr. L.K. Gupta, learned Senior Advocate, appearing in support of the writ petition advanced two submissions (a) Sub-section 6 of the Section 4 of the Payment of Gratuity Act provides for forfeiture of the gratuity where the offence involves a moral turpitude. He submitted that the legislature has advisedly not used the expression that the gratuity can be forfeited in a case where the workman has been convicted of an offence involving moral turpitude. He submitted that the theory propounded by the Controlling Authority insists upon something which is not required by law. Drawing an analogy he drew attention of this Court to Clause (a) of Sub-article 2 of Article 311 of the Constitution which provides as follows.
where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge.
8. He submitted that if the legislature intended that conviction is a prerequisite condition for forfeiture of the gratuity then the legislature would have provided for the same. Accordingly the Controlling Authority fell into an error in proceeding on an erroneous proposition of law which is also the basis of the Judgment and, therefore, the order should be set aside. He relied on a Division Bench Judgment of the Karnataka High Court, in support of the submission, in the case of Bharath Gold Mine v. The Regional Labour Commissioner reported in 1986 Lab IC 1976 wherein the question was whether theft is an offence involving moral turpitude in order to attract the provision of Sub-clause II of Clause 'b' of Sub-section 6 of Section 4 of the aforesaid Act. The answer given by the Division Bench was as follows:
Theft is an offence involving moral turpitude and consequently if the services of an employee had been terminated for committing theft in the course of his employment, the Gratuity payable to him under the provisions of the Act stands wholly forfeited in view of Section 4(6)(b)(ii) of the Act.
9. With regard to the opinion expressed by the Controlling Authority that principles of natural justice have to be complied with before resorting to forfeit the gratuity. Mr. Gupta, learned Senior Advocate, submitted that he had no quarrel with that proposition and he was agreeable to do so provided the order under challenge is set aside.
10. Mr. Banerjee, learned Advocate, appearing for the workman, respondent No.1, submitted that a sympathetic attitude should be adopted. He also relied on a Division Bench Judgment of this Court in the case of Eastern Coal Fields Ltd. v. Kripa Sankar Somany and Ors. . That was however a Judgment in which the question considered by the Division Bench was whether the gratuity could be forfeited where the employer had suffered no loss or destruction of the properties. This Judgment, in my view, is clearly distinguishable and does not address the point canvassed before this Court.
11. After considering the rival submissions made by the learned Advocates, this Court is of the view that the object of paying gratuity has to be borne in mind. In the case of the Delhi Cloth and General Mills Co. Ltd. v. Workmen and Ors. . Their Lordships opined that :
The object of providing a gratuity scheme is to provide a retiring benefit to workmen who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer. It is one of the 'efficiency devices' and is considered necessary for an 'orderly and human elimination' from industry of superannuated or disabled employees who, but for such retiring benefits, would continue in employment even though they function inefficiently. It is not paid to an employee gratuitously or merely as a matter of boon: it is paid to him for long and meritorious service rendered by him to the employer.
12. The aforesaid object was also reiterated in a recent Judgment in the case of Ahmedabad Pvt. Primary Teachers' Association v. Administrative Officers and Ors. ;
13. The case of Delhi Cloth and General Mills (supra) was decided before the Payment of Gratuity Act was enacted. Prior to the aforesaid Act the matter was dealt with under the provisions contained in 'The Industrial Employment (Standing Orders) Central Rules 1946". Their Lordships considering the question as to when the gratuity can or cannot be forfeited opined as follows :
We think that in the application of those cases as precedents a distinction should be made between technical misconduct which leaves no trial of indiscipline, misconduct resulting in damage to the employer's property, which may be compensated by forfeiture of gratuity or part thereof, and serious misconduct which though not directly causing damage, such as acts of violence against the management or other employees or riotous or disorderly behaviour, in or near the place of employment 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 may entail forfeiture of gratuity due to the workmen. The precedents of this Court e.g., , Ramington Rand of India Ltd. case (1968) 2 Lab LJ 139 (SC) do not compel us to hold that no misconduct however grave may be visited with forfeiture of gratuity. In our Judgment, the rule set out by this Court in Wenger & Co.'s case 1963-2 Lab LJ 403 : AIR 1961 SC 864 and Motipur Zamindari (P) Ltd.'s case 1965-2 Lab 139 SC applies only to those cases where there has been by action wilful or negligent any loss occasioned to the property of the employer and the misconduct does not Involve acts of violence against the management or other employees, or riotous or disorderly behaviour in or near the place of employment. In these exceptional cases-the third class of cases-the employer may exercise the right to forfeit gratuity: to hold otherwise would be to put a premium upon conduct destructive of maintenance of discipline.
14. The view expressed in the case of Delhi Cloth Mills really got legislative approval in the form of Sub-section 6 of Section 4 of the Payment of Gratuity Act as observed by the Apex Court in the case of the Management of Tournamulla Estate v. Workmen reported in 1973(2) SC 502 wherein Their Lordships opined as follows :
the importance of the enactment lies in the fact that the principle which was laid down in the Delhi Cloth Mills case (supra) with regard to forfeiture of gratuity in the event of commission of gross misconduct of the nature mentioned above, has been incorporated in the statute itself.
15. In the aforesaid case of the Management of Toummulla Estate Their Lordships held that "if a workman is guilty of a serious misconduct such as acts of violence against the management or other employees of riotous or disorderly behaviour in or near the place of employment, which, though not directly causing damage, is conducive to grave indiscipline, then gratuity can be forfeited in its entirety".
16. I am conscious of the fact that the Toumamolla (supra) involved Sub-clause I of clause b of Sub-section 6 of Section 4 whereas the question to be decided in this case is whether gratuity can be forfeited under Sub-clause II for an offence involving moral turpitude which is not backed by a conviction by a competent Court of criminal jurisdiction.
17. It is undeniable that the criminal law is narrower than morality. Many a things are immoral but they are not recognized as an offence in the criminal law. An act or omission in order to become punishable has to come within the four corners of the Penal Code or the other pieces of legislation providing for imposition of penalty. Broadly speaking the Penal Code comprises of (a) offences against the state; (b) offences affecting common well being; (c) offences affecting the human body; (d) offences against property, documents and property mass (corporeal and incorporeal); (e) offences relating to marriage; (f) offences affecting reputation etc.
18. It is difficult to say with any amount of emphasis that any of the aforesaid offences does not involve moral turpitude. The word 'turpitude' as comprehended in the Concise Oxford Dictionary is as follows: "depravity, wickedness, disgraceful, base". The word 'moral' has been comprehended in the same dictionary as follows: "concerned with the principles of right and wrong behaviour, examining the nature of ethics and the foundations of good and bad character : moral philosophers, based on or adhering to the code of behaviour that is considered socially right or acceptable".
19. I would think that anything which is disagreeable to conscience is immoral. An act or omission which is disagreeable to conscience is not always an offence punishable by law. It can hardly be disputed that a riotous or disorderly conduct or any act of violence is also an offence and the legislature was fully conscious about it. A distinction has nonetheless been made between an offence and an offence involving moral turpitude. For instance a case of strict liability does not involve any moral turpitude. An unintended violation of traffic rule is punishable offence although even the element of mens rea may be missing. It is also comparable with the case of manslaughter. All mans laughters are not murders in the eyes of law. A distinction has been made by Sections 302 and 304 of IPC. I am inclined to think that the true distinction lies in finding out whether the act or omission was just mn instance of inadvertence or an error of Judgment or whether it was a well planned deliberate act. In all those cases where the act or omission is both immoral and deliberate one can say without hesitation that it is a case of moral turpitude covered by sub Clause II of Clause 'b'. A conviction by a Criminal Court of competent jurisdiction is not required for the purpose of forfeiting gratuity either under Sub-clause I or under II of Clause 'b' of Sub-section 6 of Section 4 of the Act. One of the objects sought to be achieved by all Industrial Legislations is to secure industrial peace. Peace without fear is hardly possible. Therefore that construction should be given to a statute which is conducive to the object sought to be achieved. It is not proper to import something which the legislature did not provide. Conviction by a Court of Criminal jurisdiction is not required by the section. To insist upon that not provided by law is sheer obstinacy. A fear, about a loss to which a person may be exposed, in general is a deterrent. The policy is to deter a person from committing an act or omission which amounts to an act or omission of moral turpitude and not to encourage him to resort to any such thing by pedantic interpretation of law.
20. For the aforesaid reasons the orders under challenge are set aside. It will be open to the writ petitioner to take steps for forfeiting the gratuity payable to the respondent No. 1 after complying with the requirements of principles of natural justice provided the act or omission complained of is deliberate as also immoral. The money deposited by the writ petitioner together with interest accrued thereupon should be refunded forthwith. The learned Registrar General shall take steps accordingly. There shall, however, be no order as to costs.