Indian Overseas Bank Thru Its Chief R.M. and another V. Union Of India And 3 Others

WRIC/21933/2017

AI Insights

The case revolves around the Indian Overseas Bank's decision to withhold gratuity from a former employee, who was dismissed for alleged embezzlement and misappropriation of funds. The employee contested the bank's decision, leading to a series of legal proceedings. The central legal issue was whether the bank was justified in withholding gratuity under the Payment of Gratuity Act, 1972, particularly section 4(6)(b) which allows forfeiture of gratuity for acts involving moral turpitude if such acts are committed in the course of employment. The court examined whether the employee's actions constituted an offence involving moral turpitude and whether the bank's actions complied with the statutory provisions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 808975 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 25-05-2023
• Assessment Year: misc
• Other Referred Cases: Union Bank of India and others vs C.G. Ajay Babu and another, Jaswant Singh Gill vs Bharat Coking Coal Ltd., State of Gujrat and Others vs Utility Unser's Welfare Association and Others, Western Coal Fields vs Manohar Govinda Fulzele and Another, UCO Bank and others vs Rajendra Shankar Shukla, M/s Hindalco Industries Ltd. vs. Appellate Authority, Under the Payment of Gratuity Act, Kanpur and others, Manager, Western Coalfields Ltd. vs. Prayag Modi, G.M.D.C. Co-operative Bank vs Deendaya Gaud
• Laws Referred To: Payment of Gratuity Act, 1972
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: ANIL KUMAR SRIVASTAVA; GAURAV SRIVASTAVA; P S CHAUHAN; SUDARSHAN SINGH
• Assessee Lawyers: VED PRAKASH SINGH; AKHILESH KALRA
• Keywords: Disciplinary Proceedings; Moral Turpitude; Gratuity withholding; Employee dismissal
• Section: 7; 4

Judgement Text

"Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 Reserved on 02.05.2023 Delivered on 25.05.2023 AFR Court No. - 52 Case :- WRIT - C No. - 21933 of 2017 Petitioner :- Indian Overseas Bank Thru Its Chief R.M. And Another Respondent :- Union Of India And 3 Others Counsel for Petitioner :- Ved Prakash Singh, Akhilesh Kalra Counsel for Respondent :- A.S.G.I., Anil Kumar Srivastava, Gaurav Srivastava, P.S. Chauhan, S.C., Sudarshan Singh Hon'ble Kshitij Shailendra,J. 1. Heard Shri Akhilesh Kalra, learned Senior Advocate assisted by Shri Avinash Chandra as well Shri Ved Prakash Singh, learned counsel for the petitioners through video conferencing mode and Shri Gaurav Srivastava, learned counsel representing the respondent No. 4. 2. The respondent No. 4 (herein-after referred to as the “employee”) was appointed on the post of Shroff/ Godown Keeper on 09.08.1978 in the petitioner-Bank. He was dismissed from service in the year 1995 and remained out of service till 2000, whereafter certain proceedings were held before the Central Government Industrial Tribunal, Lucknow, which set aside the termination order imposing a condition that the period during which the employee remained suspended would be treated as “no work no pay” period. The said order was confirmed by this Court in Writ C No. 49519 of 2004. On Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 03.02.2009, the employee was placed under suspension in contemplation of the disciplinary enquiry on the charge of embezzlement and misappropriation of funds. A charge sheet was issued to the employee on 08.05.2009 containing charges of misappropriation of amount. 3. The employee challenged the charge sheet by filing writ petition and, thereafter, various miscellaneous and other proceedings were held, which are not necessary to be stated as the issue involved in the present writ petition is as to whether withholding of gratuity payable to the employee is according to law or not. However, it is relevant that pursuant to the disciplinary proceedings, a final order of punishment was passed on 29.09.2015 dismissing the respondent No. 4 from services in terms of clause 6 (a) of the Memorandum of Settlement dated 10.04.2002 and it was held that since the charges had been proved in the enquiry and were grave in nature and reveal moral turpitude, the period spent by the employee under suspension would be treated as “one not spent on duty” and he would not be entitled to any monetary or other benefits other than the subsistence allowance, already paid to him. 4. It is alleged that the respondent-employee filed a writ petition being Writ A No. 56257 of 2015 (Satya Prakash Tripathi vs The Chairman, Indian Overseas Bank and 3 others) praying for a writ of mandamus directing the Bank to release the retiral benefits, however during the course of hearing, it 2 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 was informed to the Court that the respondent-employee had been dismissed from services on 29.09.2015 and, consequently, the writ petition was dismissed as withdrawn by this Court by order dated 02.11.2015, granting liberty to the employee to file a fresh writ petition challenging the termination order dated 29.09.2015. There is no dispute about the fact that no writ petition was filed challenging the order dated 29.09.2015, which became final. 5. In the meantime, the respondent-employee was issued a notice dated 31.07.2015 informing him that his retirement was due on 31.07.2015 on completion of 60 years as the age of superannuation and insofar as the disciplinary proceedings were concerned, it was informed that the said proceedings were pending at the enquiry stage and that the employee would be deemed to be in service for the purpose of completion of disciplinary proceedings after the date of his age of superannuation i.e. 31.07.2015. Admittedly, the respondent- employee retired on 31.07.2015 and termination order was passed after his retirement on 29.09.2015. The respondent- employee submitted an application dated 13.08.2015 seeking release of terminal benefits and also filed an application under section 4 of the Payment of Gratuity Act, 1972 (herein-after referred to as the “Act of 1972”) before the Controlling Authority on 16.11.2015, which was objected to by the petitioner-Bank by filing written submissions/objections dated 10.02.2016. 3 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 6. The Controlling Authority vide order dated 29.09.2016, directed payment of maximum amount of gratuity amounting to Rs. 10,00,000/- (rupees ten lac) to the employee along with 10% simple interest w.e.f. 01.08.2015. The petitioner-Bank challenged the order dated 29.09.2016 by preferring a statutory appeal before the Appellate Authority under section 7 of the Act of 1972. The appeal was dismissed by order dated 10.04.2017. 7. This writ petition has been filed challenging the aforesaid orders dated 29.09.2016 and 10.04.2017. A consequential order was also passed on 03.05.2017 directing release of an amount of Rs. 11,33,699/- (rupees eleven lac thirty three thousand six hundred ninety nine) in favour of respondent-employee, which was also challenged by seeking amendment in the writ petition. Hence, three orders are under challenge in the present writ petition. 8. I have heard the learned counsel for the parties and perused the record. 9. Shri Akhilesh Kalra, learned Senior Advocate appearing on behalf of the petitioner-Bank has raised the following contentions: (i) In view of the fact that termination order dated 29.09.2015 was not challenged by the respondent- employee, despite the fact that he was granted liberty by this Court while dismissing Writ A No. 56257 of 2015 (Satya Prakash Tripathi vs The 4 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 Chairman, Indian Overseas Bank and 3 others), the employee was not entitled to gratuity, inasmuch as the termination/dismissal order clearly provided that the period spent by the employee under suspension would be treated as “one not spent on duty” and he would not be entitled to any monetary or other benefits other than the subsistence allowance, already paid to him. (ii) In view of section 4(6)(b) of the Act of 1972, the petitioner-Bank was fully justified in withholding the gratuity as the services of respondent No. 4 had been terminated for an act which constitutes an offence involving moral turpitude, which offence was committed by him during the course of his employment. (iii) The Appellate Authority has committed gross error of facts and law while dismissing the appeal under section 7 of the Act of 1972 as barred by limitation by misinterpreting the provisions of section 7(7) of the Act as the appeal was filed within time and though it was returned to the petitioner-Bank for certain defects, it was re-presented within time and, therefore, the dismissal of appeal as barred by limitation is illegal. (iv) The orders impugned are against the provisions of Rule 8 of the Payment of Gratuity (Central) Rules, 5 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 1972 (herein-after referred to as the “Rules of 1972”) as the requirement of notice was fulfilled by the Bank in the case when no amount of gratuity was admitted to be paid by the Bank. (v) The Controlling Authority had no competence to deal with the merits of the termination order dated 29.09.2015 as it was dealing with a case for withholding of gratuity. 10. Per contra, Shri Gaurav Srivastava, learned counsel for the respondent-employee has vehemently opposed the writ petition contending that gratuity could not be withheld for any reason whatsoever including on the ground of section 4(6)(b) of the Act of 1972, inasmuch as no offence was found to be have been committed by the employee and there is no decision of any court of criminal jurisdiction holding the employee as guilty of offence of moral turpitude and, therefore, merely because the Bank was alleging the act or alleged misconduct of the employee as “moral turpitude”, for withholding any amount of gratuity invoking section 4(6) (b) of the Act of 1972, there has to be evidence in terms of the judgement of conviction of the employee on the ground of offence involving moral turpitude, but there being no such evidence on record, except that a letter was sent by the Central Bureau of Investigation that gratuity be withheld until finalization of case, the 6 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 argument advanced on behalf of the petitioner-Bank has no force. Regarding other submissions raised by the learned Senior Advocate appearing for the petitioner- Bank, it is argued by Shri Gaurav Srivastava that the things have to be examined in their entirety that the services were governed by the Memorandum of Settlement, clause 12.2 whereof contained in Chapter XII, clearly provides that there will be no forfeiture of gratuity for dismissal on account of misconduct, except in cases where such misconduct causes financial loss to the Bank and in that cases also to that extent only. It has been argued that the loss allegedly occurred to the Bank was only to the extent of Rs. 1,500/- (rupees one thousand five hundred only) or Rs. 9,000/- (rupees nine thousand only), and even if, the findings recorded in the termination order are treated to be final, it would be a case where, at the most, gratuity to the extent of aforesaid financial loss occurred to the Bank could be withheld, but remaining amount was bound to be paid to the employee. However, regarding bar of limitation, learned counsel for the respondent-employee has argued that the order of Appellate Authority was on merits also and since everything is established on record, no error has been committed by the Appellate Authority in confirming the order of the Controlling Authority. 7 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 11. I have considered the rival submissions made at the bar and I deal with the same one by one. Analysis of first and second contentions 12. Insofar as the effect of termination/dismissal order dated 29.09.2015 is concerned, though it is true that the same became final, despite liberty granted by this Court while dismissing Writ A No. 56257 of 2015, the Court has to see as to whether finality attached to the termination order could be a ground for forfeiture of gratuity. 13. Section 4 of the Act of 1972 is a provision for making payment of gratuity and insofar as the power of employer to withhold gratuity, either wholly or in part, is concerned, sub section (6) of section 4 of the Act of 1972 provides as follows: “4. Payment of gratuity.- (1) to (5) ……….. (6) Notwithstanding anything contained in sub- section (1),- (a) the gratuity of an employee, whose services have been terminated for any act, wilful 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 8 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 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.” 14. Shri Kalra has vehemently argued that since the employee had committed embezzlement and misappropriation of funds, his act was an offence involving moral turpitude and, therefore, as per section 4(6)(b)(ii) of the Act of 1972, the Bank was justified in withholding gratuity. 15. I am not inclined to accept the said submission of learned counsel for the petitioner-Bank as the said issue is not res-integra and has been dealt with by the Supreme Court in the case of Union Bank of India and others vs C.G. Ajay Babu and another, reported in 2018 (158) FLR 948. In paragraph 16 of the judgement, it was held that under sub-section (6)(a), also the gratuity can be forfeited to only to the extent of damage or loss caused to the Bank. In case, the termination of the employee is for any act or wilful omission or negligence causing any damage or loss to the employer or destruction of property belonging to the employer, the loss can be recovered from the gratuity by way of forfeiture. Whereas under sub- Clause (b) of sub-section 9 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 (6), the forfeiture of gratuity, either wholly or partially, is permissible under two situations- (i) in case the termination of an employee is on account of riotous or disorderly conduct or any other act of violence on his part, (ii) 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, sub-clause (a) and sub-Clause (b) of sub-section (6) of section 4 of the Act operate in different fields and in different circumstances. Under sub-clause (a), the forfeiture is to the extent of damage or loss caused on account of the misconduct of the employee whereas under sub-clause (b), forfeiture is permissible either wholly or partially in totally different circumstances. Sub-clause (b) operates either 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 sub-clause (ii) of sub-section (6)(b) when the termination is on account any act which constitutes an offence involving moral turpitude committed during the course of employment. 16. In relation to sub-section (6)(b)(ii) of section 4 of the Act of 1972, the Supreme Court referred to the definition of “offence” as per the General Clauses Act, 1897 to mean “any act or omission made punishable by any law for the time being enforce”, and held that it is 10 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 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. That is absolutely in the realm of criminal law. It is not for the Bank to decide whether an offence has been committed. It is for the Court. 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 he is convicted accordingly by a Court of competent jurisdiction. 17. In the present case, learned Senior Advocate for the petitioner-Bank has not been able to establish that the respondent-employee was punished by any competent court of criminal jurisdiction for the alleged offence of moral turpitude. Therefore, this Court cannot take a different view what has been taken by the Supreme Court in the case of Union Bank of India (supra), where the Supreme Court emphasized that the requirement of the statute is not the proof of misconduct of acts involving the moral turpitude, but the acts should constitute an offence involving moral turpitude and such offence should be duly established in a court of law. 18. Shri Kalra, with reference to the judgment of Apex Court in the case of Union Bank of India and 11 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 others (supra), has argued that the said judgment/opinion is not a binding precedent and that the aforesaid judgment has been passed relying on an earlier judgment in the case of Jaswant Singh Gill vs Bharat Coking Coal Ltd. reported in (2007) 1 SCC 663, and is an obiter dicta, which is not binding on this Court. It is further argued that the observation made in the aforesaid judgment cannot be said to be the ratio decidendi, as the question involved in this case did not squarely arise for determination before the Supreme Court in those cases. Further submission is that in view of the law laid down by the Hon'ble Supreme Court in the case of State of Gujrat and Others vs Utility Unser's Welfare Association and Others, reported in (2018) 6 SCC 21, which prescribes the norms for deciding the ratio decidendi of a judgment, the opinion of the Hon'ble Supreme Court would be binding on the High Courts in India if the opinion was on a question that arose for determination before the Hon'ble Supreme Court. Further argument is that the issue before the Hon'ble Supreme Court was whether the forfeiture of gratuity would be automatic or not; as such the opinion expressed by the Hon'ble Supreme Court will not form the binding precedent. 19. It has further been argued that after Union Bank of India and Others (supra) the direct issue as to whether the services of an employee whose services have been 12 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 terminated on the ground of misconduct, which may also amount of offence of moral turpitude is pending before the Hon'ble Supreme Court in SLP (C) 10088/2022 \"Western Coal Fields bs Manohar Govinda Fulzele and Another\". 20. I am not convinced by the interpretation made by Shri Kalra as regard to the judgment of Supreme Court in the case of Union Bank of India and Others (supra) in view of the clear ratio laid down in the said authority. In the opinion of the Court, the judgment passed in the said case is not obiter, but a clear ratio and, therefore, the submission of Shri Kalra to this effect is hereby discarded. Though, Shri Kalra has referred to the aspect that the matter was being examined by the Central Bureau of Investigation, nothing has been brought on record that Central Bureau of Investigation submitted any report before any court or that any court ever passed any order of punishment of the employee, rather, specific case of respondent-employee is that he was not punished by Central Bureau of Investigation or by any court of law and that alleged offence was not established nor did it result into conviction of the employee. In this view of the matter, the first and second contentions of Shri Kalra have no force. Analysis of third contention 13 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 21. As regards third contention regarding dismissal of the appeal as barred by limitation, Shri Kalra has referred to section 7(7) of the Act of 1972, which reads as follows: 7. Determination of the amount of gratuity.- (1) to (6) ………………. x x x x x x x x x x “(7) Any person aggrieved by an order under sub-section (4) may, within sixty days from the date of the receipt of the order, prefer an appeal to the appropriate Government or such other authority as may be specified by the appropriate Government in this behalf: Provided that the appropriate Government or the appellate authority, as the case may be, may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days. [Provided further that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited 14 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 under sub-section (4), or deposits with the appellate authority such amount.] 22. Submission of Shri Kalra is that the termination/dismissal order was passed on 29.09.2016 and the appeal under section 7 of the Act of 1972 was preferred within a period of 60 days, i.e. on 01.12.2016, however since there were certain defects in presentation of the appeal, an order was passed by the Appellate Authority on 07.12.2016 (annexure No. 4 to the writ petition) pointing out certain defects and it was observed that the appeal was not maintainable with a further observation that if the defects were removed by the management of the Bank and the appeal was re- submitted within the prescribed time, opportunity of hearing would be provided under the provisions of section 7(7) of the Act of 1972. With this observation, the appeal was returned to the petitioner-Bank. 23. Shri Kalra has argued that the aforesaid order dated 07.12.2016 was received in the Bank on 17.12.2016 as endorsed on the first page of order itself, which is reflected at page 75 of the paper book of the writ petition. Shri Kalra has further argued that after removal of defects pointed out in the order dated 07.12.2016, the appeal was re-submitted on 26.12.2016, and was well within time and, therefore, dismissal of 15 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 appeal as barred by limitation is contrary to the order dated 07.12.2016. 24. In this regard, I have perused the order impugned dated 10.04.2017 and I find that while interpreting the order dated 07.12.2016, the Appellate Authority has observed that no application seeking condonation of delay was preferred by the Bank and in absence of any such application, the delay cannot be condoned suo-moto. Here, I find that the Appellate Authority has utterly failed to understand the language used in first proviso attached to sub-section (7) of section 7 of the Act of 1972, which does not contain any requirement of moving any application by the appellant for condonation of delay. Rather, the said proviso is an enabling provision empowering the Appellate Authority to extend the initial period of 60 days for a further period of 60 days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the first period of 60 days. 25. In the present case, since certain defects were pointed out in the order dated 07.12.2016, and the Appellate Authority permitted removal of the defects and while returning the appeal to the Bank, re-submission was permitted within the prescribed time, I find that re- submission of appeal on 26.12.2016 would be treated as within time as per conjoint reading of section 7 (7) of the 16 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 Act of 1972 read with its proviso. Therefore, the finding that appeal was barred by limitation is incorrect and the argument of Shri Kalra is accepted to this extent. 26. However, I find that apart from dismissal of appeal as barred by limitation, the Appellate Authority has discussed the merits of the entire matter and after discussing the same, dismissed the appeal on the ground of limitation as well as on merits. Therefore, even if, I ignore the dismissal of appeal as barred by limitation in view of the aforesaid finding in favour of the petitioner- Bank, even then the Court has to satisfy itself as to whether affirmation of the order of Controlling Authority by the Appellate Authority was according to law or not. 27. I do not find any error in the view taken by the Appellate Authority on merits in relation to the issue of withholding of gratuity except that at one place the Appellate Authority has misunderstood the admissibility or non-admissibility of deposit of amount by the employer, but that will not affect the merits of the case of respondent-employee, even if I accept the contention of the petitioner-Bank that no amount was admitted to be paid or deposited by the Bank. Therefore, when the law supports the claim of respondent-employee and irrespective of finality attached to the termination order dated 29.09.2015, I have already discussed that withholding of gratuity as per section 4(6)(b)(ii) of the 17 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 Act of 1972 was not justified in view of the law laid down by the Supreme Court in the case of Union Bank of India (supra), I find that the order of Appellate Authority cannot be set aside merely on the ground that it contains certain observations, which are contrary to the record, but the overall view affirming the order of Controlling Authority is found to be in consonance with the law laid down by the Supreme Court and the provisions of the Act itself. Therefore, third contention raised by Shri Kalra is answered accordingly. Analysis of fourth contention 28. As regards fourth contention of Shri Kalra with reference to Rule 8 of the Rules of 1972, the submission is that action of the Bank should not have been turned down for want of issuance of notice to the employee as it was a case where the Bank had not admitted any amount payable as gratuity to the employee and, therefore, whatever information was given to the employee, was in consonance with the provisions of Rule 8 of the Rules of 1972. There may be a dispute regarding issuance or non-issuance of notice in the present case, however, and same would not affect the merits of the submissions of either side, particularly when there is no dispute about the fact that the Bank never admitted its liability to pay gratuity and proceeded throughout against the employee not only by terminating his services, but 18 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 also by taking advantage of the operative portion of the termination order, whereby it was provided that the period spent by the employee under suspension would be treated as “one not spent on duty” and he would not be entitled to any monetary or other benefits other than the subsistence allowance, already paid to him. Therefore, issuance or non-issuance of notice in one or other other forms prescribed under the Rules would not be adverse to the case of the petitioner-Bank at least on this score and, hence, I hold that the action of the Bank could not be deprecated on the point of alleged failure to comply with Rule 8 of the Rules of 1972. The fourth contention to this effect is answered accordingly. Analysis of fifth contention 29. Insofar as fifth contention to the effect that the Controlling Authority was not justified in either interfering with or interpreting the termination order dated 29.09.2015, I find that the Controlling Authority has observed that the termination order nowhere speaks about forfeiture of amount of gratuity payable to the employee and that the charge of moral turpitude has also not been mentioned in the charge sheet. The Controlling Authority has observed that as regards letter of Central Bureau of Investigation directing the Bank that gratuity may not be released until finalization of the case pending with it. I do not find any error in approach of Controlling 19 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 Authority on this ground. Once the Bank agitated the issue that the dismissal/termination order dated 29.09.2015 had become final and, even otherwise, it mentioned that the employee would not be entitled for any sum, the Controlling Authority was well within its power to deal with competence of and justification on the part of the Bank to withhold gratuity as provisions of Act of 1972 specifically deal with every situation under which gratuity is payable or can be withheld. Therefore, if the Controlling Authority perused the termination order and made certain observations as regards to its contents, the same, in the opinion of the Court, cannot be taken as interference in the termination order. Accordingly, the contention of Shri Kalra to this effect is not acceptable so as to warrant interference in the order of the Controlling Authority. 30. As regards submission of learned counsel for respondent-employee in connection with the Memorandum of Settlement, I find that the allegation against the employee was that he had embezzled or misappropriated Rs. 1500/- (rupees one thousand five hundred) and/or Rs. 9000/- (rupees nine thousand) and, therefore, I find that as per clause 12.2 of Memorandum of Settlement, at the most gratuity to the extent of aforesaid sum could be withheld, but not the entire amount. 20 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 31. Learned counsel for the respondent-employee has placed reliance upon the judgement of the Supreme Court in the case of UCO Bank and others vs Rajendra Shankar Shukla, reported in 2018 (157) FLR 482 and argued that punishment of dismissal could not have been imposed after superannuation of the employee. However, I find that respondent would not get any advantage of the said authority as this Court is not deciding the validity of the termination order dated 29.09.2015, which admittedly became final in absence of challenge made by the employee. The writ petition is being dealt with and decided in relation to the issue of payment vis-a-vis withholding of gratuity and, hence, judgement in the case of UCO Bank and others (supra) has no application in the facts and circumstances of the case. 32. Learned counsel for the respondent-employee has placed strong reliance upon judgement of this Court in the case of M/s Hindalco Industries Ltd. vs. Appellate Authority, Under the Payment of Gratuity Act, Kanpur and others, reported in 2004 (101 FLR 1063. This Court in the said case has held that the Payment of Gratuity Act, 1972 gives a statutory right to an employee for payment of gratuity on his superannuation, retirement or resignation, or on his death or disablement due to accident or disease. Section 4(6) (a) of the Act provides that the gratuity of an employee, whose services have 21 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 been terminated for any act, wilful 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. Sub- section 6 (b), provides that 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. 33. It has further been held that the scheme of the Act and the provisions of section 4 (6) (a) and (b) show that for depriving an employee his statutory right to receive gratuity, an order must be passed forfeiting the gratuity, and conscious decision to be taken with regard to reasons specified in sub-section (a) and to damage or loss so caused. The sub-section (b) after its amendment by Act No. 26 of 1984 (with effect from 11.2.1981) to the effect that gratuity may be wholly or in part forfeited, gives discretion to the employer and thus postulates application of mind and recording of reasons. 34. Shri Gaurav Srivastava, learned counsel for the respondent-employee has also placed reliance upon 22 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 the judgment of Karnataka High Court in the case of J.B. Micheal D’souza vs. Appellate Authority Under Payment of Gratuity Act, Bangalore and others, reported in 2002 (92) FLR 1200, in which requirement of issuance of notice to the employee was dealt with. I have already dealt with the said aspect of the matter in the light of Rule 8 of the Rules of 1972 and, therefore, the judgement of Karnataka High Court in the case of .B. Micheal D’souza (supra) is of no much help to the respondent-employee. 35. Learned counsel for the respondent-employee has further placed reliance on the judgement of Madhya Pradesh High Court in the case of Manager, Western Coalfields Ltd. vs. Prayag Modi, reported in 2018 (157) FLR 323, wherein it has been held that 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. Vs State of M.P. and others, reported in 1996 (72) FLR 748 (MP), the same view was taken in the matter of Krishnaveni Textile Ltd. v. Assistant Labour Commissioner reported in 2002 (95) FLR 1164 (Mad.). The Karnataka High Court in Bharat Gold Mines Ltd. v. Regional Labour Commissioner, reported in ILR 1986 KAR 2755, took the same view. Similar is the view of Division Bench of Gujarat High Court in the case of 23 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 Regional Manager v. 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. The Madhya Pradesh High Court in in the case of G.M.D.C. Co-operative Bank v. Deendaya Gaud, reported in 2013 (1) MPLJ 301, 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. 36. The ratio of the authorities cited by learned counsel for the respondent-employee is that the gratuity of an employee can be withheld only as per the procedure prescribed under the 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 Baru Ram v. Prasanni, reported in AIR 1959 SC 93 and Commissioner of Income Tax, Mumbai v. Anjum M.H. Ghaswala, reported in 2002 (1) SCC 633]. The Supreme Court held that Law has reached its fine moments, stated Douglas, J. in United States v. 24 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 Wunderlich, reported in 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, reported in 1770 (4) Burr 2527 Burr at page 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 Supreme Court in Natural Resources Allocation, In Reference Special Reference No. 1 of 2012, reported in 2012 (10) SCC 1. 37. The contention of learned counsel for the respondent-employee is also to the effect that respondent-employee had completed qualifying service so as to entitle him to get payment of gratuity. Learned Senior Advocate for the petitioner-Bank has not been able to dispute the said contention and, therefore, I find that the irrespective of termination/dismissal of the services of respondent-employee, once he became entitled for payment of gratuity in the light of completion of qualifying period of services, withholding of gratuity could be only in connection with section 4(6)(b)(ii) of the Act of 1972 and not otherwise. 38. In view of above discussions of facts and law, I find that action of the Bank in withholding the 25 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 gratuity payable to respondent-employee was contrary to the provisions and spirit of the Payment of Gratuity Act, 1972 as explained by the Apex Court and other courts in the aforesaid authorities and, therefore, I do not find any error in the orders impugned so as to warrant interference in extraordinary jurisdiction under Article 226 of Constitution of India. 39. The writ petition fails and is, accordingly, dismissed with the aforesaid observations. 40. The petitioner-Bank is directed to release the entire amount of gratuity in terms of the order dated 29.09.2015 passed by the Controlling Authority by making calculations including the interest awarded upto date. The amount so computed shall be released in favour of respondent-employee within a period of two months from the date a certified copy of this order is produced before the Bank along with application. 41. In this case, an interim order was passed on 29.05.2017 directing the petitioner-Bank to deposit a sum of Rs. 11,00,000/- (rupees eleven lac only) before the Prescribed Authority and a sum of Rs. 5,00,000/- (rupees five lac only) was directed to be released in favour of respondent-employee against the security of Rs. 2,00,000/- (rupees two lac only) to be furnished by the said respondent with a further direction that balance amount of Rs. 6,00,000/- (rupees six lac only) shall be 26 Writ C No. 21933 of 2017 (Indian Overseas Bank Thru Its Chief R.M. and another vs Union of India and 3 others) Neutral Citation No. - 2023:AHC:117320 invested in an interest bearing term deposit scheme in a nationalized Bank, which shall abide by the final order to be passed in the present writ petition. 42. In view of above, while making computation of the amount payable and making payment to respondent-employee, adjustment of the aforesaid amount shall be made and the concerned Bank where the amount is lying invested and deposited in terms of the interim order passed by this Court, shall release it in favour of respondent-employee within the aforesaid period of two months. 43. Dismissed with the aforesaid observations. Order Date :- 25.05.2023 Sazia 27 Digitally signed by :- SAZIA AQUIL High Court of Judicature at Allahabad "