# Indian Overseas Bank & Anr v. Union of India & Ors

- **Citation:** (2023) 6 ILRA 691
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-05-25
- **Case number:** Writ-C No. 21933 of 2017
- **Bench:** Kshitij Shailendra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/indian-overseas-bank-anr-v-union-of-india-ors-50345
- **Pages:** 13

## Headnote

Civil Law - Payment of Gratuity Act, 1972Respondent employee retired but termination
order passed after his retirement-Respondent
sought release of terminal benefits u/s 4 of
Payment of gratuity Act-objected by the
Petitioner Bank-granted maximum gratuityimpugned-Appeal
dismissed-impugnedforfeiture of gratuity is permissible only if
termination
is
for
misconduct
which
constitutes
an
offence
involving
moral
turpitude and convicted by competent courtnot proof of misconduct will do-no error in the
impugned orders-Bank directed to release the
gratuity.
692 INDIAN LAW REPORTS ALLAHABAD SERIES
W.P. dismissed. (E-9)

List of Cases cited:

## Text

_Characters 0–39,964 of 44,039. This is a partial read: ask again with offset=39964 for what follows._

6 All. Indian Overseas Bank & Anr. Vs. Union of India & Ors.
691
Zamindari Abolition And Land Reforms
Act, 1950 and as Uttar Pradesh Land
Revenue Act, 1901).

18. The litigant, whose proceeding are
mentioned above was not decided despite
his application relying upon this judgement
within the time fixed by this court, then
litigant instead of filing writ petition for
expeditious disposal may directly approach
this Court by filing contempt proceedings
against the concerned officer.

19. It is made clear that if the State
Government by issuing notification or by
making amendments prescribes time for
deciding the proceedings for which this Court
has a fixed period for deciding the
proceedings, then that period will be
substituted in place of the period specified by
this Court.

20. The State is further directed to fill
up the posts of Sub Divisional Magistrate
(Judicial) as required by Section 13(6) of
Code, 2006 as well as posts of Tehsildar
(Judicial) as required by Section 14(1) of
Code, 2006 so as to address the problem of
pendency of proceedings under Code, 2006
as early as possible preferably within a period
of one year from today.

21. This Court also found that despite
repeal of Uttar Pradesh Zamindari Abolition
And Land Reforms Act, 1950 as well as Uttar
Pradesh Land Revenue Act, 1901 on
11.02.2016, Revenue Authority/Court still
mentioning provision of above repealed Act
in new proceeding initiated after the repeal,
therefore, all revenue authority are directed to
mention provisions of Code, 2006 in the
aforesaid proceedings.

22. With the aforesaid direction the
petition is disposed of.

23. Let a copy of this order be sent to
Chief Secretary, U.P. who will further
circulate
the
same
to
Divisional
Commissioner as well as District Collector
with the direction that District Collector
will further inform to all his subordinate
officers
including
the
concerned bar
association.

24. Registrar (Compliance) is directed
to send a copy of this order to the Chief
Secretary, U.P. for necessary compliance.
----------
(2023) 6 ILRA 691
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.05.2023

BEFORE

THE HON'BLE KSHITIJ SHAILENDRA, J.

Writ-C No. 21933 of 2017

Indian Overseas Bank & Anr. ...Petitioners
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioners:
Sri Ved Prakash Singh, Sri Akhillesh Kalra (Sr.
Adv.), Sri Avinash Chandra

Counsel for the Respondents:
A.S.G.I., Sri Anil Kumar, Sri Gaurav Srivastava,
Sri P.S. Chauhan, S.C., Sri Sudarshan Singh

Civil Law - Payment of Gratuity Act, 1972Respondent employee retired but termination
order passed after his retirement-Respondent
sought release of terminal benefits u/s 4 of
Payment of gratuity Act-objected by the
Petitioner Bank-granted maximum gratuityimpugned-Appeal
dismissed-impugnedforfeiture of gratuity is permissible only if
termination
is
for
misconduct
which
constitutes
an
offence
involving
moral
turpitude and convicted by competent courtnot proof of misconduct will do-no error in the
impugned orders-Bank directed to release the
gratuity.
692 INDIAN LAW REPORTS ALLAHABAD SERIES
W.P. dismissed. (E-9)

List of Cases cited:

1. U.O.I. & ors.Vs C.G. Ajay Babu & anr., 2018
(158) FLR 948.

2. Jaswant Singh Gill Vs Bharat Coking Coal Ltd.
reported in (2007) 1 SCC 663

3. St. of Guj. & ors.Vs Utility Unser's Welfare
Association & ors., reported in (2018) 6 SCC 21

4. Western Coal Fields bs Manohar Govinda
Fulzele & anr., SLP (C) 10088/2022

5. UCO Bank & ors.Vs Rajendra Shankar Shukla,
reported in 2018 (157) FLR 482

6. M/s Hindalco Industries Ltd. Vs Appellate
Authority, Under the Payment of Gratuity Act,
Kanpur & ors., reported in 2004 (101 FLR 1063

7. J.B. Micheal D'souza Vs Appellate Authority
Under Payment of Gratuity Act, Bangalore &
ors., reported in 2002 (92) FLR 1200

8. Manager, Western Coalfields Ltd. Vs Prayag
Modi, reported in 2018 (157) FLR 323

9. Permali Wallance Ltd. Vs St. of M.P. & ors.,
reported in 1996 (72) FLR 748 (MP)

10. Krishnaveni Textile Ltd. Vs Assistant Labour
Commissioner reported in 2002 (95) FLR 1164
(Mad.)

11. Bharat Gold Mines Ltd. Vs Regional Labour
Commissioner, reported in ILR 1986 KAR 2755

12. G.M.D.C. Co-operative Bank Vs Deendaya
Gaud, reported in 2013 (1) MPLJ 301,

13. Baru Ram Vs Prasanni, reported in AIR 1959
SC 93

14. Commissioner of Income Tax, Mumbai Vs
Anjum M.H. Ghaswala, reported in 2002 (1) SCC
633

15. United St.s Vs Wunderlich, reported in 342
US 98 (1951)

16. R. Vs Wilkes, reported in 1770 (4) Burr 2527
Burr at page 2539

17. Natural Resources Allocation, In Reference
Special Reference No. 1 of 2012, reported in
2012 (10) SCC 1

(Delivered by 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 petitionerBank. 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 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
6 All. Indian Overseas Bank & Anr. Vs. Union of India & Ors.
693
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 respondentemployee 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 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 respondentemployee 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.

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 respondentemployee, 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.
694 INDIAN LAW REPORTS ALLAHABAD SERIES

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
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, 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 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
6 All. Indian Overseas Bank & Anr. Vs. Union of India & Ors.
695
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.

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 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 resintegra 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
696 INDIAN LAW REPORTS ALLAHABAD SERIES
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 (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, subclause (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 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 subsection (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 respondentemployee 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 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
6 All. Indian Overseas Bank & Anr. Vs. Union of India & Ors.
697
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 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

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
698 INDIAN LAW REPORTS ALLAHABAD SERIES
required to be deposited 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 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, resubmission 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 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.
6 All. Indian Overseas Bank & Anr. Vs. Union of India & Ors.
699

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 respondentemployee 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 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 nonissuance 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 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
700 INDIAN LAW REPORTS ALLAHABAD SERIES
Controlling 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.

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 respondentemployee 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 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.
6 All. Indian Overseas Bank & Anr. Vs. Union of India & Ors.
701

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 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 respondentemployee 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 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 respondentemployee 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. Wunderlich,
reported in 342 US 98 (1951), 'when it has
702 INDIAN LAW REPORTS ALLAHABAD SERIES
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 petitionerBank 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 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 respondentemployee 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 petitionerBank to deposit a sum of Rs. 11,00,000/-
(rupees eleven lac only) before the Prescribed
Authority and a sum of Rs.