# Smt. Anju Srivastava v. U.P. State Agro Indus. Corp. Ltd. & Ors

- **Citation:** (2025) 1 ILRA 775
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-01-10
- **Case number:** Writ A No. 10247 of 2024
- **Bench:** Abdul Moin
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/smt-anju-srivastava-v-u-p-state-agro-indus-corp-ltd-ors-53091
- **Pages:** 8

## Headnote

(A) Service Law - Payment of Gratuity -
Payment of Gratuity Act, 1972 - Section 4
- Gratuity is payable to an employee on
the termination of his employment after
he has rendered service for not less than
five years either on his superannuation or
on his retirement or resignation or on his
death or disablement due to accident or
disease. (Para -19,22)

(B) Service Law - Payment of Gratuity Act,
1972 - Section 4(6) - An employee's
gratuity can be fully or partially forfeited if
their services are terminated due to - (i)
Willful damage or loss to employer's
property
,(ii)
Riotous
or
disorderly
conduct, (iii) Acts or violence or (iv)
Offences
involving
moral
turpitude
-
Termination of service is required for
gratuity forfeiture - Termination of service
is the sine-qua-non to forfeiture, fully or
partly, of the gratuity.(Para -20)

Petitioner's husband, a storekeeper in the
respondent corporation - died in harness -
Employer sought to recover Rs. 6,20,101.56
from his gratuity - alleging a shortage in stores -
petitioner challenged the deduction - arguing
that gratuity could not be withheld as her
husband was never terminated - no disciplinary
proceedings were ever initiated - failed to pay
the Employees' Deposit Linked Insurance (EDLI)
amount to the petitioner - hence petition. (Para
- 2 to 17)

HELD: - Employer cannot withhold gratuity
unless the employee was terminated . As the
deceased was never terminated but died in
harness, recovery from gratuity is impermissible.
Orders impugned, forfeiting /making deductions
from gratuity of the petitioner's husband, are
legally not tenable in the eyes of law and merit
to be quashed. Employer must pay the full
gratuity within eight weeks with interest and
must also decide on the EDLI payment within
the same period. (Para -21,23,26,27)

Petition allowed. (E-7)
List of Cases cited:

## Text

1 All. Smt. Anju Srivastava Vs. U.P. State Agro Indus. Corp. Ltd. & Ors.
775
respondents to pay the petitioner
due compensation for his mother's death,
treating
it
to
be
death
for
which
compensation
is
payable
under
the
Government Orders dated 11.04.2020,
22.06.2021
and
26.07.2021.
This
mandamus shall be carried out by the
respondents within six weeks of the date of
communication of this order.

55. There shall be no order as to
costs.

56. Let a copy of this order be
communicated to the Secretary, Local
Bodies, Government of U.P., Lucknow, the
Additional
Chief
Secretary,
Finance
Department,
Government
of
U.P.,
Lucknow, the Director, Local Bodies, U.P.,
Lucknow, the District Magistrate, Fatehpur
and the Executive Officer, Nagar Panchayat
Khaga, District Fatehpur by the Registrar
(Compliance).
----------
(2025) 1 ILRA 775
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 10.01.2025

BEFORE

THE HON'BLE ABDUL MOIN, J.

Writ A No. 10247 of 2024

Smt. Anju Srivastava ...Petitioner
Versus
U.P. State Agro Indus. Corp. Ltd. & Ors.
 ...Respondents

Counsel for the Petitioner:
Birendra Kumar Yadav, Amit Kumar

Counsel for the Respondents:
Rajeeva Kumar Sinha, Akhilesh Pratap Singh

(A) Service Law - Payment of Gratuity -
Payment of Gratuity Act, 1972 - Section 4
- Gratuity is payable to an employee on
the termination of his employment after
he has rendered service for not less than
five years either on his superannuation or
on his retirement or resignation or on his
death or disablement due to accident or
disease. (Para -19,22)

(B) Service Law - Payment of Gratuity Act,
1972 - Section 4(6) - An employee's
gratuity can be fully or partially forfeited if
their services are terminated due to - (i)
Willful damage or loss to employer's
property
,(ii)
Riotous
or
disorderly
conduct, (iii) Acts or violence or (iv)
Offences
involving
moral
turpitude
-
Termination of service is required for
gratuity forfeiture - Termination of service
is the sine-qua-non to forfeiture, fully or
partly, of the gratuity.(Para -20)

Petitioner's husband, a storekeeper in the
respondent corporation - died in harness -
Employer sought to recover Rs. 6,20,101.56
from his gratuity - alleging a shortage in stores -
petitioner challenged the deduction - arguing
that gratuity could not be withheld as her
husband was never terminated - no disciplinary
proceedings were ever initiated - failed to pay
the Employees' Deposit Linked Insurance (EDLI)
amount to the petitioner - hence petition. (Para
- 2 to 17)

HELD: - Employer cannot withhold gratuity
unless the employee was terminated . As the
deceased was never terminated but died in
harness, recovery from gratuity is impermissible.
Orders impugned, forfeiting /making deductions
from gratuity of the petitioner's husband, are
legally not tenable in the eyes of law and merit
to be quashed. Employer must pay the full
gratuity within eight weeks with interest and
must also decide on the EDLI payment within
the same period. (Para -21,23,26,27)

Petition allowed. (E-7)
List of Cases cited:
1. Bankey Bihari Chauhan Vs St. of U.P. & ors.
Special Appeal Defective No.101 of 2015
776 INDIAN LAW REPORTS ALLAHABAD SERIES
2. Secy., ONGC Ltd. & anr. Vs V.U. Warrier, AIR
2005 SC 3039

(Delivered by Hon'ble Abdul Moin, J.)

1. Heard learned counsel for the
petitioner, Shri Rajeev Kumar Sinha,
learned counsel appearing on behalf of
respondents No.1 to 3 and Shri Akhilesh
Pratap Singh, learned counsel appearing on
behalf of respondent No.4.

2. The instant petition has been
filed praying for the following reliefs:

"(i). To issue a writ, order
or direction in the nature of
certiorari quashing the letter /
order No. 28/EPF/24-25 dated
16.05.2024
and
letter
No.
175/DEL- sthapna/ 2023-2024
dated 30.03.2024 for recovery /
adjustment of Rs.6,20,101.56/-
from gratuity and other dues of
the
petitioner's
deceased
husband, copies of which are
annexures 1 & 2 to the writ
petition.

(ii). To issue a writ, order
or direction in the nature of
mandamus
commanding
the
respondents to release the gratuity
amount along with interest @12%
and
further
directing
the
respondent No.4 to release the
employees deposit link insurance
amount (EDLI) along with interest
at the market rate."

3. Learned counsels for the parties
state that the facts of the case have already
been set forth in detail in the order dated
11.11.2024.

4. For the sake of convenience, the
order dated 11.11.2024 is reproduced
below:-

"1. Heard learned counsel
for the petitioner, Shri Rajeeva
Kumar Sinha, learned counsel for
respondents and Shri Akhilesh
Kumar Singh, learned counsel for
respondent No.4.
2. Under challenge is the
order dated 16.05.2024, a copy of
which is Annexure-1 to the petition,
whereby the respondents No.1 to 3
have indicated about recovering of
a certain amount from the gratuity
payable to the petitioner in the
capacity of being the widow of Late
Sarvesh Srivastava, who died on
10.04.2021.
3. The contention is that
there cannot be any occasion for
the respondents to withhold the
amount of gratuity in order to make
recovery of certain amounts which
might be payable by the deceased
employee.
4.
Shri
Sinha,
learned
counsel appearing for respondents
No.1 to 3 states that certain amount
is sought to be recovered from the
gratuity payable to the petitioner in
the capacity of being widow of the
deceased employee on account of
there being shortage of stores that
were noted in the stores which were
required to be maintained by the
husband of the petitioner inasmuch
as he was working as Store Keeper
in-charge at the time of his death
and thus it has been found feasible
to withhold the aforesaid amount.
5. Shri Sinha has referred
to the provisions of sub section 6 of
Section 4 Payments of Gratuity Act,
1 All. Smt. Anju Srivastava Vs. U.P. State Agro Indus. Corp. Ltd. & Ors.
777
1972 to contend that in respect of
any loss, willful omission or
negligence causing any damage or
loss or destruction of the property
belonging to the employer the
gratuity can be withheld.
6. The contention is that
once the Act, 1972 itself empowers
the respondents to make deduction
from
the
amount
of
gratuity
consequently there is no error in
the order impugned.
7. However, bare perusal of
the Sub Section 6 of Section 4 of the
Act, 1972 indicates that prima facie
withholding of gratuity would only
be there in case of termination of
an
employee
in
certain
circumstances and not otherwise.
Even otherwise alleged shortage of
stores is sought to be recovered
from the gratuity of the deceased
employee that too without affording
any
opportunity
of
hearing
inasmuch as once the employee is
already deceased there cannot be
any occasion for issuance of any
notice. However, Shri Sinha prays
for and is granted 10 days' time to
file a short counter affidavit to
which reply may be filed within
next three days.
8. List thereafter as fresh.
9.
Meanwhile,
learned
counsel for respondent No.4 shall
seek
instructions
as
to
why
Employee Deposit Link Insurance
(EDLI) has not been paid to the
petitioner and in case there is no
legal impediment in payment, the
said amount should be paid to the
petitioner.

10. Whenever the case is
next listed, name of Shri Akhilesh
Pratap Singh, Advocate be shown as
Counsel for Respondent."

5. From perusal of the aforesaid
order, it emerges that the petitioner-widow is
before this Court raising a claim for being
paid the Gratuity under the provisions of the
Payment of Gratuity Act, 1972 (hereinafter
referred to as "Act, 1972") on account of
her husband having died in harness on
10.04.2021. The respondents have passed an
order dated 16.05.2024, a copy of which is
annexure 1 to the petition, whereby they have
indicated about recovering of certain amount
from the Gratuity payable to the petitioner in
the capacity of being the widow of Late
Sarvesh Srivastava i.e. the husband of the
petitioner. Also, by means of order dated
30.03.2024, a copy of which is annexure 2 to
the petition, the respondents have indicated
that an amount of Rs.6,20,101.56/- worth
stores / material being found less.

6. Learned counsel for the petitioner
has placed reliance on the provisions of the
Sub-section (6) of Section 4 of the Act, 1972
to contend that a recovery from gratuity can
only be made in case of termination of an
employee.

7. The contention is that services
of the husband of the petitioner were never
terminated rather he died in harness on
10.04.2021
and
consequently,
the
respondents are not within their right of
passing the order impugned for withholding
of the certain amount which is allegedly
due to be recovered from the husband of
the petitioner towards shortage in stores,
which was the alleged responsibility of the
husband of the petitioner.

8. In this regard, reliance has also
been placed on the judgment of Division
Bench of this Court passed in the case of
778 INDIAN LAW REPORTS ALLAHABAD SERIES
Bankey Bihari Chauhan vs. State of U.P.
& Ors. in Special Appeal Defective
No.101 of 2015 decided on 06.02.2015.

9. It is thus contended that the
respondents have patently erred in passing
the orders impugned and for adjusting the
amount as specified in the order impugned.

10. The further contention is that
the respondent No.4 has failed to pay the
Employees'
Deposit
Linked
Insurance
(EDLI) amount to the petitioner.

11. On the other hand, Shri Sinha,
learned counsel appearing for respondents
No.1 to 3 has stated that once there was a
shortage in stores found subsequent to the
death of the husband of the petitioner,
consequently, the respondents are within
their right of recovering the said amount
from the Gratuity which is payable to the
petitioner under the provisions of the Act,
1972.

12. In this regard, reliance has
been placed on the judgment of the Hon'ble
Supreme Court in the case of Secretary,
ONGC Ltd. and Anr. vs. V.U. Warrier
AIR 2005 SC 3039.

13. It is contended that once the
respondents are within their right of
recovering the amount of shortage in stores
which stores were the responsibility of the
husband of the petitioner consequently, in
case shortage is found they can very well
recover the said amount from the Gratuity
which is payable to the petitioner in the
capacity of being the widow of Late
Sarvesh Srivastava.

14. On the other hand, Shri
Akhilesh Pratap Singh, learned counsel
appearing on behalf of respondent No.4
states
that
regular
amount
was not
deposited by the respondent-establishment
towards the EDLI. The records are being
traced out and every endeavour would be
made to pay the aforesaid amount, as due to
the petitioner, and a final decision in this
regard would be taken within the shortest
possible time.

15. Heard the learned counsels for
the parties and perused the record.

16. From a perusal of the record, it
emerges that the husband of the petitioner,
who was working under the respondents
No.1 to 3, died in harness on 10.04.2021.
The respondents have passed the order
impugned dated 16.05.2024 whereby the
petitioner has been informed that the
amount of Gratuity, as due to her, is
Rs.4,83,000/- and odd but there is a
shortage
in
stores
of
approximately
Rs.6,20,000/-,
which
were
the
responsibility of the husband of the
petition, which is sought to be recovered.

17. Raising a challenge to the
aforesaid orders, the instant petition has
been filed.

18. The sheet anchor of the
argument of the learned counsel for the
petitioner is Sub-section (6) of Section 4 of
the Act, 1972. For the sake convenience,
Section 4 of the Act, 1972 is reproduced
below:

"Section 4. Payment of
Gratuity.
(1)
Gratuity
shall
be
payable to an employee on the
termination of his employment after
he has rendered continuous
service for not less than five years,-
-
1 All. Smt. Anju Srivastava Vs. U.P. State Agro Indus. Corp. Ltd. & Ors.
779
(a) on his superannuation,
or
(b) on his retirement or
resignation, or
(c)
on
his
death
or
disablement due to accident or
disease:
Provided
that
the
completion of continuous service of
five years shall not be necessary
where the termination of the
employment of any employee is due
to death or disablement:
[Provided further that in
the case of death of the employee,
gratuity payable to him shall be
paid to his nominee or, if no
nomination has been made, to his
heirs,
and
where
any
such
nominees or heirs is a minor, the
share of such minor, shall be
deposited
with
the
controlling
authority who shall invest the same
for the benefit of such minor in
such bank or other financial
institution, as may be prescribed,
until such minor attains majority.] [
Substituted by Act 22 of 1987,
Section 4 (w.e.f. 1.2.1991).]
Explanation.--
For
the
purposes
of
this
section,
disablement
means
such
disablement as incapacitates an
employee for the work which he
was capable of performing before
the accident or disease resulting in
such disablement.

(2) For every completed
year of service or part thereof in
excess of six months, the employer
shall pay gratuity to an employee at
the rate of fifteen days' wages
based on the rate of wages last
drawn by the employee concerned:
Provided that in the case of
a
piece-rated
employee,
daily
wages shall be computed on the
average of the total wages received
by him for a period of three months
immediately
preceding
the
termination of his employment,
and, for this purpose, the wages
paid for any overtime work shall
not be taken into account:
Provided further that in the
case of [an employee who is
employed
in
a
seasonal
establishment and who is not so
employed throughout the year] [
Substituted by Act 25 of 1984,
Section 3, for " an employee
employed
in
a
seasonal
establishment" (w.e.f. 1.7.1984).],
the employer shall pay the gratuity
at the rate of seven days' wages for
each season.
[Explanation.-- In the case
of a monthly rated employee, the
fifteen
days'
wages
shall
be
calculated by dividing the monthly
rate of wages last drawn by him by
twenty-six and multiplying the
quotient by fifteen. [ Inserted by
Act 22 of 1987, Section 4 (w.e.f.
1.2.1991).]
(3) The amount of gratuity
payable to an employee shall not
exceed [such amount as may be
notified by the Central Government
from time to time]. [ Substituted
'ten lakh rupees' by Act No. 12 of
2018, dated 28.3.2018.]
(4) For the purpose of
computing the gratuity payable to
an employee who is employed, after
his disablement, on reduced wages,
his wages for the period preceding
his disablement shall be taken to be
the wages received by him during
780 INDIAN LAW REPORTS ALLAHABAD SERIES
that period, and his wages for the
period
subsequent
to
his
disablement shall be taken to be the
wages as so reduced.
(5) Nothing in this section
shall affect the right of an employee
receive better terms of gratuity
under any award or agreement or
contract with the employer.
(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] [ Substituted by
Act 25 of 1984, Section 3, for "
shall be wholly forfeited" (w.e.f.
1.7.1984).]-
(i) if the services of such
employee have been terminated for
his riotous or disorderly conduct or
any other act 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.
[ Sub-Section (7) omitted
by Act 34 of 1994, Section 3 (w.e.f.
24.5.1994).]"

19. A perusal of Section 4 of the
Act, 1972 indicates that Gratuity is payable
to an employee on the termination of his
employment after he has rendered service
for not less than five years either on his
superannuation or on his retirement or
resignation or on his death or disablement
due to accident or disease.

20. Sub-section (6) of Section 4 of
the Act, 1972 provides that notwithstanding
anything contained in Sub-section (1),
which pertains to payment of Gratuity, the
Gratuity of an employee whose services
have been terminated for any act, willful
omission
or
negligence
causing
any
damage or loss to, or destruction of,
property belonging to the employer, shall
be forfeited to the extent of the damage or
loss so caused and that the gratuity payable
to an employee may be wholly or partially
be forfeited if the services of such
employee have been terminated for his
riotous or disorderly conduct for any act or
violence on his part or if the services of the
employee have been terminated for any act
which constitutes an offence involving
moral turpitude. Thus, termination of
service is the sine-qua-non to forfeiture,
fully or partly, of the gratuity.

21. Admittedly, the services of the
husband of the petitioner were never
terminated rather he died in harness on
10.04.2021. Thus the only provision per
which the respondents could have forfeited
the gratuity, i.e. Sub-section (6) of Section
4 of the Act, 1972, is clearly not attracted in
the instant case as the services of the
husband of the petitioner were never
terminated rather he died in harness after
having rendered continuous service of more
than five years. Thus, the petitioner clearly
became entitled for gratuity.

22. This aspect of the matter has
also been considered by the Division Bench
1 All. Smt. Anju Srivastava Vs. U.P. State Agro Indus. Corp. Ltd. & Ors.
781
of this Court in the case of Bankey Bihari
Chauhan (supra) wherein the Division
Bench has held as under:

"Section 4 (6) of the Act
provides for the circumstances in
which the gratuity of an employee,
whose
services
have
been
terminated,
can
be
forfeited.
Section 4 (6) is in the following
terms:
"4. Payment of gratuity. -
(1) ... ...
(6)
Notwithstanding
anything contained in sub-section
(1), -
(a) the gratuity of an
employee, whose services have
been terminated for any act, willful
omission or negligence causing any
damage or loss to, or destruction
of, property belonging to the
employer shall be forfeited to the
extent of the damage or loss so
caused;
(b) the gratuity payable to
an employee may be wholly or
partially forfeited, -
(i) if the services of such
employee have been terminated for
his riotous or disorderly conduct or
any other act of violence on his
part, or
(ii) if the services of such
employee have been terminated for
any act which constitutes an
offence involving moral turpitude,
provided that such offence is
committed by him in the course of
his employment."
In the present case, it is not
in dispute that the services of the
appellant were never terminated.
The appellant continued to be in
service and retired on attaining the
age of superannuation. In the
circumstances,
the
basic
precondition for the forfeiture of
gratuity under Section 4 (6) of the
Act was not fulfilled."

23. From a perusal of the provision
of Sub-section (6) of Section 4 of the Act,
1972 and the Division Bench's judgment of
this Court passed in the case of Bankey
Bihari Chauhan (supra), it is apparent
that the gratuity of the petitioner's husband
could only have been forfeited had he been
terminated from service, may be for
shortage of stores. However, the services
were
never
terminated
rather
the
petitioner's husband died in harness on
10.04.2021 and no disciplinary proceedings
were ever initiated against him while he
was in service and thus, the sine-qua-non
for forfeiture of gratuity or making
deductions from gratuity, as specified in
Sub-section (6) of Section 4 of the Act,
1972, never arose and thus the orders
impugned, forfeiting / making deduction
from gratuity of the petitioner's husband,
are legally not tenable in the eyes of law
and merit to be quashed.

24. So far as the judgment of the
Hon'ble Supreme Court in the case of V.U.
Warrier (supra) is concerned, it would be
suffice to state that the Hon'ble Supreme
Court in the said judgment has clearly held
that the services of the retired employee in
that case were not governed by the
provisions of the Act, 1972 rather the Oil &
Natural Gas Commission (ONGC), of
which the person was an employee, had its
own rules pertaining to recovery of dues.
Thus, the said judgment would have no
applicability in the facts of the instant case.

25. So far as the non payment of
the EDLI is concerned, it has fairly been
782 INDIAN LAW REPORTS ALLAHABAD SERIES
stated by learned counsel appearing for the
respondent No.4 that the respondents are
examining the records and an endeavour
would be made to take a final decision in the
matter pertaining to the same. The aforesaid
statement is recorded.

26. Accordingly, the writ petition is
allowed.
The
order
impugned
dated
16.05.2024, a copy of which is annexure 1 to
the petition, and the order dated 30.03.2024, a
copy of which is annexure 2 to the petition, are
quashed. The respondents No.1 to 3 are
directed to pay the entire amount of gratuity due
to the petitioner within a period of eight weeks
from the date of receipt of certified copy of this
order along with admissible interest.

27. The respondent No.4 shall also
take a final decision pertaining to the
payment of EDLI as due to the petitioner
within the aforesaid period of time.
----------
(2025) 1 ILRA 782
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 06.01.2025

BEFORE

THE HON'BLE ATTAU RAHMAN MASOODI, J.
THE HON'BLE SUBHASH VIDYARTHI, J.

Writ -A No. 12422 of 2024

Union of India & Ors. ...Petitioners
Versus
Central Administrative Tribunal Lko. &
Anr. ...Respondents

Counsel for the Petitioners:
Ajit Kumar Dwivedi

Counsel for the Respondents:
Praveen Kumar

A. Service Law - Disciplinary Enquiry -
Sexual Harassment - Conspiracy - CCS
(CCA) Rules, 1965 - Rule 11(i), 29 - The
action (revisional power) could not have
been set aside merely for want of the
order having been passed by an authority
other than the President. Petitioners have
submitted that a bare perusal of the Rule 29
indicates that besides the President, the Head of
Department and the appellate authority are also
empowered to exercise the revisional power
under the Rule. In the present case, the fresh
action has been instituted by an order passed
by the appellate authority. (Para 12)

B. None of the allegations levelled in the
complaint
make out
a
case
"sexual
harassment" as defined in the guidelines
issued by the Government of India. (Para
18)

C. The complainant has already written to the
Additional Director, G.S.I. stating that the
dispute between her and the opposite party
no. 2 stands settled. In these circumstances,
before directing any action to be taken
against the opposite party no. 2, the
authorities
ought
to
have
satisfied
themselves whether any prima facie
case
of
commission
of
sexual
harassment by the opposite party no. 2
was made out. The authorities have not
recorded any satisfaction before instituting
proceeding afresh against the opposite party
no. 2. After examination of record, it can be
concluded that no case for instituting any
fresh proceeding on the allegation of sexual
harassment is made out against the opposite
party no. 2. (Para 19)

D.(i) The opposite party no. 2 has sent a
complaint dated 07.05.2023 to the Director
General, GSI against two officers, reproducing a
transcript of a conversation showing that they
had instigated the complainant to file a false
complaint against the opposite party no. 2 and
in response to this suggestion the complainant
had stated that the opposite party no. 2 had not
said anything to her. The opposite party no.
2 has requested the Director General to
take action against the aforesaid two
officers but it appears that no action has
been taken against those two officers.
(Para 20)