# Yasmeen Talat Usmani v. State of U.P. & Ors. Opp. Parties

- **Citation:** (2024) 5 ILRA 1126
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-05-23
- **Case number:** Writ-A No. 17262 of 2023
- **Bench:** J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/yasmeen-talat-usmani-v-state-of-u-p-ors-opp-parties-51974
- **Pages:** 10

## Headnote

(A) Service law - Widow's claim for refund
of deducted gratuity amount from her
deceased husband's employment benefits -
The Payment of Gratuity Act, 1972 -
Section 4(6)(a) - Payment of gratuity -
gratuity of an employee may be forfeited to
the extent of damage or loss caused to the
employer, if his services have been
terminated for any act, willful omission or
negligence, causing any damage or loss to
or destruction of the employer's property -
employer
cannot
recover
alleged
embezzlement
amount
from
gratuity
without
following
due
process
-
Departmental
proceedings
or
judicial
proceedings pending against an employee
abate upon their death - No recovery can
5 All. Yasmeen Talat Usmani Vs. State of U.P. & Ors.
1127
be made from death-cum-retirement dues
without fixing liability during employee's
lifetime.(Para - 9,17,18)

Deceased
employee
was
accused
of
embezzlement - no departmental inquiry or
liability determination during his lifetime - No
charge-sheet filed - police submitted a final
report after his death - Corporation deducted
amount from gratuity payable to widow, citing
alleged embezzlement. (Para - 1 to 10)

HELD: - It was not open to the respondents to
recover the sum of Rs.5,62,745/- from the
gratuity payable to the petitioner on account of
death-cum-retirement benefits due to the
petitioner's husband and now receivable by her.
Directing the respondents to refund the deducted
amount of Rs. 5,62,745/- with interest. (Para -
21,22)

Writ Petition Allowed. (E-7)

List of Cases cited:

## Text

1126 INDIAN LAW REPORTS ALLAHABAD SERIES
Authority, the application was received by
them from the District Cane Officer,
Sambhal on 20.07.2021. The impugned
order was passed on 25.09.2023. This order
came to be passed after we had passed
orders
on
15.09.2023,
asking
the
respondents to show cause in terms
indicated in that order, which we have
quoted
hereinabove
in
extenso.
In
administrative decision making, this Court
cannot lose sight of the fact that the primary
decision
maker,
the
Administrator,
sometimes loses his objectivity, the moment
he is visited with a judicial command to do
his duty. Either he is panicked into acting
erratically and taking a wrong decision or
turns malicious and motivated to teach the
man, who has brought a writ to him of any
kind. Administrators must not panic or
retaliate when faced with a judicial
command, asking them to perform their
duties. Sadly, they often do. Here, the Court
thinks that the very nonchalant and
halfhearted appraisal of the petitioner's
claim, which the State Authority have done
by the order impugned dated 25.09.2023,
could be the result of either of the two
possibilities that we have indicated above.
We are sure that in the sequence of things, it
is the result of one of the two; which one,
would be best known to the State Cadre
Authority themselves. We do not wish to
probe into it, but caution the State Authority
in this regard.

15. In the result, this petition
succeeds and is allowed. The impugned
order dated 25.09.2023 passed by the State
Authority and the order dated 30.09.2023
passed by the District Cane Officer,
Sambhal
are
hereby
quashed.
The
petitioner's application for compassionate
appointment stands remitted to the State
Authority, which they shall now decide
strictly in accordance with law, within a
period of one month, from the date of receipt
of this judgment, bearing in mind our
remarks.

16. Costs easy.

17. Let a copy of this judgment be
communicated to the District Cane Officer,
District Sambhal and the Adhyaksha, Rajya
Ganna Pradhikaran, Uttar Pradesh by the
Registrar (Compliance).
----------
(2024) 5 ILRA 1126
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.05.2024

BEFORE

THE HON'BLE J.J. MUNIR, J.

Writ-A No. 17262 of 2023

Yasmeen Talat Usmani ...Petitioner
Versus
State of U.P. & Ors. ...Opp. Parties

Counsel for the Petitioner:
Bhagwan Dutt Pandey

Counsel for the Opp. Parties:
C.S.C., Abhishek Srivastava

(A) Service law - Widow's claim for refund
of deducted gratuity amount from her
deceased husband's employment benefits -
The Payment of Gratuity Act, 1972 -
Section 4(6)(a) - Payment of gratuity -
gratuity of an employee may be forfeited to
the extent of damage or loss caused to the
employer, if his services have been
terminated for any act, willful omission or
negligence, causing any damage or loss to
or destruction of the employer's property -
employer
cannot
recover
alleged
embezzlement
amount
from
gratuity
without
following
due
process
-
Departmental
proceedings
or
judicial
proceedings pending against an employee
abate upon their death - No recovery can
5 All. Yasmeen Talat Usmani Vs. State of U.P. & Ors.
1127
be made from death-cum-retirement dues
without fixing liability during employee's
lifetime.(Para - 9,17,18)

Deceased
employee
was
accused
of
embezzlement - no departmental inquiry or
liability determination during his lifetime - No
charge-sheet filed - police submitted a final
report after his death - Corporation deducted
amount from gratuity payable to widow, citing
alleged embezzlement. (Para - 1 to 10)

HELD: - It was not open to the respondents to
recover the sum of Rs.5,62,745/- from the
gratuity payable to the petitioner on account of
death-cum-retirement benefits due to the
petitioner's husband and now receivable by her.
Directing the respondents to refund the deducted
amount of Rs. 5,62,745/- with interest. (Para -
21,22)

Writ Petition Allowed. (E-7)

List of Cases cited:

1. Bankey Bihari Chauhan Vs St. of U.P. & ors.,
2015(3) ADJ 305 (DB)

2. Union Bank of India & ors. Vs C.G. Ajay Babu
& anr., (2018) 9 SCC 529

3. Jaswant Singh Gill Vs Bharat Coking Coal Ltd.,
(2007) 1 SCC 663: (2007) 1 SCC (L&S) 584

(Delivered by Hon'ble J.J. Munir, J.)

1. This writ petition has been
instituted by the widow of a deceased
employee of the Uttar Pradesh Power
Corporation Limited, Lucknow (for short,
'the Corporation'), praying that a mandamus
be issued directing the respondents to refund
the deducted sum of Rs.5,62,745/- out of the
gratuity payable to her for her deceased
husband's services, along with interest at the
admissible rate.

2. The petitioner's husband was a
Patrolman, a Class-IV employee, appointed
against a regular vacancy on 01.04.1976,
after following the procedure prescribed. He
was promoted to the post of a Technician
Grade-II (for short, 'TG-II') in the office of
the Executive Engineer, Pashchimanchal
Vidyut Vitran Nigam Limited, Bulandshahr.
In the year 2007, the petitioner's husband
was TG-II In-charge in the Division of the
Executive Engineer and while still in
harness, he passed away on 24.07.2007. The
respondents say that some receipt book was
issued to the deceased employee for the
purpose of ensuring collection of revenue
from consumers. The deceased employee,
after
collecting
the
dues
of
the
Pashchimanchal
Vidyut
Vitran
Nigam
Limited
(for
short,
'the
Distribution
Corporation') from consumers, deposited it
in the Distribution Corporation's account.
Later on, the Executive Engineer issued a
letter dated 17.05.2007 to the petitioner's
husband, directing him to submit his
explanation and return the receipt books,
and something called an RR Statement etc.
The details of receipt books, with their
number and date of issue, were given in the
letter issued to the deceased employee. The
petitioner's husband deposited the revenue
receipt books on 17.05.2007. The Executive
Engineer proceeded to issue a letter dated
22.05.2007 to the deceased employee,
informing him that a total sum of
Rs.6,65,985/- was recovered by him on the
basis of receipts available from consumers,
but a sum of Rs.1,26,576/- alone was
deposited in the Distribution Corporation's
account. The balance sum of Rs.5,40,467/-
be deposited, failing which penal action
would be taken against him.

3. The allegation levelled against
the deceased employee was that some
receipt books for revenue collection were
issued to the employee to facilitate
collection on behalf of the Distribution
Corporation, but when the receipt books
1128 INDIAN LAW REPORTS ALLAHABAD SERIES
were returned, the discrepancy, as aforesaid,
in the sum of money collected in revenue
from consumers and that deposited, was
detected. On these allegations, the Assistant
Accounts Officer got an FIR lodged against
the deceased employee on 31.05.2007. On
the selfsame allegations, the deceased
employee was placed under suspension vide
order dated 01.06.2007. Surprisingly, the
order of suspension does not say if it is
passed pending or in contemplation of
inquiry or pending criminal investigation,
though it says that the employee is being
placed under suspension finding him prima
facie guilty of embezzling a sum of
Rs.5,40,467/-.

4. It is the petitioner's case that the
allegation against the petitioner's husband,
about non-deposit of the entire revenue
collected from consumers, is baseless and he
did not commit any embezzlement of the
Distribution Corporation's moneys. It is
averred that no inquiry in this regard was
conducted or the liability determined in any
departmental
proceedings
against
the
deceased employee. It was only an
allegation and nothing more. The FIR, that
was registered against the petitioner's
husband, did not lead to any charge-sheet
being filed against him in Court. He died on
24.07.2007, and the Investigating Officer
submitted a Final Report on 02.06.2009. It
was accepted by the Court on the same day.
It must be remarked that the Final Report
was submitted as the accused was dead and
no proceedings could be taken.

5.

On
27.06.2007,
the
Superintending Engineer wrote a letter to
the Executive Officer saying that the sum of
Rs.5,40,467/-, which appears prima facie
embezzled by the employee, be recovered
from
the
petitioner's
husband
and
departmental proceedings initiated against
him. Apparently, by that time, the employee
was already dead, a fact of which the
Superintending Engineer does not appear to
have been aware. It is averred that the letter
dated 27.06.2007 from the Superintending
Engineer shows that, until the petitioner's
husband's demise on 24.07.2007, no
departmental proceedings had ever been
initiated against him. The further case of the
petitioner is that no charge-sheet was issued
to the employee during his lifetime, or any
action taken against him in accordance with
law to recover the sum of money that was
alleged to have been embezzled by him. On
07.10.2009, the Executive Engineer wrote a
letter to the Panel Lawyer, representing the
respondents, seeking his advice in the
matter. The letter said that the petitioner's
husband had caused a loss of Rs.5,63,000/-,
but no liability had been fixed and the Police
had submitted a Final Report. The learned
Panel Lawyer gave opinion that the sum of
money aforesaid can be recovered from the
funds payable to the deceased employee's
heirs.

6. The petitioner made a number of
applications, seeking payment of deathcum-retirement benefits, including family
pension and gratuity, but none were paid for
a long time. One of these representations
dated 23.06.2010 is annexed to the writ
petition. A letter dated 27.09.2010 was
written
by
the
Executive
Engineer,
Electricity
Distribution
Division-II,
Distribution
Corporation
to
the
Superintending
Engineer,
Electricity
Distribution
Division-I,
Bulandshahr,
saying that there are no outstandings against
the
petitioner,
except
the
sum
of
Rs.5,62,745/-, on account of revenue
collected from the consumers, but not
deposited by the deceased employee. An
entry to that effect had been made in his
pension papers with a request that after
5 All. Yasmeen Talat Usmani Vs. State of U.P. & Ors.
1129
deducting the said sum of money from the
gratuity payable to the petitioner, the
necessary papers be made available to the
Executive Engineer.

7. In furtherance of the letter dated
27.09.2010, the petitioner's family pension
and all other dues were sanctioned and paid,
but the sum of Rs.5,62,745/- was deducted
from the gratuity payable to her on account
of her husband's services illegally. The total
sum of gratuity payable was a sum of
Rs.8,33,052/-, from which the deduction
was illegally made.

8. The petitioner, being aggrieved
by the aforesaid illegal deduction, made a
representation dated 28.10.2010 to the
Executive Engineer, Electricity Distribution
Division-II,
Bulandshahr,
demanding
payment of the sum of Rs.5,62,745/-,
illegally deducted from the gratuity payable.
It is the petitioner's case that since no
liability had been fixed while the deceased
was alive and no inquiry held during his
lifetime, determining the liability, the
respondents have no right to deduct the sum
of money from the gratuity payable to the
petitioner, merely on the basis of an
allegation. It is specifically pleaded that
neither departmental proceedings were
initiated against the petitioner's husband, nor
any inquiry conducted nor a show cause
notice issued in this regard to the petitioner's
husband, after he was placed under
suspension. It is averred that without
conducting
disciplinary
proceedings,
affording due opportunity to the deceased
employee while alive, no deduction can be
made from his gratuity. The deduction is
castigated
as
illegal.
The
fact
of
embezzlement is denied by the petitioner,
who claims refund of the sum of money
deducted from the gratuity paid to her on
account of her husband's services.
9. It is also averred that the
deceased employee was never terminated or
removed from service during his lifetime
and for the said reason, no deduction could
be made from his gratuity in violation of
Section 4(6) of the Payment of Gratuity Act,
1972 (for short, 'the Act of 1972'). There is
also reliance placed on a Board Order dated
10.03.1997, an order of the former State
Electricity Board, said to be still in force,
which prohibits recovery from the deathcum-retirement
dues
of
a
deceased
employee, where the liability has not been
fixed during his lifetime after issue of a
show cause. Attention of the Court is also
invited to the otherwise very obvious
proposition of law, which the aforesaid
Board Order incorporates that upon the
death
of
an
employee,
departmental
proceedings or judicial proceedings pending
against him would abate.

10. A notice of motion was issued
in the case on 18.10.2023 and a counter
affidavit filed in Court on behalf of
respondent No.4 on 28.11.2023. Respondent
No.2, represented by Mr. Raj Kumar
Mishra, Advocate holding brief of Mr.
Abhishek Srivastava, learned Counsel,
made a statement that they waive their right
to file a counter affidavit as they were
proforma parties. A rejoinder affidavit was
also filed. When the matter came up before
the Court on 13.12.2023, the parties having
exchanged affidavits, it was admitted to
hearing, which proceeded forthwith and
concluded on that day. Judgment was
reserved.

11. Heard Mr. Bhagwan Dutt
Pandey, learned Counsel for the petitioner,
Mr. Ridham Gupta, Advocate holding brief
of Mr. Kaushalendra Nath Singh, learned
Counsel appearing on behalf of the
Distribution Corporation, Mr. Raj Kumar
1130 INDIAN LAW REPORTS ALLAHABAD SERIES
Mishra, Advocate holding brief of Mr.
Abhishek
Srivastava,
learned
Counsel
appearing on behalf of the Corporation and
Ms. Amrita Singh, learned Additional Chief
Standing Counsel appearing on behalf of the
State.

12. This Court having heard learned
Counsel for the parties finds that for a fact it
is not disputed that during his lifetime, the
petitioner's husband was not found guilty on
any charge of embezzlement, either in
departmental proceedings or by a Court of
law. There is no material on record to show
that except for the respondents' stand that he
had
not
accounted
for
a
sum
of
Rs.5,40,467/- that he had collected in
revenue from consumers, an order was ever
made by any competent officer of the
Distribution
Corporation,
holding
the
petitioner's husband liable for the aforesaid
sum of money. This could have been done
during the petitioner's husband's lifetime in
more than one ways. This liability could
have been determined in consequence of
disciplinary proceedings taken against the
petitioner's husband, where the Disciplinary
Authority could have held him liable for the
aforesaid loss caused to the Distribution
Corporation. In addition, there could be
some basis for the Distribution Corporation
to recover from the petitioner's husband's
death-cum-retirement benefits, if he had
been held guilty of embezzling the sum of
money in question by a Court of competent
criminal jurisdiction after trial. There was
still
this
possibility
of
holding
the
petitioner's husband liable during his
lifetime, in some kind of a summary
proceeding by issuing a show cause notice
to the employee and asking him to
demonstrate why the sum of money in
question be not recovered from him. In that
case, after due opportunity, an order
directing recovery passed against the
petitioner's husband, could then be made the
basis of recovery from the death-cumretirement benefits due to the deceased's
employee in the petitioner's hands.

13. A perusal of the stand taken in
the counter affidavit does not show that any
such course of action was taken by the
Distribution Corporation during the lifetime
of the petitioner's husband. No order passed
after hearing the petitioner's husband, fixing
liability against him, is in existence. If there
were such an order indeed, it would have
been annexed to the counter affidavit. In the
absence of a determination of liability for
the petitioner's husband made during his
lifetime by some method acknowledged in
law, it does not appear to be at all
permissible to recover from his widow, in
whose hands the deceased employee's
death-cum-retirement benefits have come.

14. The second point, on which
parties have been much at issue, is a letter
written by the petitioner to the Executive
Engineer, Electricity Distribution DivisionII of the Distribution Corporation at
Bulandshahr, where she has said that she
assures the Engineer that if the Corporation
pays the death-cum-retirement benefits due
to her on account of her husband's services,
she is ready to deposit, after receipt of her
dues, any outstandings against her husband,
payable to the Distribution Corporation in
accordance with rules. Now, this application
was apparently made by the petitioner when
the death-cum-retirement benefits due to her
husband, were all withheld. Apart from the
fact that the concession may be a desperate
attempt to secure some of her deceased
husband's dues to bail herself and the family
out of financial difficulties, the application
does not authorize any deduction to be
made. It says that once the Distribution
Corporation pays all death-cum-retirement
5 All. Yasmeen Talat Usmani Vs. State of U.P. & Ors.
1131
benefits due to her husband, she assures that
she would pay the Distribution Corporation
any outstandings against her husband in
accordance with rules. This was never an
acknowledgment of any liability or an
authorization by the petitioner to the
Distribution
Corporation
to
deduct
unilaterally a mere claim of theirs from the
petitioner's husband's gratuity.

15. It is to be noticed that the
petitioner's husband's liability to pay the
sum of money in question on account of
revenue receipts illegally retained by him,
has never been adjudicated or determined by
any Authority or Forum and held payable by
the
deceased
to
the
Distribution
Corporation. It is no more than an allegation.
It is not possible to prove it now anyway
once the deceased employee has left the
mortal world. There is no firm basis to
accept the Distribution Corporation's case
that in fact the deceased owed a sum of
Rs.5,62,745/-
to
the
Distribution
Corporation on account of illegally retained
revenues that he had collected. The case has
never travelled beyond an allegation to ripen
into a determination by any competent
Authority or Forum while the deceased was
still around.

16. The third issue, that has been
mooted by parties, is, if at all it is open to the
Distribution Corporation to recover the sum
of money that they claim as embezzled by
the deceased from gratuity payable to the
petitioner on account of the deceased's
services. In this connection, reference may
be made to the Act of 1972, where Section 4
is relevant. Sub-Sections (1) and (6) of
Section 4 of the Act of 1972 provide:

"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,-
(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.
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.
(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
1132 INDIAN LAW REPORTS ALLAHABAD SERIES
(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.

17. A perusal of Clause (a) of subSection (6) of Section 4 would show that
gratuity of an employee may be forfeited to
the extent of damage or loss caused to the
employer, if his services have been
terminated for any act, willful omission or
negligence, causing any damage or loss to or
destruction of the employer's property. It
may be wholly or partially forfeited, if the
employee's services have been terminated
for his riotous or disorderly conduct or any
other act of violence on his part. It can also
be forfeited in whole or in part, if the
employee's services have been terminated
for an act which constitutes an offence
involving moral turpitude, provided such
offence is committed in the course of his
employment. This is more or less the
phraseology of sub-Section (6) and its
clauses to limit and define situations where
gratuity payable to an employee may be
forfeited, fully or in part. Else, the
entitlement to receive gratuity is sacrosanct.
Sub-Section (5) of Section 4 of the Act of
1972 does provide that the employee has the
right to receive gratuity on better terms
under an award or agreement or contract
with the employer, that is to say, better than
those provided under the Act of 1972. In
case of employment under a State or State
Corporation, there could be rules governing
gratuity, that may offer better terms, or
whatever that be. No such rules have been
brought to the Court's notice on behalf of the
respondents,
which
may
entitle
the
employer to forfeit a part of the gratuity for
loss caused to them merely for their saying.
This the Court observes, because we have
held elsewhere that no determination of
liability against the petitioner's husband was
ever made in any proceedings, known to law
while he was alive.

18. If one were to go by the mandate
of Section 4(6), which this Court thinks
would apply in the present case, the
deduction being made from gratuity, the
right to forfeit gratuity or a part thereof,
postulates the essential fact of termination of
the employee's services for any act or
omission envisaged under Section 4(6). The
petitioner's husband was admittedly never
terminated from service while alive. Not
even a charge-sheet relating to disciplinary
proceedings was issued to him, though he
was
placed
under
suspension
in
contemplation of inquiry. Departmental
proceedings had to go a long way and end in
termination of service in order to attract
Clause (a) of sub-Section (6) of Section 4,
where the charge of causing loss to the
Corporation on account of embezzlement
alleged, was held proved. If the petitioner's
husband had been charge-sheeted by the
Police and convicted on a charge of criminal
breach of trust, it would have attracted
Section 4(6)(b)(ii) of the Act of 1972 to
authorize a partial or wholesome forfeiture
of gratuity payable to the deceased in the
petitioner's hands. This contingency also
never came about, because the FIR, alleging
embezzlement, lodged by the respondents,
resulted in a Final Report as the deceased
passed away. In these circumstances, this
Court does not think that it was at all open
to the respondents to recover any sum of
money from the deceased's gratuity payable
to the petitioner.

19. In this connection, reference
may be made to a Bench decision of this
Court in Bankey Bihari Chauhan v. State
of U.P. and others, 2015(3) ADJ 305 (DB).
5 All. Yasmeen Talat Usmani Vs. State of U.P. & Ors.
1133
The facts in Bankey Bihari Chauhan
(supra) show that disciplinary proceedings
were initiated against a bus conductor of the
State Road Transport Corporation and a
charge-sheet issued to him. His reply was
not found satisfactory and a show cause
notice followed. After considering the
employee's reply, the Disciplinary Authority
found him negligent in the performance of
his duties, which had resulted in financial
loss to the State Road Transport Corporation
in the sum of Rs.2,19,846/-. The State Road
Transport Corporation passed an order to
recover it from the gratuity payable to the
employee. It was in the context of the
aforesaid facts that their Lordships of the
Division Bench held:

"7. In the decision of the Supreme
Court in Jaswant Singh Gill v. Bharat
Coking Coal Limited, (2007) 1 SCC 663, it
has been held that termination of services for
any of the causes enumerated in sub-section
(6) of Section 4 of the Act is imperative
before the gratuity can be forfeited. The
same principle has been followed in a more
recent decision of the Supreme Court in
State of Jharkhand v. Jitendra Kumar
Srivastava, 2013(2) ESC 554 (SC).
8. 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 pre-condition for
the forfeiture of gratuity under Section 4 (6)
of the Act was not fulfilled. We may also
note that Regulation 63 of the Regulations
provides for penalties and clause (4) thereof
provides for the recovery from pay or
deposit at the credit of an employee of the
whole or part of a pecuniary loss caused to
the Corporation by negligence or breach of
an order. The Regulations must necessarily
be harmonized with the provisions of the
Act and cannot override the express
statutory provision. In any event, it is clear
that even Regulation 63 contains no such
provision of recovery from gratuity. In these
circumstances, we are of the view that the
action for recovery from gratuity was
contrary to law and in the teeth of the
express provision of the Act....."

20. Reference in this connection
may also be made to the decision of the
Supreme Court in Union Bank of India and
others v. C.G. Ajay Babu and another,
(2018) 9 SCC 529. In C.G. Ajay Babu
(supra), it was held:

"15. Under sub-section (6)(a), also
the gratuity can be forfeited 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
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, clause (a)
and clause (b) of sub-section (6) of Section
4 of the Act operate in different fields and in
different circumstances. Under clause (a),
the forfeiture is to the extent of damage or
loss caused on account of the misconduct of
the employee whereas under clause (b),
forfeiture is permissible either wholly or
partially in totally different circumstances.
Clause (b) operates either when the
termination is on account of: (i) riotous, or
1134 INDIAN LAW REPORTS ALLAHABAD SERIES
(ii) disorderly, or (iii) any other act of
violence on the part of the employee, and
under clause (ii) of sub-section (6)(b) when
the termination is on account of any act
which constitutes an offence involving
moral turpitude committed during the course
of employment.
17. Though the learned counsel for
the appellant Bank has contended that the
conduct of the respondent employee, which
leads to the framing of charges in the
departmental proceedings involves moral
turpitude, we are afraid the contention
cannot be appreciated. 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. Apart from the disciplinary
proceedings initiated by the appellant Bank,
the Bank has not set the criminal law in
motion either by registering an FIR or by
filing a criminal complaint so as to establish
that the misconduct leading to dismissal is
an offence involving moral turpitude. 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 convicted
accordingly by a court of competent
jurisdiction.
18. In Jaswant Singh Gill v. Bharat
Coking Coal Ltd. [Jaswant Singh Gill v.
Bharat Coking Coal Ltd., (2007) 1 SCC
663 : (2007) 1 SCC (L&S) 584] , it has been
held by this Court that forfeiture of gratuity
either wholly or partially is permissible
under sub-section (6)(b)(ii) only in the event
that the termination is on account of riotous
or disorderly conduct or any other act of
violence or on account of an act constituting
an offence involving moral turpitude when
he is convicted. To quote para 13: (SCC p.
670)
"13. The Act provides for a closeknit scheme providing for payment of
gratuity. It is a complete code containing
detailed provisions covering the essential
provisions of a scheme for a gratuity. It not
only creates a right to payment of gratuity
but also lays down the principles for
quantification thereof as also the conditions
on which he may be denied therefrom. As
noticed hereinbefore, sub-section (6) of
Section 4 of the Act contains a non obstante
clause vis-à-vis sub-section (1) thereof. As
by reason thereof, an accrued or vested right
is sought to be taken away, the conditions
laid down thereunder must be fulfilled. The
provisions
contained
therein
must,
therefore, be scrupulously observed. Clause
(a) of sub-section (6) of Section 4 of the Act
speaks of termination of service of an
employee for any act, wilful omission or
negligence causing any damage. However,
the amount liable to be forfeited would be
only to the extent of damage or loss caused.
The disciplinary authority has not quantified
the loss or damage. It was not found that the
damage or loss caused to Respondent 1 was
more than the amount of gratuity payable to
the appellant. Clause (b) of sub-section (6)
of Section 4 of the Act also provides for
forfeiture of the whole amount of gratuity or
part in the event his services had been
terminated for his riotous or disorderly
conduct or any other act of violence on his
part or if he has been convicted for an
offence
involving
moral
turpitude.
Conditions laid down therein are also not
satisfied."
19. In the present case, there is no
conviction of the respondent for the
misconduct which according to the Bank is
an offence involving moral turpitude.
5 All. Rachit Vs. U.O.I. & Ors.
1135
Hence, there is no justification for the
forfeiture of gratuity on the ground stated in
the
order dated
20-4-2004
that
the
"misconduct proved against you amounts to
acts involving moral turpitude". At the risk
of redundancy, we may state that the
requirement of the statute is not the proof of
misconduct
of
acts
involving
moral
turpitude but the acts should constitute an
offence involving moral turpitude and such
offence should be duly established in a court
of law.
20. That the Act must prevail over
the Rules on Payment of Gratuity framed by
the employer is also a settled position as per
Jaswant Singh Gill [Jaswant Singh Gill v.
Bharat Coking Coal Ltd., (2007) 1 SCC
663 : (2007) 1 SCC (L&S) 584] . Therefore,
the appellant cannot take recourse to its own
Rules, ignoring the Act, for denying
gratuity."

21. In view of whatever has been
held by this Court and the position of the law
authoritatively settled, we hold that it was
not open to the respondents to recover the
sum of Rs.5,62,745/- from the gratuity
payable to the petitioner on account of
death-cum-retirement benefits due to the
petitioner's husband and now receivable by
her.

22. In the result, this writ petition
succeeds and is allowed. A mandamus is
issued to respondent Nos.2, 3, 4 and 5 to
ensure amongst themselves immediate
refund of the sum of Rs.5,62,745/- to the
petitioner in account within a month of the
date of receipt of a copy of this order. The
said sum of money will carry simple interest
at the rate of 6% per annum, reckoned from
the month after death of the petitioner's
husband, until realization. In the event, the
said sum of money is not remitted in account
to the petitioner within a month of receipt of
a copy of this order by the respondents, it
will carry simple interest at the rate of of 9%
per annum beyond the period of one month
as aforesaid, until realization.

23. There shall be no order as to
costs.

24. Let a copy of this order be
communicated to the Chairman, U.P. Power
Corporation Limited, Shakti Bhawan, 14
Ashok Marg, Lucknow, the Deputy General
Manager, Electricity Distribution Circle,
Western Area, Pashchimanchal Vidyut
Vitran Nigam Limited, Railway Road,
Bulandshahr,
the
Executive
Engineer,
Electricity Urban Distribution Division,
Pashchimanchal
Vidyut
Vitran
Nigam
Limited, Railway Road, Bulandshahr and
the Superintending Engineer, Electricity
Distribution
Circle-1,
Pashchimanchal
Vidyut Vitran Nigam Limited, Railway
Road,
Bulandshahr
by
the
Registrar
(Compliance).
----------
(2024) 5 ILRA 1135
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 22.05.2024

BEFORE

THE HON'BLE J.J. MUNIR, J.

Writ-A No.17724 of 2023

Rachit ...Petitioner
Versus
U.O.I. & Ors. ...Respondents

Counsel for the Petitioner:
Mr. Prabhakar Awasthi, Mr. Suresh Singh

Counsel for the Respondent:
Mr. Ashok Trivedi, Ms. Annapurna Singh 'Chandel'

(A)
Service
Law
-
Scheme
for
Compassionate Appointment or Payment