# MANAGEMENT OF TOURNAMULLA ESTATE v. WORKMEN

- **Citation:** [1973] 3 S.C.R. 762
- **Court:** Supreme Court of India
- **Decided:** 1973-03-26
- **Case number:** Civil Appeal No. 698 of 1968
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/management-of-tournamulla-estate-v-workmen-5936
- **Pages:** 4

## Headnote

762
MANAGEMENT OF TOURNAMULLA ESTATE
v.
WORKMEN
March 26, 1973
[A. N. GROVER, S. N. DwlVEDI AND C. A. VAIDIAL!NGAM, JJ.1
ia.bour Law-Gratuity Sclienie-Wprkmen clisn1issed for 111isconduc1Gratui1y whethtr can be forfeitecl.
Clause ( 4) of the Scheme of gratuitty
applicable to the appellant
Estate provided that a dispute regarding a claim for payment c!l gratuity
of a workman who had been dismissed for misconduct shall be referred
to the Labour Court for decision. One of workmen of the appellant was
charge-sheeted in respect of riotous and disorderly behaviour for having
assaulted a tea-maker inside the factory of the appellant. A departmental
enquiry was held and being found guilty of mi.sconduct he was dismissed.
As a dispute arose about the payment of gratuity the matter was referred
to the Labour Court. Before the Labour Court it was not disputed that
the dismissal o'f the workman was on account of .misconduct consisting of
riotous and disorderly behaviour and assaulting a tea.maker: The Labour
Court, relying upon the decision of this Court in State of Punjab v. Sura;
Prakash Kapur, [1962] 2 S.C.R. 711 decided the question in favour of
the workman. Appeal by special leave, was filed in this Court. Allowing
the appeal,
HELD : According to the decision of this Court in the Delhi Cloth
Mills case misconduct could be of three kinds, (I) technical misconduct
which leaves no trial of indiscipline;
(2)
mis.conduct resulting in
damage to the employer's property which might be compensated by forfei·
ture of gratuity or a part thereof, and ( 3) serious misconduct such a•
acts of violence against the management or other employees or disorderly
behaviour in or near the place of the employmen4 which though
not
directly causing damage is conJucive to. grave indiscipline.
The first
should involve no forfeiture,
the second may involve forfeiture of an
amount equal to· the loss directly suffered by the employer in consequence
of the misconduct, and the third will entail forfeiture of the gratuity payable to the workman.
In other words, according to this deci5ion, if a
workman is guilty of a serious misconduct of the third category, then
his gratuity can be forfeited in its entirety.
[7640]
The decision in the Delhi Cloth Mills as applicable to the facts af
the present case and the appeal must accordingly be allowed.
Stale of Punjab v. Sura; Parkasli Kapur, etc., [1962] 2 S.C.R. 711
applied.
Dtl/Ii Cloth & General Mi!ls Co. Ltd. v. Workmen and Others, etr:.
[1969) 2 S.C.R. 307, referred to.
(ii) The contention that the Labour Court did not apply its mind to
the nature and degree c!f the misconduct committed and therefore the
matter should be remitted to that court for decision iri accordance with
B
c
D
f
G
Jaw, could not be accepted because the facts were not in dispute before
H
the Labour Court.
(7650]

## Text

762
MANAGEMENT OF TOURNAMULLA ESTATE
v.
WORKMEN
March 26, 1973
[A. N. GROVER, S. N. DwlVEDI AND C. A. VAIDIAL!NGAM, JJ.1
ia.bour Law-Gratuity Sclienie-Wprkmen clisn1issed for 111isconduc1Gratui1y whethtr can be forfeitecl.
Clause ( 4) of the Scheme of gratuitty
applicable to the appellant
Estate provided that a dispute regarding a claim for payment c!l gratuity
of a workman who had been dismissed for misconduct shall be referred
to the Labour Court for decision. One of workmen of the appellant was
charge-sheeted in respect of riotous and disorderly behaviour for having
assaulted a tea-maker inside the factory of the appellant. A departmental
enquiry was held and being found guilty of mi.sconduct he was dismissed.
As a dispute arose about the payment of gratuity the matter was referred
to the Labour Court. Before the Labour Court it was not disputed that
the dismissal o'f the workman was on account of .misconduct consisting of
riotous and disorderly behaviour and assaulting a tea.maker: The Labour
Court, relying upon the decision of this Court in State of Punjab v. Sura;
Prakash Kapur, [1962] 2 S.C.R. 711 decided the question in favour of
the workman. Appeal by special leave, was filed in this Court. Allowing
the appeal,
HELD : According to the decision of this Court in the Delhi Cloth
Mills case misconduct could be of three kinds, (I) technical misconduct
which leaves no trial of indiscipline;
(2)
mis.conduct resulting in
damage to the employer's property which might be compensated by forfei·
ture of gratuity or a part thereof, and ( 3) serious misconduct such a•
acts of violence against the management or other employees or disorderly
behaviour in or near the place of the employmen4 which though
not
directly causing damage is conJucive to. grave indiscipline.
The first
should involve no forfeiture,
the second may involve forfeiture of an
amount equal to· the loss directly suffered by the employer in consequence
of the misconduct, and the third will entail forfeiture of the gratuity payable to the workman.
In other words, according to this deci5ion, if a
workman is guilty of a serious misconduct of the third category, then
his gratuity can be forfeited in its entirety.
[7640]
The decision in the Delhi Cloth Mills as applicable to the facts af
the present case and the appeal must accordingly be allowed.
Stale of Punjab v. Sura; Parkasli Kapur, etc., [1962] 2 S.C.R. 711
applied.
Dtl/Ii Cloth & General Mi!ls Co. Ltd. v. Workmen and Others, etr:.
[1969) 2 S.C.R. 307, referred to.
(ii) The contention that the Labour Court did not apply its mind to
the nature and degree c!f the misconduct committed and therefore the
matter should be remitted to that court for decision iri accordance with
B
c
D
f
G
Jaw, could not be accepted because the facts were not in dispute before
H
the Labour Court.
(7650]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 698 of
1968.
'
TOURNAMULLA ESTATE v. WORKMEN (Gro11er, J,)
763
A
Appeal by special leave from the Award dated August I 0.
1'967 of the Labour Court,
(Kerala State), Quilon, Camp Dt
Calicut, in Industrial Dispute No. 70 of 1965 published in the
Kerala Govt. Gazette No. 39 dated 3-10-67.
G. B. Pai, Bhuvanesh Kumari and O. C. Mathur, for the appe].
lant.
B
A. S. Nambiyar, for the resJ)Ondent.
c
D
E
F
G
H
The Judgment of the Court was delivered by
GROVER, J.-This is an appeal by special leave from an award
of th~ Labour Court, Quilon (Kerala State)
The point before us is simple. The workman concerned was
charge-sheeted in respect of riotous and disorderly behaviour for
having assaulted a tea maker Shri U. M. Abdul Kadar on May
29, 1965, inside the factory. A departmental enquiry was held
wherein, it is said, he was given every opportunity to fully participate. He was found guilty of misconduct by the domestic
tribunal and was accordingly dismissed. There was a scheme of
gratuity in force, which was and is not challenged by the respondent. Clause 4 of that scheme, which is called "Terms of Agreement", provides that if a dispute arises regarding. a ~laim for l'l':Y·
ment of gratuity of a workman who has been d1sm1ssed for misconduct, such a dispute shall be referred to the labour court
having jurisdiction, for decision. As a dispute arose with regard
to the payment of gratuity, the matter was referred to the Labour
court. Before that court, in the statement of case submitted by the
Secretary of the Malabar Estate Workers' Union, it was stated in
clause ( c) as follows :
"The worker was not paid gratuity on. dismissal,
in spite of making a request for the same. There is a
gratuity scheme applicable to this estate and p.s. per the
terms of the scheme if a dispute arises regarding the
payment of gratuity to a dismissed workman, the same
is left open to be decided by this Court. The allegations
of misconduct levelled against the worker in this case
cannot be considered to be one which by its nature
disentitles the worker_ to claim gratuity.
Even if the
allegation is true the same! does not involve any question
of moral turpitude or cause any financial loss to the
company. Any allegations of misconduct do not impose
(sic) disentitle the workmen for gratuity. Hence in this
particular case it is submitted that the worker is entitled
for gratuity as claimed. The worker has put in 18 years
of service and as such he is entitled to get at the rate of
15 days wages based on last draw wage rate for every
completed years of service."
764
SUPREME COURT REPORTS
[l 973] 3 S.C.R.
In reply, which was filed by the management, the facts which have
been set out above and the circumstances in which the dismissal
was directed, were fully given.
Before the Labour court, there
seems to have been no dispute whatsoever that the dismissal of
the respondent workman was on account of misconduct consisting
of behaving in a riotous and disorderly manner and having assaulted a tea maker (supervisor). . The Labour court, however,
referred to the judgment of this Court in State of Punjab v. Suraj
Parkash Kapur, etc.(') in which the general argument was not
accepted that in all cases where services of an employee are tenninated for misconduct, gratuity should not be paid to him. However, this Coiirt has had occasion to considerilf detail the various
circumstances in which gratuity ":would tfe"liable to forfeiture for
misconduct of a particular nature. It was laid down in t>elhi
Cloth & General Mills Co., Ltd., v. Workmen and Others, etc.(')
that the object of Jiaving a gratuity scheme is to provide a retiring
benefit to workmen who have rendered long and unblemished
service to the employer and thereby contributed to the prosperity
of the employer, and it is, therefore,. not correct to say . that no
misconduct however grave, may not be visited with forfeiture of
gratuity. Miseonduct could be of three kinds, ( 1) technical misconduct which 'leaves no trail of indiscipline,
(2) misconduct
resulting in damage t!> the employer's property which might be
compensated by forfeiture of gratuity or part thereof, and ( 3)
serious misconduct such as acts of violence against the management or other employees or riotous or disorderly behaviour in or
near the place of employment, which, though not direct}y causing
damage, is conducive to grave indiscipline. The first should in·
volve no fol!feiture, the second may involve forfeiture of the
amount equal to the loss directly suffered by the employer in consequence of the misconduct and the third will entail forfeiture of
gratuity due to the workman. In other words, according to this
decision, if a workman is guilty of a ,serious misconduct of the
third category, then, his gratuity can be forfeited in its entirety.
In yet another case in Remington Rand of India Ltd. v. The
Workmen,(') one of the questions was whether a provision can
be made in a gratuity scheme that if the misconduct is a gross one,
involving violence, riotous behaviour, etc., the qualifying period
should be limited to fifteen years of continuous service. The
earlier decision in Delhi Cloth and General Mills Ltd., was dis'
. cussed and reference was made to it. The Court expressed agreement with the decision in the earlier case that matters which had
impact on the discipline and the working of the concern, require
a different treatment in the matter of forfeiture of gratuity. It is
(I) [1962] 2 S.C.R. 71[,
(2) [1969] 2 S.C.R. 307.
(3) [1970] 2 S.C.R. 935.
A
B
c
D
E
F
G
H
A
c
TOURNAMULLA ESTATE v. WORKMEN (Grover, J.)
765
significant that ins. 4(6)(b) of the Payment of Gratuity Act, it
has been provided as follows : .
"the gratuity payable to an employee shall be wholly
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, . . . . "
Although the provisions of this statute would not g0vern the decision of the present case, the importance of the· enactment lies in
the fact that the principle which was laid down in the Delhi C/Oth
Mills case with regard to forfeiture of gratuity in the event of
commission of gross misconduct of the nature .mentioned above,
has been incorporated in the statute itself. Even otherwise,. such
a rule is conducive to industrial hannony and is in consonance
with public policy.
·
·
Learned counsel for the respondents has not been able to show
how the rule laid down· in the Delhi Cloth Mills case would not
be applicable if the concerned workman was guilty of the kind of
D · misconduct mentioned above. His sole contention has been that
the Labour court did not apply its mind to the nature and degree
of the disconduct committed, and, therefore, the matter should be
i-ernitted to that court for a decision in accordance. with law. In
our opinion, it is not necessary to send the matter to the labour
court, because the .facts were no_t in dispute before it.
E
For the reasons given above, the appeal is allowed and the
award of the Labour Court is set aside. Jt is hereby declared that
the concerned workman will not be. entitled to .the gratuity earned
by him. The respondents will be entitled to costs in view of the
order already made by this Court on February 1, 1968.
·
G.C.
Appeal allowed.
/