-1- 2025:CGHC:20194 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPL No. 134 of 2016 1 - Prabandh Sanchalak, Chhattisgarh Rajya Sahakari Vipran Sangh Maryadit Raipur, Through Its Deputy Manager Establishment, Headquarter, Raipur, 808, Civil Lines, Raipur, Chhattisgarh, Chhattisgarh 2 - Sachiv, Chhattisgarh Rajya Sahakari Vipran Sangh Maryadit, Raipur, Headquarter, Raipur, 808, Civil Lines, Raipur, Chhattisgarh, District : Raipur, Chhattisgarh ... Petitioner(s) versus 1 - Rajendra Singh Thakur Aged About 62 Years R/o Sanjay Nagar, Rajiv Pandey Ward, House No. 40/140, Near Ramjanki Mandir, District Raipur, Chhattisgarh, Chhattisgarh 2 - Appellate Authority, Under Payment Of Gratuity Act, And Deputy Labour Commissioner, Office Of Labour Commissioner, Chhattisgarh Indrawati Bhavan, Naya Raipur, District Raipur, Chhattisgarh, District : Raipur, Chhattisgarh 3 - Controlling Authority, Under Payment Of Gratuity Act, And Assistant Labour Commissioner, Raipur, Chhattisgarh, District : Raipur, Chhattisgarh ... Respondent(s) (Cause Title is taken from Case Information System) For Petitioners : Mr. Chetan Singh Chauhan, Advocate For Respondent : Mr. Ashish Surana, Advocate Hon'ble Shri Justice Rakesh Mohan Pandey -2- Order on Board 02.05.2025 1) The petitioners have challenged the order dated 31.10.2015 passed by the learned Appellate Authority under the Payment of Gratuity Act, 1972, in Appeal Case No. 43/P.G.A/2015, whereby the appeal preferred by the petitioner No.1 was dismissed, and the order dated 05.02.2015 passed by the learned Controlling Authority in Case No. 181/P.G.A./2012 was affirmed. 2) Learned counsel for the petitioners submits that respondent No.1 was working as an Assistant Manager with the petitioner’s federation and retired on 28.02.2010. Thereafter, he filed an application before the Controlling Authority for payment of gratuity. It is contended that the respondent No.1 pleaded in his application that he had worked for 36 years and his last drawn salary was Rs.24,601/-. 3) Learned counsel for the petitioner further submits that the learned Controlling Authority assessed the amount of gratuity in accordance with the provisions of the Act, 1972 and directed the petitioner to make payment of Rs.5,15,000/-. The said order was challenged by filing an appeal before the learned Appellate Authority, which was dismissed vide impugned order dated 31.10.2015. He further submits that in the year 2010, an enquiry was pending against respondent No.1, which has not been concluded, and an order of recovery to the tune of Rs.42,37,900/- has been passed. He contends that according to Rule 25(23) of the Chhattisgarh Rajya Sahakari Vipanan Sangh Sewaniyam, 2007 (for short, the Rules, 2007) a departmental enquiry can be initiated for any loss suffered by the federation on account of an employee’s negligence, even after two years of -3- retirement, and a decision can be taken on the basis of enquiry report. As the Enquiry Officer and Disciplinary Authority have recorded findings against respondent No.1, the federation has the right to withhold the gratuity amount. Hence, he prays for the setting aside of the orders passed by the learned Controlling Authority and affirmed by the Appellate Authority. 4) None appears for the respondent despite service of notice. 5) I have heard Mr. Chetan Singh Chouhan, learned counsel for the petitioner, at length. 6) Section 4(6) of the Payment of Gratuity Act, 1972 is relevant to the issue in the present case. It provides that the gratuity of an employee whose services have been terminated for any act, willful omission, or negligence causing damage or loss to the employer’s property shall be forfeited to the extent of such damage or loss. It further provides for full or partial forfeiture of gratuity where an employee’s services have been terminated for riotous conduct, acts of violence, or offences involving moral turpitude committed during the course of employment. The provision is reproduced as under: “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 -4- (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.” 7) Rule 25(23) of the Rules, 2007 states that a departmental enquiry can be initiated against an employee for any loss suffered by the federation due to his negligence, even after two years of his retirement, and a decision can be taken accordingly. 8) A plain reading of Rule 25(23) of the Rules, 2007 would make it clear that while it permits initiation of departmental enquiry after retirement, it does not authorize forfeiture or withholding of amount of gratuity. Further, the provisions of the Payment of Gratuity Act, 1972 would prevail over the service Rules of 2007 in case of any conflict. 9) It must be noted that Section 4(6) of the Act, 1972 provides a specific legal framework under which an employer is empowered to forfeit or withhold the gratuity amount. Such forfeiture is permissible only in limited circumstances: (a) where the employee’s services have been terminated for any act, willful omission, or negligence resulting in damage or loss to the employer’s property—only to the extent of such loss; (b) where the services are terminated due to riotous or violent conduct, or (c) where termination is due to an offence involving moral turpitude committed during the course of employment. 10) In all these cases, a key requirement is that the services must be terminated for the specified misconduct. 11) In the present case, there is no termination of service on these grounds. The -5- employee retired in the ordinary course, and later on, the enquiry was concluded. Therefore, the statutory preconditions under Section 4(6) for forfeiture of gratuity are not satisfied. 12) In the present case, though a departmental enquiry was conducted and an order of recovery was passed against respondent No.1, this Court is of the opinion that such a finding, post-retirement, does not entitle the petitioner to withhold the gratuity. The learned Controlling Authority and Appellate Authority have rightly passed the impugned orders in favour of respondent No.1/employee. 13) In the result, this petition fails and is hereby dismissed. Sd/- (Rakesh Mohan Pandey) Judge Nadim