1 2026:CGHC:27030 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPL No. 34 of 2021  Sub Area Manager, South Eastern Coalfield Limited Hasdeo Area, South Jhagrakhand, Post Office Kursia Colliery, District Korea Chhattisgarh. 497448 ... Petitioner versus 1. The Appellate Authority Under The Payment Of Gratuity Act 1972 And The Deputy Chief Commissioner (C) Govt. Of India, Ministry Of Labour And Employment, D-6, Adarsh Society, Sector 1, Avanti Vihar Raipur Chhattisgarh. 2. The Controlling Authority And The Regional Labour Commissioner (C) Bilaspur Chhattisgarh Under The Payment Gratuity Act , 1972, Torwa Road, Bilaspur Chhattisgarh. 3. Shri Trinath Gour R/o Mukam Godripara, (Near Odiya School) Po-Kursia Colliery, District Korea Chhattisgarh. ... Respondent(s) For Petitioner : Mr. Vivek Verma, Advocate For State/Respondents No. 1 & 2 : Mr. Vivek Siddharth Ojha, Panel Lawyer For Respondent No. 3 : Ms. Mahi Pandey, Advocate holding the brief of Mr. Chandresh Shrivastava, Advocate Hon'ble Shri Justice Rakesh Mohan Pandey Order on Board 02.07 .2026 1. By way of this petition, the petitioner has sought the following relief(s):- “10.1 The Hon'ble Court may kindly be pleased to call for the entire records from the respondent no. 1 and 2, pertaining to the case of the Respondent No. 3. SIDDHANT TAMRAKAR Digitally signed by SIDDHANT TAMRAKAR Date: 2026.07.03 18:25:53 +0530 2 10.2 That, the Hon'ble Court may kindly be pleased to set aside the impugned order dated 22.02.2021 (Annexure P/1) and order dated 31.01.2020 (Annexure P/6) holding the same to bad in law. 10.3 The Hon'ble Court may kindly be pleased to grant any other ancillary relief, as it may deem fit and proper in the facts and circumstances of the case.” 2. Facts in brief are that the respondent No. 3 was an employee of petitioner, who was appointed on the post of Clerk on 03.08.1983. He would submit that a departmental enquiry was initiated against him on the allegation that he had accepted illegal gratification of Rs. 10,000/-. In the departmental enquiry, the disciplinary authority inflicted penalty of dismissal from service vide order dated 08.07.2016. The respondent No. 3 preferred appeal, which was dismissed vide order dated 29.10.2016 and thereafter, revision was also dismissed. The respondent No. 3 approached Controlling authority for payment of gratuity and application was allowed vide order dated 31.01.2020, whereby, the Controlling authority directed the employer to make payment of Rs. 10,00,000/- to the respondent No. 3. The employer preferred an appeal before the appellate authority under the Payment of Gratuity Act, 1972 ( for short “Act, 1972”), which was dismissed vide order dated 22.02.2021 and against said order this petition has been preferred. 3. Mr. Vivek Verma, Advocte would argue that respondent No. 3 was dismissed from services by the disciplinary authority and said order has been affirmed by the appellate authority and revisional authority. He would refer Section 4(1) of the Act of 1972 and contends that an employee becomes entitled to receive gratuity on his superannuation, on his retirement or resignation or on 3 his death or disablement due to accident or disease. He would contend that as the respondent No. 3 was dismissed from services after due enquiry by the employer, therefore, he is not entitled for gratuity and the Controlling authority committed an error of law while passing order in his favour. It is also argued that the respondent No. 3 has challenged order of dismissal before the Central Government Industrial Tribunal, Jabalpur. He would pray to allow this petition. 4. On the other hand, Ms. Mahi Pandey, Advocate appearing for respondent No. 3 would oppose. She would submit that Section 4(1) of the Act of 1972 cannot be read in isolation. She would refer Section 4(6) of the Act of 1972 and submit that gratuity of an employee can be forfeited if services of such an employee have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer. She would further submit that the gratuity payable to an employee may be wholly or partially forfeited 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 for any act which constitutes an offence involving moral turpitude. She would submit that in the order passed by the disciplinary authority there is no such allegation or finding, therefore, the Controlling authority rightly passed order in favour of workman. She has placed reliance on the judgment passed by the Hon’ble Supreme Court in the matter of Union Bank of India and Others vs. C.G. Ajay Babu and Another reported in (2018) 9 SCC 529. 5. Mr. Vivek Siddharth Ojha, Panel Lawyer appearing for the State would submit that there is dispute between the petitioner and respondent No. 3. 4 6. I have heard learned counsel for the parties and perused the documents placed on record. 7. It is not in dispute that the respondent No. 3 was appointed under the petitioner herein on 03.08.1983. After full fledged departmental enquiry ,an order of dismissal from services was passed by the disciplinary authority on 08.07.2016 and order has been affirmed by the appellate authority and revisional authority and at present matter is pending before the Central Government Industrial Tribunal, Jabalpur, wherein, respondent No. 3 has challenged all three orders. 8. The petitioner approached the Controlling authority and order was passed in his favour, wherein, direction was issued to the employer to make payment of Rs. 10,00,000/- to the petitioner and said order has been affirmed by the appellate authority under the Act of 1972. 9. Section 4 of the Act of 1972 reads as under :- “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: 5 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. (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 riot so employed throughout the year], 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. (3) The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand] rupees. (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 that period, and his wages for the period subsequent to his disablement 6 shall be taken to be the wages as so reduced. (5) Nothing in this section shall affect the right of an employee to 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]- (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. (7) [***]” 10. Cojoint reading of Section 4(1) and Section 4(6) of Act of 1972 would make it clear that if an employee has rendered continuous service for not less than 5 years, he would be entitled for an amount of gratuity on his superannuation, on his retirement or resignation, on his death or disablement due to accident or disease, but at the same time, amount of gratuity can be forfeited by the employer if service of such an employee have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer and further the act of such an employee comes within definition of moral turpitude. 7 11. Perusal of penalty inflicted by the disciplinary authority would show that there are no such allegations as mentioned in Section 4(6) of the Act of 1972. The Hon’ble Supreme Court in the matter of Ajay Babu (supra) in para 14, 15 and 19 held as under :- 14. That there is a bipartite settlement in the appellant-Bank is not in dispute. That the settlement provides for forfeiture only if there is a loss caused on account of misconduct leading to dismissal, is also not in dispute. There is no case for the Bank that the misconduct of the respondent-employee has caused any financial (2013) 3 SCC 472 loss to the Bank, and therefore, forfeiture, taking recourse to sub- Section (6) of Section 4 of the Act, cannot be resorted to. Thus, we are in respectful agreement with the view taken by the High Court that the respondent-employee is entitled to the protection of the bipartite settlement. 15. 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 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, sub-Clause (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- 8 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. 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. Hence, there is no justification for the forfeiture of gratuity on the ground stated in the order dated 20.04.2004 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. 12. The appellate authority has affirmed the order passed by the Controlling authority. Though the respondent No. 3 has challenged the order of dismissal before the learned Central Government Industrial Tribunal, but pendency of said matter would not come in the way of respondent No. 3 to claim gratuity from his employer, and therefore, the contention made by Mr. Verma cannot be accepted. It is also apparent from perusal of documents that notice with regard to forfeiture of amount of gratuity was served upon the respondent No. 3. 13. Having considered above-discussed facts, provisions of Section 4 of the Act 9 of 1972 and law laid down by the Hon’ble Supreme Court, in my opinion, no case is made out for interference. Accordingly, this petition fails and is hereby dismissed. Sd/- (Rakesh Mohan Pandey) JUDGE $iddhant