IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction APPELLATE SIDE Present: The Hon’ble Justice Shampa Dutt (Paul) WPA 8203 of 2019 Eastern Coalfields Ltd. & Anr. Vs Union of India & Ors. For the Petitioners : Mr. Manik Das. For the Respondent Nos.1, 2 & 3 : Mr. Raj Kumar Gaurisaria, Mr. Ashok Prasad. Judgment reserved on : 17.09.2026 Judgment delivered on : 21.09.2026 Shampa Dutt (Paul), J.: 1. The writ application has been preferred challenging an order dated 10th October, 2018 as passed by the respondent no.2 Appellate Authority (C) in Gratuity Appeal No. 32/2018-E along with order dated 11.06.2018 passed by the respondent no.3, the Controlling Authority (C). 2. Vide the impugned order dated 11.06.2018, the respondent no.3/the Controlling Authority held as follows:- “As per the provisions of the Payment of Gratuity Act, 1972 and plethora of judgments of Hon'ble Supreme Court and High Courts some of which have been cited above, it is 2 amply clear that the employer cannot withhold gratuity of an employee unless his/her services are terminated on the grounds specified under Section-4(6) of Payment of Gratuity Act, 1972. As such, the action of the Respondent in withholding the gratuity of the Applicant is not in accordance with the provisions of the Payment of Gratuity Act, 1972. As regards interest, the Respondent had prepared the cheque but could not pay as the disciplinary case and CBI case were pending. Further, legal issues involved in the matter were to be interpreted. As such, the Respondent cannot be charged for intentional delay. Therefore, it is not appropriate to pass any order imposing interest on the Respondent for delay in payment. In view of the discussion supra, I now proceed to pass the following orders: ORDER i) The claim of the Applicant namely Dr. Sunil Kumar Singh is allowed. He is entitled to receive the gratuity amount of Rs. 10,00,000/-. ii) The Respondent is directed to pay the gratuity to the Applicant within sixty days under intimation to this office.” 3. In appeal the respondent no.2/the Appellate Authority decided as follows:- “This Authority has measured the case (appeal) from both the angles. The Employer has adopted a callous attitude by not taking immediate action. If the criminal trial goes on for another 10 years, what would happen? His gratuity will not be paid. On retirement, a person needs the gratuity due to loss of a sizeable portion of the income and in old age, gratuity comes as a solace to the old person. This aspect 3 cannot be lost sight of. The Respondent has behaved in the most unbecoming manner being a Medial Practitioner which also cannot be taken lightly. Therefor, a balanced order need be passed. In view of what have been discussed hereinbefore, I proceed to pass the following order. ORDER 1. The Respondent will execute/submit an Indemnity Bond of Rs. 15,00,000/-lakhs in favour of the Employer. In the said Indemnity Bond, he will put immovable property (land or building) worth Rs. 15 lakhs with Plot Number, Khata Number etc. The said property shall not be leased, sold, gifted, transferred or mortgaged to any one when the case is pending in the CBI Court. 2. On getting the Indemnity Bond on appropriate non judicial stamp paper to the satisfaction of the employer, the gratuity amount of Rs. 120 lakhs shall be released to the Respondent. 3. If the Respondent is acquitted he will get interest @ 10% from the date gratuity accrued till the date of payment as per this order. If he is convicted, he will have to refund the gratuity along with 10% interest to the employer. If he does not refund the amount, the pledged property worth of Rs. 15 lakhs shall be auctioned/sold by the employer to recover the amount. This is being done as a matter of abundant precaution and to safe guard the interest of the employer. 4 4. The appeal is disposed off as per the above terms.” 4. The petitioner’s case in short is that both the Controlling Authority (Respondent No. 3) and the respondent No. 2 (Appellate Authority) erred in holding that gratuity cannot be withheld and proceeded on a wrong notion that major penalty cannot be imposed upon a delinquent after his retirement even if the disciplinary proceedings were initiated prior to his retirement. Such observation was made by the respondent Nos. 2 and 3 mainly basing on the judgment rendered by the Hon'le Supreme Court of India in Jaswant Singh Gill-versus-Bharat Coking Coal Limited (now overruled) and Others reported in (2007)1 SCC 663 as would be evident from the impugned orders dated 11-06-2018 and 10- 10-2018. The respondent No. 2, as is evident has even exceeded his jurisdiction to comment on the disciplinary authority of the 1st petitioner. 5. The petitioners have relied upon the judgment of the Hon’ble Supreme Court in the case of Chairman-Cum-Managing Director, Mahanadi Coalfields Limited -versus- Rabindranath Choubey reported in (2020) 18 SCC 71- Paragraphs 8, 9, 10, 39, 40 and 41. 6. It is further stated that both the respondent Nos. 2 and 3 erred in holding that service of a superannuated employee cannot be terminated post superannuation. While passing the impugned orders dated 11-06- 2018 and 10-10-2018 the respondent Nos. 2 and 3 failed to consider the relevant provisions of the Coal India Executives Conduct, Discipline and Appeal Rules (hereinafter referred to as the "CDA Rules") whereunder Rule 34.3 permits withholding of the gratuity amount during pendency 5 of the disciplinary proceedings. The respondent authorities failed to understand that 34.3 of the CDA Rules is in consonance with Section 4 (6) of the Payment of Gratuity Act, 1972 and there is no inconsistency between Section 4 (6) of the Payment of Gratuity Act and Rule 34.3 of the CDA Rules. Even Rule 34.2 of the CDA Rules provides for continuation of disciplinary proceedings after superannuation where the disciplinary proceeding is initiated prior to superannuation date. 7. It is further stated that if the charge of misconduct against the respondent No. 4 and punishment of dismissal is given thereon, the provisions of sub-section (6) of section 4 of the Payment of Gratuity Act, 1972 would be attracted and it would be within the discretion of the petitioners herein to forfeit the gratuity payable to the respondent No. 4 and as such the petitioners herein have the right to withhold the payment of gratuity during pendency of the disciplinary proceedings. When a disciplinary proceedings is initiated prior to the date of superannuation, it may continue after the date of superannuation and any penalty, whether major/minor, can be imposed even after superannuation otherwise there would be no meaning to continue with the disciplinary proceedings after the date of superannuation and thus, where the rules permit, gratuity can be withheld by the employer during the disciplinary proceedings. 8. It is now stated that the respondent No. 4 has been convicted in the criminal proceedings, which indicates that the charges against him in the criminal proceedings have been proved beyond doubt and the same being not yet been set aside by any higher forum. The petitioner no.1 is 6 empowered under Clause 34.1 of the CDA Rules to impose any punishment on the delinquent on the strength of facts or conclusions arrived at in the criminal proceedings and thus prayed for setting aside of the impugned order. 9. The respondent nos. 1, 2 and 3 being the authority under the Payment of Gratuity Act, 1972 have argued through their learned counsel for Union of India as follows:- “Gratuity is a statutory right under the Payment of Gratuity Act, 1972. Under Section 4(6) of the Act, forfeiture of gratuity (wholly or partially) is permissible only if the employee‟s service has been terminated for any act, willful omission, negligence, or moral turpitude. In the instant case, respondent no.4 retired normally on superannuation on 31.03.2017 without any order of termination passed against him prior to or at the time of retirement. In the absence of any explicit statutory power or a final order of termination forfeiting gratuity under Section 4(6), withholding the statutory entitlement post- superannuation is impressible in law.” 10. The authorities thus state that the impugned orders are in accordance with law and require no interference. The respondent no.4 being the employee herein has argued that the Respondent No. 4 was employed with Petitioner No. 1, Eastern Coalfields Limited, and during that time served as Deputy Chief Medical Officer at Sanctoria Hospital, ECL. He rendered long years of service without any interruption and superannuated from service on 31 March 2017. 7 11. In or about February 2009, an allegation was made by one Mr. Dudh Nath Yadav alleging demand for illegal gratification of ₹400/- by the Respondent No. 4. No immediate departmental action was initiated at the relevant time. 12. After an unexplained delay of nearly seven years, the Petitioners initiated a disciplinary proceeding on 27 December 2016 against the Respondent No. 4 under the Conduct, Discipline and Appeal Rules, 1978 of Coal India Limited, alleging misconduct based on the aforesaid allegation. 13. During the pendency of the said disciplinary proceeding, the Respondent No. 4 attained the age of superannuation and retired from service on 31 March 2017. The disciplinary proceeding was not concluded prior to his retirement. 14. Simultaneously, a criminal case arising out of the same allegation was pending before the Learned Special Judge, CBI Court, Asansol. 15. Upon retirement, Respondent No. 4 became entitled to payment of statutory retiral benefits, including gratuity amounting to Rs.10,00,000/-. However, the Petitioners withheld the gratuity amount on the ground of pendency of the disciplinary proceeding and the criminal case. 16. By an interim order dated 21 June 2019, the High Court stayed the operation of the Appellate Authority's order and directed the Petitioners to deposit a sum of ₹10,00,000/-. 17. During the pendency of the writ petition, the Learned Special Judge. CBI Court, Asansol, by judgment dated 17 December 2024, 8 purportedly convicted Respondent No. 4 under Section 7 of the Prevention of Corruption Act, 1988. Aggrieved by the said judgment. The Respondent No. 4 preferred a criminal appeal before this Hon'ble Court. By an order dated 24 December 2024, the Hon'ble Court was pleased to suspend the sentence and enlarge Respondent No. 4 on bail. The criminal appeal is presently pending adjudication. 18. The respondent no.4 prays for dismissal of the writ application on the ground that gratuity is a statutory right and that the charges against him was never proved. 19. The respondent no.4 relied upon the following judgments:- (i) State of Kerala & Ors. Vs. M. Padmanabhan Nair (1985) 1 SCC 429. (ii) State of M. P. Vs. Ranojirao Shinde, 1968 SCC OnLine SC 18. (iii) State of Punjab Vs. Khemi Ram, AIR 1970 SC 214. (iv) M. Narasinga Rao Vs. District Cooperative Central Bank 1998 (2) ALD 712. 20. It is further stated that once an employee is permitted to retire on superannuation, gratuity becomes payable forthwith and cannot be withheld or made subject to service rules or continuation of disciplinary proceedings, as the provisions of the Payment of Gratuity Act, 1972 prevail over all such rules. 21. It is true that under the A-P Pension Rules if an employee is facing a departmental enquiry or facing a criminal trial before Court, he is permitted to retire from service and his retirement benefits can be withheld. However, in the instant case, there is absolutely no material to 9 show that a criminal case was pending or that a departmental proceeding was pending against the petitioner. What the counter of the respondent No.2 shows is that a departmental proceeding was to be initiated against the petitioner, and that investigation was in progress in respect of criminal charge. Therefore, there was no pending criminal case or a disciplinary enquiry against the petitioner at the lime of his retirement. Furthermore, respondent No. 1 had specifically allowed the petitioner to retire from service on superannuation on 31-10-1988, and he was accordingly relieved on 31-10-1988. 22. The petitioner, having been permitted to retire on attaining the age of superannuation, there was no question of withholding his retiral benefits thereafter. Section 4 of the Payment of Gratuity Act is quite clear, and it makes it incumbent on the employer to pay the amount of gratuity if the employee on termination of his employment due to superannuation claims such retiral benefits. It is only under sub-section (6) that the gratuity can be withheld if the employee, whose services come to an end due to termination, on account of damages or loss caused to the property of the employer and that the gratuity can be forfeited to the extent of damage or loss. As pointed out earlier, the petitioner's services have not been terminated on account of willful omission or loss caused to the employer. It may be stated at the cost of the repetition, the petitioner's employment came to an end due to superannuation as ordered by the respondent No.1 itself The gratuity payable to an employee can be partially or wholly forfeited if the services of the employee have been terminated on any disciplinary charge or, if 10 the services of the employee have been terminated for an offence involving moral turpitude. Again, it may be pointed out that the services of the petitioner have not been terminated on any of these counts, but he attained superannuation, and he was relieved on superannuation as per order of the respondent No. 1. In the circumstances, subsection (6) of Section 4 of Payment of Gratuity Act 1972 cannot be invoked by any of the respondents. 23. In the circumstances, it is stated that there is no justification for withholding the gratuity of the petitioner. The respondents are directed to pay the amount of gratuity that has become due to the petitioner, within six months from today according to the provisions of the Payment of Gratuity Act. 24. It is further stated that though the respondent/employee has been convicted by the trial court, the said judgment has not attained its finality as the statutory appeal is pending. 25. Finally, the respondent no.4 states that rules 34.2 and 34.3 of the CDA Rules, 1978, are wholly inapplicable, as the disciplinary proceedings that culminated into the criminal proceedings, do not hold and/or contemplate that any pecuniary loss was caused to the petitioner company. Additionally, no order has been passed by the petitioner, withholding such gratuity on any basis thereof. As such, the arbitrary withholding of gratuity, de hors, the said rules, even assuming without admitting, that the said rules are applicable to the private respondent. 26. The respondent no.4 thus prays for dismissal of the writ application. 11 27. The writ petitioner has filed an affidavit disclosing documents relating to the disciplinary proceedings against the respondent no.4. Article of charge I against the employee herein is as follows:- “That It was revealed during CBI Investigation that Dr. Sunil Kumar Singh, the then Medical Superintendent at Central Hospital, Kalla, ECL. demanded a bribe of Rs. 400 (Rupees Four Hundred) only, agreed to accept and accepted illegal gratification other than legal remuneration on 17.02.2009 from one Shri Dudhnath Yadav, S/o Late Ram Awadh Yadav, a resident of 7 No. Chora Colllery, P.O. Bahula, PS-Andal, Dist- Bardhaman, West Bengal for issue of pre-employment medical examination report, which was mandatory requirement for appointment of Shri Dudhnath Yadav.” 28. It appears that Articles of charge I is the one and only charge leveled against the respondent/employee. The only evidence before the Enquiring Officer during the deposition of the complainant and a trap laid and the respondent no.4 was allegedly caught red-handed. 29. The case investigated by the CBI ended in conviction of the petitioner herein. 30. The authorities herein have mainly proceeded to grant gratuity on the ground that the employee had superannuated and as such was entitled to his retirement benefits including gratuity, considering that there was no certainty when the criminal proceeding would end. 31. In State Bank of India & Ors. vs Ratan Kumar Rabbai & Ors., 2022 SCC OnLine Cal 1218, the Court held:- “11. The contention of the respondent no. 1 is that gratuity under the 1972 Act could not be withheld by the employer on the ground of pendency of the disciplinary 12 proceedings as the right to get gratuity accrued in terms of the 1972 Act immediately on the date of his superannuation that is on 30.11.2011. On the other hand the employer contended that an employee against whom disciplinary proceedings can continue even after superannuation in accordance with the service rules cannot be treated as a superannuated employee and punishment of dismissal/termination can be inflicted even after the superannuation. According to employer, an employee governed by the service rules could not have applied for gratuity before completion of the disciplinary proceedings. 17. The judgment in Jaswant Singh Gill (supra) was overruled by the larger bench in Rabindranath Choubey (supra) inter alia for the reasons that the authority under the Payment of Gratuity Act, 1972 had no jurisdiction to go into the legality of the order of disciplinary authority which was not questioned. It was further observed that in Jaswant Singh Gill (supra) the court did not consider the scope of the provisions of the Payment of Gratuity Act, 1972 and the provisions of the service rules providing legal fiction of employee deemed to be in service even after superannuation. 18. In the case on hand the appointing authority in the order dated 10.08.2012 returned a finding that the chargesheeted officer has been chiefly responsible for the financial loss of Rs. 1.90 crores to the bank. On such finding the chargesheeted officer was inflicted with the penalty of removal from service under Rule 67(i) of SBIOSR and forfeiture of entire gratuity in terms of Section 4 of the 1972 Act. The said order had attained finality and is thus binding upon the employee and the employer. 19. The principle laid down in Jaswant Singh Gill (supra) was the basis for passing the order by the appellate authority under the 1972 Act. The observations made in Rabindranath Choubey (supra) while overruling Jaswant Singh Gill (supra) are clearly applicable to the facts of the instant case as the order of punishment inflicted upon the employee is not under challenge. The reasons assigned by the appellate authority under the 1972 Act against forfeiture of gratuity was in view of the decision in Jaswant Singh Gill. Since Jaswant Singh Gill (supra) stands overruled, the order of the appellate authority under the 1972 Act cannot be sustained in the eye of law. In view of the observations in Rabindranath Choubey (supra) it cannot 13 also be said that Jaswant Singh Gill's case is a possible view as held by the learned Single Judge and as such the same also calls for interference. 20. This Court is, therefore, of the considered view that the Appellate Authority while exercising its power under the 1972 Act cannot act as the Appellate Authority of the disciplinary authority imposing the punishment. An authority exercising powers under 1972 Act, which in the instant case is the appellate authority, had no jurisdiction to deal with the order of punishment passed by the disciplinary authority. The said authority could not sit in appeal over the order of punishment of the disciplinary authority and modify or set aside the order of the disciplinary authority forfeiting the gratuity. Since the order of punishment is not the subject matter of challenge in this appeal, this Court does not deem necessary to deal with the argument of Mr. Basu that the gratuity could not have been forfeited in a case of removal from service. 23. A Division Bench of the Madras High Court by a judgment dated 23.08.2021 passed in W.A. No. 1558 of 2011 and M.P. No. 1 of 2011 in the case of The Management, Coimbatore District Central Co-operative Bank Ltd. v. N. Somasundaram while dealing with a case involving recovery of loss caused to the bank held that since the surcharge proceedings has come to an end it was open to the authorities to recover the loss by invoking the provisions of the Revenue Recovery Act from the employee but the gratuity cannot be withheld in view of Section 13 of the Payment of Gratuity Act. The said decision is distinguishable on facts and as such the same has no manner of application to the facts of the instant case.” 32. In Western Coal Fields Ltd. vs Manohar Govinda Fulzele, in Civil Appeal No. 2608 of 2025, dated 17th February, 2025, wherein the Supreme Court held:- “2. The question raised in the above cases is the permissibility of forfeiture of gratuity, in the event of termination of service on misconduct, which can be categorised as an act constituting an offence involving moral turpitude; without there being any conviction in a criminal case or even a criminal proceeding having been initiated. 14 10. As has been argued by the learned Solicitor General and the learned Counsel appearing for MSRTC, sub- clause (ii) of Section 4(6)(b) enables forfeiture of gratuity, wholly or partially, if the delinquent employee is terminated for any act which constitutes an offence involving moral turpitude, if the offence is committed in the course of his employment. An „Offence‟ as defined in the General Clauses Act, means „any act or omission made punishable by any law for the time being‟ and does not call for a conviction; which definitely can only be on the basis of evidence led in a criminal proceeding. The standard of proof required in a criminal proceeding is quite different from that required in a disciplinary proceeding; the former being regulated by a higher standard of „proof beyond reasonable doubt‟ while the latter governed by „preponderance of probabilities‟. The provision of forfeiture of gratuity under the Act does not speak of a conviction in a criminal proceeding, for an offence involving moral turpitude. On the contrary, the Act provides for such forfeiture; in cases where the delinquent employee is terminated for a misconduct, which constitutes an offence involving moral turpitude. Hence, the only requirement is for the Disciplinary Authority or the Appointing Authority to decide as to whether the misconduct could, in normal circumstances, constitute an offence involving moral turpitude, with a further discretion conferred on the authority forfeiting gratuity, to decide whether the forfeiture should be of the whole or only a part of the gratuity payable, which would depend on the gravity of the misconduct. Necessarily, there should be a notice issued to the terminated employee, who should be allowed to represent both on the question of the nature of the misconduct; whether it constitutes an offence involving moral turpitude, and the extent to which such forfeiture can be made. There is a notice issued and consideration made in the instant appeals; the efficacy of which, has to be considered by us separately . 15. The appointment itself being illegal, there is no question of the terminated employee seeking fruits of his employment by way of gratuity. We uphold the decision of the PSU forfeiting his entire gratuity. However, in the case of conductors (Civil Appeal No._____________ @SLP (C) No.21957 of 2022), we see that the act alleged and proved is of misappropriation of meagre amounts. It is trite that even if minimal amounts are misappropriated it would constitute a misconduct warranting termination, as held by this Court. However, on the question of 15 forfeiture of gratuity, we are of the opinion that the Appointing Authority should have taken a more sympathetic approach. We do not propose to send back the matter for fresh consideration but direct the Appointing Authority to limit the forfeiture to 25% of the gratuity payable and release the balance amounts to the respondent employees.” This Court also considered the judgments in:- i. Union Bank of India vs C.G. Ajay Babu, (2018) 9 SCC 529. ii. Jaswant Singh Gill vs M/s. Bharat Coking Coal Ltd. & Ors., (2007) 1 SCC 663. iii. Chairman cum Managing Director, Mahanadi Coalfields Limited vs Sri Rabindranath Choubey, (2020) 18 SCC 71. 33. Section 4(6)(b) sub clause (ii) Payment of Gratuity Act, lays down:- “(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.” 34. In Sushil Kumar Singhal vs Regional Manager Punjab National Bank, in Civil Appeal No. 6423 of 2010 (arising out of SLP (C) No. 4216 of 2008), decided on 10 August, 2010, the Supreme Court has described:- 16 “21. Moral Turpitude means [Per Black's Law Dictionary (8th Edn.,2004)] :- "Conduct that is contrary to justice, honesty, or morality. In the area of legal ethics, offenses involving moral turpitude such as fraud or breach of trust. Also termed moral depravity. Moral turpitude means, in general, shameful wickedness- so extreme a departure from ordinary standards of honest, good morals, justice, or ethics as to be shocking to the moral sense of the community. It has also been defined as an act of baseness, vileness, or depravity in the private and social duties which one person owes to another, or to society in general, contrary to the accepted and customary rule of right and duty between people." 22. In Pawan Kumar Vs. State of Haryana & Anr., AIR 1996 SC 3300, this Court has observed as under:- "`Moral turpitude' is an expression which is used in legal as also societal parlance to describe conduct which is inherently base, vile, depraved or having any connection showing depravity." 23. The aforesaid judgment in Pawan Kumar (supra) has been considered by this Court again in Allahabad Bank & Anr. Vs. Deepak Kumar Bhola, (1997) 4 SCC 1; and placed reliance on Baleshwar Singh Vs. District Magistrate and Collector, AIR 1959 All. 71, wherein it has been held as under:- "The expression `moral turpitude' is not defined anywhere. But it means anything done contrary to justice, honesty, modesty or good morals. It implies depravity and wickedness of character or disposition of the person charged with the particular conduct. Every false statement made by a person may not be moral turpitude, but it would be so if it discloses vileness or depravity in the doing of any private and social duty which a person owes to his fellow men or to the society in general. If therefore the individual charged with a certain conduct owes a duty, either to another individual or to the society in general, to act in a specific manner or not to so act and he still acts contrary to it and does so knowingly, his conduct must be held to be due to vileness and depravity. It will be contrary to accepted customary rule and duty between man and man." 24. In view of the above, it is evident that moral turpitude means anything contrary to honesty, 17 modesty or good morals. It means vileness and depravity. In fact, the conviction of a person in a crime involving moral turpitude impeaches his credibility as he has been found to have indulged in shameful, wicked, and base activities.” 35. The offence for which the employee has been convicted is under the Prevention of Corruption Act, 1988 (Bribery in this case). The employee as a doctor (ENT) issuing fitness certificate on receiving gratification is a clear case of moral turpitude. And as such this is a fit case where the petitioner/authorities are within their rights under Section 4(6)(b)(ii) of the Payment of Gratuity Act to forfeit the employees gratuity. 36. The impugned orders thus being not in accordance with law are quashed and set aside. 37. WPA 8203 of 2019 is allowed. 38. All connected application, if any, stands disposed of. 39. Interim order, if any, stands vacated. 40. Urgent Photostat certified copy of this judgment, if applied for, be supplied to the parties, expeditiously after complying with all necessary legal formalities. (Shampa Dutt (Paul), J.)