The Sub Area Manager Vs the Appellate Authority

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Digitally signed by RAMESH KUMAR VATTI Date: 2026.06.29 16:24:26 +0530

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2026:CGHC:24334

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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WPL No. 5 of 2020

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*** -** The Sub Area Manager South Eastern Coal Field Limited, Kurasia Colliery Group District Korea, Chhattisgarh-497553, District : Koriya (Baikunthpur), Chhattisgarh

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... Petitioner

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Versus

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1 - The Appellate Authority Under The Payment Of Gratuity Act, 1972 And The Deputy Chief Commissioner (C), Government Of India, Ministry Of Labout And Employment, Raipur, District : Raipur, Chhattisgarh

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2 - The Controlling Authority Under The Payment Of Gratuity Act, 1972 And The Deputy Chief Labour Commissioner (Central), Ministry Of Labour And Employment, Raipur, District : Raipur, Chhattisgarh

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3 - Shri Shiv Prasad Village Harra, Post Chhota Nagpur, District Korea, District : Koriya (Baikunthpur), Chhattisgarh

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	..	. Respondents
For Petitioner	: Mr. Vivek Verma, Advoc	ate
For Respondent No. 3	: Ms. Mahi Pandey, Adv the brief of Mr.	ocate holding Chandresh
	Shrivastava, Advocate

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Hon’ble Shri Justice Rakesh Mohan Pandey Order on Board

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17/06/2026

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In this petition, the petitioner has challenged the order dated 20.09.2019 passed by the Appellate Authority under the Payment of Gratuity Act, 1972 (for short ‘Act of 1972’).

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The facts, in brief, are that the respondent No. 3 was appointed as Time Rated Worker under the petitioner on 05.10.1983. He was interviewed on 23.09.1983 and thereafter he was appointed on the

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post of Line Man/ Mistri. An article of charge was issued on 22.03.2016 with allegation that the respondent No. 3 secured employment using false name as his real name is Amoli Jaiswal. A complaint was made against the respondent No. 3 and an inquiry was conducted by Superintendent of Police. A letter dated 27.06.2016 was issued by the Superintendent of Police to the petitioner to the effect that real name of the respondent No. 3 is Amoli Jaiswal. In the article of charge, it was alleged that the respondent No. 3 submitted false information relating to his name, father’s name, qualification etc. and his such act was detrimental to the interest of company as per Clause 26.9 and 26.22 of the Standing Order.

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The respondent No. 3 filed reply to article of charge which was not found satisfactory by the disciplinary authority, consequently he was removed from services vide order dated 17.03.2017. It was also observed in the said order that the petitioner shall not be entitled for any admissible service claim.

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The further case depicted in the order passed by the controlling authority is that cognizance was never taken by the criminal court against the respondent No. 3 and he was removed from services on the basis of letter issued by the Superintendent of Police dated 27.06.2016.

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The petitioner moved an application before the controlling authority claiming therein amount of gratuity on the ground that he served under the petitioner for 33 years, 05 months and 08 days.

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The employer filed reply and took a plea that the allegations levelled against the respondent No. 3 were found proved and act of employee constituted an offence involving moral turpitude. The controlling

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authority considered material available on record and directed the employer to pay gratuity amount Rs.10 lacs to the respondent No. 3 within a period of 30 days.

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The employer preferred an appeal before the appellate authority under the Act of 1972, which was dismissed vide order dated 19.09.2019 wherein the appellate authority affirmed the order passed by the controlling authority and directed the petitioner herein to make payment of gratuity amount with interest @ 10% per annum from 17.03.2017 to the date of filing of appeal i.e. 19.04.2019. The petitioner has challenged said order by filing this petition.

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Mr. Vivek Verma, learned counsel appearing for the petitioner would argue that the respondent No. 3 secured employment on the basis of false documents and information and his such act was misconduct according to Clause 26.9 and 26.22 of the Standing Order. He would further submit that the matter was duly inquired by the Superintendent of Police and vide letter dated 27.06.2016, it was informed that the real name of the respondent No. 3 is Amoli Jaiswal S/o Chhake Jaiswal. He would contend that a show cause notice was issued to the respondent No. 3 on 08.02.2017 and thereafter departmental inquiry was conducted, wherein respondent No. 3 was afforded sufficient opportunity. He would submit that the disciplinary authority inflicted penalty of removal from services and it was also observed that respondent No. 3 shall not be entitled for any admissible service claim. He would refer Section 4(6) (b) (ii) of Act of 1972 which states that gratuity payable to an employee may be wholly or partially forfeited, if services of such employee have been terminated for any act which constitutes an offence involving moral turpitude. He would contend that

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the act of the respondent No. 3 constituted an offence involving moral turpitude, therefore, the employer rightly took decision to forfeit admissible service claim of respondent No. 3. He would contend that an employee, who had committed fraud, submitted false information about his name, father’s name and qualification; services of such an employee were terminated and order was affirmed in WP No. 22/2002 in the matter of Tularam @ Khamman Sai Vs. South Eastern Coalfields Limited & Ors . He would contend that the appellate authority failed to consider true intent of Section 4(6) (b) (ii) of Act of 1972 and therefore, the order impugned is not sustainable in the eyes of law. He would pray to allow this petition.

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On the other hand, Ms. Mahi Pandey, learned counsel appearing for the respondent No. 3 would oppose. Ms. Mahi Pandey would contend that the respondent No. 3 was never prosecuted for any act which constituted an offence involving moral turpitude. She would submit that the employer inflicted penalty of dismissal from service on the basis of letter issued by the Superintendent of Police dated 27.06.2016. She would contend that no notice was issued to the respondent No. 3 by the SECL for forfeiture of gratuity amount. She would also refer Section 4 of Act of 1972. It is contended that the disciplinary authority did not conclude that the respondent No. 3 caused loss to the property belonging to the employer and therefore order to forfeit admissible dues was illegal and it was rightly interfered by the controlling authority and appellate authority. It is also argued that no separate notice was issued to the respondent No. 3 before taking decision of forfeiture of admissible dues including gratuity. She has placed reliance on the

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judgment passed by the Hon’ble Supreme Court in the matter of Union Bank of India Vs. Ajay Babu reported in AIR 2018 SC 3792 .

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I have heard learned counsel for the parties and perused the documents.

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The respondent No. 3 was appointed under the petitioner on 05.10.1983 to the post of Line Man/Mistri. He worked there for 33 year 05 months and 08 days. A complaint was made against respondent No. 3 making allegation of impersonation and matter was inquired into by the Superintendent of Police. The said authority vide letter dated 27.06.2016 stated that the real name of respondent No. 3 is Amoli Jaiswal S/o Chhake Jaiswal and thereafter article of charge was issued to the respondent No. 3 on 08.02.2017. The disciplinary authority vide order dated 17.03.2017 passed order of dismissal from services against the respondent No. 3 and at the same time took decision to forfeit dues admissible to him.

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Section 4 (6) of Act of 1972 which is relevant for adjudication of this case reads as under:-

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“ 4. Payment of gratuity.-

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(6) Notwithstanding anything contained in subsection (1),-

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(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 damage or loss so caused;

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(b) the gratuity payable to an employee may be wholly or partially forfeited-

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(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

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(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.”

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Bare reading of above quoted provisions would make it clear that gratuity of an employee can be forfeited, if his services have been terminated for any act, wilful omission or negligence causing any damage or loss to property belonging to the employer. The gratuity can wholly or partially be forfeited if services have been terminated for riotous or disorderly conduct or services of employee have been terminated for any act which constitutes an offence involving moral turpitude.

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In the present case, defence was taken by the employer that the services of the respondent No. 3 were terminated for an act involving moral turpitude, but perusal of order of termination, inquiry report and order passed by the controlling authority would reveal that no FIR was registered against the respondent No. 3 and he was never tried by competent criminal court for an offence involving moral turpitude, therefore, the contention raised by employer was turned down by the controlling authority and said findings have been affirmed by the appellate authority. To forfeit the amount of gratuity to the extent of damage or loss caused, the employer has to prove the fact that the services of the employee were terminated for an act which constitutes an offence involving moral turpitude.

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The Hon’ble Supreme Court in the matter of Ajay Babu (supra) held that the requirement of statute is not the proof of misconduct of acts involving moral turpitude but the acts should constitute an offence

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involving moral turpitude and such offence should be duly established in a court of law. It is further held that forfeiture of gratuity is not automatic on dismissal from service.

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It is also not in dispute that before taking decision to forfeit the amount of gratuity no show cause notice was issued to the respondent No. 3 and in the article or charge such intent of employer was not disclosed at all.

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Mr. Vivek Verma has placed judgment passed in the matter of Tularam @ Khamman Sai (supra) wherein punishment of dismissal from services on account of impersonation was held valid and proper.

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In the present case also, the punishment of dismissal from services is not subject matter of this petition. Neither the petitioner nor the respondent No. 3 has challenged said order and, therefore, the petitioner/employer would not get any benefit from said cited judgment.

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The respondent No. 3 worked under the petitioner for period of 33 years, 05 months and 08 days and therefore, the controlling authority rightly granted gratuity to the tune of Rs.10 lacs and said order has been affirmed by the appellate authority.

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Taking into consideration the above-discussed facts, provisions of law and the law laid down by the Hon’ble Supreme Court, no case is made for interference.

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Consequently, this petition fails and is hereby dismissed . No costs.

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Sd/- (Rakesh Mohan Pandey) Judge

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vatti

The Sub Area Manager v. the Appellate Authority

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The Sub Area Manager v. the Appellate Authority

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