Dismissed

M/S C C I Ltd., v. the Deputy Labour Commissioner

Karnataka HC17 Jul 2018WA/16/2015

Case brief

AI extract

What is this about?

Writ appeals filed by a company challenging the dismissal of its appeal against forfeiture of gratuity paid to an employee terminated for causing loss. The Court upheld the lower orders finding no evidence of moral turpitude or riotous conduct justifying forfeiture under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972.

What did the court decide?

Intra Court Writ Appeals dismissed; Intra Court Application No.1/2015 disposed.

M/S C C I Ltd., Vs the Deputy Labour… — Pension and Retirement Benefits | Karnataka HC (2018)

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W.A.No.16/2015 & W.A.No.323/2016

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17^TH DAY OF JULY, 2018

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PRESENT

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HON’BLE MR.JUSTICE DINESH MAHESHWARI, CHIEF JUSTICE

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AND

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HON’BLE MR.JUSTICE R.DEVDAS

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WRIT APPEAL NO.16 OF 2015 AND WRIT APPEAL NO.323 OF 2016 (L-PG)

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BETWEEN:

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M/S C.C.I. LTD., SYNDICATE HOUSE 3^RD FLOOR, MANIPAL, UDUPI-576 104 G.P.A.HOLDERS REP BY ITS AUTHORISED PERSON SMT SUSHEELA CHANDRAKUMAR AGED ABOUT 48 YEARS

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... APPELLANT

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(BY SRI.NATARAJA BALLAL A, ADVOCATE)

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AND:

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THE DEPUTY LABOUR COMMISSIONER AND APPELLATE AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT, HASSAN REGION, HASSAN - 573 201.

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THE ASSISTANT LABOUR COMMISSIONER AND CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT, BENDOREWELL, KANKANDY P. O. MANGALORE - 575 001.

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SRI Y N RAMACHANDRA RAO #15, BANGARU RESIDENCY

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W.A.No.16/2015 & W.A.No.323/2016

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OPP:PRASANNA GANAPATHI TEMPLE MANIPAL, UDUPI DISTRICT – 576 104

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... RESPONDENTS

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(BY SRI S.S. MAHENDRA AGA FOR R1 & R2 R3 SERVED.)

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THESE WRIT APPEALS ARE FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER PASSED IN THE WRIT PETITION NO.46165-66/2013 DATED 26/02/2014.

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THESE APPEALS COMING ON FOR PRELIMINARY HEARING THIS DAY, R.DEVDAS J., DELIVERED THE FOLLOWING:

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JUDGMENT

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The matters are considered on their merits while ignoring the question of delay.

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The appellant-Company seeks to assail the impugned order dated 26.02.2014 passed by the learned Single Judge in W.P.Nos.46165-66/2013.

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Respondent No.3 served in the appellant-Company as its Chief Executive Officer, having joined the services on 06.12.1984 till 24.07.2009. It is the case of the appellant that respondent No.3 misused his office and committed illegal acts

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causing loss to the Company to the tune of Rs.3.3 crores.

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W.A.No.16/2015 & W.A.No.323/2016

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According to the appellant, services of the third respondent were terminated by the Company by virtue of a resolution passed by the Board of Directors on the ground that he had caused loss to the Company and also on the ground of commission of acts which constitute offences involving moral turpitude. Thereafter, the appellant-Company issued a showcause notice dated 23.08.2010 calling upon the third respondent to explain why the entire gratuity payable should not be forfeited. The third respondent submitted his reply denying the allegation and thereafter, the Company, after considering the explanation offered proceeded to forfeit the entire gratuity vide order dated 14.09.2010.

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The third respondent approached the Controlling Authority under the Payment of Gratuity Act, 1972 (hereinafter referred to as ‘the Act’ for the sake of brevity). The second respondent-Controlling Authority set aside the order of forfeiture passed by the appellant-Company. The appellantCompany approached the appellate authority, first respondent herein seeking to assail the order of the Controlling Authority. The first respondent, after considering the material evidence

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W.A.No.16/2015 & W.A.No.323/2016

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on record and considering the pleadings and arguments of the parties, came to the conclusion that the appellant-Company had not provided any evidence to substantiate its contention that the third respondent had committed misappropriation to the extent of Rs.3.3 crores. The first respondent, further held that no departmental enquiry was conducted in respect of the alleged misconduct of the third respondent, criminal prosecution was not initiated against the third respondent and therefore, declined to hold that the third respondent committed any offence involving moral turpitude. The first respondent-Deputy Labour Commissioner, accordingly, dismissed the appeal filed by the appellant herein. The appellant, therefore, approached the learned Single Judge invoking his writ jurisdiction, challenging the orders of respondents No.1 and 2.

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The learned Single Judge raised a question as to whether notice was issued to the third respondent over the allegation of occasioning damages sustained by the petitioner-appellant herein, due to the misconduct committed

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W.A.No.16/2015 & W.A.No.323/2016

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by him, entailing forfeiture of the gratuity amount in its entirety?

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The learned Single Judge proceeded to hold that relevant material constituting substantial legal evidence of the fact of forfeiture of the gratuity was not placed by the petitioner-appellant herein in the proceedings before the authorities under the Act, though a trial was held over the claim of the third respondent for payment of gratuity.

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Under the provisions of the Act, gratuity amount payable to employees can be wholly or partially forfeited only on two grounds:

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i) If the service of employee is terminated for his riotous or disorderly conduct or any other act of violence; and

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ii) If terminated for any act which constitutes an offence involving ‘moral turpitude’ and if such act is committed in the course of his employment.

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The appellant, admittedly, has not made any allegation that the third respondent’s behaviour was riotous, disorderly

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W.A.No.16/2015 & W.A.No.323/2016

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or has committed any act of violence. The contention of the appellant is that the services of the third respondent were terminated for causing loss to the Company and on the ground of commission of acts which constitute offences involving moral turpitude. Both the statutory authorities and the learned Single Judge have consistently held that relevant material constituting substantial legal evidence to establish that the conduct of the third respondent was so offensive as to constitute ‘moral turpitude’ and consequently entailing forfeiture of the entire gratuity payable to the third respondent, has not been placed on record by the appellant.

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The appellant has raised the same grounds that Section 4(6)(b)(ii) of the Act provides for forfeiture and the third respondent is guilty of offence involving moral turpitude. No other material is placed before this Court to view the matter differently. The impugned order cannot be faulted in any manner whatsoever.

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W.A.No.16/2015 & W.A.No.323/2016

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These intra Court appeals, accordingly, stand

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dismissed. I.A.No.1/2015 stands disposed.

SD/CHIEF JUSTICE

SD/-

JUDGE

JT/-

M/S C C I Ltd., v. the Deputy Labour Commissioner

Case brief

What is this about?

What did the court decide?

M/S C C I Ltd., v. the Deputy Labour Commissioner

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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