Gratuity forfeiture requires a criminal conviction for moral turpitude; departmental misconduct alone is insufficient.

Section 4(6)(b)(ii) of the Payment of Gratuity Act is an exception to the general rule of gratuity payment and must be strictly construed. Departmental misconduct, including furnishing false date of birth information to obtain employment, may justify dismissal, but it does not by itself amount to an offence involving moral turpitude for gratuity forfeiture. The statutory condition requires an act constituting an offence in criminal law, established before a competent court; an employer cannot treat proved misconduct in disciplinary proceedings as a substitute for criminal conviction. Gratuity therefore cannot be forfeited on departmental findings alone.

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Issues: Whether gratuity could be forfeited under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 on the basis of proved departmental misconduct in the absence of a criminal conviction for an offence involving moral turpitude.

Analysis: The provision permitting forfeiture of gratuity is an exception to the general rule of payment of gratuity and therefore must be strictly construed. The proved misconduct consisted of furnishing false date of birth information in the course of securing employment, which justified dismissal in departmental proceedings, but the statutory text requires that the employee's services be terminated for an act which constitutes an offence involving moral turpitude. An offence is an act or omission punishable by law, and that characterisation must arise in criminal law proceedings before a competent court. Mere proof of misconduct in departmental enquiry is not enough to establish an offence, and the employer cannot unilaterally treat such misconduct as an offence for the purpose of forfeiture. The binding Supreme Court ruling on the point was applied to hold that conviction by a court of competent jurisdiction is necessary before gratuity can be forfeited under this clause.

Conclusion: Gratuity could not be forfeited on the basis of departmental misconduct alone, and the employee remained entitled to gratuity.

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