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Issues: Whether gratuity could be forfeited under Section 4(6) of the Payment of Gratuity Act, 1972 in the absence of termination of service and a conviction for an offence involving moral turpitude.
Analysis: Section 4(6) permits forfeiture of gratuity only where the employee's services have been terminated for the specified misconduct. The provision is a restriction on a vested statutory right and must be strictly applied. Mere pendency of criminal or CBI cases, or adverse observations in disciplinary proceedings, does not by itself satisfy the statutory conditions. The requirement is not simply misconduct, but termination on account of an act constituting an offence involving moral turpitude, and such offence must be established in accordance with law. On the facts, the employee was not terminated from service; he was only demoted, and the criminal cases cited against him were either pending or not shown to have resulted in the necessary legal determination.
Conclusion: Gratuity could not be denied or forfeited, and the order rejecting the claim was unsustainable.
Ratio Decidendi: Forfeiture of gratuity under Section 4(6) of the Payment of Gratuity Act, 1972 is permissible only when service is terminated for the specified misconduct, and a mere allegation or pendency of criminal proceedings is insufficient.
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