Gratuity forfeiture requires criminal conviction for moral turpitude; disciplinary findings alone cannot justify withholding payment.

Gratuity under section 4(6)(b)(ii) of the Payment of Gratuity Act cannot be forfeited merely on an employer's disciplinary conclusion or on the basis of a pending FIR or charge-sheet. The provision requires that the act amounting to moral turpitude be established as an offence in criminal proceedings and culminate in conviction by a court of competent jurisdiction. On that basis, forfeiture before conviction was impermissible, and the challenge to the gratuity rejection succeeded.

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Issues: Whether gratuity could be forfeited under section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972 before any conviction by a criminal court for an offence involving moral turpitude.

Analysis: Section 4(6)(b)(ii) permits forfeiture only where the employee's services are terminated for an act that constitutes an offence involving moral turpitude committed in the course of employment. The provision was interpreted to mean that the employer cannot itself decide that an offence has been committed; that determination lies in the realm of criminal law and must be established by a court of competent jurisdiction. Mere disciplinary findings, a pending FIR, or a filed charge-sheet are not enough. The authority under the Act could not validly forfeit gratuity while the criminal case had not culminated in conviction. The separate notice objection was not examined further because the legality of forfeiture itself was decisive.

Conclusion: Forfeiture of gratuity was held impermissible in the absence of conviction, and the petitioners succeeded.

Final Conclusion: The impugned decisions rejecting gratuity were set aside, and the petitions were allowed.

Ratio Decidendi: Forfeiture of gratuity under section 4(6)(b)(ii) is permissible only when the act constituting moral turpitude is established as an offence by a criminal court and results in conviction; the employer cannot forfeit gratuity merely on its own disciplinary conclusion or on pending criminal proceedings.

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