TaxTMI 
TaxTMI 
2018 (8) TMI 934
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on account of proved misconduct involving moral turpitude. His explanation was rejected and the gratuity was forfeited by order dated 20.04.2004. The order reads as follows: "We refer to the show cause notice no. CO:IRD:654 dated 30.01.2004, seeking your explanation as to why the gratuity payable to you should not be forfeited on account proved misconduct against you and the explanation dated 26.02.2004 submitted by you thereto. The misconduct proved against you amounts to acts involving moral turpitude. In this regards, the explanation submitted by you in terms of your above reference reply is not satisfactory and therefore not acceptable to the bank. Therefore, in accordance of the provisions of section 4, subsection 6(b)(ii) of the Gratuity Act, 1972 and clause 3 to Schedule "A" of the Banks Gratuity Rules, the Bank has decided to forfeit an amount of Rs. 1,77,900/- from the Gratuity amount payable to you." (Emphasis supplied) 6. The dismissal and forfeiture were the subject matters of challenge before the High Court leading to the impugned judgment dated 08.01.2016 of the learned Single Judge. The Court did not interfere with the dismissal; however, it was held ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ruction of, property belonging to the employer shall be forfeited to the extent of the damage or loss so caused; (b) the gratuity payable to an employee may be wholly or partially forfeited- (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 (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." (Emphasis supplied) 10. The subtle distinction between sub-Section (5) and sub-Section (6) is that the former is a non-obstante clause of the entire Section whereas the latter is only in respect of sub-Section (1). In other words, sub-Section (5) has an overriding effect on all other sub-Sections under Section 4 of the Act. Thus, notwithstanding anything contained under Section 4 of the Act, an employee is entitled to receive better terms of gratuity under any award or agreement or contract with the employer. 11. In the case of the appellant-Bank, as noted by the learned Single Judge, there is a bipartite settlement dat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....option open in respect of a part of the statute. While reserving his right to opt for the beneficent provisions of the statute or the agreement, he has to opt for either of them and not the best of the terms of the statute as well as those of the contract. He cannot have both. If such an interpretation is given, the spirit of the Act shall be lost....." 14. In Y.K. Singla v. Punjab National Bank and others (2013) 3 SCC 472 , the position has been reiterated holding that the employee has to make a choice between the two for drawing the benefit of gratuity and the choice has a statutory protection under sub-Section (5) of Section 4 of the Act. To quote paragraph-23: "23. Based on the conclusions drawn hereinabove, we shall endeavour to determine the present controversy. First and foremost, we have concluded on the basis of Section 4 of the Gratuity Act that an employee has the right to make a choice of being governed by some alternative provision/instrument other than the Gratuity Act, for drawing the benefit of gratuity. If an employee makes such a choice, he is provided with a statutory protection, namely, that the employee concerned would be entitled to receive better terms ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., under The General Clause Act, 1897, to mean "any act or omission made punishable by any law for the time being in force". 18. Though the learned Counsel for the appellant-Bank has contended that the conduct of the respondent-employee, which leads to the framing of charges in the departmental proceedings involves moral turpitude, we are afraid the contention cannot be appreciated. It is not the conduct of a person involving moral turpitude that is required for forfeiture of gratuity but the conduct or the act should constitute an offence involving moral turpitude. To be an offence, the act should be made punishable under law. That is absolutely in the realm of criminal law. It is not for the Bank to decide whether an offence has been committed. It is for the court. Apart from the disciplinary proceedings initiated by the appellant-Bank, the Bank has not set the criminal law in motion either by registering an FIR or by filing a criminal complaint so as to establish that the misconduct leading to dismissal is an offence involving moral turpitude. Under sub-Section (6)(b)(ii) of the Act, forfeiture of gratuity is permissible only if the termination of an employee is for any miscon....