Section 4(6)(b)(ii) of The Payment of Gratuity Act, 1972 enables ‘forfeiture of gratuity’, wholly or partially, if delinquent employee is terminated for any act which constitutes an offence involving ‘moral turpitude’, if offence is committed in course of his employment. The provision of ‘forfeiture of gratuity’ does not speak of a conviction in a criminal proceeding. Only requirement is for Disciplinary Authority or Appointing Authority to decide as to whether, the ‘misconduct’ could, in normal circumstances, constitute an offence involving ‘moral turpitude’. A further discretion is conferred to decide whether, ‘forfeiture should be of whole or only a part of gratuity payable’, which would depend on gravity of the ‘misconduct’.
The appointment itself being illegal, there is no question of terminated employee seeking fruits of his employment by way of gratuity.
– Hon’ble Justice K. Vinod Chandran, Western Coalfield Ltd. v. Manohar Govinda Fulzele, [Civil Appeal No. 2608 of 2025].
