LexWESTERN COAL FIELDS LTD. versus MANOHAR GOVINDA FULZELE & ANR.
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[2025] 3 S.C.R. 183 : 2025 INSC 233 Western Coal Fields Ltd. v. Manohar Govinda Fulzele & Anr. (Civil Appeal No. 2608 of 2025) 17 February 2025 [Sudhanshu Dhulia and K. Vinod Chandran,* JJ.] Issue for Consideration Whether forfeiture of gratuity is permissible in the event of termination of service on misconduct, which can be categorised as an act constituting an offence involving moral turpitude; without there being any conviction in a criminal case or even a criminal proceeding having been initiated. Headnotes† Payment of Gratuity Act, 1972 – s.4(6)(b)(ii) – Interpretation: Held: Under the Act, for forfeiture of gratuity, conviction in a criminal proceeding is not necessitated, if the misconduct alleged and proved constitutes an offence involving moral turpitude – In case of PSU, the employee was proceeded against for the misconduct of producing a fraudulent ‘date of birth certificate’ to obtain appointment – It has been proved that he supressed his actual date of birth – Thus, the appointment itself was illegal – Decision of the PSU forfeiting entire gratuity of the terminated employee upheld – However, in case of conductors in appeals filed by MSRTC, the act alleged and proved is of misappropriation of meagre amounts, Appointing Authority directed to limit the forfeiture to 25% of the gratuity payable and release the balance amounts to the respondent employees. [Paras 11, 13, 15] Misappropriation – Misappropriation of fares collected from passengers, if an offence involving moral turpitude: Held: Misappropriation is an act constituting an offence involving moral turpitude – Even if the amounts misappropriated are minimal it would constitute a misconduct warranting termination. [Paras 13, 15] Words and Phrases – ‘Offence’ – General Clauses Act. [Para 10] * Author 184 [2025] 3 S.C.R. Digital Supreme Court Reports Payment of Gratuity Act, 1972 – s.4(6)(b)(ii) – Words “duly established in a Court of Law” cannot be supplied – Relying on C.G. Ajay Babu case, the impugned judgments held that the forfeiture of gratuity is not permissible under the 1972 Act: Held: The interpretation of sub-clause (b)(ii) of sub-section (6) of s.4 was uncalled for in C.G. Ajay Babu since the provisions of the s.4 including sub-section(6) was inapplicable to the employer Bank and its employee, by virtue of sub-section (5) of s.4 – The interpretation was an obiter making a reference unnecessary – Furthermore, s.4(6)(b)(ii) does not make it a requirement that the misconduct alleged and proved in a departmental enquiry should not only constitute an offence involving moral turpitude, but also should be duly established in a Court of Law – The words “duly established in a Court of Law” cannot be supplied to the provision. [Para 9] Case Law Cited Union Bank of India and Ors. v. C.G. Ajay Babu [2018] 9 SCR 995 : (2018) 9 SCC 529; Jaswant Singh Gill v. Bharat Coking Coal Ltd [2006] Supp. 8 SCR 1064: (2007) 1 SCC 663; Mahanadi Coalfields Ltd. v. Rabindranath Choubey (2020) 18 SCC 71; Devendra Kumar v. State of Uttaranchal [2013] 8 SCR 471 : (2013) 9 SCC 363 – referred to. List of Acts Payment of Gratuity Act, 1972; General Clauses Act. List of Keywords Forfeiture of gratuity; Termination of service; Misconduct; Offence involving moral turpitude; No conviction in a criminal case/no criminal proceeding initiated; Public Sector Undertaking (PSU); Maharashtra State Road Transport Corporation (MSRTC); Fraudulent ‘date of birth certificate’; Actual date of birth supressed; Appointment illegal; Entire gratuity forfeited; Delinquent employee; Terminated employee; Conductors; Misappropriation; Misappropriation of meagre amounts, Appointing authority; Disciplinary authority; Misappropriation of fares collected from passengers; Nature of the misconduct; Extent of forfeiture; ‘Offence’; “duly established in a Court of Law”. [2025] 3 S.C.R. 185 Western Coal Fields Ltd. v. Manohar Govinda Fulzele & Anr. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2608 of 2025 From the Judgment and Order dated 29.01.2020 of the High Court of Judicature at Bombay at Nagpur in WP No. 6006 of 2016 Appearances for Parties Tushar Mehta, Solicitor General, Ms. Mayuri Raghuvanshi, Vyom Raghuvanshi, Ms. Akanksha Rathore, Ms. Kinjal Sharma, Uddyam Mukherjee, Swapnil Pattanayak, Agnibha Chatterjee, Advs. for the Appellant. Pratik R. Bombarde, Devendra Singh, Jitendra Kumar, Rohit Verma, Ms. Kirti Anand, Naman Tan
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