Forfeiture of gratuity without held guilty


Question asked on: 04/03/2019

I am a retired government servant. A departmental proceeding was pending at the time of my retirement. Therefore, the competent authority had forfeited my gratuity without holding me guilty of proved misconduct. He presented ambiguous inquiry report which is forthwith admitted by the superior officer.  Thereupon full gratuity is forfeited.

Gratuity is self-earned income of the employee, so the government has no power to forfeit it without holding me guilty. Is there any provision that concerned authority can forfeit my gratuity without held me guilty? 

Advised by: Shivendra Pratap Singh,

There is no provision under The Payment of Gratuity Act, 1972 which empowers the concerned authority to forfeit gratuity without holding you guilty. Section 4 of the said act unambiguously states that:

“Gratuity shall be payable to an employee on the termination of his employment (after he has rendered continuous service for not less than five years) on his superannuation, or retirement or resignation, or his death or disablement due to accident or disease.”

Furthermore, sub section 6 of the said section 4 states that authority may forfeit gratuity if he terminated the employee on these grounds:

  • On any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer.
  • His riotous or disorderly conduct or any other act of violence on his part.
  • For any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

Thus, it is evidence that authority cannot forfeit gratuity except holding the employee guilty for any offence as mentioned above. Disciplinary proceedings were pending at the time of your retirement. Hence, the concerned authority had no authority to forfeit gratuity. Eventually, he is not empowered to automatically forfeit the gratuity.

In Beed District Central Coop. Bank Ltd. v. State of Maharashtra, (2006) 8 SCC 514; Y. K. Singla v. PNB, (2013) 3 SCC 472 and Jaswant Singh Gill v. Bharat Coking Coal Ltd., (2007) 1 SCC 663; the Supreme Court has held that employer can forfeit the gratuity if he convicts the employee for any offence mentioned in subsection 6 of section 4 of The Payment of Gratuity Act, 1972.

Hence, forfeiture of gratuity without holding you guilty is illegal. Therefore, you should challenge the process of forfeiture before the High Court under article 226 of the Constitution of India. You should file a writ petition before the High Court.

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Shivendra Pratap Singh

Advocate, Lucknow

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