Supreme Court of India· 17 February 2025
Does suppression of material information at the time of appointment amount to moral turpitude for the purposes of forfeiture of gratuity?
Western Coal Fields Ltd. v. Manohar Govinda Fulzele & Anr.
CIVIL APPEAL NO.2608 of 2025 · CIVIL APPEAL NO.2608 of 2025
Coram: K. Vinod Chandran; Sudhanshu Dhulia
Answer
Yes. Where an appointment is obtained by employing fraud, the question is not whether the applicant is suitable for the post but whether the appointment was obtained by suppressing material information; even if the information suppressed would not itself involve moral turpitude, the suppression does.
Headnote
Payment of Gratuity Act, 1972 — s.4(5) — s.4(6)(b)(ii) — General Clauses Act — Forfeiture of gratuity — Offence involving moral turpitude — Conviction not required — Departmental enquiry — Extent of forfeiture —
Payment of Gratuity Act, 1972 — s.4(6)(b)(ii) — Forfeiture needs no conviction —
Held: Section 4(6)(b)(ii) requires only that the act for which the employee is terminated constitutes an offence involving moral turpitude. The words "duly established in a Court of Law" cannot be supplied to the provision, and the contrary interpretation was obiter. (¶9)
General Clauses Act — Offence — Standard of proof in a departmental enquiry —
Held further: An offence is any act or omission made punishable by law and does not call for a conviction. A departmental enquiry proceeds on preponderance of probabilities, not on proof beyond reasonable doubt. (¶10)
Payment of Gratuity Act, 1972 — s.4(6) — Notice before forfeiture —
Held further: The Disciplinary or Appointing Authority must decide whether the misconduct constitutes such an offence. Notice must issue to the terminated employee, who may represent on that question and on the extent of forfeiture, which turns on the gravity of the misconduct. (¶10)
Payment of Gratuity Act, 1972 — s.4(6)(b)(ii) — Suppression of date of birth — Extent of forfeiture —
Held further: An appointment obtained by suppressing the actual date of birth is itself illegal, and forfeiture of the entire gratuity was upheld. Where conductors misappropriated meagre amounts, forfeiture is confined to 25%; appeals allowed with that modification. (¶13, 15)
In the Court's own words
Paragraph 12Devendra Kumar[^7] was a case where the services of the delinquent employee were terminated for reason of suppressing material information regarding pending criminal cases against him, at the time of appointment. This Court held that when an appointment is obtained by employing fraud; the question is not whether the applicant is suitable for the post but whether the appointment was obtained by supressing material information. It was held that even if the offence alleged in the case pending against the applicant would not involve moral turpitude, suppressing such information would amount to moral turpitude.
Paragraph 13In the present case it has been proved that the petitioner supressed his actual date of birth. The failure of the employer to initiate a criminal proceeding on the fraud employed by way of the the fabricated/forged certificate produced for the purpose of employment, does not militate against the forfeiture. Obviously, as coming out from the provision, no conviction in a criminal proceeding is necessitated, if the misconduct alleged & proved constitutes an offence involving moral turpitude. The very same reasoning applies in the appeals by the MSRTC were the delinquent employees, conductors in the stage carriages operated by the MSRTC were found to have indulged in misappropriation of fares collected from passengers. Misappropriation definitely is an act constituting an offence involving moral turpitude.
Acts & Sections
s.4(6)(b)(ii) Payment of Gratuity Act, 1972s.4(5) Payment of Gratuity Act, 1972s.4(1) Payment of Gratuity Act, 1972General Clauses Act, 1897One judgment a day. That's the whole habit.
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Also decided in this judgment
Under the Payment of Gratuity Act, 1972, must an offence involving moral turpitude be established by conviction in a criminal court before gratuity is forfeited under Section 4(6)(b)(ii)?What is the status of the observation in Union Bank of India v. C.G. Ajay Babu that an offence involving moral turpitude must be duly established in a Court of Law before gratuity is forfeited under the Payment of Gratuity Act, 1972?How does the meaning of offence in the General Clauses Act bear on forfeiture of gratuity under Section 4(6)(b)(ii) of the Payment of Gratuity Act, 1972?What standard of proof distinguishes a disciplinary proceeding from a criminal proceeding when gratuity is forfeited under the Payment of Gratuity Act, 1972?What procedure must precede forfeiture of gratuity under Section 4(6) of the Payment of Gratuity Act, 1972?Does the authority forfeiting gratuity under the Payment of Gratuity Act, 1972 have a discretion as to whether the forfeiture is whole or partial?Does an employer's failure to initiate a criminal proceeding on the fraud defeat forfeiture of gratuity under the Payment of Gratuity Act, 1972?Is misappropriation of meagre amounts by an employee an offence involving moral turpitude under the Payment of Gratuity Act, 1972, and does the smallness of the amount matter?