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?

It is obiter and does not come out of the statutory provision. Section 4 including sub-section (6) had already been found inapplicable to that bank and its employee by virtue of sub-section (5), so the interpretation of sub-clause (b)(ii) was uncalled for and a reference to a Larger Bench was unnecessary.

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)

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