Madhya Pradesh High Court Rules in Favor of Gratuity Payment to Deceased Officer's Widow
Bank's Service Regulations Cannot Override Payment of Gratuity Act, 1972; Court Orders Gratuity Payment with Interest
In a landmark decision, the Madhya Pradesh High Court in Jabalpur has directed Central Madhya Pradesh Gramin Bank to release the gratuity due to the widow of a dismissed officer, Rajesh Mor. The judgment, delivered by Justice Vivek Jain, establishes that bank regulations inconsistent with the Payment of Gratuity Act, 1972 cannot deny statutory entitlements to employees or their legal heirs.
The case revolved around the dismissal of Rajesh Mor, who faced departmental charges of failing to open the bank branch and committing cash defalcation. After his dismissal and subsequent death, his widow, Smt. Babita Mor, petitioned for the release of gratuity. The bank rejected her application based on its service regulations, citing the dismissal as grounds for forfeiture of gratuity.
Justice Jain, however, emphasized that the Payment of Gratuity Act, 1972, particularly Section 4(6), mandates forfeiture only in cases of proven criminal conviction involving moral turpitude or when financial loss is caused to the employer. The court noted that no criminal prosecution was initiated against the deceased officer, and the alleged defalcation amount was repaid by him, negating any loss to the bank.
The court further noted that the statutory provisions under Section 14 of the Payment of Gratuity Act, 1972, override any inconsistent regulations or service rules framed by employers. In particular, the court cited precedents such as Jaswant Singh Gill v. Bharat Coking Coal Ltd. and Union Bank of India v. C.G. Ajay Babu, reinforcing that statutory rights cannot be impaired by non-statutory rules.
Consequently, the High Court directed the bank to calculate and disburse the gratuity to Smt. Babita Mor within 60 days, along with 6% interest from the date of her husband's death until payment. The judgment provides an avenue for the petitioner to approach the Controlling Authority under the Payment of Gratuity Act if she is dissatisfied with the calculation.
This decision reaffirms the supremacy of statutory provisions in protecting employees' rights, ensuring that regulations do not unjustly override legislative mandates.
Bottom Line:
Payment of Gratuity Act, 1972 - Forfeiture of gratuity under Section 4(6) - Bank regulations inconsistent with the Act cannot override statutory provisions - Gratuity cannot be forfeited without a criminal conviction involving moral turpitude, and only to the extent of loss caused.
Statutory provision(s): Payment of Gratuity Act, 1972 - Section 4(6), Section 14
