Court Affirms Payment of Gratuity Act Prevails Over Bank's Non-Statutory Service Regulations
In a significant judgment, the Madhya Pradesh High Court dismissed an appeal by the Central Madhya Pradesh Gramin Bank, thereby affirming the decision of a Single Judge to grant gratuity to Smt. Babita Mor, widow of a dismissed bank officer. The Division Bench, comprising Justices Vivek Rusia and Pradeep Mittal, held that the Payment of Gratuity Act, 1972 has overriding effect over the bank's non-statutory service regulations, ensuring that the officer's widow is entitled to receive her deceased husband's gratuity.
The deceased officer, Rajesh Mor, was dismissed following departmental proceedings for alleged misconduct, including defalcation of funds. The bank had withheld his gratuity citing misconduct under its service regulations. However, the court clarified that forfeiture of gratuity can only occur under specific conditions outlined in Section 4(6) of the Payment of Gratuity Act, which were not met in this case. The court noted that since no financial loss was caused to the bank and no criminal conviction for moral turpitude was recorded against the officer, the forfeiture was unjustified.
Citing the Supreme Court judgment in Jaswant Singh Gill v. Bharat Coking Coal Ltd., the court reiterated that the Payment of Gratuity Act is a welfare legislation with overriding provisions, meant to secure retirement benefits for employees. The court rejected the bank's reliance on the P. Rajan Sandhi case, which pertained to the Working Journalists Act, stating it was inapplicable in this context.
The judgment underscores the precedence of statutory provisions of the Payment of Gratuity Act over non-statutory service regulations, ensuring protection of employee rights to retirement benefits. This decision reinforces the principle that gratuity cannot be withheld unless the strict statutory conditions are met.
Bottom line:-
Payment of Gratuity Act, 1972 prevails over non-statutory service regulations of a bank. Gratuity cannot be forfeited unless the statutory conditions under Section 4(6) of the Act are strictly satisfied.
Statutory provision(s):
Payment of Gratuity Act, 1972, Section 4(6); Section 14; Clause 72 of Central Madhya Pradesh Gramin Bank (Officers and Employees) Service Regulations, 2010
