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Labour & Industrial LawSupreme Court of India

Western Coal Fields Limited v. Manohar Govinda Fulzele & Anr.

Civil Appeal · 2025 INSC 233Decided 17 Feb 2025
C.A. No.-002608-002608 - 2025 (@ SLP(C) No. 10088 of 2020, with connected Civil Appeal Nos. 2609 and 2610 of 2025)
Justice Sudhanshu Dhulia · Justice K. Vinod Chandran

Background

This case was heard together with two other appeals raising a common legal question: can gratuity be forfeited for termination on grounds of misconduct amounting to an offence involving moral turpitude, even without any criminal conviction or proceeding? In the lead appeal, Western Coal Fields Limited (a public sector undertaking) had dismissed the respondent employee after departmental proceedings found he had obtained his job using a fraudulent date-of-birth certificate. He had understated his age by seven years to secure the appointment. The employee argued he had served about 22 years unblemished and that gratuity was a statutory right that could not be denied on termination; lower forums (relying on an earlier Supreme Court ruling, Union Bank of India v. C.G. Ajay Babu) had held forfeiture impermissible without a criminal conviction.

Decision Breakdown

The Supreme Court clarified that Section 4(6) of the Payment of Gratuity Act only requires that the misconduct constitute an offence involving moral turpitude. It does not require an actual criminal conviction or even that criminal proceedings be initiated. Relying on its earlier ruling in Devendra Kumar v. State of Uttaranchal, the Court held that suppressing material information (here, the true date of birth) to fraudulently obtain an appointment itself amounts to an offence involving moral turpitude, and since the very appointment was obtained illegally, the employee could not claim gratuity as "fruits of his employment." The Court fully upheld forfeiture of the employee's entire gratuity in this case. In the connected MSRTC appeals involving bus conductors who had misappropriated small amounts of passenger fares, the Court found their misconduct also involved moral turpitude but directed a more sympathetic approach, capping forfeiture at 25% of their gratuity rather than the full amount.

Lesson Learnt

An employee who obtains a job through fraud (such as falsifying a date-of-birth certificate) can lose his entire gratuity on dismissal even without a criminal conviction, because gratuity forfeiture under the law only requires proof that the misconduct amounts to an offence involving moral turpitude: years of otherwise good service will not override a fraudulently obtained appointment.

Western Coal Fields Limited v. Manohar Govinda Fulzele & Anr. – Legal Case Shots | LegalAware