IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN FRIDAY, THE 13TH JUNE 2008 / 23RD JYAISHTA 1930 WP(C).No. 37220 of 2003(E) -------------------------- PETITIONER: ------------ FACT LIMITED, COCHIN DIVISION, AMBALAMEDU, REP. BY THE GENERAL MANAGER. BY ADV. . SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SMT.PRIYA MAHESH SMT.PRIYA MANJOORAN RESPONDENTS: ------------- 1. ALEXANDER THOMAS, HOUSE NO.VII/221, MARGIUM CLINIC BUILDING, KARIMUGAL, PUTHENCRUZ P.O., ERNAKULAM DISTRICT. 2. ASST.LABOUR COMMISSIONER (C) KENDRIYA SHRAM SADAN, OLIMUGHAL, KAKKANAD, KOCHI. 3. REGIONAL LABOUR COMMISSIONER (C), KENDRIYA SHRAM SADAN, OLIMUGHAL, KAKKANAD, KOCHI. BY ADV. SRI.V.M.KURIAN FOR R1 SRI.A.V.THOMAS FOR R1 SRI.MATHEW B. KURIAN FOR R1 SRI.K.T.THOMAS FOR R1 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 13/06/2008 THE COURT, ON THE SAME DAY, DELIVERED THE FOLLOWING: PETITIONER'S EXHIBITS: W.P.C.NO. 37220/2003. ---------------------------------------------------------------------- EXT.P1 TRUE COPY OF FERTILISERS AND CHEMICALS TRAVANCORE LIMITED EMPLOYEES (CONDUCT, DISCIPLINE AND APPEAL) RULES, 1977. EXT.P2 ORDER DT. 26-3-1988. EXT.P3 PETITION DT. 25-4-1988. EXT.P4 ORDER OF APPOINTMENT DT.25-5-1989. EXT.P5 APPLICATION DT. 12-6-2002. EXT.P6 WRITTEN STATEMENT FILED BY THE PETITIONER. EXT.P7 REJOINDER DT. 12-7-2002. EXT.P8 ORDER DT. 27-1-2003. EXT.P9 MEMORANDUM OF APPEAL DT. 31-1-2003. EXT.P10 ORDER PASSED BY R3 DT. 6-10-2003. RESPONDENTS' EXHIBITS: -------------------------------------- EXT.R1(a) TRUE COPY OF JUDGMENT IN O.P.NO. 10290/1989. EXT.R1(b) OFFICE ORDER DT. 15-11-2001. EXT.R1(c) ORDER DT. 29-11-2001. EXT.R1(d) LETTER DT. 12-12-2001. EXT.R1(e) LETTER DT. 3-8-1999. EXT.R1(f) LETTER DT. 1-3-2002. EXT.R1(g) CHEQUE DT. 1-6-1989. EXT.R1(h) REPRESENTATION DT. 21-4-2002. EXT.R1(i) BANK VOUCHER DT. 31-5-2002. EXT.R1(j) STATEMENT OF FACTS DT. 12-6-2002. EXT.R1(k) ORDER DT. 25-5-1989. EXT.R1(l) REPLY DT. 9-7-2003. [TRUE COPY] P.S TO JUDGE. S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= W. P (C) No. 37220 of 2003 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 13th June, 2008. J U D G M E N T Petitioner is an employer coming within the purview of the Payment of Gratuity Act. They are challenging Exts. P8 and P10 orders of the controlling authority and the appellate authority respectively under the Payment of Gratuity Act, whereby the controlling authority and the appellate authority directed the petitioner to pay additional gratuity to the 1st respondent over and above the gratuity already paid to him. The short facts necessary for the disposal of this writ petition are as follows. 2. The 1st respondent was an employee who entered service of the petitioner in 1967. By Ext. P2 order dated 26-3-1988, the 1st respondent was dismissed from service on having been found guilty of very serious misconducts involving misappropriation of money and other charges. Against Ext. P2 order of punishment, the 1st respondent filed Ext. P3 appeal before the Managing Director. Considering the extreme difficult family circumstances of the 1st respondent, the Managing Director offered him fresh appointment as Senior Assistant (Finance) by Ext. P4 order without interfering with the punishment imposed. The same contained the following clause: “You will not be entitled to or eligible for any benefits or claim on your past service for the purpose of Gratuity or any other statutory or non-statutory benefits available to regular employees.” Accepting Ext. P4, the 1st respondent joined service and continued till 31-5-2002. He superannuated from service on 31-5-2002. At the time of superannuation, the 1st respondent was paid gratuity for the 13 years' of service from 1989 to 2002, since, by Ext. P4 order with the above said condition, he had foregone the gratuity due to him for the earlier service of 22 years. Thereafter, 1st respondent filed a claim for gratuity before the 2nd respondent in respect of the 22 years' service W.P.C. No. 37220/2003. -: 2 :- prior to 1989. The controlling authority under the Payment of Gratuity Act, by Ext. P8 order, upheld his claim and directed payment of gratuity for the 22 years service put in by the 1st respondent prior to the second appointment by Ext. P4 order. Petitioner's appeal before the 3rd respondent appellate authority was also rejected. The petitioner is challenging those orders in this writ petition. 3. According to the petitioner, the earlier order of dismissal of the 1st respondent was never revoked. That punishment stands as such. But, taking into account his difficult family circumstances, a fresh appointment was offered subject to certain conditions, which conditions the 1st respondent accepted with open eyes and joined service. One of the conditions was that he will not be entitled to benefits of his past service for the purpose of gratuity or any other statutory or non-statutory benefits available to the regular employees. Learned counsel would submit that the 1st respondent never challenged either Ext. P2 punishment order or the condition in Ext. P4 fresh appointment order. Without challenging the same appropriately, the 2nd and 3rd respondents could not have validly come to the conclusion that, that condition whereby the 1st respondent had foregone his gratuity, is not valid. That being so, he would submit that the direction of respondents 2 and 3 to pay to the 1st respondent gratuity for the prior service of 22 years is patently unsustainable. 4. I have considered the contentions of counsel in detail. 5. It remains a fact that the 1st respondent had accepted both Ext. P2 punishment order of dismissal as also Ext. P4 fresh appointment order with the conditions therein. He never challenged the same. The 2nd and 3rd respondents are not authorities competent to decide the question as to whether any condition in Ext. P4 is valid or not unless, of course, the same are inconsistent with the provisions W.P.C. No. 37220/2003. -: 3 :- of the Payment of Gratuity Act. After having accepted the fresh appointment with the specific condition that he will not be entitled to gratuity in respect of the service put in by him prior to the date of fresh appointment, the 1st respondent could not have turned around and claimed the same after continuing in service and retiring. As such, I am satisfied that the findings in Exts. P8 and P10 that the clause in Ext. P4 fresh appointment order is invalid is clearly beyond the scope of the jurisdiction of respondents 2 and 3. Of course, respondents 2 and 3 in the order would find that even after dismissal, the 1st respondent could have claimed gratuity in respect of the service already put in by the 1st respondent. In Ext. P2, the 1st respondent was dismissed from service on very serious charge of misappropriation of money. Under the Payment of Gratuity Act, if the service of an employee had been terminated for any act which constitutes an offence involving moral turpitude in the course of his employment, the employer is entitled to forfeit gratuity payable to the 1st respondent. There cannot be any doubt whatsoever that the misconduct of misappropriation of money is one involving moral turpitude and in fact the 1st respondent was terminated from service for that specific misconduct. Therefore, clearly, Section 4(6)(ii) of Payment of Gratuity Act is attracted in this case, as per which the petitioner could have forfeited gratuity due to the 1st respondent in respect of his 22 years of service prior to the fresh appointment as per Ext. P4 order. That is exactly what has been done in Ext. P4 by incorporating a condition in Ext. P4 to the effect that while joining as a fresh appointee, the 1st respondent shall not be eligible for gratuity in respect of his past service. I do not find anything wrong with the same. If the orders are upheld, it would amount to rewarding the 1st respondent for having committed very serious misconducts of W.P.C. No. 37220/2003. -: 4 :- misappropriation of money, which is against public policy also. An employer who has shown kindness to an employee cannot be punished for their kindness. In the above circumstances, I am satisfied that Exts. P8 and P10 orders are clearly unsustainable and accordingly the same are quashed. The writ petition is allowed as above. Sd/- S. Siri Jagan, Judge. Tds/