IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 01.02.2011 CORAM: THE HON’BLE MR. JUSTICE K.CHANDRU W.P.No.20979 of 2006 The Manager Park Side Estate Nonsuch Post Coonoor The Nilgiris ..Petitioner Vs. 1.The Appellate Authority Under the Payment of Gratuity Act/ Joint Commissioner of Labour Coimbatore 2.The Controlling Authority/ Asst.Commissioner of Labour Coimbatore 3.L.Kuppuswamy .. Respondents Prayer in W.P.No.24065/2005 : Petition under Article 226 of the Constitution of India praying for a Writ of Certiorari calling for the entire records of the first respondent herein relating to his order dated 27.03.2006 in AGA No.23/2005 confirming the order of the second respondent herein dated 30.03.2005 in G.A.No.56/2004, quash the same. For Petitioner :: Mr.AR.L.Sundaresan for Ms.AL.Ganthimathi For Respondents :: Mr.R.Murali,Govt.Advocate for R1 and R2 R3-served O R D E R Heard Mr.AR.L.Sundaresan, leading Ms.AL.Ganthimathi for the petitioner. The first and second respondent being represented by Mr.R.Murali, the learned Government Advocate and the third respondent having been served did not appear either in person or through counsel. https://hcservices.ecourts.gov.in/hcservices/ 2.The petitioner is the Management of an Estate at Coonoor. They filed the present writ petition challenging the order passed by the first respondent-Appellate Authority made in AGA.No.23/05 dated 27.03.2006. By the said appeal, the order passed by the second respondent, – Controlling Authority under the Gratuity Act dated 30.03.2005 came to be confirmed. 3. In the writ petition, notice of motion was ordered. Pending notice of motion, an interim stay was also granted. 4. The contention raised by the Management before the authorities was that the third respondent was dismissed after holding an exparte enquiry for his riotous and disorderly behaviour and therefore, he was not eligible to get gratuity in terms of Section 4 (6)(b)(i)of the Payment of Gratuity Act, 1972 (hereinafter called as the P.G.Act). In the said provision, the gratuity payable to an employee may be wholly or partially forfeited if the services of such employee was terminated for riotous or disorderly conduct or any other act of violence on his part. Even in cases of such forfeiture, the authority constituted under Section 7(4)(b) of the Act can also decide the dispute regarding forfeiture after an amendment made to the said provision. 5. Before the second respondent-Controlling Authority, on behalf of the petitioner/Management one Richard Ravikumar was examined as R.W.1 and they filed four documents which were marked as Exhibits R1 to R4. With reference to marking of R4, (which was suspension order dated 18.03.1993), an objection was raised on behalf of the third respondent. On the side of the third respondent, he had examined himself as P.W.1 and on his side five documents were filed and marked as Exhibits P.1 to P.5. 6. On the basis of these materials and on considering the petitioner/Management's defence that as was dismissed for riotous and disorderly behaviour and that his entire gratuity can be forfeited, the Controlling Authority found that there was no separate order produced before him forfeiting the gratuity which lead to third respondent's termination. In this context, the authority held that the employer must specifically pass an order exercising his right of forfeiture under Section 4(6) of the Gratuity Act. He relied upon the judgment of the High Court of Allahabad in Hindalco Industries Ltd., and Appellate Authority under the Payment of Gratuity Act, Kanpur and others reported in 2004(3) LLN 106. Therefore, the authority found that the third respondent having served 23 years and his last drawn wage was Rs.70.70, he was eligible to get gratuity of a sum of Rs.24,392/-. 7. Aggrieved by the same, the petitioner/Management preferred an appeal under Section 7(7) of the Payment of Gratuity Act, 1972 before https://hcservices.ecourts.gov.in/hcservices/ the first respondent. The first respondent took up the appeal in AGA.No.23 of 2005 and after issuing notice to R3 and after hearing the parties and dismissed the appeal. The first respondent agreed with the reasoning of the second respondent held though it was claimed that the petitioner framed charges against the third respondent for riotous and disorderly behaviour vide charge sheet dated 06.05.2002 and that after conducting domestic enquiry, he was dismissed on 10.07.2004, the said charge sheet was not produced before the authorities. He also found that the petitioner/Management did not issue any separate show cause notice as to why the gratuity should not be forfeited either wholly or partially and since no order was passed forfeiting the gratuity after giving an opportunity to the employee, their contention cannot be accepted. 8. The only question that arises for consideration is whether mere dismissal on ground of riotous and disorderly behaviour by itself is sufficient for forfeiting the gratuity or that an employer should pass a separate order forfeiting the right of employee to receive gratuity. 9. In the present case, the authorities had adopted the ratio in Hindalco's case (cited supra) and held that forfeiture of gratuity is the right accrued to the employer. Therefore, held that am employer must express their mind for forfeiting the gratuity. It is not as if the dismissal for riotous and disorderly behaviour will automatically enable the gratuity to be forfeited. The section relating to forfeiture viz., 4(6)(b) of the Act says that forfeiture wholly or partially can be made. Therefore, it requires the application of mind by an employer and it will not be automatic on the issuance of the order of dismissal. It is well with their right to pass order of forfeiture on the basis of disqualification under Section 4(6) of the Act. 10. It was rightly found by the first respondent that since the Act provides for a whole or partial forfeiture of gratuity, it requires that the employee should be given an opportunity of hearing ; After serving 26 years, the employee cannot be simply be told that he will not get any gratuity on the basis of the order of dismissal for indulging in riotous and disorderly behaviour. In the absence of any clear definition as to what is a riotous and disorderly behaviour, a safeguard is made under Section 4(6)(b). 11. The controversy raised in the writ petition is no longer res integra. The Supreme Court in P.Rajan Sandhi Vs. Union of India and another reported in 2010 10 SCC 338, had an occasion to compare section 4(6) of the P.G. Act and Section (5) of the Working Journalists and Newspaper Employees (Conditions of Service) Act 1955. The Supreme Court after noticing the difference between the two enactments held that in case of working journalists, a mere dismissal by way of punishment on a disciplinary ground is sufficient ground to https://hcservices.ecourts.gov.in/hcservices/ forfeiture gratuity and it does not require any allegation or proof of any damage or loss to, or destruction of, property, etc., as is required under the general law i.e., the Payment of Gratuity Act. When attempts were made to press into service, the safeguard under Section 4(6) of the P.G.Act, it held that the two acts has to be independently analysed, since Working Journalists Act is a special law, whereas the Payment of Gratuity Act is a general law and the special law will prevail over the provisions of the Payment of Gratuity Act. In paragraphs 11 and 12, the Supreme Court had observed as follows:- " 11. It may be seen that there is a difference between the provisions for denial of gratuity in the Payment of Gratuity Act and in the Working Journalists Act. Under the Working Journalists Act, gratuity can be denied if the service is terminated as a punishment inflicted by way of disciplinary act, as has been done in the instant case. We are of the opinion that Section 5 of the Working Journalists Act being a special law will prevail over Section 4(6) of the Payment of Gratuity Act which is a general law. Section 5 of the Working Journalists Act is only for working journalists, whereas the Payment of Gratuity Act is available to all employees who are covered by that Act and is not limited to working journalists. Hence, the Working Journalists Act is a special law, whereas the Payment of Gratuity Act is a general law. It is well settled that special law will prevail over the general law, vide G.P.Singh's Principles of Statutory Interpretation, 9th Edn., 2004, proprietor.133 and 134. 12. The special law i.e. Section 5(1)(a)(i) of the Working Journalists Act, does not require any allegation or proof of any damage or loss to, or destruction of, property, etc., as is required under the general law i.e., the Payment of Gratuity Act. All that is required under the Working Journalists Act is that the termination should be as a punishment inflicted by way of disciplinary action, which is the position in the case at hand. Thus, if the service of an employee has been terminated by way of disciplinary action under the Working Journalists Act, he is not entitled to gratuity." 12. While dealing with the application of Gratuity act, there is no difficulty in holding that a forfeiture order will have to be independent of an order of penalty. Hence, the authorities have found they are not satisfied with the defence taken by the petitioner and hence ordered for the payment of gratuity. The impugned order does not call for any interference. https://hcservices.ecourts.gov.in/hcservices/ 13. Accordingly, the writ petition stands dismissed. No costs. Consequently, connected M.P.No.1 of 2006 also stands closed. In the light of the dismissal of he writ petition, the third respondent is entitled to withdraw gratuity lying with the second respondent. Sd/- Asst. Registrar //true copy// Sub Asst.Registrar nvsri To 1.The Appellate Authority Under the Payment of Gratuity Act/ Joint Commissioner of Labour Coimbatore 2.The Controlling Authority/ Asst.Commissioner of Labour Coimbatore 1 cc to M/s.AL.Ganthimathi, Advocate, Sr.No.7504 W.P.No.20979 of 2006 RSI {CO} TP/17.2.2011. https://hcservices.ecourts.gov.in/hcservices/