Delhi High Court in Sanjay Kaura vs. Air India Limited (W.P.(C) 770/2019) while examining the justification of employer’s action to forfeit gratuity to an employee [who is charged with an offence involving moral turpitude leading to his dismissal (although not convicted by the competent court)] reiterated the settled position that under sub- Section (6)(b)(ii) of the Payment of Gratuity Act, 1972, forfeiture of gratuity is permissible only if the termination of an employee is for any misconduct which constitutes an offence involving moral turpitude, and convicted accordingly by a court of competent jurisdiction. Considering that the employer has not set the criminal law in motion either by registering an FIR or by filing a criminal complaint so as to establish that the misconduct leading to dismissal is an offence involving moral turpitude therefore employer’s action to forfeit gratuity of the employee is invalid.
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