Criminal Conviction By A Court Is Necessary For Forfeiture Of Gratuity

Introduction:

In a recent judgment titled Punjab National Bank vs. Niraj Gupta and Anr.¹ the Hon'ble Delhi High Court ("Hon'ble HC") clarified that an employee's gratuity could not be forfeited on the grounds of an 'offence amounting to moral turpitude' if there is no criminal conviction by a court of competent jurisdiction. The Hon'ble HC emphasized that it is not within the employer's authority to determine what constitutes an 'offence amounting to moral turpitude'.

Facts:

The Respondent ("Employee") was serving as deputy general manager at Punjab National Bank ("Bank") in the year 2015 when he was deputed as MD and CEO of Punjab National Bank International Ltd. in the UK where he was accused of sexual harassment of a colleague. As a result of this, he was called back to India, and an investigation was initiated against him by the Internal Complaints Committee ("IC") of the Bank constituted under the Sexual Harassment of Women at Workplace (Prevention,