SC to decide whether gratuity can be withheld

The Supreme Court will lay down the law on whether an employer can withhold gratuity of an employee after retirement if a departmental proceeding is pending against him, saying there is no authoritative judgement on the issue.
The court referred the issue to a three-judge bench which will also decide whether an employee, who has retired, can be penalised with retrospective termination of service which is a condition for forfeiture of gratuity.
It passed the order on an appeal filed by Chairman-cum- Managing Director of Mahanadi Coalfield Ltd challenging a high court order restraining him from withholding the gratuity of an employee, saying the question of imposing penalty of removal or dismissal from service would not arise after his retirement.

Holding that there is no authoritative judgement on the issue, an apex bench of justices K S Radhakrishnan and A K Sikri said that the matter be decided by a larger bench and referred it to Chief Justice of India P Sathasivam to constitute the bench to decide it.
"As a corollary one can safely say that the employer has right to withhold the gratuity pending departmental inquiry. However, this course of action is available only if disciplinary authority has necessary powers to impose the penalty of dismissal upon the respondent (employee) even after his retirement.
"Having regard to our discussion above of Jaswant Singh Gill and Ram Lal Bhaskar cases, this issue needs to be considered authoritatively by a larger bench. We, therefore, are of the opinion that present appeal be decided by a bench of three judges," it said.

In this case, the employee Rabindranath Choubey, Chief General Manager at Mahanadi Coalfield Ltd, was facing allegations of misconduct for dishonestly causing loss of Rs. 31.65 crore to the company and was served a charge sheet in 2007.
During the pendency of inquiry, he superannuated in 2010. The company then withheld his gratuity after which he moved the high court which decided in his favour.