In Brief
A bank sought to forfeit an employee's gratuity following dismissal for misconduct allegedly involving moral turpitude. The Supreme Court held that forfeiture is not automatic upon dismissal. Under the Payment of Gratuity Act, 1972, forfeiture for moral turpitude requires that the act constitute a criminal offence and that the employee be convicted by a court—mere departmental findings of misconduct are insufficient. Additionally, where a bipartite settlement limits forfeiture only to cases causing financial loss to the employer, that more beneficial contractual term applies and must be honoured. Since the bank neither initiated criminal proceedings nor proved financial loss, gratuity forfeiture was unjustified. Appeal dismissed.
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