Keerthan was employed by a publishing company as Marketing Executive. He was found guilty of fraud while in service and after the enquiry he was terminated from service. The company for which Keerthan served for 13 years

Answer 6(b) Section 4(6)(a) of the Payment of Gratuity Act, 1972 provides that the gratuity of an employee whose services have been terminated for any act or willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, gratuity shall be forfeited to the extent of the damage or loss or caused. Further, section 4(6)(b) deals with a case where the services of an employee have been terminated: for riotous and disorderly conduct or any other act of violence on his part, or for any act which constitutes an offence involving moral turpitude provided that such offence is committed by him in the course of his employment. In such cases the gratuity payable to the employee may be wholly or partially forfeited. The right of forfeiture is limited to the extent of damage. In absence of proof of the extent of damage, the right of forfeiture is not available (LLJ-II-1996-515 MP). The proper rule will be that the employer is entitled to deduct out of gratuity such sum or sums against legitimate loss or damage caused to him by the conduct of the employee. (Hindustan Times Vs Workman AIR 1963 SC 1332). In, the given case, and in view of the above, Keerthan is correct in his challenge. The gratuity can be forfeited for any act or wilful omission or negligence causing any damage or loss to or destruction of property belonging to the employer limited to the extent of damage. Here Keerthan is guilty of fraud. Mere dismissal does not disentitle him from claiming gratuity. Only offences of moral turpitude could be the ground of denial of gratuity. Therefore, Keerthan would not be entitled to full gratuity.