Romesh was a godown keeper in a textile factory and in the course of his employment he committed theft of cotton bales worth ₹1.50 lakh and sold them in the market. This act of Romesh was caught red handed through the CC

According to Section 4(1) of the Payment of Gratuity Act, 1972, gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years: on his superannuation, or on his retirement or resignation, or on his death or disablement due to accident or disease. Forfeiture of Gratuity The Act deals with this issue in two parts. Section 4(6)(a) provides that the gratuity of an employee whose services have been terminated for any act of wilful 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. 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. 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. Where the service has not been terminated on any of the above grounds, the employer cannot withhold gratuity due to the employee. In view of the above, the employer can forfeit the gratuity to the extent of loss i.e. ₹1.5 lakh due to theft.