Calcutta High Court Holds That Employee’s Gratuity Can Only Be Stopped If Employment Is Terminated

In a challenge by a former employee against Food Corporation of India (FCI) for withholding his gratuity citing ongoing criminal investigations against him for alleged moral turpitude, the Calcutta High Court has directed FCI to pay the withheld gratuity along with 8% interest thereon, within 4 weeks. The petitioner had merely been suspended for a brief period in 2012 after audits revealed shortage of grains in the sheds of FCI. However, the suspension was subsequently revoked later that year and the petitioner was reinstated. The court observed that as the petitioner had never been dismissed/terminated from service on grounds of committing moral turpitude, gratuity cannot be withheld merely because of any pending cases which bear the possibility of the petitioner being found guilty at a later stage.