The employer cannot retain and forfeit the gratuity amount without initiating proceedings for recovery: Karnataka High Court

The employee, i.e. respondent was suspended from the service of the petitioner on a serious charge of misappropriation of amounts and misconduct pending enquiry, consequently he was dismissed from service. After 7 years the respondent claimed his gratuity with interest by applying with the controlling authority. The controlling authority directed the petitioner to pay gratuity with interest, challenging the same the petitioned approached High Court of Karnataka vide Writ Petition No. 102635 of 2024 (L-PG). It was argued by the petitioner that the petitioner was entitled to withhold gratuity amount and adjust the amount towards the losses which have been caused to the petitioner, further the respondent chose to remain quiet for 7 years and then claim gratuity.

The court observed that, the petitioner had not initiated any proceedings for recovery of losses, it is the duty of the employer to initiate proceedings for recovery of the losses, which had been caused during those proceedings, to forfeit and or adjust the monies due to the delinquent employee after holding necessary proceedings by providing an opportunity to delinquent employee to contest those proceedings. Hence, retaining gratuity amount and forfeiting the same cannot be effectuated. As far as delay in claiming gratuity is considered, it is noted that the respondent was suffering from a disease which prevented the respondent from applying for gratuity. The petition stands dismissed.