The Calcutta High Court has ruled that denying an employee their gratuity dues on the ground of seeking employment elsewhere is against the principles of natural justice. The court observed that exploring better career opportunities, even with a rival company, is a basic right and cannot be equated with moral turpitude.
Justice Shampa Dutt (Paul) passed the order while setting aside the disciplinary authority’s decision of a company that claimed to be the sole manufacturer of a specific type of insulator film in India. The court directed the company to pay ₹1.37 lakh in gratuity dues to its former technician, Sudip Samanta, along with 8% simple interest per annum.
Justice Dutt noted, “Looking for another job, even if with a rival company (though not proved in this case) with better perks and facilities is a basic right and does not constitute moral turpitude as it is not contrary to honesty, modesty or good morals.”
The court held that the company failed to prove any misconduct by Samanta that caused loss or damage to its property, or that his actions involved riotous or disorderly behaviour. It further held that the disciplinary proceedings lacked fairness, reasoning, and independent findings, amounting to an abuse of power.
Samanta, who joined the company in 2012, was accused of being in contact with officials of a rival firm and allegedly passing confidential information. The company initiated disciplinary proceedings, and its enquiry officer found him guilty, recommending termination. On October 11, 2022, Samanta was dismissed from service, and his gratuity was withheld on the grounds of alleged misconduct and moral turpitude.
However, both the Controlling Authority and the Appellate Authority under the Payment of Gratuity Act directed the company to release his dues. The company challenged these orders before the High Court.
Upholding the Appellate Authority’s ruling, Justice Dutt dismissed the company’s petition, stating the decision was well-reasoned, within jurisdiction, and in accordance with law. The court also noted that the company failed to produce credible evidence, relying only on vague witness statements that Samanta was seen speaking to personnel of the rival firm.
The judgment reinforces that employees cannot be penalised for exploring career opportunities, and withholding statutory dues on such grounds violates principles of natural justice.
