The Punjab and Haryana High Court has ruled that the conviction of an employee under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) for a cheque issued in a personal capacity does not constitute an offence involving “moral turpitude.” A Bench of Justice Harpreet Singh Brar quashed the dismissal orders of a deceased employee, directing the Punjab State Civil Supplies Corporation to release all retiral benefits to his widow and consider his son for compassionate appointment.
The Court held that an offence under Section 138 of the NI Act cannot be equated with serious offences involving moral turpitude unless committed in an official capacity or involving the employer’s property. Consequently, the Court set aside the dismissal order passed against the deceased employee, Dharampal Singh, and directed the respondents to treat him as being in service until his death for the purpose of releasing benefits.
Background of the Case
The petition was filed by the widow and son of the late Dharampal Singh, who was employed as a Chowkidar with the Punjab State Civil Supplies Corporation. The deceased was initially dismissed from service on April 15, 2015, following a conviction under Section 138 of the NI Act. He successfully appealed this conviction and was acquitted by the Additional Sessions Judge, Ferozepur, on January 19, 2016. Subsequently, a Civil Court declared the termination illegal and ordered his reinstatement on July 19, 2017, a decision upheld by the Appellate Court.
However, the deceased was involved in a second complaint under Section 138 of the NI Act. He was convicted and sentenced to one year of imprisonment vide judgment dated February 7, 2017, which was upheld on March 22, 2018. Based on this second conviction, the Corporation dismissed him from service again vide order dated October 6, 2020. Dharampal Singh passed away on June 15, 2022. The petitioners’ subsequent representation for service benefits and compassionate appointment was rejected on September 16, 2022, prompting them to approach the High Court.
Contentions of the Parties
Counsel for the petitioners, Mr. Maninder Arora, argued that the deceased had been duly exonerated in the first criminal case. Regarding the second conviction, it was submitted that the deceased was forced to borrow money for survival due to his unjust dismissal in 2015 and lack of livelihood. Reliance was placed on judgments including Tarsem Singh v. State of Punjab and Jagroop Singh v. The Punjab State Power Corporation Limited, arguing that a dispute regarding dishonour of a cheque for personal reasons is private in nature and does not amount to an offence involving moral turpitude.
Per contra, Counsel for the respondents, Mr. Manbir Singh Batth, contended that the petitioners had concealed the fact that the deceased was terminated on account of his second conviction. Citing Instructions dated August 5, 1998, issued by the Department of Personnel, Government of Punjab, he argued that an employee convicted of a serious offence could be dismissed. It was further submitted that since the dismissal was based on a conviction for an offence involving moral turpitude, the legal heirs were not entitled to gratuity or leave encashment.
Court’s Observations and Analysis
Justice Harpreet Singh Brar analyzed the nature of the offence under Section 138 of the NI Act in the context of service jurisprudence. The Court referred to a clarification issued by the Department of Personnel, Government of Punjab, dated January 24, 2023, which listed offences involving moral turpitude, such as those under the Prevention of Corruption Act, the POCSO Act, and the NDPS Act.
Justice Brar observed:
“The offence under the NI Act cannot reasonably be equated with the offences under the statutes listed above.”
Referring to the Supreme Court judgment in State Bank of India and others v. P. Soupramaniae (2019), the Court reiterated that moral turpitude involves “baseness, vileness, or depravity.”
Addressing the issue of gratuity under Section 4(6) of the Payment of Gratuity Act, 1971, the Court noted that the respondents did not claim the cheques were issued in an official capacity or to cause loss to the Corporation. Justice Brar stated:
“It is not the case of the respondents that the cheques qua which criminal complaints had been filed against the deceased were issued by him in an official capacity to make unlawful gains for himself or cause unlawful loss to respondent-Corporation. As such, no moral turpitude can be attributed to the deceased.”
Decision
The High Court allowed the petition, holding that it is not justifiable to categorize a matter involving dishonour of a cheque, issued in a personal capacity, as an offence involving moral turpitude.
The Court issued the following directions:
- Quashing of Orders: The dismissal order dated October 6, 2020, and the rejection order dated September 16, 2022, were quashed and set aside.
- Deemed Service: The deceased is deemed to be in service until the date of his death on June 15, 2022.
- Release of Benefits: The respondent-Corporation was directed to release all admissible service benefits, including gratuity and leave encashment, to petitioner No. 1 (the widow), subject to the adjustment of Rs. 9,76,602 already disbursed.
- Interest: An interest rate of 6% per annum was awarded on the differential amount from the date of filing the petition until actual payment.
- Compassionate Appointment: The Corporation was directed to consider the case of petitioner No. 2 (the son) for compassionate appointment “strictly in terms of the applicable policy at the time of death of the deceased employee.”
Case Title: Rajwinder Kaur and another v. Punjab State Civil Supplies Corporation and another
Coram: Justice Harpreet Singh Brar
Case No: CWP-16093-2023 Date of Decision: November 21, 2025
