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When charge-sheet does not show any financial loss caused to the employer, gratuity cannot be withheld and forfeited. - The Payment of Wages Act, 1936

Forfeiture of gratuity may be effected by complying with the provisions of Section 4 (6) (b) of the Payment of Gratuity Act, 1972 but only to the extent of loss suffered and proved in the enquiry. For invoking provisions of Section 4 (6) (b) of the Payment of Gratuity Act, 1972, not only termination of services of the concerned employee is imperative but such a termination is to be effected on the basis of enquiry finding in the charge-sheet having allegation of specific financial loss caused to the employer, show cause notice for termination of services as well as forfeiture of gratuity, satisfying requirements of Section 4 (6) of the Act. Since the charge-sheet shows that none of the charges has been alleged to have caused any financial loss to the management, there is no justification to withheld gratuity till conclusion of enquiry.

-Sarva Haryana Gramin Bank (SHGB) vs. Rajpal Singh Sangwan, 2019 (P&H H.C)

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