Allahabad High Court: Gratuity Due To Employee Cannot Be Stopped


The Allahabad High Court has said that under no circumstances can an employee’s gratuity be stopped. Even if the decree passed by the Court or in any other way proves the liability of the employee, gratuity cannot be attached to his reimbursement.

This order was given by a division bench of Chief Justice Govind Mathur and Justice Piyush Aggarwal on the petition of bank employee Bhudev Trivedi on Wednesday.

The Court directed the bank to make the payment within 15 days, terming it illegal to stop the payment of gratuity to bank employees, who became guarantors when the company’s account was NPA (Non Performing Asset).

The petitioner was the guarantor for the Jai Gopal Inter Prize. When the company’s account became NPA, the bank withheld the gratuity of the petitioner on retirement on the basis that the guarantor also has the responsibility. A petition was filed against it in the High Court. The single bench rejected the petition. This order was challenged in a special appeal.

The bench said that there is a provision in the service manual of the petitioner on the basis of which gratuity can be stopped. There is no provision to stop gratuity even in the Payment of Gratuity Act. Further, gratuity cannot be attached under sub-section (1) clause (g) of section 60 of the Code of Civil Procedure. Under this section, gratuity has immunity from affiliation.

Even if the decree passed by a court or in any other way proves the liability of the petitioner, it cannot be repaid by the amount of gratuity.

The Court directed the employing bank to pay the gratuity of the petitioner with interest within 15 days.

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