Conviction under Section 138 NI Act for dishonor of cheque does not constitute moral turpitude

Punjab and Haryana High Court Rules: Dishonor of Personal Cheques Not Moral Turpitude; Orders Compassionate Appointment Court Quashes Dismissal, Directs Release of Service Benefits to Legal Heirs of Deceased Employee Convicted Under NI Act

In a significant ruling, the Punjab and Haryana High Court, presided over by Justice Harpreet Singh Brar, has set aside the dismissal of a deceased employee of the Punjab State Civil Supplies Corporation. The court ruled that a conviction under Section 138 of the Negotiable Instruments Act, concerning dishonor of cheques issued in a personal capacity, does not amount to an offence involving moral turpitude. Consequently, the court ordered the release of the deceased employee's service benefits and directed the consideration of his legal heir for compassionate appointment.

The case revolved around the dismissal of Dharampal Singh, a Chowkidar with the respondent-Corporation, following his conviction under Section 138 of the NI Act. The court observed that the conviction was not for an act committed in his official capacity but for personal financial distress, which does not constitute moral turpitude as per legal interpretations and precedents.

Despite Dharampal Singh's acquittal in an earlier appeal, the Corporation had not reinstated him, leading to continued financial hardship for his family. After his demise, his legal heirs petitioned for the release of service benefits and compassionate appointment of his son, which the Corporation had denied based on his dismissal.

In its judgment, the court emphasized that the legal heirs are entitled to gratuity and leave encashment and that the corporation's action of withholding these benefits was unjustified. Additionally, the court mandated the respondent-Corporation to consider the case of the deceased’s son for compassionate appointment in accordance with the prevailing policy at the time of the employee’s death.

The decision underscores the court’s stance that not all convictions automatically lead to dismissal, especially when they do not involve moral turpitude or acts against the employer's interest. The judgment aligns with the principles laid out in previous rulings, reinforcing the need for fair assessment of the circumstances leading to an employee’s conviction before imposing severe penalties like dismissal.

This ruling is expected to set a precedent for similar cases where employees are dismissed on grounds of convictions unrelated to their professional conduct or duties.

Bottom Line:

Compassionate appointment and service benefits - Conviction under Section 138 NI Act for dishonor of cheque issued in personal capacity does not constitute moral turpitude - Legal heirs entitled to gratuity and leave encashment - Compassionate appointment must be considered as per applicable policy.

Statutory provision(s): Article 226 of the Constitution of India, Section 138 of the Negotiable Instruments Act, 1881, Section 4(6) of the Payment of Gratuity Act, 1971.

Rajwinder Kaur v. Punjab State Civil Supplies Corporation, (Punjab And Haryana) : Law Finder Doc Id # 2812521