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Can gratuity amount forfeited against staff home loan outstanding if contractually agreed

(Querist) 07 September 2012 This query is : Resolved 
Please let me know that, Can employer have right to adjust the Gratuity amount / retirement benefit against the loan outstanding (if turned in to NPA), if the employee had agreed by way of execution of staff loan agreement (under Contract Act) ?

Whether employee have right to restrain or challenge in any manner the action of employer, for forfeiture of gratuity amount under Consumer Protection Act, as he s not now in service with the employer ?

Regards,
Sudhir Kumar, Advocate (Expert) 07 September 2012
Yes gratuity can be set off against HBA.

COnsumer Protectin act for employee-employer relations?? It is not possible.
V R SHROFF (Expert) 07 September 2012
Gratuity can be set off against home loan [ but PF cannot}
Hetalkumar (Querist) 09 September 2012
There are certain protection given u/s. 12/13 of Payment of Gratuity Act to the Gratuity amount. Please clarify the correct position as to the adjustment of it against Home Loan or any mis-conduct resulting to employer put into immense financial loss. Please provide ruling in regard to set off or adjustment by employer towards loss/ home loan overdues of employee. It would be a great assistance for me. Thanking you again.
Sudhir Kumar, Advocate (Expert) 10 September 2012
You are right

Section 13 reads as under :-

No gratuity payable under this Act and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under section 5 shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court.
Hetalkumar (Querist) 10 September 2012
Sir,

Then, is there any solution of my query ?

Regards,
Hetalkumar


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