Gratuity is protected and no recoveries could be made from it.File a case with the jurisdictional Assistant commissioner of labour after issuing Form I to the Employer.

Gratuity can be forfeited to the extent of loss/damage incurred by the employer. in your case if the charges are proved and you are terminated for those charges, your gratuity can be forfeited. how ever before such forfeiture the employer should give u a show cause notice. 

Mr. Anand,

You have already mentioned that you were releaved from the Company  on 23rd July'12.  Whether you are having such written releaving letter from your company? if it is so, you can claim your Gratuity. Or otherwise as Mr. Vicky Ji said, such Gratuity amounts can be  forfeited by the Company to the extent of loss. If you have not received such  written releaving letter, you have face the consequences . Once you have releaved from the Company, you need not worry about client complaints since without Company Authorised person's involvement ,you can not do the unauthorised trading.

Mr. Murthy has given valuable advice. Kindly follow it.

Yu must know the superior official of your company who has authorized the transaction.

You have posted that:

--“ i ask the client to file arbitration, But employer not allow the client to file it, and ask me to settle the amount out of office.”

Why the employer has blocked the client and employee to file arbitration?

The contract signed by client might be having the provision for Arbitration.

Is it that employer is afraid that it may spill the beans on him?

Why should employee settle the matter out of office out of his salary?

If you are innocent and client has not lodged any complaint in writing under acknowledgment so far, you can agitate.

You may obtain the copy of register in which all incomings documents are recorded.

You may ensure that a back dated complaint is not entered.

--“ I resigned from there because there is no proper investigation in that matter.” You have not been terminated. { i relieved from there on 23rd July 2012 with proper notice period.}

Do you have acknowledgment of resignation from your company or POD?

Has your resignation been accepted? If no, you may obtain it.

Has your resignation been accepted? Has the company issued FNF statement? If no, you may obtain it.

Has the company issued relieving letter, work experience certificate? If no, you may obtain it, with good comments. As the employer is content by deduction employer may issue both. Be smart and apply your skills to obtain these. The client might be content so you may obtain a suitable written communication if possible.

--“ I resigned from there because there is no proper investigation in that matter.”

Did the company issue any show cause notice to you? Was any inquiry conducted at all?

Has the company produced the inquiry report and provided copy to you?

Payment of Gratuity Act, 1972

Section: 4
Payment of gratuity.

(6) Notwithstanding anything contained in sub-section (1), -

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused.

The company has neither issued any notice to employee, nor conducted any transparent inquiry, and has not issued speaking order with reasons stated in sec 4(6) to forfeit the gratuity to the extent of the damage is must following due process of natural justice.