Case Note & Summary
The petitioner, The Maharashtra State Co-operative Marketing Federation Ltd., challenged an order dated 19th October 2018 passed by the Appellate Authority under the Payment of Gratuity Act, 1971 (the Act) in PGA Application No.2 of 2012. The respondent, Subhash Tukaram Nikam, a former employee, had filed an application before the Controlling Authority seeking gratuity of Rs.5,47,000/- with interest. The Controlling Authority allowed the application on 9th February 2015, directing payment of Rs.5,47,000/- with interest at 9% p.a. from 31st March 2010. The petitioner appealed to the Appellate Authority, which condoned the delay on 5th April 2018. During the appeal, the petitioner filed an application on 9th October 2018 seeking to deposit a demand draft of Rs.5,47,000/- with the Appellate Authority. The Appellate Authority rejected this application on 19th October 2018, holding that under Section 7(7) of the Act, such an application was not maintainable as there is no provision for accepting the gratuity amount during the appeal. The petitioner then filed the present writ petition. The High Court examined Section 7(7) of the Act, which states that the appellate authority has the power to confirm, modify, or reverse the order of the controlling authority. The Court noted that the Act only provides for deposit of the gratuity amount under Section 7(3A) before the Controlling Authority, and there is no corresponding provision for deposit before the Appellate Authority. The Court held that the Appellate Authority correctly rejected the application as there was no legal basis to accept the demand draft. The writ petition was dismissed, and the Appellate Authority was directed to decide the appeal on its own merits within six months.
Headnote
A) Payment of Gratuity Act, 1972 - Section 7(7) - Deposit of Gratuity Amount During Appeal - No Provision - The Appellate Authority rejected the employer's application to accept a demand draft of the gratuity amount during the pendency of the appeal, holding that Section 7(7) of the Act does not provide for such a deposit. The High Court upheld the order, noting that the Act only provides for deposit under Section 7(3A) before the Controlling Authority, and no corresponding provision exists for the appellate stage. (Paras 1-4)
Issue of Consideration
Whether the Appellate Authority under the Payment of Gratuity Act, 1971 can accept a demand draft of the gratuity amount from the employer during the pendency of an appeal, in the absence of any provision under Section 7(7) of the Act.
Final Decision
The High Court dismissed the writ petition, upholding the order of the Appellate Authority dated 19th October 2018. The Court directed the Appellate Authority to decide the appeal on its own merits within six months from the date of the order.
Law Points
- Section 7(7) of Payment of Gratuity Act
- 1972
- no provision for deposit of gratuity amount during appeal
- appellate authority cannot accept demand draft
- writ petition dismissed
Case Details
2025 LawText (BOM) (12) 243
Writ Petition No.5489 of 2019
Mr. Narendra Bandiwadekar, Senior Advocate with Mr. Sagar Mane, i/b. Ms. Ashwini Bandiwadekar, for the Petitioner. Mr. Manoj A. Patil, for the Respondent.
The Maharashtra State Co-operative Marketing Federation Ltd.
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Nature of Litigation
Writ petition challenging order of Appellate Authority under Payment of Gratuity Act, 1971 rejecting employer's application to deposit gratuity amount during appeal.
Remedy Sought
Petitioner sought quashing of order dated 19th October 2018 rejecting its application to accept demand draft of Rs.5,47,000/-.
Filing Reason
Petitioner's application to deposit gratuity amount during appeal was rejected by Appellate Authority on ground of maintainability under Section 7(7) of the Act.
Previous Decisions
Controlling Authority allowed respondent's gratuity application on 9th February 2015 directing payment of Rs.5,47,000/- with interest. Petitioner appealed; delay condoned on 5th April 2018. Petitioner's application to deposit demand draft rejected on 19th October 2018.
Issues
Whether the Appellate Authority under the Payment of Gratuity Act, 1971 can accept a demand draft of the gratuity amount from the employer during the pendency of an appeal, in the absence of any provision under Section 7(7) of the Act.
Submissions/Arguments
Petitioner argued that it was willing to deposit the gratuity amount and the Appellate Authority should have accepted it.
Respondent supported the Appellate Authority's order, contending that there is no provision for such deposit under Section 7(7).
Ratio Decidendi
Under Section 7(7) of the Payment of Gratuity Act, 1971, the Appellate Authority has only the power to confirm, modify, or reverse the order of the Controlling Authority. There is no provision for the Appellate Authority to accept a deposit of the gratuity amount during the pendency of an appeal. The Act only provides for deposit under Section 7(3A) before the Controlling Authority. Therefore, the Appellate Authority correctly rejected the employer's application to accept a demand draft.
Judgment Excerpts
The Appellate Authority rejected said application vide impugned order dated 19th October 2018, observing that in view of provision of Section 7(7) of the Act, application is not maintainable.
The Act only provides for deposit of the gratuity amount under Section 7(3A) before the Controlling Authority, and there is no corresponding provision for deposit before the Appellate Authority.
Procedural History
Respondent filed PGA Application No.2 of 2012 before Controlling Authority for gratuity. Controlling Authority allowed it on 9th February 2015. Petitioner appealed to Appellate Authority, which condoned delay on 5th April 2018. Petitioner filed application on 9th October 2018 to deposit demand draft, which was rejected on 19th October 2018. Petitioner then filed Writ Petition No.5489 of 2019 before the High Court.
Acts & Sections
- Payment of Gratuity Act, 1971: Section 7(7), Section 7(3A)
