Case Note & Summary
The petitioners, the Maharashtra State Cooperative Tribal Development Corporation Ltd. and its officers, challenged the order of the Controlling Authority under the Payment of Gratuity Act, 1972 directing them to pay Rs.1,80,000/- as gratuity to the respondent No.1, Purushottam Raut, along with interest at 10% per annum. The respondent No.1 was employed as a Grader with the petitioners from 4 November 1978 until his dismissal from service on 23 May 2000. On 18 April 2011, he filed an application before the Controlling Authority claiming gratuity. The employer opposed the application on the ground that it was time-barred and also disputed the employee's entitlement to gratuity. The Controlling Authority held that the employee was entitled to gratuity and directed payment. The employer's appeal to the Industrial Court was dismissed on 17 January 2014. The employer then filed a writ petition in the Bombay High Court. The High Court examined the issue of limitation under the Payment of Gratuity Act, 1972. It held that Section 7(7) of the Act, which prescribes a limitation period of 90 days, applies only to appeals filed under that sub-section and not to original applications for gratuity under Section 7(2). The Act does not prescribe any limitation for making an application for gratuity. The controlling authority has the power to entertain an application even if filed beyond 90 days. The court also considered the ground of forfeiture of gratuity under Section 4(6) of the Act. It noted that gratuity can be forfeited only in cases of willful omission or negligence causing damage to property, riotous or violent conduct, or an offense involving moral turpitude. The employer did not establish any such grounds. The court further observed that the employee had explained the delay by stating that he was pursuing other remedies, which was accepted by the authorities below. The High Court found no perversity in the concurrent findings of the authorities and dismissed the writ petition, upholding the order for payment of gratuity with interest.
Headnote
A) Gratuity - Limitation - Section 7(7) Payment of Gratuity Act, 1972 - The limitation period of 90 days prescribed under Section 7(7) applies only to appeals filed under that sub-section and not to original applications for gratuity made under Section 7(2). The controlling authority has the power to entertain an application even if filed beyond the period of 90 days, as the Act does not prescribe any limitation for making such application. (Paras 7-9) B) Gratuity - Forfeiture - Section 4(6) Payment of Gratuity Act, 1972 - Gratuity can be forfeited only if the employee's services have been terminated for any act of willful omission or negligence causing damage to the employer's property, or for riotous or violent conduct, or for an offense involving moral turpitude. The employer must establish such grounds; mere dismissal from service does not automatically result in forfeiture. (Para 10) C) Gratuity - Delay in Filing Application - Condonation - The controlling authority has the discretion to condone delay in filing an application for gratuity if sufficient cause is shown. In the present case, the employee explained the delay due to pursuing other remedies, which was accepted by the authorities below. (Paras 11-12)
Issue of Consideration
Whether the application for gratuity filed by the employee after a delay of about 11 years from the date of dismissal was barred by limitation under the Payment of Gratuity Act, 1972.
Final Decision
Writ petition dismissed. Orders of controlling authority and appellate authority upheld. Employer directed to pay gratuity of Rs.1,80,000/- with interest at 10% per annum.
Law Points
- Limitation under Section 7(7) of Payment of Gratuity Act
- 1972 applies only to appeals
- not to original applications for gratuity under Section 7(2)
- Gratuity is a statutory right and cannot be forfeited except as per Section 4(6)
- Delay in filing application can be condoned by controlling authority in appropriate cases
