Bombay High Court Allows MCGM's Writ Petition Against Gratuity Order Due to Procedural Irregularities. Controlling Authority's Ex Parte Order Set Aside as Corporation Was Not Given Proper Opportunity to Be Heard.

Writ petition challenging orders of controlling authority and Industrial Court under the Payment of Gratuity Act, 1972.

The petitioner, Municipal Corporation of Greater Mumbai, sought to set aside the ex parte order directing payment of gratuity and to have the matter heard on merits.

The controlling authority passed an ex parte order directing MCGM to pay gratuity to the respondent teacher. MCGM's application to set aside the ex parte order was rejected, and its appeal was dismissed as time-barred.

The controlling authority (Labour Judge) passed an ex parte order on 31 August 2013? (date not mentioned) directing payment of Rs.10 lakhs gratuity. The Labour Court rejected MCGM's application for setting aside the ex parte order. The Industrial Court dismissed MCGM's appeal.

Whether the application for setting aside the ex parte order was a review application barred by limitation under Rule 11(5) of the Payment of Gratuity (Central) Rules, 1972. Whether the appeal under Section 7(7) of the Payment of Gratuity Act, 1972 was time-barred. Whether the petitioner was denied an opportunity to be heard on merits.

The petitioner argued that the application was for setting aside an ex parte order and restoration, not a review, and thus the 30-day limit under Rule 11(5) did not apply. The petitioner contended that the appeal under Section 7(7) was filed within time from the date of the order rejecting the restoration application. The respondent argued that the application was a review and was barred by limitation, and the appeal was also time-barred.

An application for setting aside an ex parte order and restoration of the application is not a review application under Rule 11(5) of the Payment of Gratuity (Central) Rules, 1972, and the 30-day limitation for review does not apply. The appeal under Section 7(7) of the Payment of Gratuity Act, 1972 is maintainable if filed within 120 days from the date of the order rejecting the restoration application. A party should not be denied an opportunity to be heard on merits due to procedural technicalities.

The present petition challenges orders passed by the controlling authority under the Payment of Gratuity Act, 1972 and the Industrial Court in an appeal from that order. The Industrial Court upheld the order of the Labour Court rejecting the corporation's application for restoration, treating it as an application for review and, thus, barred under Rule 11(5). The court held that there was a delay of about 5 months and 17 days in filing the application for review. The court, though it found substance in the corporation's case on merits, considering, however, its conclusion that the appeal was not maintainable on account of the bar of limitation, was of the view that merits of the case could not be examined.

The respondent teacher superannuated on 31 August 2013 and claimed gratuity from MCGM. She approached the controlling authority under the Payment of Gratuity Act, 1972. The controlling authority issued notice to MCGM, but MCGM remained absent, leading to an ex parte order on an unspecified date directing payment of Rs.10 lakhs. MCGM applied for setting aside the ex parte order and restoration. The Labour Court rejected that application. MCGM appealed to the Industrial Court under Section 7(7) of the Act, challenging both the ex parte order and the rejection of the restoration application. The Industrial Court dismissed the appeal on 2 August 2018? (date not mentioned). MCGM then filed the present writ petition in the High Court.

• Payment of Gratuity Act, 1972: Section 7(4), Section 7(7)
• Payment of Gratuity (Central) Rules, 1972: Rule 11(5)