A2Z Infraservices Limited vs Assistant Labour Commissioner & Ors.

TARA VITASTA GANJU, J.: (Oral)

The present Petition has been filed on behalf of the Petitioner seeking to challenge an office order bearing No.ALC-III/36/RC to 134/2020-SK dated 02.03.2022 [hereinafter referred to as the “Office Order”] and the recovery certificate dated 09.09.20222 bearing Memo No.1872/DRA [hereinafter referred to as the “Recovery Certificate”] issued against the Petitioner for recovery of an amount of Rs.62,94,754/-.

The grievance of the Petitioner as articulated in the Petition is that although the demand was raised against on the Petitioner, the recovery certificate was issued without following the procedure as laid down in Section 8 of the Payment of Gratuity Act, 1972 [hereinafter referred to as “Act”] as well as Rules 17 and 19 of the Payment of Gratuity (Central) Rules, 1972 which mandates issue of a show cause notice before issue of a recovery certificate. It is the case of the Petitioner that no such show cause notice was ever received by the Petitioner.

This Court, on 24.01.2023, after examining the matter, had passed the following directions:

Learned Counsel for the Petitioner submits that no show cause notices were ever received by the Petitioner. In addition, it is contended that the Annexure A-1 (Colly) which has been filed along with the Short Affidavit shows that show cause notices were sent out to the Petitioner at the same addresses, however he submits, that the speed post number for each of these show cause notices is the same being ED 956733845IN.

Learned Counsel for the Respondent No.1 submits the show cause notices were sent and that the relevant extract of the dispatch register has also been placed on record.

It is the case of the Respondent that several Claim Petitions were filed under the Act against the Petitioner. On receipt of these claims, notices were issued to the parties and show cause notices were issued to the Petitioner at its address as well. The Affidavit also states that the details of the show cause notices are annexed to the Affidavit as well as the extract of the dispatch register.

Annexure A-1 to the Affidavit is a tabular chart which sets out 264 entries stated to be show cause notices dated 24.12.2021 dispatched on 31.12.2021. 132 of these entries have been sent to the Petitioner at one address and under speed post no. ED956733845 while the remaining notices from 133 to 264 have also dated 24.12.2021 stated to be dispatched on 31.12.2021 at second address and under speed post no. ED 956733845IN. It is apposite to extract Annexure A-1 as reproduced in the Affidavit which is below:

Thus, as contended by the Respondent, 264 notices have been sent by two speed post communications bearing ED 956733845 and ED 956733845IN. As proof of dispatch, an extract of the dispatch register has also been placed on record. However, no delivery receipts are present.

The Petitioner has contended that he did not receive any of these notices. The Respondent, on the other hand, has only been able to place on record the dispatch details without any acknowledgment or delivery proof. The Affidavit filed also does not contain any dates when these notices were stated to have been delivered to the Petitioner.

The first proviso to Section 8 of the Act sets out that the controlling authority, before issuing a notice for recovery of gratuity shall give the employer a reasonable opportunity of showing cause against such certificate in the following terms:

The Affidavit as filed does not set out whether the compliance in terms of proviso to Section 18 of the Act or the Rule 17 of the Payment of Gratuity (Central) Rules, 1972 has been carried out prior to issuing of the recovery certificate. No other details are forth coming in the hearing either.

In the absence of such material particulars renders insufficient to establish that due service of show cause notices was effected on the Petitioner as is the Short Affidavit thus cannot be relied upon in support of the contentions of the Respondent No.1.

Accordingly, in view of what is stated above, the Office Order and consequent Recovery Certificate are accordingly set aside. All consequential orders flowing therefrom are also set aside.

The Respondent No.1 is however at liberty to take appropriate steps in accordance with law to effect recoveries from the Petitioner, if due. The rights and contentions of both parties shall be left open in this behalf.

The Petition is allowed. All pending Applications stand closed.

The parties shall act based on the digitally signed copy of the order.