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Judgment
By this Petition, the Petitioner-employer has challenged judgment and order dated 7 January 2025 passed by the Controlling Authority under the Payment of Gratuity Act and Judge, Seventh Labour Court, Mumbai (Controlling Authority) allowing Application (PGA) No.1122 of 2024 and directing the Petitioner to pay to the Respondent amount of Rs.2,02,664/- towards gratuity alongwith simple interest @ 10% per annum from the date of his retirement i.e. 6 May 2020. The Petitioner has also challenged order dated 5 June 2025 passed by the Controlling Authority in Recovery Application (PGA) No.5 of 2025 by which Recovery Certificate under Section 8 of the Payment of Gratuity Act, 1972 (PG Act) is issued to the Collector for recovery of gratuity amount alongwith2026:BHC-OS:11495 compound interest @ 15% per annum.
The Petitioner is a private limited company engaged in the business of publication of Hindi daily by name ‘Hamara Mahanagar’ and Marathi daily ‘Maza Mahanagar’ having branch offices at Mumbai, Pune and Nashik. The Respondent was working with the Petitioner as Marketing Manager in the marketing department at its Pune office. He was initially engaged as Assistant Manager in October-2001 and was transferred on 17 November 2014 to head office at Pune. He was terminated on 1 March 2015. He served demand letter dated 12 September 2016 seeking reinstatement with full backwages w.e.f. 1 March 2015. At the instance of the Respondent, Reference was made to 6th Labour Court, Mumbai, which was registered as Reference (IDA) No.129 of 2017. By Award dated 13 December 2023, the Reference (IDA) No.129 of 2017 is answered partly in the affirmative by directing reinstatement of the Respondent with 40% backwages from 1 March 2015 till he attained the age of superannuation of 58 years. The Petitioner has filed Writ Petition No.3553 of 2025 challenging the order dated 13 December 2023. The Respondent filed Application (PGA) No.1122 of 2024 seeking payment of gratuity of Rs.3,21,923/- alongwith interest. Notice of Application (PGA) No.1122 of 2024 was served on the Petitioner. However, the Petitioner failed to appear before the Controlling Authority. Accordingly, the Application (PGA) No.1122 of 2024 proceeded ex-parte. By judgment and order dated 7 January 2025, the Application has been allowed by the Controlling Authority directing the Petitioner to pay gratuity of Rs.2,02,664/- alongwith simple interest @10% per annum from the date of retirement i.e. 6 May 2020. Since the Petitioner failed to obey order dated 7 January 2025, Respondent was2026:BHC-OS:11495 required to file Recovery Application, in which again the Petitioner failed to appear despite service of notice. By order dated 5 June 2025 Recovery Application is allowed issuing Recovery Certificate under Section 8 of the PG Act for recovery of amount of Rs.2,02,664/- alongwith compound interest @15% per annum from 6 May 2020. The Tahasildar has issued demand dated 23 September 2025 for execution of the Recovery Certificate.
The Petitioner has filed the present Petition challenging the order passed by the Controlling Authority on 7 January 2025 in Application (PGA) No.1122 of 2024 and order dated 5 June 2025 passed in Recovery Application (PGA) No.5 of 2025.
I have heard Mr. Shukla, the learned counsel appearing for the Petitioner, who submits that the Controlling Authority has erroneously taken into consideration amount of Rs. 31,935/- to be salary of the Respondent for the purpose of payment of amount of gratuity. He relies on salary certificate for January 2015 indicating basic pay of Rs.6,500 and Variable Dearness Allowance as ‘zero’. He submits that gratuity ought to have been computed on Rs.6500/-, which comes to Rs.41,250/-. That the Respondent deliberately did not produce salary slip and made the Controlling Authority to believe that entire amount of Rs.31,935/- is the Basic Pay and Dearness Allowance payable to him. He submits that the Petitioner cannot exercise the remedy of appeal on account of expiry of maximum time of limitation. He accordingly prays for setting aside the orders passed by the Controlling Authority.
Per contra, Mr. Naik, the learned counsel appearing for the2026:BHC-OS:11495 Respondent opposes the Petition submitting that the same is not maintainable as the Petitioner had the remedy of filing Appeal under Section 7 of the PG Act. That the PG Act is a complete code in itself and that therefore without exhausting the remedy of filing an Appeal, a direct Writ Petition cannot be entertained by the High Court. In support, he relies on judgment of this Court in Chief Executive Officer , Zilla Parishad Beed V/s. Assistant Labour Commissioner, and Controlling Authority, Latur and Anr.1 and of Madras High Court in Management of Sri Sowdeswari Industries, Coimbatore V/s. Assistant Commissioner of Labour, Coimbatore and 2 Ors. 2
Mr. Naik further submits that the Petitioner did not appear before the Controlling Authority in two proceedings despite being served. That there is absolutely no justification for non-appearance in the proceedings. That only after Tahasildar issued demand notice that the Petitioner has filed the present Petition bypassing the statutory remedy. The statutory remedy is bypassed to avoid deposit of amount of gratuity. He denies that salary slip was never issued indicating the break-up of amount of salary. He denies having received salary slip at Exhibit-A to the Petition. That before filing application for gratuity, the Respondent had served notice dated 29 January 2024 indicating the amount of gratuity on the basis of salary of Rs.36,500/- at the time of termination. That despite receipt of said notice, no dispute was created by the Petitioner about the amount of salary. He relies on letter of appointment in support of his contention that salary was always paid to the Respondent in lumpsum manner. That in absence of any evidence before the Controlling Authority, this Court cannot directly permit the2026:BHC-OS:11495 Petitioner to rely upon the alleged salary slip. He accordingly prays for dismissal of the Petition.
Rival contentions urged on behalf of the parties now fall for my consideration.
In the present Petition, the Petitioner has challenged the order passed by the Controlling Authority on 7 January 2025 in Application (PGA) No.1122 of 2024. The Petitioner had remedy of preferring appeal against the order passed by the Controlling Authority under sub-section (4) of Section 7 of the PG Act before the Appellate Authority under sub-section (7) of Section 7 of the PG Act. Sub-section (7) of Section 7 of the PG Act provides thus:
7. Determination of the amount of gratuity-
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(7)Any person aggrieved by an order under sub-section(4) may, within sixty days from the date of the receipt of the order, prefer an appeal to the appropriate government or such other authority as may be specified by the appropriate government in this behalf:
Provided that the appropriate government or the appellate authority, as the case may be, may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days:
Provided further that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under sub-section (4), or deposits with the appellate authority such amount.
The Appeal however needs to be filed within a period of 60 days2026:BHC-OS:11495 from the date of receipt of order of the Controlling Authority. Under first Proviso to sub-section (7) of Section 7 of the PG Act, the Appellate Authority has power of condoning the delay of only 60 days. Thus, appeal under sub-section (7) of Section 7 of the PG Act cannot be filed once period of 120 days has passed from the date of passing of the order by the Controlling Authority. Second Proviso to sub-section (7) of Section 7 of the PG Act provides that no appeal filed by the employer can be admitted unless at the time of filing of the appeal, the appellant either produces the certificate of Controlling Authority about deposit of amount equal to the amount of gratuity to be deposited under sub-section (4) of Section 7 of the PG Act or the Appellant deposits with the Appellate Authority such amount. No appeal can be entertained unless the awarded amount of gratuity is first deposited by the employer. The statutory scheme of sub-section (7) of Section 7 of the PG Act is that though remedy of appeal is provided, such remedy has to be exercised within maximum period of 120 days. There is legislative objective behind prescribing a limit on condonation of delay considering the position that the PG Act is a social welfare legislation. Gratuity is payable only upon cessation of employment and is to be paid at the time of their retirement. Legislative objective is that employees cannot be made to wait endlessly for receipt of gratuity. The gratuity is to be paid with a view to provide financial assistance to the employee whose monthly salary stops after cessation of service/retirement. Therefore, the Legislature has put an embargo on condonation of delay in filing appeal under first proviso to sub-section 7 of Section 7 of the PG Act. An additional condition is imposed in the second Proviso for employers, who cannot embroil the employee in endless litigation by simply lodging an appeal before the Appellate Authority. The employer must deposit2026:BHC-OS:11495 awarded amount of gratuity so that baseless appeals are not filed with the objective of delaying payment of gratuity and the employee does not have to run behind the employer for recovery of gratuity, in the event of dismissal of the appeal
In Chief Executive Officer, Zilla Parishad, Beed (supra), order passed by the Controlling Authority was directly sought to be challenged before the High Court under Articles 226 and 227 of the Constitution of India. Discouraging such tendency and keeping in mind the legislative scheme of the PG Act, this Court held in paragraphs 10 to 13 of the judgment as under:-
10.The question therefore is when a specific act has been put in place to deal with all connected and incidental issues to payment of gratuity, whether it would it be appropriate for any party, in order to avoid the precondition of deposit of entire amount while filing appeal, to by pass the said provision and invoke the writ jurisdiction of this Court.
11.The payment of gratuity and its provisions is a part of social security legislation which not only has to be dealt with on a broader spectrum, but with a high degree of sensitivity.
12.I have therefore no hesitation in concluding that this writ petition, filed with an intent and object of avoiding deposit of the determined amount while preferring an appeal, is not maintainable before this Court, by bypassing the Appeal provision u/s. 7(7).
13.In the light of the above, the petition stands dismissed for being untenable. Nevertheless, this would not come in the way of the petitioner taking recourse to section 7 (7) of the Gratuity Act for preferring an appeal against the impugned order dated 23/08/2011 passed by the Controlling Authority.
Similarly, in Management of Sri Sowdeswari Industries, Coimbatore (supra) the Madras High Court deprecated the shortcut method of challenging order of Controlling Authority by filing Writ2026:BHC-OS:11495 Petition in the High Court and has held in paragraphs 5 to 8 as under:-
5.The contention of the third respondent-workman is that the statutory appeal provided under Section 7(7) of the Payment of Gratuity Act, has not been exhausted by the writ petitioner-management and it is a precondition that in the event of preferring an appeal under Section 7(7) of the Act, the amount of gratuity to be deposited and the said appeal must be filed within a period of 60 days from the date of the original order. The writ petitioner had not done anything in this regard and therefore, the writ petition deserves to be rejected.
6.The learned counsel appearing on behalf of the writ petitioner states that the management during the relevant point of time was closed down and was not running the business. Therefore, it will be difficult for the management to settle the entire dues to the employees. This Court is not inclined to accept such contentions in view of the fact that the writ petitioner-management received the notice from the first respondent-competent authority and failed to participate in the adjudication in an effective manner.
7.This apart, the final order had been passed by the first respondent on 2.7.2012 and thereafter, the recovery certificate was also issued on 3.4.2014. The writ petition was filed on 22.4.2014, challenging the original order passed by the first respondent without exhausting the remedy of appeal provided under Section 7(7) of the Gratuity Act.
8.Thus, the writ petitioner has not exhausted the statutory remedy provided under the Act, not deposited the gratuity amount for the purpose of preferring an appeal and no such appeal was filed within a period of 60 days as contemplated under the said Act. This being the factum of the case, this Court is of the opinion that the writ petitioner has not established any ground for the purpose of considering the claim made in the writ petition. Accordingly, the writ petition stands dismissed and the order passed by the first respondent in G.A.No.6 of 2012 dated 2.7.2012 stands confirmed. However, there shall be no order as to costs. Consequently, connected miscellaneous petitions are also dismissed.
In my view, in the present case as well, the Petitioner cannot be permitted to bypass the statutory remedy under the PG Act by filing Writ Petition directly in this Court merely because the maximum period of condonable delay has expired. No doubt, High Court can always entertain Writ Petitions by ignoring availability of alternate remedies in2026:BHC-OS:11495 appropriate cases, particularly when the order is without jurisdiction or where gross violation of principle of natural justice is involved. [See: Whirlpool Corporation v/s. Registrar of Trade Marks, Mumbai and ors.3].
However, in the present case, Petitioner does not really dispute entitlement of the Respondent for payment of gratuity. The Petition is filed creating dispute about quantum of gratuity payable. The case thus does not involve total absence of jurisdiction in passing the impugned order by the Controlling Authority nor the case is of violation of principles of natural justice as the Petitioner had received notices both of PGA Application as well as of Recovery Application. It is the Petitioner, who has acted negligently and did not appear before the Controlling Authority and did not even bother to verify outcome of the proceedings. The case also does not involve a situation where gratuity itself is not payable to the Respondent.
As observed above, the Petitioner does not seriously dispute entitlement of the Respondent for gratuity. Existence of employer-employee relationship or completion of five years of service is also not under dispute. Therefore, the Respondent is undoubtedly entitled to receive gratuity from the Petitioner. Merely because the dispute is sought to be created about quantum of gratuity payable, this Court would not entertain a direct Petition filed by the employer ignoring the alternate remedy under sub-section (7) of Section 7 of the PG Act.
Even otherwise, I do not find any valid reason to interfere in the quantum of gratuity awarded by the Controlling Authority. Petitioner's reliance on the alleged salary certificate cannot be a2026:BHC-OS:11495 reason for setting at naught the order passed by the Controlling Authority. The said document is sought to be produced directly before this Court. It is just a computer-generated statement without bearing any signature. Since Petitioner did not appear before the Controlling Authority, there was no question of it producing the pay slip before the Controlling Authority. Having failed to produce the said slip before the Controlling Authority and having not exercised the statutory remedy of filing Appeal, Petitioner cannot be permitted to take disadvantage of his own wrong by producing directly before this Court copy of a document claiming to be the pay slip of January 2015. Even otherwise, the said pay-slip does not inspire confidence. It is difficult to believe that a person carrying the designation of Marketing Manager and gross emoluments of Rs.31,935/- can be paid basic salary of only Rs.6,500/-. The Respondent has emphatically denied having provided with any pay slip at any point of time. On the other hand, the Respondent has taken a specific plea that he was being paid consolidated salary by the employer without indicating the break-up. The initial appointment letter dated 17 October 2008 indicates monthly remuneration of Rs.20,000/-. The remuneration of Rs.20,000/- paid in the year 2008 rose upto Rs.31,935/- by the year 2015. Except producing a stray document in the form of alleged pay slip for January 2015, the Petitioner has not made a statement in the Petition that the said pay slip was ever handed to the Respondent or that Petitioner always used to provide copy of pay slips every month to the Respondent. There is no averment in the Petition that there is a practice of issuance of pay slips to all the employees of the Petitioner. It is therefore difficult to believe that the Respondent was being paid2026:BHC-OS:11495 basic salary of only Rs.6,500/-. In this regard, following averment in the Affidavit-in-Reply is relevant :
Respondent is not aware about breakage of salary in as much as the Respondent never received any pay slip. Respondent states that Petitioners used to pay the salary amount in the bank account of the Respondent'
Considering the above position, I am not inclined to interfere in the impugned orders passed by the Controlling Authority. The Writ Petition is devoid of merits. It is accordingly dismissed with no order as to costs. The Respondent shall be entitled to withdraw the deposited amount of Rs.2,00,000/- alongwith accrued interest thereon. Petitioner shall pay balance amount of gratuity and interest by calculating the interest amount upto the date of deposit of amount of Rs.2,00,000/- in this Court. The payment shall be made within a period of 4 weeks.