The court affirmed that the controlling authority can determine the employer-employee relationship for gratuity claims, establishing that IIT Bombay was liable for gratuity payments to contract employees based on the nature of control and service rendered.

JUDGMENT :

1) Rule. Rule is made returnable forthwith. With the consent of the learned counsel appearing for parties, the Petitions are taken up for final disposal.

2) Indian Institute of Technology, Bombay (IIT Bombay) has filed these Petitions challenging the orders passed by the Assistant Labour Commissioner (Central), Mumbai acting as Controlling Authority under the Payment of Gratuity Act, 1972,(PG Act) allowing the applications filed by Respondent-employees and directing payment of gratuity to them. The orders passed by the Controlling Authority have been upheld by the Appellate Authority and the Deputy Chief Labour Commissioner(Central), Mumbai by orders dated 3 April 2024, which are also subject matter of challenge in the present Petitions.

3) Petitioner IIT-Bombay is a premier research and educational institute in technology and engineering disciplines and established under the provisions of the Institute of Technology Act, 1961. It is recognized as institute of eminence by the Government of India. Petitioner has employed regular staff for conducting various study and academic programs. Its campus is spread over land admeasuring more than 500 acres. Various projects undertaken by Petitioner for different durations are implemented by itself or through collaboration of private or government organisations. With a view to maintain the infrastructure spread over vast tract of land as well as for execution of various projects, Petitioner needs manpower of skilled, semi- skilled and unskilled in nature. For provision of such manpower, Petitioner engages various contractors for supply of required labour force.

4) According to Petitioner, the Respondents-employees are few such contract labourers provided by various contractors engaged by it for execution of various works at the campus as well as on projects undertaken by IIT, Bombay. It is contended that Respondents are employees of the concerned contractors and that there has been no employer-employee relationship between Petitioner and Respondents at any point of time. It appears that the last engagement of the Respondents was through the contractor M/s. Moosa Services Company. Respondents filed applications in Form ‘N’ before the Controlling Authority complaining about the non-payment of gratuity by the Petitioner. The Controlling Authority issued notices to the Petitioner in such applications. Petitioner appeared before the Controlling Authority and filed its reply denying existence of any employer-employee relationship as well as responsibility to pay gratuity to the Respondents. Petitioner also relied upon Clause 9 of the relevant Work Order, under which the contractor was under obligation to follow all labour laws. Petitioner prayed for dismissal of the applications.

5) Evidence was led before the Controlling Authority. After considering the rival contentions, the Controlling Authority held that Petitioner was liable to pay gratuity to Respondents and accordingly passed order dated 31 January 2022 directing it to pay following amounts to Respondents towards gratuity as under:

The Controlling Authority has further directed Petitioner to pay simple interest @10% per annum on the amounts indicated above w.e.f. the dates of retirement of each of the Respondents, till the date of actual payment.

6) Petitioner filed Appeals before the Appellate Authority challenging the orders passed by the Controlling Authority. It appears that while filing the Appeals, Petitioner deposited the principal amount of gratuity with the Appellate Authority. Appellate Authority has however, dismissed Petitioner’s appeal by order dated 3 April 2024. Petitioner has accordingly filed the present Petitions challenging the orders passed by the Controlling and the Appellate Authority.

7) Mr. Arsh Misra, the learned counsel appearing for the Petitioner would submit that t