The main legal point established in the judgment is the interpretation and application of the provisions of the Payment of Gratuity Act, 1972, in determining the entitlement of an employee to claim gratuity.

1. The Appellant/Defendant has filed the present appeal as against the judgment and decree dated 6/8/1997 in O.S.No.2771 of 1996 passed by the learned VII Additional Judge, City Civil Court, Chennai.

2. PLAINT FACTS:- The Appellant/Defendant, a Company registered under the Companies Act has been managed and administered more in the nature of a partnership concerned. The First Respondent/Plaintiff (Deceased), in his capacity as the first Managing Director and then Director of the Appellant/Defendant Company has contributed extensively to its growth and success. Due to relentless efforts of the First Respondent/Plaintiff, the Appellant/Defendant's company's record was unblemished and its turnover and profit increased by leaps and bounds.

3. The First Respondent/Plaintiff was not re-elected as Director in the Appellant/Defendant company in the meetingss held on 6/4/1981. The First Respondent/Plaintiff (since deceased) during his lifetime, requested the Appellant/Defendant's company to settle all the dues to be paid to him during his tenure as Director and subsequently in the Appellant/Defendant Company. But the

Appellant/Defendant Company intentionally withheld the payment due to the First Respondent/Plaintiff, his state of accounts relating to him.

4. The Appellant/Defendant Company sent several reminders to furnish him with the statement of accounts, wrote a letter to the Appellant/Defendant on 10/4/1982, calling upon it to send its statement of accounts or face the consequences. The Appellant/Defendant Company, by its letter dated 26/4/1982, sent the statement of accounts to the First Respondent/Plaintiff. The First Respondent/Plaintiff through its letters dated 29/5/1982, 30/7/1982, 17/2/1983 and 28/3/1983, requested the Appellant/Defendant Company to set right the statement of accounts and pay him his legal and actual dues that he is entitled to towards which due credit would have to be given to his account. According to the First Respondent/Plaintiff, the Appellant/Defendant Company owed him a sum of Rs.2,38,559.76 as on 30/9/1982. But the Appellant/Defendant Company showed that there is a debit balance of Rs.6,805/-due by the First Respondent/Plaintiff to the Appellant/Defendant Company.

5. A sum of Rs.2,38,559.76 due by the Appellant/Defendant Company to the First Respondent/Plaintiff represented his remuneration, sales commission, gratuity and miscellaneous expenses that the plaintiff was entitled to receive, expend and be reimbursed. The First Respondent/Plaintiff was entitled to the gratuity as claimed in the statement of account which was substantiated as per the Board Resolution of the Appellant/Defendant Company dated 3/3/1981.

6. The First Respondent/Plaintiff issued a legal notice to the Appellant/Defendant Company dated 27/12/1983 for which the Appellant/Defendant Company sent a reply dated 24/2/1984 denying his legitimate claims.

7. Hence, the First Respondent/Plaintiff, filed a suit for recovery of the principal sum of Rs.2,38,559.76 with interest at 12% p.a., which came to Rs.57,127.92 and thus, in all, the Appellant/Defendant Company, have to pay a sum of Rs.3,35,687.68 with further interest at the rate of 6% p.a., from the date of plaint till the date of realisation.

8. WRITTEN STATEMENT AVERMENTS:- According to the Appellant/Defendant Company, the First Respondent/Plaintiff was the Director of the Company for about 30 years and he was the Managing Director for about 10 years. The first Managing Director of the Appellant/Defendant Company was one C.A.Chettiar and thereafter, the First Respondent/Plaintiff became the Managing Director. The First Respondent/Plaintiff was not re-elected as Director of the Appellant/Defendant Company at the Annual General Meeting of the Company held on 6/4/1981. Whatever the payments were due to the First Respondent/Plaintiff was partly paid to him during his tenure as the Director and whatever, the balance left was adjusted for the payments due from him to the Appella