Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(Mad) 11494

IN THE HIGH COURT OF JUDICATURE AT MADRAS
A.D. Maria Clete, J
Aspire Systems (India) Private Limited – Appellant
Versus
Venkatesh Veerasamy – Respondent
W.P.Nos. 25310 & 25314 of 2021|W.M.P. Nos. 26718 & 26723 of 2021

Advocates:
For the Appellants/Petitioners: Anitha Suresh, Bhagavath Krishnan, Jyotsna Sivakumar
For the Respondents: Naveen Kumar

The Payment of Gratuity Act does not provide a limitation period for filing claims before the controlling authority. Subordinate rules imposing such limits are ultra vires. Furthermore, forfeiture of gratuity is a penal measure requiring due process and an opportunity for adjudication on merits before the competent authority.

Headnote:(A) Payment of Gratuity Act, 1972 - Section 4(6) and Section 7(4) - Industrial disputes - Forfeiture of terminal benefits - Limitation period for filing applications - The Act does not prescribe a limitation period for submitting an application to the controlling authority for determining gratuity disputes - Subordinate legislation cannot impose limitation periods where the parent statute has not provided for the same, as such provisions are ultra vires the act. (Paras 16, 17, 18)

(B) Principles of Natural Justice - Adjudication of gratuity claims - Forfeiture of terminal benefits is a penal action which must be preceded by due process of law and an opportunity for the employee to contest the claims before a competent authority. (Paras 14, 15)

(C) Condonation of Delay - Sufficient cause - Judicial discretion - The expression 'sufficient cause' for condoning delay must be interpreted liberally to advance substantial justice, avoiding pedantic interpretations that result in the denial of a decision on merits. (Paras 20, 21)

Facts of the case:
The management filed petitions challenging orders passed by the controlling authority that allowed applications for the condonation of delay in filing gratuity claims. The management had previously forfeited the employees' gratuity on grounds of alleged misconduct and financial loss. The management contended that the claims were filed with significant delay and that the controlling authority erred in condoning said delay, while the employees sought adjudication on the merits of their entitlement to gratuity.

Findings of Court:
The court found that the controlling authority acted within its jurisdiction. It held that the absence of a prescribed limitation period in the parent Act meant that claims could not be summarily rejected as time-barred. Furthermore, the forfeiture of terminal benefits requires a proper inquiry, and the interim applications filed by the management were viewed as vexatious attempts to delay the adjudication of the employees' rightful terminal benefits.

Issues: Whether there is a mandatory limitation period for filing an application before the controlling authority under the statute, and whether the forfeiture of gratuity by an employer precludes the need for a formal adjudication on its merits.

Ratio Decidendi: The statute provides no limitation period for approaching the controlling authority, and delegated legislation cannot validly introduce one. Forfeiture of gratuity is a penal act subject to scrutiny; therefore, courts must facilitate a fair adjudication on merits rather than allow procedural technicalities to deprive employees of terminal benefits without due process.

Result: Writ petitions dismissed.

Table of Content
1. procedural history of gratuity claims and delay condonation. (Para 2 , 3 , 4 , 5 , 6 , 7)
2. maintainability of writ petitions during interlocutory stages. (Para 8 , 9 , 10 , 11)
3. gratuity forfeiture requires due process and adjudication. (Para 12 , 13 , 14 , 15)
4. statute of limitations cannot be prescribed via delegated legislation. (Para 16 , 17 , 18 , 19)
5. liberal construction of 'sufficient cause' for delay condonation. (Para 20 , 21)
6. dismissal of writ and direction for merit-based adjudication. (Para 22)

C O M M O N J U D G M E N T\\

Heard.

2.In both writ petitions, the petitioner is the Management. In W.P. No. 25310 of 2021, the petitioner challenges the order dated 24.09.2021 passed by the Deputy Commissioner of Labour, Chennai, whereby the interim applications in P.G.I.A. Nos. 88 and 89 of 2021 in P.G. Case No. 96 of 2019 were dismissed. I.A. No. 88 of 2021, arising from I.A. No. 192 of 2020 in the same P.G. case, sought recall of the earlier order dated 16.12.2019. I.A. No. 89 of 2021, also arising from I.A. No. 192 of 2020, prayed for condonation of delay in filing documents, which had been served on the petitioner on 23.01.2020, with a request that the matter be heard on merits. Both interim applications were filed on 31.03.2021.

3.The contesting respondent in W.P. No. 25310 of 2021 filed an application under the Payment of Gratuity Act before the Controlling Authority (Deputy Commissioner of Labour), seeking payment of gratuity to the tune of Rs.5,56,500/- along with interest at 12% per annum. Believing that there was a delay of 238 days in filing the application, the respondent also filed an interim application seeking condonation of the said delay. In support of this request, the reasons for the delay were set out in paragraphs 3 and 4 of the accompanying affidavit.

“3. It is further submitted that I had relied upon the intimation dt. 12.12.2017 and the email dt. 02.02.2018 of the Respondents to settle the Gratuity monies dues and payable. I was unfortunately misled into trusting the Respondents that the Gratuity payments would be taken care of by them. The trust in the Respondents was wholly misplaced and in vain given the eventual outcome therein.

4. On account of the above I had inadvertently missed the time period within which one ought to have approached this Hon’ble Forum. As understood considering the last date of service was 29.12.2017 the petition for claiming gratuity ought to have been filed by 29.04.2018. However since the same was prolonged due to the restive attitude of the Respondents the claim petition could be filed only on 26.12.2018. Hence there has been an apparent delay of by about 238 days in approaching this Hon’ble Forum.”

4.The petitioner contended that the notes paper dated 25.11.2019 contained the following recorded entry:—

“Petitioner filed an affidavit to condone delay. For counter. NH-16.12.2019”

5.On 16.12.2019, counsel for both parties appeared and endorsed their presence on the notes paper maintained by the authority. As no counter affidavit had been filed by the petitioner, the authority recorded the following observation:—

As no counter affidavit was filed, the application for condonation of delay was allowed. Subsequently, the petitioner filed I.A. No. 192 of 2020 seeking recall of the order dated 16.12.2019. In the supporting affidavit filed by the junior counsel, it was stated that the senior counsel was out of station, and she had appeared on that date only to request a copy of the condonation application. This development led to the filing of two further interim applications, as already referred to earlier.

6.In W.P. No. 25314 of 2021, the contesting respondent, Ms. Sujatha Sukumaran, filed an application for gratuity before the Controlling Authority on 13.12.2018, along with an application seeking condonation of delay. The Controlling Authority, by order dated 16.12.2019, allowed the delay condonation application. The petitioner thereafter filed I.A. No. 191 of

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2025 Supreme(Online)(Mad) 11494

IN THE HIGH COURT OF JUDICATURE AT MADRASA.D. Maria Clete, JAspire Systems (India) Private Limited – AppellantVersusVenkatesh Veerasamy – RespondentW.P.Nos. 25310 & 25314 of 2021|W.M.P. Nos. 26718 & 26723 of 2021

Cases Referred (2)

IN THE HIGH COURT OF JUDICATURE AT MADRAS
A.D. Maria Clete, J
Aspire Systems (India) Private Limited – Appellant
Versus
Venkatesh Veerasamy – Respondent
W.P.Nos. 25310 & 25314 of 2021|W.M.P. Nos. 26718 & 26723 of 2021