Payment of Gratuity Act, 1972

The appellant, a former employee of the respondent firm, resigned in May 1983 and applied for payment of gratuity, which the employer failed to determine. The statutory controlling authority quantified the gratuity at Rs.16,380 and ordered payment of 9% compound interest under Section 8 of the Payment of Gratuity Act, …

The Central Bank of India’s Voluntary Retirement Scheme, 2001 allowed employees who were over 40 years of age or had 15 years of service to retire voluntarily. Tara Chand, who had 11 years of service and was over 40, opted for voluntary retirement in February 2001, but the Bank denied him a pro‑rata pension. The Single…

The workmen of Metro Theatre Ltd. challenged an Industrial Tribunal award that revised wage scales and dearness allowance effective from 1‑1‑1977, arguing that it should have been retrospective to 1‑1‑1974, that dearness allowance ought to be linked to the cost‑of‑living index, and that the tribunal could grant a more …

N. Venkataramani, an employee of Indian Bank, voluntarily retired after 14 years, 9 months and 17 days of service. The bank denied his claim for pension on the ground that he had not completed the statutory minimum of 15 years. The Madras High Court set aside the bank’s order and directed the grant of pension, interpre…

The appellant, Mahanadi Coalfield Ltd., sought to withhold the gratuity of its former Chief General Manager, Rabindranath Choubey, on the ground that a departmental inquiry for alleged misconduct was pending. The employee retired on superannuation and applied for gratuity under the Payment of Gratuity Act, 1972, which …

The Bank, a co‑operative society, had a gratuity scheme offering 26 days' wages per year of service with a ceiling of Rs 2.5 million. Under the Payment of Gratuity Act, 1972 (as amended), the statutory rate is 15 days' wages with a ceiling of Rs 3.5 million. After retirement, the employees claimed the benefit of both t…

The Supreme Court examined the constitutional validity of the Payment of Gratuity (Amendment) Act, 2009, which amended the definition of “employee” in the Payment of Gratuity Act, 1972 and inserted Section 13A with retrospective effect from 3 April 1997 to extend gratuity benefits to teachers in private schools. The pe…

The Supreme Court considered appeals by a public limited company challenging the calculation of gratuity for a monthly‑rated employee who had retired after 35 years of service. The employee claimed that "fifteen days' wages" under s.4(2) of the Payment of Gratuity Act, 1972 should be computed by first determining a dai…

The respondent, Pradeep Mehra, served as Chief Operating Officer of BCH Electric Limited for 12 years and, upon resignation in June 2012, claimed gratuity of Rs.1.83 crore based on the company's gratuity scheme which did not impose a statutory ceiling. The employer paid only Rs.10 lakh, the ceiling prescribed under Sec…

The Central Bank of India and other nationalised banks (appellants) challenged the validity of a cut‑off date they fixed for calculating gratuity payable to retired employees (respondents) under their Regulation 46. The respondents argued that the cut‑off date, which limited the benefit of revised pay scales to retiree…

Amarjit Singh Sahni, a cashier‑clerk of Punjab and Sind Bank, applied for voluntary retirement under the bank's scheme (effective 1‑31 Dec 2000) but withdrew his application on 22 Dec 2000 before the bank had accepted it. The bank later treated him as relieved from service on 28 Jan 2001 and denied his reinstatement, d…

The Himachal Pradesh Government introduced the 1999 Pension Scheme for employees of state-owned corporations, replacing the Employees' Provident Funds Scheme, 1995. After a high‑level committee found the scheme financially unsustainable, the Government issued a notification on 2 December 2004 repealing the scheme, allo…

The appellants, manufacturers of pharmaceutical products, dismissed several medical representatives and the employees sought relief from the appellate authority under the Andhra Pradesh Shops and Establishments Act, 1988. The employers contended that the Sales Promotion Employees (Conditions of Service) Act, 1976, bein…

The appellant, Mahanadi Coalfields Ltd., sought to withhold the gratuity of its former employee, Sri Rabindranath Choubey, who had superannuated while a disciplinary inquiry was pending, and to impose dismissal after the inquiry concluded. The respondent argued that gratuity becomes payable on superannuation and that d…

The respondents, former employees of E.I.D. Parry (I) Ltd., retired under a voluntary scheme in 1984 and received gratuity under the Payment of Gratuity Act, 1972. Because their monthly wages exceeded Rs 1,000, they were not covered by the definition of "employee" in Section 2(e) of the Central Act, and therefore could…

The appellant, a permanent uncovenanted employee of Tata Iron & Steel Co., rendered 29 years of continuous service and resigned, thereby becoming eligible for retiring gratuity under the 1937 Retiring Gratuity Rules. The company refused payment, invoking Rule 10 which purported to give it absolute discretion to pay or …

The Union of employees of Grand Kakatiya Sheraton Hotel challenged Sections 47(3) and 47(4) of the Andhra Pradesh Shops and Establishments Act, 1988, which provided a "service compensation" after only one year of continuous service. The Supreme Court examined whether these provisions were in fact a gratuity, whether th…

The appellants, former employees of United India Insurance, retired under the General Insurance Employees’ Special Voluntary Retirement Scheme, 2004 (SVRS‑2004) and claimed that they were also entitled to the notional five‑year service benefit provided under the earlier General Insurance (Employees) Pension Scheme, 199…

The appellants, teachers appointed in a grant‑in‑aid school in Rajasthan, were regularised by the Supreme Court but were denied leave‑encashment and gratuity benefits. The High Court held that payment of salary arrears sufficed, ignoring the entitlement to leave encashment and gratuity. On appeal, the Court examined wh…

The Gujarat Transport Department floated a tender for manpower services with conditions that the salary paid must not be less than the minimum wage and that bids must be fixed, not open‑ended. Three bidders qualified; the Technical Evaluation Committee fixed a minimum‑wage figure of Rs 3,00,92,346, rendering the bids o…

The case concerned whether a railway employee who retired on 31 January 1995 was entitled to gratuity under the Payment of Gratuity Act, 1972 or whether the Railway Services (Pension) Rules, 1993 governed his benefit. The Union of India argued that Section 2(e) of the 1972 Act expressly excludes persons holding a post …

A coffee curing establishment, declared a seasonal industry, operated from September to June and was closed June to September. The workmen claimed gratuity at the rate of seven days' wages for two seasons in each calendar year, arguing that the accounting year (January‑December) split their service into two seasons. Th…

The case concerned a Sub‑Inspector of the Railway Protection Force, Rajendra Kumar Dubey, who was compulsorily retired on 5 December 2007 for gross neglect of duty relating to theft of railway property. Dubey challenged the retirement in a writ petition, and the Bombay High Court set aside the order, reinstating him wi…

The petitioners, Anganwadi workers and helpers employed under the Integrated Child Development Services (ICDS) scheme in Gujarat, sought gratuity benefits under the Payment of Gratuity Act, 1972. The Gujarat High Court’s Division Bench held that they were not employees and thus ineligible for gratuity, overturning an e…

The case arose from the merger of Murphy India Ltd. with CEAT Ltd., after which 45 workmen were appointed on a temporary basis on 1‑Feb‑1991 and placed on probation. A Memorandum of Settlement dated 29‑Apr‑1991 provided benefits to "permanent workmen" on the rolls as of 31‑Dec‑1990. The workmen claimed that, upon succe…

The case concerned a claim for gratuity under the Payment of Gratuity Act, 1972 by an employee who resigned on 22 March 1983, before the management of his employer, Finlay Mills Ltd., was taken over by the National Textile Corporation (NTC) under the Textile Undertakings (Take Over of Management) Act, 1983. The employe…

M.C. Chamaraju, a supervisor employed by Hind Nippon Rural Industrial (P) Ltd, worked for more than five years across several units before his salary stopped in March 1993. He applied for gratuity under the Payment of Gratuity Act, 1972. The Controlling Authority and the Appellate Authority held that the various units …

Workmen who retired from T.I. Cycles of India claimed that incentive wages paid for extra work should be treated as "wages" under Section 2(s) of the Payment of Gratuity Act, 1972 and thus be included in the calculation of gratuity under Section 4(2). The Controlling Authority and the Madras High Court held the incenti…

The National Textile Corporation (M.P.) Ltd. issued a Voluntary Retirement Scheme (VRS) effective 31 July 2000. M.R. Jadhav applied for the scheme on 16 May 2000 and obtained administrative clearance, but the corporation never communicated a final decision or acceptance, citing lack of funds. Jadhav continued in servic…

The case concerned whether Anadi Nath Banerjee, whose land was acquired for the Sonepur Bazari Open Cast Project, was entitled to employment under a tripartite agreement that promised jobs to land‑losers possessing at least two acres. The Land Acquisition Collector’s certificate recorded Banerjee’s own holding as 0.300…

The Supreme Court considered two appeals by employers challenging the calculation of gratuity under Section 4(2) of the Payment of Gratuity Act, 1972. The employers had computed the fifteen days' wages component as half of the employee's monthly salary, assuming a 30‑day month, while the employees argued that monthly w…

Netram Sahu was employed by the State of Chhattisgarh as a daily wager from 1 April 1986 and was regularized as a work‑charge employee on 6 May 2008, retiring on 30 July 2011 after a total service of 25 years 3 months. He claimed gratuity under the Payment of Gratuity Act, 1972, and the Controlling Authority allowed hi…

The respondent, Hooghly Mills Co. Ltd., purchased an industrial undertaking from Fort Gloster Industries Ltd. and, under the sale agreement, assumed the vendor’s accrued and future gratuity liability of about Rs 3.5 crore. The assessee claimed depreciation on this amount under Section 32 of the Income Tax Act, arguing …

The appellant, an Assistant Editor of a newspaper publishing company, was dismissed after a disciplinary inquiry that found him guilty of misconduct. He subsequently claimed gratuity under the Payment of Gratuity Act, 1972, but the employer denied it, invoking the Working Journalists and Other Newspaper Employees (Cond…

Sudhir Kumar Consul was appointed as a clerk in Allahabad Bank in 1976 and promoted to officer in 1983. After taking voluntary retirement in 2001, he sought pension under the Old Pension Scheme, invoking Regulation 46(1) of the Allahabad Bank Officers Service Regulations, 1979, which provides pension in lieu of gratuit…

DhanSai Sahu, who had worked as a daily‑wager before being regularised as a government employee, claimed gratuity under the Payment of Gratuity Act, 1972 after superannuation. The High Court held that Section 2(e) of the Act excluded him because his post was governed by the Chhattisgarh Civil Services (Pension) Rules, …

The case concerned V.U. Warrier, a former "gold‑collar" officer of the Oil and Natural Gas Commission (ONGC), who after retirement failed to vacate a residential quarter allotted to him and was charged penal rent. ONGC deducted Rs.53,632 of the penal rent from the gratuity payable to Warrier under the ONGC (Death, Reti…

The appellant, a bank officer, was served a charge sheet for loan disbursement irregularities on the day he superannuated, and disciplinary proceedings continued, resulting in a permanent reduction of three pay‑scale stages. The appellant challenged the punishment, arguing that post‑retirement only the Pension Regulati…

Anita Merchant booked three flats from Suneja Towers Private Limited, paid 60% of the price, but the builder failed to deliver possession even after the agreed period, leading her to file consumer complaints. The District Forum dismissed the complaints, but the State Consumer Commission reversed the decision, ordering …

The Supreme Court examined the validity of Voluntary Retirement Schemes (VRS) introduced by State Bank of India and other nationalised banks, focusing on whether an employee’s application for retirement could be withdrawn before the bank’s acceptance despite a clause stating the request was irrevocable. The Court held …

The petitioners, two retired government servants and a society of pensioners, challenged two 1979 Government memoranda that liberalised pension computation but limited the benefit to employees who were in service on 31 March 1979 (civil servants) or 1 April 1979 (armed forces) and retired on or after those dates. They …

The Supreme Court examined whether the Hydel Upper Bari Doab Construction Project, undertaken by the Punjab Hydel Department, qualified as an "establishment" under Section 1(3)(b) of the Payment of Gratuity Act, 1972, and whether the retrenchment of its workers entitled them to gratuity. It held that the project fell w…

The employer, M/s. Creative Garments Ltd., appealed against a Labour Court award that reinstated employee Kashiram Verma with back wages. The employee never reported for duty despite multiple communications, and his permanent address was never furnished; only a "care of Union" address was provided. The Supreme Court fo…

The Supreme Court examined two appeals challenging the forfeiture of gratuity by a public sector undertaking (Western Coal Fields Ltd.) and the Maharashtra State Road Transport Corporation (MSRTC) after employees were terminated for misconduct. The employees argued that forfeiture required a criminal conviction, which …

The All India Allahabad Bank Retired Employees Association filed writ petitions seeking gratuity under the Payment of Gratuity Act, 1972, alleging that the bank’s pension scheme, which employees had opted for, could not deprive them of statutory gratuity. The Allahabad High Court held that the retirees were entitled to…

Dhirendra Pal Singh, a retired Assistant Store Superintendent of Uttar Pradesh, had 30% of his gratuity and pension withheld on the ground of alleged stock discrepancies. No departmental enquiry under Article 351‑A of the Uttar Pradesh Civil Service Regulations was ever initiated, and the document relied upon was dated…

The Associate Banks Officers Association, representing officers of the State Bank of India’s subsidiary banks, filed a writ petition seeking parity in terminal benefits, medical benefits and extra increments with employees of the State Bank of India (SBI). SBI contended that, under Section 50(2) of the State Bank of In…

The Supreme Court examined whether a government employee convicted of corruption, with a criminal appeal pending, is entitled to his death‑cum‑retirement gratuity (DCRG) under the Kerala Service Rules. The Court held that Rule 3A cannot be read in isolation; it must be read together with Rule 3, Note 2 and Ruling 3, wh…

Y.K. Singla, a former chief manager of Punjab National Bank, retired on superannuation in 1996 but his gratuity and other retiral benefits were withheld pending criminal proceedings alleging conspiracy. He was acquitted in 2009 and subsequently received his gratuity and leave encashment, but the bank paid interest only…

The Union Bank of India dismissed a branch manager, C.G. Ajay Babu, for alleged misconduct and subsequently forfeited his gratuity on the ground that the misconduct involved moral turpitude. The employee challenged the forfeiture, arguing that under the Payment of Gratuity Act, 1972 forfeiture is not automatic on dismi…

The petitioner, son of a teacher who died while in service at an aided school, claimed death‑cum‑retirement gratuity under the Payment of Gratuity Act, 1972. The claim was rejected by the school authorities, the appellate authority and the High Court, which held that the teacher was not an employee within the meaning o…

The appellants, employees of Coal India Ltd., received gratuity under a 2008 Government office memorandum that raised the ceiling to Rs 10 lakhs effective from 1 January 2007. They challenged the tax deducted at source, arguing that the Payment of Gratuity (Amendment) Act, 2010, which officially raised the ceiling to R…

A teacher employed by a municipal school sought gratuity under the Payment of Gratuity Act, 1972, but the Gujarat High Court held that teachers are not "employees" within the meaning of section 2(e) and dismissed the claim. The Ahmedabad Private Primary Teachers' Association appealed, arguing that the definition of emp…

Bakshish Singh, a fitter, resigned after more than ten years of service and claimed gratuity under Section 4(1)(b) of the Payment of Gratuity Act, 1972. The Controlling Authority awarded him gratuity, but the employer challenged the award, and the High Court struck down Section 4(1)(b) as an unreasonable restriction on…

The appellant, a workman of Laxmi Vishnu Textile Mills, challenged a tripartite settlement and the sale of the mill’s assets to a purchaser, alleging that the settlement was illegal, that the sale violated a BIFR order under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), and that the workers’ dues…

The case concerned whether the retired employees of the Heavy Water Plant (HWP) of the Department of Atomic Energy, Tuticorin, are covered by the Payment of Gratuity Act, 1972. The employees had received gratuity under the CCS (Pension) Rules, 1972 and sought the higher amount prescribed under the Gratuity Act, leading…

Md. Safiur Rehman, a dock worker, died leaving a widow and son. The Calcutta Dock Labour Board sought attachment of the gratuity payable to Rehman under its scheme to satisfy a decree against the heirs. The Small Causes Court ordered attachment, overruling the Board’s objection that gratuity was exempt. The High Court …

The Supreme Court considered claims for gratuity by 85 permanent and 25 badli employees of Laxmi Vishnu Textile Mills who sought payment for every year of service irrespective of whether they had worked at least 240 days. The employer had paid gratuity only for years in which the employees were actually employed for 24…

Jaswant Singh Gill, a chief general manager of Bharat Coking Coal Ltd., faced departmental proceedings for alleged shortage of coal. While the disciplinary inquiry was pending, he retired and applied for gratuity under the Payment of Gratuity Act, 1972, which was denied on the ground that his gratuity was forfeited by …

The petitioner, Katheeja Bai, widow of a retired Tamil Nadu Electricity Board employee, claimed that the Board had failed to credit the special contribution mandated by Regulation 37 of the Board’s Contributory Provident Fund Regulations to her late husband’s provident fund account. The Board contended that this specia…

The respondents, employees of National Insurance Co., opted for voluntary retirement under the General Insurance Employees Special Voluntary Retirement Scheme, 2004 (SVRS 2004) and claimed pension under the General Insurance (Employees) Pension Scheme, 1995. The insurers rejected the claim, arguing that pension under t…

Ashok Kumar Dabas, a conductor with Delhi Transport Corporation since 1985, resigned on 7 August 2014 and his resignation was accepted on 19 September 2014; a subsequent request to withdraw the resignation was denied. The deceased sought pension, gratuity and leave encashment for his legal heirs, but the Tribunal and t…

The case concerned 85 workers who had resigned from the Cochin Port Thozhilali Union and sought a refund of amounts that the union, through its president‑treasurer G.S. Dhara Singh, had collected from the employer on their behalf for gratuity and accident benefit funds. The workers filed civil suits demanding an accoun…

The Supreme Court allowed the appeal of Birla Institute of Technology against the State of Jharkhand on 7 January 2019, relying on the decision in Ahmedabad Pvt. Primary Teachers Association v. Administrative Officer. During the hearing it emerged that Parliament had subsequently amended the definition of “employee” un…

Sajjian Mills Ltd, a public limited company, incurred a statutory liability to pay gratuity under the Payment of Gratuity Act, 1972 and actuarially determined its total liability of Rs 48,59,431 for the assessment year 1973‑74. It made a provision of Rs 20 lakhs in its books, added it back in its return, and claimed a …

The Supreme Court examined the dispute between State Bank of India and other creditors (petitioners) and the consortium of Murari Lal Jalan and Florian Fritsch (respondent SRA) over the implementation of the approved resolution plan for Jet Airways. The core issue was whether the Performance Bank Guarantee (PBG) of Rs.…

The case concerned employees of Fertiliser Corporation of India Ltd. who, after a series of writ petitions for pay‑scale revision, were granted ad‑hoc monthly payments by the Supreme Court in 2000 pending final resolution. After the companies were closed and the employees exited under a voluntary separation scheme, the…

The Rajasthan Welfare Society, an aided non‑government educational institution, challenged the State of Rajasthan's refusal to allow the gratuity payable to its employees to be counted as part of the approved expenditure for computing grant‑in‑aid under the Rajasthan Non‑Government Educational Institution Act, 1989. Th…

The Birla Institute of Technology (BIT) appealed against the State of Jharkhand and other respondents after a teacher who retired in 2001 claimed gratuity under the Payment of Gratuity Act, 1972. The High Court had upheld the gratuity award, and BIT challenged the applicability of the Act to teachers, arguing that the …

The Birla Institute of Technology (BIT) employed Respondent No.4 as an Assistant Professor from 1971 until his superannuation in 2001. He claimed gratuity under the Payment of Gratuity Act, 1972, which BIT denied. The controlling authority allowed the claim, but the appellate authority and the High Court upheld BIT's r…

The case concerned employees of five nationalised general insurance companies who had taken voluntary retirement under the 2004 Special Voluntary Retirement Scheme and later sought the benefit of a retrospective pay revision dated 21 December 2005. The employers argued that the scheme was designed to reduce future sala…

Jyotirmay Ray, a senior manager of Punjab National Bank, was compulsorily retired and denied employer's contribution to his provident fund, gratuity, leave encashment and pension. He challenged the denial of PF contribution and gratuity before the High Court, which partially granted relief, but the Division Bench of th…

The petitioners, dependents of a deceased SAIL employee, applied for a compassionate appointment after the employee's death, but SAIL declined, citing a Family Benefit Scheme introduced under the 1989 NJSC Tripartite Agreement that required the family to deposit provident fund and gratuity amounts in exchange for a mon…

The appellant, a retired employee of Karnataka Agro Industries Corp., had been suspended in 1999, the suspension was later withdrawn, and he retired in 2000 without any order regularising his service or settling salary and allowances. He filed a writ petition seeking full salary for the suspension period, gratuity, cas…

The Karnataka State Financial Corporation (KSFC) sold the lease‑hold rights of the closed industrial concern Mysore Panel and Boards Pvt Ltd, whose 83 workmen had earlier been awarded statutory dues of Rs 29,17,062 by courts under Section 33‑C of the Industrial Disputes Act and the Payment of Gratuity Act. The workmen’…

The Management of Sri Ramnarayan Mills Ltd. applied to the Joint Commissioner of Labour to amend its certified standing orders by adding "break in service" as a new ground for punishment under Clause 16. The certifying officer allowed the amendment, but the workers' union challenged it. The Labour Court set aside the a…

ELD Parry (India) Ltd. retired several employees who claimed a pension (retiring allowance) under General Office Order No. 26, 1943. The 1956 settlement between the company and the employees' union allowed workers to choose either gratuity or, in lieu of gratuity, a retiring allowance, but did not expressly abolish the…

The Municipal Corporation of Kanpur, governed by the Uttar Pradesh Municipal Corporation Act, sought to limit gratuity payments to its employees to the rates prescribed under the 1962 Retirement Benefits and General Provident Fund Regulations, arguing that the Payment of Gratuity Act, 1972 did not apply to local bodies…

The Karnataka State Road Transport Corporation (KSRTC) had a settlement with its employees that tied the rate of Dearness Allowance (DA) to the rates sanctioned by the State Government and required any merger of DA with basic pay to be considered for calculating gratuity. The State Government issued a Government Order …