Gujarat High Court
Raghuvanshi Motors Private Limited vs Pankaj Ishwarbhai Patel on 30 September, 2025
NEUTRAL CITATION
C/SCA/13975/2022 JUDGMENT DATED: 30/09/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 13975 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
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Approved for Reporting Yes No
NO
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RAGHUVANSHI MOTORS PRIVATE LIMITED
Versus
PANKAJ ISHWARBHAI PATEL & ORS.
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Appearance:
MR DIPAN DESAI(2481) for the Petitioner(s) No. 1
MR ADITYA DAVDA, ASST. GOVERNMENT PLEADER for the
Respondent(s) No. 2,3
SINGHI & CO(2725) for the Respondent(s) No. 1
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CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 30/09/2025
ORAL JUDGMENT
1. Present petition is filed under Articles 226 and 227 of the Constitution of India, challenging the order dated 08.06.2021 passed by the learned Controlling Authority under the Payment of Gratuity Act in Gratuity Application No. 5 of 2020, which has been confirmed by the Appellate Authority vide order dated 26.04.2022 in Gratuity Appeal No. 51 of 2021.
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2. It is the case of the petitioner that respondent No.1 was appointed with the petitioner-Company on 01.01.2004 and continued in service till 18.01.2018. Thereafter, respondent No.1 proceeded on unauthorized leave without obtaining permission from the petitioner-Company, after availing a loan facility of ₹2,00,000/-, out of which an amount of ₹99,323/- still remains outstanding. After a lapse of more than two years from 18.01.2018, respondent No.1 filed an application under the Payment of Gratuity Act on 09.03.2020 claiming gratuity of ₹75,115/-. The learned Controlling Authority allowed the said application and directed the petitioner to pay the aforesaid amount along with interest at the rate of 10% from the date of filing of the application. The said order was challenged before the learned Appellate Authority, which came to be dismissed by confirming the order of the Controlling Authority. The impugned orders are therefore the subject matter of challenge in the present petition.
3. Heard the learned advocate Mr.Dipan Desai for the petitioner and learned advocate Mr.I.G.Joshi for the respondent No.1.
4. Learned advocate Mr. Desai submits that no resignation letter was ever produced before the Page 2 of 7 Uploaded by M.M.MIRZA(HC01407) on Wed Oct 01 2025 Downloaded on : Wed Oct 01 22:39:17 IST 2025 NEUTRAL CITATION C/SCA/13975/2022 JUDGMENT DATED: 30/09/2025 undefined learned Appellate Authority, nor was any resignation approved by the petitioner-Company. In absence of such documentary evidence, the authorities have erroneously believed the oral resignation as contended by the respondent in Form 'N'. It is submitted that resignation necessarily has to be in writing and requires acceptance by the employer, whereas in the present case, no such written resignation was ever placed on record. Learned advocate Mr. Desai further submits that respondent No.1 had gone on unauthorized long leave and had stopped reporting for duty, which cannot, by any stretch, be treated as resignation or voluntary abandonment of service. More particularly, in light of the fact that an amount of ₹99,323/- remains outstanding towards the loan availed by respondent No.1, the findings recorded by the authorities below are unsustainable. In view of the aforesaid submissions, learned advocate Mr. Desai prays that the present petition be allowed by setting aside the impugned orders.
5. Per contra, learned advocate Mr. I.G.Joshi submits that the continuous service rendered by respondent No.1 from 01.01.2004 to 18.01.2018 is not in dispute, nor is the fact of last drawn wages of ₹9,300/- disputed. The only issue raised before the learned Page 3 of 7 Uploaded by M.M.MIRZA(HC01407) on Wed Oct 01 2025 Downloaded on : Wed Oct 01 22:39:17 IST 2025 NEUTRAL CITATION C/SCA/13975/2022 JUDGMENT DATED: 30/09/2025 undefined authorities pertained to the alleged outstanding loan amount. However, for recovery of such loan, the remedy lies before the appropriate forum, and gratuity being a statutory right, cannot be withheld or adjusted against such claim. Learned advocate Mr. Joshi further submits that though respondent No.1 had orally resigned and the same was accepted by the petitioner-Company, the petitioner has now raised a false defence with a view to evade its liability towards gratuity. It is therefore submitted that the learned Controlling Authority as well as the Appellate Authority have rightly passed the impugned orders, and no error is committed warranting interference under Articles 226 and 227 of the Constitution of India. Hence, the petition deserves to be dismissed.
6. Having considered the submissions advanced by the learned advocates for the respective parties, it emerges that the respondent had submitted Form 'N' on 09.03.2020 stating that after completion of 14 years of continuous service he had resigned from the petitioner-Company on 18.01.2018. In the said Form, it is further stated that despite repeated demands, the petitioner did not pay the gratuity amount due. It is an undisputed fact that the respondent was appointed on 01.01.2004 and had continuously Page 4 of 7 Uploaded by M.M.MIRZA(HC01407) on Wed Oct 01 2025 Downloaded on : Wed Oct 01 22:39:17 IST 2025 NEUTRAL CITATION C/SCA/13975/2022 JUDGMENT DATED: 30/09/2025 undefined served the petitioner-Management up to 18.01.2018. Insofar as the plea of abandonment raised by the petitioner is concerned, no notice or any contemporaneous communication was ever issued by the petitioner-Management to the respondent. The only contention urged is that since no written resignation was tendered and as certain loan amount remained outstanding, the respondent is not entitled to gratuity. However, a plain reading of Section 4(1) of the Payment of Gratuity Act, 1972 makes it clear that gratuity is payable upon termination of employment on account of superannuation, retirement, resignation, or death, provided the employee has completed the qualifying service. Once it is undisputed that the respondent had rendered continuous service of more than 14 years, mere absence of a written resignation or pendency of loan dues cannot disentitle him from receiving gratuity. In the opinion of this Court, the respondent has rightly been held entitled to gratuity by the authorities below.
7. This Court has referred the decision rendered by the Apex Court in the case of Rajasthan State Road Transport vs. Mohani Devi and Anr, reported in (2020) 5 SCC 741, relevant paragraph is extracted hereunder for appreciation of the dispute:
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8. This Court has also placed reliance upon the decision rendered in Bakshish Singh v. M/s. Darshan Engineering Works and Others, reported in (1994) 1 SCC 9, wherein the Apex Court has discussed the dictionary meaning of the term "gratuity". It has been observed that gratuity means a gratuitous payment, a gift or a boon made by the employer to the employee as per his sweet will. However, under industrial adjudication, gratuity has come to be regarded as a reward for long and meritorious service, and its payment, therefore, depends upon the duration and quality of service rendered by the employee.
9. As regards the other contention raised by the petitioner with respect to the outstanding loan amount availed by the respondent, this Court is of the considered view that gratuity cannot be withheld on such ground unless the circumstances contemplated under Section 4(6)(b) of the Payment Page 6 of 7 Uploaded by M.M.MIRZA(HC01407) on Wed Oct 01 2025 Downloaded on : Wed Oct 01 22:39:17 IST 2025 NEUTRAL CITATION C/SCA/13975/2022 JUDGMENT DATED: 30/09/2025 undefined of Gratuity Act, 1972 are satisfied. For ready reference, Section 4(6)(b) is reproduced hereinbelow:
"4(6)(b):the gratuity payable to an employee [may be wholly or partially forfeited].
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part; or
(ii) If the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment."
10. As the case of the petitioner does not fall within the ambit of the aforesaid provision, this Court is of the considered view that the gratuity amount cannot be withheld on such ground.
11. In view of the foregoing discussion, the petition is devoid of merits and is, accordingly, dismissed.
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