Gujarat High Court
Claris Limited vs District Collector Ahmedabad on 24 July, 2025
Author: A.S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/LPA/868/2025 ORDER DATED: 24/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 868 of 2025
In
R/SPECIAL CIVIL APPLICATION NO. 3842 of 2025
With
CIVIL APPLICATION (FOR INTERIM RELIEF) NO. 1 of 2025
In
R/LETTERS PATENT APPEAL NO. 868 of 2025
With
R/LETTERS PATENT APPEAL NO. 869 of 2025
In
R/SPECIAL CIVIL APPLICATION NO. 2778 of 2025
With
CIVIL APPLICATION (FOR INTERIM RELIEF) NO. 1 of 2025
In
R/LETTERS PATENT APPEAL NO. 869 of 2025
In
R/SPECIAL CIVIL APPLICATION NO. 2778 of 2025
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CLARIS LIMITED
Versus
DISTRICT COLLECTOR AHMEDABAD & ORS.
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Appearance:
MR K M PATEL SENIOR ADVOCATE WITH MR P A MEHD(3489) for the
Appellant(s) No. 1
MS SHRUTI DHRUVE AGP for the Respondent(s) No. 1,3
JWALIT B SONEJI(7895) for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR.JUSTICE R. T. VACHHANI
Date : 24/07/2025
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE R. T. VACHHANI)
ADMIT. Learned AGP Ms.Dhruve for respondent No.1 and
learned advocate Mr.Soneji for respondent No.2 waives service of notice
of admission.
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2. LPA No.868 of 2025 is directed against the dismissal of the SCA
No.3842 of 2025 filed by the appellant-company and LPA No.869 of
2025 is directed against the order passed in SCA No.2778 of 2025 filed
by the respondent No.2-employee. Both the petitions are decided by
common oral judgment dated 17/06/2025.
3. Brief; undisputed facts as surfaced from the record of the case are
that respondent no.2 joined the appellant - company in the year 2005 on
the post of Officer-Projects. While discharging his duty, in the year 2017,
he requested for an advance of Rs.25,00,000/- for the purchase of house,
which was acceded to by executing an agreement between the parties.
Though the loan amount of Rs.12,20,020/- plus interest amount of
Rs.3,35,506/- was remained outstanding, the respondent no.2 tendered the
resignation, which was accepted on 31/07/2021; subject to the conditions
as mentioned in the appointment order. Since the loan amount remained
outstanding, the appellant - company filed Civil Suit o.561 of 2024 for
recovery of the same and the same is pending for adjudication.
3.1 As the advance salary remained unpaid, the respondent no.2 filed
an application before the appropriate authority under the Payment of
Gratuity Act and the same having been allowed by ordering to pay
amount of Rs.20,00,000/- with interest from the date of making an
application i.e. 08/11/2023.
3.2 Thereafter, the appellant filed SCA No.3842 of 2025 before this
Court seeking to restrain the respondents from execution of the recovery
certificate, wherein learned Single Judge to show the bona-fide of the
appellant, granted ad-interim-relief in terms of paragraph 20(B) subject to
the appellant deposits an amount of Rs.20,00,000/- with interest and the
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said directions have been complied with.
3.3 The respondent No.2 also moved SCA No.2778 of 2025 before this
Court with Civil Application No.1 of 2025 in the said SCA which also
came to be heard and decided with SCA No.3842 of 2025. The learned
Single Judge after hearing the learned Advocates appearing for the
respective parties was pleased to dismiss the SCA No.3842 of 2025 filed
by the appellant-company.
4. Heard learned Senior Advocate Mr.K M Patel with Mr.Mehd,
learned advocate for the appellant and learned Advocate Mr.Soneji for
the respondent No.2-employee and learned AGP for the respondent no.1-
State.
5. Learned Senior Counsel Mr.Patel for the appellant has submitted
that in absence of any challenge to the order passed by the controlling
authority, the gratuity dues to the respondent no. 2 could have been
withheld till the decision of the pending civil suit would arise. He has
further submitted that the learned Single Judge failed to appreciate that
the order passed by the controlling authority merely quantified the
amount of gratuity and did not and could never have dealt with matters
relating to the adjustment of the other dues between the appellant and the
respondent no. 2 and therefore the mere fact that the said quantification
was accepted would not amount to the appellant not being able to claim
set off and adjustment of the rest of the dues of the respondent no. 2 and a
stay of recovery of the said dues till the time that the rest of the claims
were quantified and adjusted.
5.1 Learned Senior Counsel Mr.Patel for the appellant has further
submitted that the learned Single Judge has failed to appreciate the fact
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that in the petition filed by the respondent no. 2, the appellant with a view
to show its bona-fide has deposited dues and therefore the further orders
were required to be passed considering the need to balance the equities
and securing the rightful claim of the appellants which was being
adjudicated in the pending proceedings before the learned Civil Court. He
has further submitted that the learned Single Judge has erred in not
maintaining equitable balance and also erred in safeguarding only the
employee's interests without ensuring protection of the employer's
financial rights in spite of the fact that appellant has already deposited the
disputed gratuity amount and consequently secured the claim of the
respondent no. 2.
5.2 Learned Senior Counsel Mr.Patel for the appellant has further
submitted that the leaned Single Judge has seriously erred in overlooking
the doctrine of equitable balancing and failed to appreciate that statutory
dues are to be weighed against pending counterclaims of the employer
and also failed to appreciate that no prejudice would have been caused to
the employee by deferring the disbursal of gratuity till outcome of the
civil suit particularly when the interest amount has also been deposited
over and above of principal amount and the whole of the amount was
sought to be invested in a nationalized bank so that interest would be
earned by the parties. He has further submitted that the learned Single
Judge failed to take into consideration the fact that necessary orders were
required to be passed in the facts of the present case to balance the
equities and meet with the ends of justice and to protect the right of both
parties.
5.3 Learned Senior Counsel Mr.Patel for the appellant has further
submitted that the learned Single Judge has failed to appreciate the terms
of engagement, appointment letter and all other documents executed by
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the respondent no. 2 with the appellant from time to time and also failed
to consider the binding policies of the appellant which the respondent no.
2 had accepted and also failed to consider the terms of the Loan
Agreement between the parties and the fact that the appellants were
entitled to adjust the said amount of gratuity against the dues of the
respondent no. 2. He has further submitted that the learned Single Judge
erred in holding gratuity as an unconditional right which was beyond any
adjustment even when the employee's had a loan outstanding from the
company and even when his resignation was without notice, in breach of
contractual terms of the engagement as well as the loan agreement and
when substantial dues remained unpaid.
5.4 By making the above submissions, learned Senior Counsel
Mr.Patel for the appellant would submit to allow the present appeal and
to quash and set aside the order passed by the learned Single Judge.
6. Per contra, learned Advocate Mr.Soneji appearing for the
employee would submit the order passed by the learned controlling
authority has attained the finality in absence of any challenge to the said
order and only after filing of the petition before this Court for execution
of the recovery certificate, the appellant has approached this Court by
filing the petition as well as the Civil Application for directions. He
would further submit that for recovery of the dues, the appellant has also
filed the Civil Suit which is also pending for adjudication. Learned
advocate Mr.Soneji would submit that if the appellant would succeed in
getting the decree, then that would be executed in accordance with law.
6.1 By making the above submissions, he would submit to dismiss the
present appeals.
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7. Having heard the learned Advocates appearing for the respective
parties and considering the relief claimed for by the appellant in the
present appeal, as also the conclusion arrived at by the learned Single
Judge, the question falls for consideration in this appeal is that whether
the gratuity payable to the respondent No.2 is attachable against the suit
filed for recovery of the loan amount advanced by the employer to the
employee while in service.
8. Before answering the above question, at the outset, the relevant
provisions of the Payment of Gratuity Act is required to have a glance
through, more particularly, Section 13 and 14 of the Act.
"13. Protection of Gratuity: - No gratuity payable under this Act
1[and no gratuity payable to an employee employed in any
establishment, factory, mine, oilfield, plantation, port, railway
company or shop exempted under section 5] shall be liable to
attachment in execution of any decree or order of any civil,
revenue or criminal court.
14. Act to override other enactments, etc. The provisions of this
Act or any rule made thereunder shall have effect notwithstanding
anything inconsistent therewith contained in any enactment other
than this Act or in any instrument or contract having effect by
virtue of any enactment other than this Act."
9. Section 60 of the Code of Civil Procedure provides for exemption
from attachment has been made and a detailed list has been provided in
sub-section (1) thereof in clauses (a) to (p). Clause (g) thereof exempts
stipends and gratuities allowed to pensioners of the government or of a
local authority or of any other employer from attachment. Moreso, the
words "local authority" or "other employer" were inserted into the statute
by the amending Act of 1976 with effect from 1.02.1977. For ready
reference, clause (g) is reproduced hereunder:
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"(g) stipends and gratuities allowed to pensioners of the
Government 3 [or of a local authority or of any other employer],
or payable out of any service family pension fund 4 notified in the
Official Gazette by 5 [the Central Government or the State
Government] in this behalf, and political pensions;"
10. Thus, the aforesaid provisions make it abundantly clear that the
amount payable towards the gratuity is not subject to the attachment and
thereby exempts the stipends and the gratuity allowed to the pensioners of
the Government or the Local authority or any other employer.
11. Though much has been emphasized by the learned Senior
Advocate Mr.Patel appearing for the appellant on the terms and
conditions claimed to have been executed between the parties while
giving appointment to the respondent No.2 contending that as per the
clause and recitals inserted pertaining to the leaving of the employment of
the company, respondent No.2 - employee will have to produce "no due
certificate" as required by the company to facilitate the settlement of the
account in question, if any. In the considered opinion of this Court, such
conditions as referred herein above to withhold the gratuity against the
outstanding dues is against the established provisions of the law as
discussed herein above; which otherwise cannot be saddled on the
respondent No.2-employee in view of the fact that resignation of the
employee was accepted; without any protest. Be that as it may, in absence
of any challenge to the order passed by the controlling authority by the
appellant-company, the legitimate dues of the employee in the form of
gratuity cannot be withheld merely on the ground that civil suit for
recovery of dues is pending for adjudication.
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12. Thus, the sum and substance of the aforesaid discussions as
emanated from the material followed by the conclusions arrived at by the
learned Single Judge leaves no doubt to enter into room with the claim as
agitated by the appellant with regard to withholding the payment of
gratuity as ordered by the controlling authority which otherwise remained
unchallenged and consequently attained the finality.
13. For the foregoing reasons, we are not inclined to entertain the
present appeals. We are in complete agreement with the findings and
conclusions arrived at by the learned Single Judge. Accordingly, the
captioned appeals are dismissed.
In view of the dismissal of the appeals, connected civil applications
would not survive and are accordingly dismissed.
(A. S. SUPEHIA, J)
(R. T. VACHHANI, J)
sompura
