Madras High Court
Aspire Systems (India) Private Limited vs Mr.Venkatesh Veerasamy on 29 May, 2025
W.P.Nos.25310 & 25314 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
(Special Original Jurisdiction)
RESERVED ON : 04.04.2025
PRONOUNCED ON : 29.05.2025
PRESENT:
THE HON’BLE DR. JUSTICE A.D. MARIA CLETE
W.P.Nos. 25310 & 25314 of 2021
and
W.M.P. Nos. 26718 & 26723 of 2021
Aspire Systems (India) Private Limited,
Having regd. Office at:
Old No. 4, New No.7, II Trust Link Road,
Mandaveli, Chennai – 600028. ...Petitioner in both WPs
Vs.
1.Mr.Venkatesh Veerasamy,
S/o. Veerasamy. P.,
Block IV, 2A, Ramaniyam Gauravv Apartments,
No.496, Model School Road,
Sholinganallur, Chennai – 600117. …1st Respondent in WP 25310/2021
2. Aspire Systems (India) Private Limited,
Employees Group Gratuity Assurance Scheme,
Rep. by its Trustee Ms. Vinodhini S.,
Old No.4, New No.7, II Trust Link Road,
Mandaveli, Chennai – 600028. …2nd Respondent in both WPs
1/22
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W.P.Nos.25310 & 25314 of 2021
3. Ms. Sujatha Sugumaran,
W/o. Venkatesh V.,
Block IV, 2A, Ramaniyam Gauravv Apartments,
No.496, Model School Road,
Sholinganallur, Chennai – 600117. …1st Respondent in WP 25314/2021
Prayer in W.P.No.25310 of 2021
To issue a Writ, Direction or Order in the nature of Writ of Certiorarified
Mandamus calling for the records of the Controlling Authority for Gratuity,
Chennai in PG.IA.Nos. 88 & 89 of 2021 in PG.IA. 192 of 2019 in PG.No.96 of
2019 dated 24.09.2021 and quash the same, and consequently direct the
Controlling Authority for Gratuity, Chennai to recall its order dated 19.12.2019
passed in PG.IA.No.192 of 2019, and provide an opportunity of hearing in
PG.IA.No.192 of 2019 and pass orders on merits, and pass such necessary or
other orders.
Prayer in W.P.No.25314 of 2021
To issue a Writ, Direction or Order in the nature of Writ of Certiorarified
Mandamus calling for the records of the Controlling Authority for Gratuity,
Chennai in PG.IA.Nos.86 & 87 of 2021 in PG.IA.No.191 of 2019 in PG.No.95
of 2019 dated 24.09.2021 and quash the same, and consequently direct the
Controlling Authority for Gratuity, Chennai to recall its order dated 19.12.2019
passed by in PG.IA.No.191 of 2019, and provide an opportunity of hearing in
PG.IA.No.191 of 2019 and pass orders on merits, and pass such necessary or
2/22
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other orders.
Prayer in WMP No. 26718 of 2021 (in W.P.No.25310 of 2021)
To Stay the proceeding in PG No.96 of 2019 before the Controlling Authority
for Gratuity, Chennai pending the disposal of the present Writ Petition.
Prayer in WMP No. 26723 of 2021 (in W.P.No. 25314 of 2021)
To Stay the proceeding in PG No.95 of 2019 before the Controlling Authority
for Gratuity, Chennai pending the disposal of the present Writ Petition.
Appearance of Parties:
For Petitioner
in both Wps : Ms. Anitha Suresh, Advocate
for M/s. Anitha Suresh, Bhagavath Krishnan
and Jyotsna Sivakumar, Advocates.
For Respondent 1 : Mr. Naveen Kumar, Advocate
In both WPs
For 2nd Respondent
In both Wps : No appearance.
COMMON JUDGMENT
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
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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
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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:—
“kDjhuupd; fhyjhkj ,ilkD mDkjpf;fg;gl;L gpujhd kD vz;/96-2019
tH';fg;gLfpwJ vd;gij gzpt[ld; bjuptpj;Jf; bfhs;sg;gLfpwJ/”
As no counter affidavit was filed, the application for condonation of delay was
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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 2020
seeking recall of the said order, followed by two additional interim applications
—namely, I.A. Nos. 86 and 87 of 2021—again seeking recall of the order dated
16.12.2019 and condonation of delay in filing supporting documents. In
response, the contesting first respondent filed a common counter affidavit
opposing the interim applications, wherein the explanation provided in
paragraph 4(c) was as follows:—
“A perusal of this Hon’ble Forum ‘A’ Diary proceedings would
reveal that on 25.11.2019 the Respondent herein had filed the
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condone delay in I.A.No.191 of 2019. On the said date there was
no representation from the Applicant / Respondent / Respondent
side at the hearing. Hence an additional copy of the condone delay
I.A.No.191 of 2019 was put up in the court bundles along with the
original filed so as to enable the court office provide the Applicant
herein with a copy when they enter appearance. The matter was
posted to 16.12.2019 for filing counter in I.A.No.191 of 2019. On
16.12.2019 the Applicant / Respondent / Respondent was present
at the hearing. However no counter was filed by them in the said
condone delay application on the said date. Hence the Hon’ble
Forum after giving sufficient opportunity had passed the order dt.
16.12.2019 stating: “Petitioner and Respondent present. Since
Respondent failed to file counter in I.A. I.A.is allowed”. Thus it
may be seen that it was in the presence of the Applicant counsel
herein this Hon’ble Forum had allowed the said application. The
Applicant counsel herein had not objected / opposed in allowing
the condone delay application I.A.191 of 2019 at the said hearing
on 16.12.2019. After passing orders the endorsement signatures of
the Applicant counsel herein at the said hearing evidenced that
allowing of the condone dela application was within knowledge of
the Applicant counsel herein. Hence the averment of the
Applicant Counsel herein is denied and said to be afterthought that
on 16.12.2019 that she was not aware of the fact that I.A.was
allowed.”
7.However, by a common order dated 24.09.2021, the Controlling
Authority dismissed the interim applications in both cases. The dismissal was
based on the facts and circumstances of the cases, with specific reference to the
observations made in File No. 95/2019. Aggrieved by these orders, the
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petitioners filed the present writ petitions. When the matters were taken up on
29.11.2021, this Court directed issuance of notice to the contesting respondents
and granted an interim stay of further proceedings. The interim stay was
subsequently extended until further orders by an order dated 03.01.2022.
Thereafter, when the matters were listed on 05.11.2024, the Court directed them
to be placed before the Lok Adalat scheduled for 14.12.2024. As no settlement
was arrived at, the cases were posted for final hearing.
8.Learned counsel for the petitioner contended that the procedure
adopted by the Controlling Authority was flawed and that the writ petitions are
maintainable even at the interlocutory stage. In support of this contention,
reliance was placed on the judgment of the Andhra Pradesh High Court in
Motor Car Beedi Factory v. Controlling Authority under the Payment of
Gratuity Act, 1972, reported in 2008 SCC OnLine AP 333. Attention was
specifically drawn to the following passage in paragraph 16 of the said
judgment:—
“Under these circumstances, it cannot be said that the writ
petitions are not maintainable. Therefore, the objection raised by
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the learned Counsel for the claimants is overruled.It has already
been pointed out that the first respondent did not undertake any
adjudication, worth its name. The only view expressed by him is
that he is "determined that the claimants are entitled for gratuity".
Failure to make any mention to the evidence on record, apart from
amounting to a serious lapse in the adjudication process, would in
a way constitute violation of principles of natural justice also. The
reason is that mere service of a notice, cannot be treated as a
compliance with the principles of natural justice and the actual
compliance can be said to have taken place, only when the
contents of the reply are taken into account. There was not even a
remote reference to the objection raised by the petitioner, about the
absence of relationship of employer and employee. When there is
no adjudication in its real sense, an appeal against such orders,
would hardly be of any sue. An appellate authority would, in the
ultimate analysis, reexamine the reasons assigned by the original
authority. Therefore, the remedy of appeal in these cases would be
futile. This Court is of the view that 1st respondent needs to be
required to determine the issues referred to above, duly furnishing
reasons in support of his conclusions.”
9.It is unclear how the judgment relied upon by the petitioner is of any
relevance at this stage, where the only issue under consideration is the
condonation of delay in filing the gratuity applications, and the main
proceedings are still pending. The petitioner has not yet filed its statement of
defence in either of the gratuity claims. In fact, a reading of paragraph 12 of the
cited A.P. High Court judgment reveals that the facts in that case were entirely
different. There, the grievance arose from the Controlling Authority having
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passed final orders without affording a proper opportunity to the employer or
considering the relevant material. Paragraph 12 of the judgment reads as
follows:—
“The individual orders passed by the first respondent run into two
typed pages. Almost 95% of the order is referred to the facts and the
documents that are placed before it. The only discussion undertaken
by the first respondent on the controversy reads as under:
On the above oral and documentary evidence, I am determined
that the applicant is entitled for gratuity as claimed in the
application for the period of service rendered with the
respondent.
I hold that the respondent is liable to pay gratuity to the
applicant.”
10.Learned counsel for the petitioner also relied on a judgment of the
Supreme Court in Sadananda Halo v. Momtaz Ali Sheikh, reported in (2008)
4 SCC 619, which arose under service jurisprudence. In support of his
contention, he referred to and relied upon the following observations found in
paragraphs 62 and 64 of the judgment:—
“ ……We have already shown in the earlier part of our judgment
that there were proper advertisements issued and reasonable
procedure was chalked out in the earlier meetings held by the
authorities, even the guidelines were defined and the interviews
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proceeded along those guidelines. A mere expression of doubts
only on the ground of large number of candidates appearing and
their not being objectively and properly tested without any further
material, in our opinion, cannot by itself render the whole selection
process illegal.”
“The Division Bench thus could not have condoned the non supply
of copy of the writ petitions prior to the hearing of the writ
petitions before the learned Single Judge. Similarly, after having
noticed that the notice issued by the learned Single Judge was
vague and that the impleaded selected candidates were constantly
crying for the copies of the writ petitions, the Division Bench
could not have simply brushed aside those weighty objections. We
also do not understand the alleged stand taken by the counsel for
the selected candidates before Division Bench regarding their
readiness to argue. It is for this reason that we have extensively
quoted the arguments by the counsel in paras 19 to 22 of this
judgment where the non supply of copies of petitions was
criticised.”
11.It is unclear how the passages cited above bear any relevance to the
orders passed by the Controlling Authority condoning the delay in filing the
gratuity applications by the contesting respondents. If the petitioner intends to
make any personal allegations against the Controlling Authority, it is pertinent
to note that the said authority has not been impleaded as a party to the present
writ petitions. Consequently, any such personal allegations cannot be
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entertained in these proceedings.
12.It is relevant to note that in both cases, the petitioners have taken a
stand forfeiting the gratuity payable to the respective contesting respondents. In
the case of the second respondent in W.P. No. 25310 of 2021, Mr. Venkatesh
Veerasamy, the final order of forfeiture dated 29.06.2018 was passed under
Section 4(6) of the Payment of Gratuity Act, and concluded as follows:—
“All the above actions constitute misconduct. Your services have
been terminated. The loss caused by you to the Company is over
Rs.10,00,000/-. The Gratuity that would ordinarily be payable to
you is Rs.5,56,500/- and the same is forfeited in full.
This is without prejudice to any other actions and proceedings
that the company may take against you under law.”
13.Likewise, in the case of the second respondent in W.P. No. 25314 of
2021, the forfeiture order dated 29.06.2018 reads as follows:—
“All the above actions constitute misconduct. Your services have
been terminated. The loss caused by you to the Company is over
Rs.10,00,000/-. The Gratuity that would ordinarily be payable to
you is Rs.3,87,688/- and the same is forfeited in full.
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This is without prejudice to any other actions and proceedings
that the company may take against you under law.”
14.In cases where forfeiture is effected under Section 4(6) of the Payment
of Gratuity Act, the authority designated under Section 7 of the Act is
empowered to determine the amount of gratuity payable to the workman. The
relevant provisions under Section 7(4)(a), (b), and (c) are as follows:—
“7 (4)(a)If there is any dispute as to the amount of gratuity payable
to an employee under this Act or as to the admissibility of any
claim of, or in relation to, an employee for payment of gratuity, or
as to the person entitled to receive the gratuity, the employer shall
deposit with the controlling authority such amount as he admits to
be payable by him as gratuity.
7(4) (b) Where there is a dispute with regard to any matter or
matters specified in clause (a), the employer or employee or any
other person raising the dispute may make an application to the
controlling authority for deciding the dispute.
7(4)(c) The controlling authority shall, after due inquiry and after
giving the parties to the dispute a reasonable opportunity of being
heard, determine the matter or matters in dispute and if, as a result
of such inquiry any amount is found to be payable to the employee,
the controlling authority shall direct the employer to pay such
amount or, as the case may be, such amount as reduced by the
amount already deposited by the employer.”
15.The forfeiture of gratuity payable to an employee is penal in nature
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and must be preceded by due process. The employer does not have the final say
in the matter, as such forfeiture is subject to adjudication by the competent
authority. In the present cases, the petitioners have withheld substantial gratuity
amounts from both employees, effectively depriving them of any terminal
benefit following their termination. In this context, it becomes necessary to
consider whether gratuity can be denied at the threshold, without affording the
employees an opportunity for review or redressal before the appropriate
authority.
16.As the petitioners have raised the issue of delay, it is necessary to
examine whether the Payment of Gratuity Act prescribes any period of
limitation for approaching the Controlling Authority or the Appellate Authority.
While Section 7(7) of the Act stipulates a limitation period of 60 days for filing
an appeal before the Appellate Authority, there is no corresponding provision
prescribing a limitation period for initiating proceedings before the Controlling
Authority. On the contrary, as seen from Section 7(4)(b), which has been
extracted earlier, the provision merely states that parties having a dispute may
approach the Controlling Authority, without prescribing any specific time limit
for doing so.
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17.It is only under Section 7(1) of the Act that a person eligible to receive
gratuity is required to submit a written application to the employer within the
prescribed time and in the prescribed form. However, no such time limit is
stipulated for filing an application before the Controlling Authority. The
procedure and time frame for such an application are instead outlined under
Rule 10 of the Tamil Nadu Payment of Gratuity Rules, 1973, which reads as
follows:—
“10. Application to controlling authority for direction
(1) If an employer:-
(i) refuses to accept a nomination or to entertain an application
sought to be filed under rule 7, or
(ii) issues a notice under sub-rule (1) of rule 8 either specifying an
amount of gratuity which is considered by the applicant less than
what is payable or rejecting eligibility to payment of gratuity, or
(iii) having received an application under rule 7 fails to issue any
notice as required under rule 8 within the time specified therein,
the claimant employee, nominee or legal heir, as the case may be,
may, within ninety days Of the occurrence of the cause for the
application, apply in Form 'N' to the controlling authority for
issuing a direction under sub-section (4) of section 7 with as many
extra copies as there are opposite parties;
Provided that the controlling authority may accept any application
under this sub-rule, on sufficient cause being shown by the
applicant, after the expiry of the specified period.
18.It is well established that the prescription of a period of limitation is a
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matter of substantive legislative power. The Payment of Gratuity Act does not
impose any limitation for approaching the Controlling Authority, and no such
condition is found in the substantive provisions of the Act. Even Section 15(1),
which empowers the appropriate government to frame rules, does not delegate
any power to prescribe a period of limitation for filing applications before the
Controlling Authority. Therefore, any attempt by the delegate—the appropriate
government—to introduce a limitation period through subordinate legislation
would be beyond the scope of the delegated power and consequently, ultra vires
the Act.
19.In Backiasamy K.P. v. Appellate Authority under the Payment of
Gratuity Act, 1972 and Regional Labour Commissioner (Central),
Chennai, reported in 2008 (1) LLJ 575 (Mad), this Court held that the State
Government does not possess the authority, under the rule-making power, to
prescribe any period of limitation for filing gratuity applications. Consequently,
the requirement that an application must be filed within 90 days was declared to
be without legal validity.
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20.In Rasipuram Co-operative Urban Bank Limited v. The Authority
under the Payment of Gratuity Act / Assistant Commissioner of Labour &
Others, reported in (2016) 1 MAD CK 36, this Court, in paragraph 8, referred
to a judgment of the Supreme Court while explaining the concept of “sufficient
cause” for condoning delay in filing an application. The relevant portion reads
as follows:—
“The Hon'ble Supreme Court in the case of Basawaraj referred to
supra, summarises the decisions rendered by the Hon'ble Supreme
Court interpreting the expression 'Sufficient Cause', taking note
of the decisions in the case of Madanlal V. Shyamlal reported in
(2002) 1 SCC 535 and Ram Nath Sao V. Gobardhan Sao reported
in (2002) 3 SCC 195. The Hon'ble Supreme Court pointed out
that there can be no straitjacket formula in such cases and each
case has to be decided on its facts. Therefore, to throw out an
application on the ground of limitation, it has to be established
that there was gross negligence, inaction or lack of bona fides and
unless any one of these factors are established, an application
cannot be rejected on the ground of limitation.”
21.In Ram Nath Sao alias Ram Nath Sahu & Others v. Gobardhan
Sao & Others, reported in (2002) 3 SCC 195, the Supreme Court, in
paragraph 12, held that the expression “sufficient cause” for condoning delay
must be interpreted liberally, and that there can be no rigid or straightjacket
formula for determining its applicability. The Court observed as follows:—
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“Thus it becomes plain that the expression "sufficient cause"
within the meaning of Section 5 of the Act or Order 22 Rule 9 of
the Code or any other similar provision should receive a liberal
construction so as to advance substantial justice when no
negligence or inaction or want of bona fide is imputable to a
party. In a particular case whether explanation furnished would
constitute "sufficient cause" or not will be dependant upon facts
of each case. There cannot be a straitjacket formula for accepting
or rejecting explanation furnished for the delay caused in taking
steps. But one thing is clear that the courts should not proceed
with the tendency of finding fault with the cause shown and
reject the petition by a slipshod order in over jubilation of
disposal drive. Acceptance of explanation furnished should be
the rule and refusal an exception more so when no negligence or
inaction or want of bona fide can be imputed to the defaulting
party. On the other hand, while considering the matter the courts
should not lose sight of the fact that by not taking steps within
the time prescribed a valuable right has accrued to the other party
which should not be lightly defeated by condoning delay in a
routine like manner. However, by taking a pedantic and hyper
technical view of the matter the explanation furnished should not
be rejected when stakes are high and/or arguable points of facts
and law are involved in the case, causing enormous loss and
irreparable injury to the party against whom the lis terminates
either by default or inaction and defeating valuable right of such
a party to have the decision on merit. While considering the
matter, courts have to strike a balance between resultant effect of
the order it is going to pass upon the parties either way.”
22.In the foregoing circumstances, this Court finds no illegality in the
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orders passed by the Controlling Authority in condoning the delay in the
applications filed by the contesting respondents. In view of the said orders, the
two interim applications filed by the petitioner in each of the P.G. Cases are
held to be vexatious and are liable to be rejected. The petitioner cannot evade
adjudication on the merits, particularly when substantial amounts claimed as
gratuity have been forfeited without proper justification. Accordingly, both writ
petitions stand dismissed. The Controlling Authority is at liberty to proceed
with the adjudication of the gratuity claims in P.G. Case Nos. 96/2019 and
95/2019, after issuing notice to both parties and disposing of the cases on their
merits. The petitioner is directed to file its counter within a period of four (4)
weeks from the date of receipt of this order. The Deputy Commissioner of
Labour (Controlling Authority under the Payment of Gratuity Act, 1972,
Chennai-6) is directed to complete the adjudication and pass appropriate orders
within three (3) months thereafter. All connected miscellaneous petitions stand
closed. There shall be no order as to costs.
29.05.2025
ay
NCC : Yes / No
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Index : Yes / No
Speaking Order / Non-speaking Order
To
The Deputy Commissioner of Labour,
(Controlling Authority under the
Payment of Gratuity Act, 1972)
DMS Office Compound,
Teynampet,
Chennai 600006.
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W.P.Nos.25310 & 25314 of 2021
DR. A.D. MARIA CLETE, J
ay
Pre-Delivery Judgment made in
W.P.No. 25310 of 2021 & 25314 of 2021
and
W.M.P. Nos. 26718 & 26723 of 2021
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W.P.Nos.25310 & 25314 of 2021
29.05.2025
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