Discover India Ltd v. Vishwambhar Nath Dwivedi

1. By way of present writ petition filed under Article 226 of the Constitution of India, the petitioner seeks setting aside of the order dated 17.04.2025 (hereinafter, ‘impugned order’) passed by the Appellate Authority under the Payment of Gratuity Act, 1972 (hereinafter, ‘the Act’). Vide the impugned order, the petitioner’s appeal came to be dismissed against the order dated 08.04.2024 passed by the Controlling Authority, whereby the respondent’s claim for Rs.2,46,923/- alongwith simple interest @ 10% p.a. towards gratuity was allowed.

2. The facts of the present case, in a nutshell, are that the respondent was employed by the petitioner as a Senior Manager from 03.02.2014 to 24.01.2022. During the COVID-19 pandemic, it is the petitioner’s case that due to huge losses in its business, the petitioner was constrained to pay the respondent a reduced salary from April 2020 to September 2020, for which it had statedly sought consent from its employees. While the petitioner claims that during the relevant period, the salary last drawn by the respondent was Rs.18,000/-, the respondent claimed it to be Rs.53,500/-. The respondent’s resignation on 24.12.2021 was accepted by the petitioner on 29.12.2021. The respondent raised a demand for payment of gratuity on the basis of consolidated salary of Rs.53,500/-. The petitioner, however, offered a settlement to the respondent, including gratuity on the reduced last drawn salary of Rs. 18,000/-. Aggrieved by the same, the respondent initiated proceedings before the Controlling Authority, in pursuance of which, the ex parte order dated 08.04.2024 came to be passed in favour of the respondent. The petitioner, thereafter, preferred an application to set aside the aforesaid ex parte order, which was dismissed by the Controlling Authority on 10.07.2024.

3. Petitioner contends that on account of fact that there were no job responsibilities during the Covid period from March to September 2020, with the consent of all the workmen, they were paid reduced salary and the last drawn was @ Rs. 18000/-. Thereafter, the respondent was on leave from October 2020 to March 2021 and then on consented leave from March 2021 to December 2021. It is contended that the respondent never protested to the reduced salary which was regularly credited to his bank account, a copy of which was placed on record. To canvass the submission that gratuity can be determined by the Competent Authority only on the basis of last drawn salary, reliance is placed on decision in MM-350 Vaiyampatti Primary Agricultural Co-operative Bank v. Appellate Tribunal, reported as 2014 SCC OnLine Mad 5590.

4. Though the petitioner contends that the closure of right to crossexamine and passing of ex parte order amount to violation of principles of natural justice, a perusal of the record would show otherwise. It is evident that on the filing of the claim application, the petitioner was served notice through speed-post on 19.02.2022, whereafter, the petitioner was duly represented on the date of hearing before the Controlling Authority. However, due to non-appearance on behalf of the petitioner, its right to cross-examine came to be closed by an ex parte order. Even though later on, the order was allowed to be set aside, subject to costs, it is pertinent to note that the petitioner failed to be represented on the following dates as well. The opportunity was closed and the matter was proceeded for final arguments/issuance of Recovery Certificate as the petitioner not only failed to cross-examine the respondent but also, did not lead its own evidence before the Controlling Authority.

5. The only question that needs consideration by this Court is whether the order dated 08.04.2024 granting the respondent’s claim for Rs.2,46,923/towards gratuity based on last drawn salary of Rs.53,500/- was rightly passed. While the respondent claimed differential amount of gratuity based on consolidated salary of Rs.53,500/-, the petitioner has disputed the same and claimed that the same should have been calculated as per the reduced last drawn salary of Rs.18,000/-. It is the petitioner’s case that it had taken consent of all its employees including that of the respondent to pay them salary on reduced rates during the pandemic. However, a perusal of the record would show that the respondent had categorically claimed that the petitioner had unilaterally reduced the salaries without any written/verbal intimation. Pertinently, the documents put on record rather indicate that from April 2020 onwards, the respondent was never paid a consistent amount towards salary, e.g., for April-May 2020, the respondent was paid salary @ 27000/- each; for June 2020 @ Rs. 25380/-; for July 2020 @ Rs. 22842/-; for August 2020 @ Rs.18274/- and for September 2020 @ Rs.18000/-. It was also claimed that the respondent did not receive salary for the period of October 2020 to February 2021, despite attending work till February 2021. Notably, no cross-examination took place on this aspect. On the contrary, while there is nothing on record to show that the petitioner did, in fact, take consent of its employees before reducing the salary for the subject period, email dated 11.04.2022 would show that the respondent had disputed the factum of consenting to the payment of reduced salary.

6. The Controlling Authority and the Appellant Authority have given concurrent findings in favour of the respondent, insofar as it was held that the last drawn salary of Rs.18,000/- was merely ad-hoc in nature and that the actual last drawn salary for the purpose of calculating gratuity will remain Rs.53,500/- per month. In view of the same and considering that the petitioner has been unable to show that it was unfairly denied the right to cross-examine, neither has it been able to refute the respondent’s claim that the salary was reduced without consent, I find no grounds to interfere with the impugned order.

7. In light of the aforenoted facts and circumstances, the petition is dismissed alongwith pending applications.

MANOJ KUMAR OHRI (JUDGE) MAY 30, 2025