High Court Can Quash Gratuity Orders Passed Without Jurisdiction Even If Employer Did Not Object To Claim: Kerala High Court
The Kerala High Court recently held that high courts can exercise power under Article 226 of the Constitution to set aside the order passed by the Controlling Authority granting gratuity without jurisdiction, even if the claim for gratuity was not objected to by the employer.Justice Gopinath P. was considering a writ petition preferred by Kosamattam Finance Ltd. seeking to set aside the...
The Kerala High Court recently held that high courts can exercise power under Article 226 of the Constitution to set aside the order passed by the Controlling Authority granting gratuity without jurisdiction, even if the claim for gratuity was not objected to by the employer.
Justice Gopinath P. was considering a writ petition preferred by Kosamattam Finance Ltd. seeking to set aside the order passed by the 1st respondent Controlling Authority appointed by the State government determining gratuity of its former employee, the 2nd respondent.
According to the petitioner, it has branches in more than one State and therefore, the claim for gratuity preferred by its employee, who worked in more than one State, ought to have been considered by the Controlling Authority appointed by the Central government as per Section 2(a) of the Payment of Gratuity Act. Since in the present case, it was done by the authority appointed by the state government, the orders are illegal for want of jurisdiction.
The employee, who claimed gratuity, appeared and opposed the plea relying on a judgment in W.P (C) No.11133/2021 where the High Court had taken the view that after failing to object to the jurisdiction of the Controlling Authority, a claim cannot be raised before the High Court. Moreover, a ground taken was that the petitioner bypassed the effective alternative remedy available to him.
The Court, after considering the arguments, felt that the petitioner's arguments had force. It referred to Sections 2(a) and 2(d) of the Act and remarked that the competent authority in the present case was the one appointed by the Central government and not the State government.
“I am of the view that in the light of the provisions contained in Section 2(a) of the 1972 Act read with the definition of 'Controlling Authority' under Section 2(d) of the 1972 Act and since it is admitted that the petitioner is an establishment having branches in more than one State, the Controlling Authority competent to consider any claim for payment of gratuity by any employee of the petitioner would be the Controlling Authority appointed by the Central Government and not the State Government… Going by the provisions of Section 2(a) read with the provisions of Section 2(d) of the 1972 Act, the 1st respondent ought to have concluded, after noticing the said averment of the 2nd respondent, that he had no jurisdiction to consider the claim for payment of gratuity. Thus, the failure of the petitioner to object to maintainability is not fatal,” the Court added.
It was further opined that the decision relied on by the petitioner is not applicable in the present facts. The Court also remarked that existence of alternative remedy does not preclude it from granting relief to the petitioner by exercising jurisdiction under Article 226.
Thus, it allowed the plea and set aside the orders of the State appointed authority. It was further clarified that the 2nd respondent/employee can raise a claim before the Central government appointed authority and if such a claim is made, the same has to be decided without delay.
Case No: WP(C) No. 34801 of 2025
Case Title: M/S. Kosamattam Finance Ltd. v. Deputy Labour Commissioner and Anr.
Citation: 2026 LiveLaw (Ker) 103
Counsel for the petitioner: Jolly John, Liza Meghan Cyriac, C.S. Reshmi, Rubin Shibu, Tania Maria Joy
Counsel for the respondents: T.R. Jagadeesh, Adi Narayanan, Jose Job, V.K Sunil – Government Pleader