Gratuity Serves As Retirement Benefit Ensuring Immediate Financial Support, Cannot Be Paid In Installments: Kerala High Court

The Kerala High Court bench of Justice Murali Purushothaman held that gratuity could not be paid in instalments as the purpose of gratuity is to serve as a retirement or terminal benefit ensuring immediate financial support to the employees or their dependents.“The law does not provide for payment of gratuity in installments as the purpose of gratuity is to serve as a retirement or terminal benefit ensuring immediate financial support to the employee or their dependents, as the case may be. It provides financial protection during the autumn years of a retired employee's life.”The employee had approached the Controlling Authority under the Payment of Gratuity Act saying that the employer refused to pay him gratuity on his retirement. The authority ordered the employer to pay the full gratuity with interest. Since the amount was not paid even after the order, the Controlling authority sent a show cause notice asking the petitioner why the amount should not be recovered as per Section 8 of the Payment of Gratuity Act.The petitioner submitted a request before the Controller asking him to allow him to pay the amount in 12 equal instalments. This request was rejected by the 1st respondent. Against this order, the petitioner approached the High Court.They submitted that they were facing serious financial issues and were not in a position to pay gratuity to 2nd respondent in lump sum. The court rejected this argument saying that the financial distress of the employer is not at all an excuse for delaying payment of gratuity.The Court asked the employer to deposit the amount due as gratuity before the employer within 30 days.Counsel for the Petitioner: Advocates D. Reetha, P. V. Vinod, Shiyas K. R.Counsel for the Respondents: Advocates K. P. Sreekumar, P. M. Satheesh, Anima N. (GP)Case No: WP(C) 36274 of 2024Case Title: Sadhoo Beedi Enterprises v The Controlling Authority and AnotherCitation: 2024 LiveLaw (Ker) 808Click Here To Read/ Download Order

Gratuity Serves As Retirement Benefit Ensuring Immediate Financial Support, Cannot Be Paid In Installments: Kerala High Court

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