Gratuity A Legal Right Not Bounty: Rajasthan HC Slaps ₹25K Fine On Engineering Institute For Frivolous Litigation Against Deceased Employee

The Jodhpur bench of the Rajasthan High Court came down heavily upon the Jodhpur Institute of engineering and Technology for indulging in “frivolous and obstructive litigation” against its deceased employee and his wife in the matter of payment of gratuity ruling that it was not a bounty but a statutory right.Justice Arun Monga also imposed a cost of Rs. 25,000 on the institute and held that the actions of the petitioner to relentlessly pursued this litigation against its terminally ill employee and thereafter his widow, displayed its lack of compassion. “As is borne out, the claim for gratuity is governed under Section 4 of the Payment of Gratuity Act, 1972, which mandates payment upon superannuation or death. The petitioner has no substantive defense against the claim, and this petition is nothing but indulging in frivolous and obstructive litigation. Pursuing this case further only reflects the petitioner's intent to avoid accountability rather than corrective measure to plug the sheer injustice to the deceased employee and now his widow...The husband of respondent No.4, who was suffering from cancer, died in the hope to have a quietus to the litigation, whereas the petitioner-institute has relentlessly pursued the lis without there being any substance. Eventually, it is his widow, who is pursuing his cause as a legal representative. Petitioner's adamant litigation against a terminally ill employee and now his widow portrays a lack of compassion, which is especially egregious for an educational institution meant to uphold societal values. Being an educational institute, not only it is expected of the petitioner herein to be a model employer, but also act as a virtuous litigant.”"Trite it may sound, gratuity is not a bounty but a statutory right and delays in its payment are a serious violation. As a reputed educational institute, the petitioner has to be held to higher standards of accountability and responsibility. Their actions undermine their moral obligations and, no doubt, if not censured, would create an adverse precedent in similar institutions," the court added. The petitioner was challenging the order of the Appellant Authority under the Payment of Gratuity Act, 1972 (“the Act”) wherein the Controller Authority's ex-parte order directing payment of gratuity to the employee was upheld. The employee had filed an application before the Controlling Authority under the Act for getting his gratuity. Despite being served with notices, no one appeared on behalf of the petitioner, and ex-parte order was passed in favour of the employee. An application was filed before the Controlling Authority for setting aside the ex-parte order which was dismissed since the same was filed after the prescribed statutory deadline. Furthermore, the initial order of the Controlling Authority was also challenged before the Appellant Authority which was also dismissed. Hence, the petition was moved before this Court. During these proceedings, the terminally ill employee succumbed to cancer and his wife was impleaded in the case. After hearing the contentions, the Court highlighted that the crux of petitioner's arguments was that the initial order was passed ex-parte without giving any hearing to them and the same was also upheld without any application of mind. This argument was rejected by the Court by firstly observing that the petitioner was issued due notices but they failed to appear which indicated lack of due diligence, and the resulting ex-parte order was because of their own negligence and not a procedural lapse. On this, the Court held that ignorance of law or proceedings could not be a defense especially for an educational institution. Furthermore, the Court stated that even though the initial order was passed ex-parte, the order passed by the Appellant Authority was only after hearing both the Parties, and since the appeal was filed after the expiry of the statutory prescribed deadline, the same was dismissed. The Court also highlighted that the order passed by the Controlling Authority was complied with and the gratuity payment of the employee was disbursed. It was opined that the deceased employee was rightly held to be entitled to receive the gratuity. The Court held that: "In view of the aforesaid, the writ petition is dismissed with costs of Rs.25,000/- payable to the respondent No.4(wife)". Accordingly, the petition was dismissedTitle: Jodhpur Institute of Engineering and Technology v Appellant Authority, under the Payment of Gratuity Act, 1972 & Ors.Citation: 2025 LiveLaw (Raj) 28Click Here To Read/Download Order

Gratuity A Legal Right Not Bounty: Rajasthan HC Slaps ₹25K Fine On Engineering Institute For Frivolous Litigation Against Deceased Employee

Nupur Agarwal

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