SRI. NANDHEESH H.V vs M/S BANGALORE METRO RAIL CORPORATION LTD
- Court
- Karnataka High Court
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R
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ND
DATED THIS THE 22 DAY OF SEPTEMBER, 2026
PRESENT
THE HON'BLE MR. JUSTICE D K SINGH
AND
THE HON'BLE MR. JUSTICE H.SHANTHI BHUSHAN
WRIT APPEAL NO. 1872 OF 2026 (L-PG)
BETWEEN:
SRI. NANDHEESH H.V
AGED ABOUT 35 YEARS,
S/O. SRI. H V VEERAPPAJI,
TH
RESIDING AT NO. 456/5, 6 MAIN,
RD
3 CROSS, KENGERI SATELLITE TOWN,
BANGALORE -560 060.
…APPELLANT
(BY SRI. S.B.MUKKANNAPPA, ADVOCATE)
AND:
1. M/S BANGALORE METRO RAIL CORPORATION LTD
BMTC COMPLEX, K.H. ROAD,
BENGALURU 560 027.
2. THE LABOUR OFFICER AND
CONTROLLING AUTHORITY
UNDER THE PAYMENT OF GRATUITY ACT,
SUB-DIVISION -07, KARMIKA BHAVAN,
BANNERGHATTA ROAD, BANGALORE – 560 029.
3. THE ASSISTANT LABOUR COMMISSIONER,
AND APPELLATE AUTHORITY UNDER THE PAYMENT
OF GRATUITY ACT, SUB-DIVISION -07,
KARMIKA BHAVAN, BANNERGHATTA ROAD,
BANGALORE – 560 029.
…RESPONDENTS
(BY SRI. S.SANTHOSH NARAYAN, ADVOCATE FOR R1;
SRI. RAGHAVENDRA.S.H, AGA FOR R2 & R3)
Digitally signed
by MALA K N
Location: HIGH
COURT OF
KARNATAKA
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THIS WRIT APPEAL FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET ASIDE THE JUDGMENT
PASSED BY THE DATED 29.06.2026 PASSED BY THE HON’BLE
LEARNED SINGLE JUDGE IN WP No. 35414/2025 AND
CONSEQUENTLY CONFIRM THE ORDER DATED 22.10.2024
ND
PASSED BY THE 2 RESPONDENT, VIDE ANNEXURE-D IN WP
No. 35414/2025 TO MEET THE ENDS OF JUSTICE AND EQUITY.
THIS APPEAL, COMING ON FOR PRELIMINARY HEARING,
THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE D K SINGH
AND
HON'BLE MR. JUSTICE H.SHANTHI BHUSHAN
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE H.SHANTHI BHUSHAN)
The Payment of Gratuity Act, 1972 is a cornerstone of
social security legislation in India, intended to secure a
lump-sum statutory benefit to employees in recognition
of the service rendered by them to their employers.
'Gratuity' is not a bounty or a matter of employer
discretion, but a statutory benefit payable upon
fulfillment of the conditions prescribed under the Act.
The concept of “continuous service” assumes particular
significance in determining an employee’s eligibility, and
its meaning must be ascertained by reading Section 4
together with Sections 2(c) and 2A of the PGA. The
provisions of a welfare enactment must be construed in
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a manner that advances its object, while remaining
faithful to the language employed by the legislature. In
this regard, the maxim “Ut res magis valeat quam
pereat”—that a statutory provision should be interpreted
so as to give it effect rather than render it ineffective—
aptly reflects the principle that the definition of
continuous service under Section 2A cannot be rendered
redundant while determining entitlement under Section
4. The statutory scheme must, therefore, be read as a
whole, giving due effect to both the prescribed qualifying
period and the deeming provision governing continuous
service.
The present intra-court appeal has been preferred by Sri.
Nandheesh H.V. (for short, ‘respondent No. 1’ ) against the
order dated 29.06.2026, passed by the learned Single Judge in
Writ Petition No.35414/2025 (L-PG), wherein the learned Single
Judge had set aside the order dated 22.10.2024 passed by the
Labour Officer and Controlling Authority/respondent No.2 (for
short, ‘Controlling Authority’ ) under the Payment of Gratuity
Act, 1972 (for short, ‘the Act’ ), in Case No.LOB-07/PGA/CR-
128/2022-23, and the consequential appellate order dated
22.09.2025 passed by the Assistant Labour Commissioner and
Appellate Authority/respondent No.3 (for short, ‘Appellate
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Authority’ ) in Appeal No.ALCBNG-3/PGA/Appeal/CR-
108/2024-25.
For the sake of convenience, the parties are referred to
by their respective ranks before the learned Single Judge.
I. FACTS OF THE PETITIONER:
2. It is the case of M/s. Bengaluru Metro Rail
Corporation Limited (for short, ‘petitioner’ ) that the dispute
arose out of the claim for gratuity made by respondent No.1,
who had been appointed as an Assistant Engineer on a
contractual basis by the petitioner under appointment order
dated 09.06.2017 and reported for duty on 06.07.2017. He
tendered his resignation on 19.03.2022, which was accepted,
and he was relieved from service on 18.04.2022. His period of
service, as recorded in the proceedings, was four years, nine
months and twelve days. After his termination from service, he
submitted representations dated 12.04.2022 and 13.06.2022
seeking payment of gratuity, claiming a sum of Rs.1,85,221/-
on the basis of his last drawn monthly salary of Rs.64,210/-. As
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the petitioner did not make the payment claimed by him, he
approached the Controlling Authority under the Act.
3. The Controlling Authority issued notice to the
petitioner, who entered appearance and filed its statement of
objections. Upon consideration of the claim and the material
placed before it, the Controlling Authority, by order dated
22.10.2024, directed the petitioner to pay gratuity of
Rs.1,75,846/- with interest at 10% from 18.04.2022.
Aggrieved by the said determination, the petitioner preferred
an appeal before the Appellate Authority. After hearing the
parties, the Appellate Authority, dismissed the appeal by order
dated 22.09.2025 and affirmed the direction to pay gratuity.
4. The petitioner thereafter approached this Court in
W.P.No.35414/2025, contending that the claim could not have
been allowed when the employee had admittedly rendered
service for less than five years, as contemplated under Section
4 of the Act. The petitioner also relied upon the decision of this
Court in M/s.Alvas Institute of Engineering and
1
Technology, Mijar v. State of Karnataka and Others , in
1
W.P. No. 48825/2016, decided on 28.06.2022.
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support of its challenge to the orders of the statutory
authorities.
II. ORDER PASSED IN W.P. NO. 35414/2025:
5. The learned Single Judge, by order dated
29.06.2026, took note of the admitted position that respondent
No.1 had rendered service for four years, nine months and
twelve days and had resigned on 19.03.2022. After hearing the
rival contentions on both sides, the learned Single Judge
observed that the issue for consideration was, whether gratuity
was payable in the circumstances of the case, having regard to
the period of service actually rendered.
6. The learned Single Judge made a reference to
Section 4 of the Act, which provides for payment of gratuity
upon termination of employment, subject to fulfillment of the
prescribed conditions, including the requirement of continuous
service for not less than five years. The learned Single Judge
held that the employee had not completed five years of service
and that the gratuity authorities had failed to have regard to
the relevant considerations while determining his entitlement.
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7. Accordingly, the learned Single Judge, vide order
dated 29.06.2026, allowed the writ petition and issued a writ of
certiorari, quashing the order dated 22.10.2024 passed by the
Controlling Authority and the appellate order dated 22.09.2025
passed by the Appellate Authority. The Court also directed that
any amount deposited in the proceedings, if any, be released or
refunded in favour of the petitioner.
III. GROUNDS URGED IN THE WRIT APPEAL:
8. Aggrieved by the order dated 29.06.2026 passed by
the learned Single Judge, respondent No.1 has preferred the
present intra-court appeal, contending, inter alia , that the
learned Single Judge failed to appreciate the scope of Sections
2A and 4 of the Act and adopted an unduly restrictive
interpretation of a beneficial labour welfare enactment.
9. It is urged that, though respondent No.1 had served
from 06.07.2017 until 18.04.2022, he had worked for more
than 240 days during the fifth year of service and that the
statutory concept of continuous service ought to have been
considered while determining his eligibility for gratuity.
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Respondent No.1 further contends that the learned Single
Judge did not properly consider the findings of the Controlling
Authority and the Appellate Authority, or the evidence and
documents placed before them, and that the petitioner had
neither effectively rebutted his evidence nor cross-examined
him before the Controlling Authority.
10. It is further contended that the learned Single
Judge re-examined the matter as though exercising appellate
jurisdiction, despite the concurrent orders of the statutory
authorities, and that the impugned order defeats the object of
the Act and the protection intended for employees. On these
grounds, the appellant seeks setting aside of the order of the
learned Single Judge and restoration of the order dated
22.10.2024 passed by the Controlling Authority.
IV. POINTS FOR CONSIDERATION:
11. We have heard Shri.S.B.Mukkanappa, learned
counsel appearing for appellant/respondent No.1;
Shri.S.Santhosh Narayan, learned counsel appearing for the
petitioner; Shri.Raghavendra S.H., learned AGA appearing for
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respondent Nos.2 and 3/State and we have carefully perused
the records of the case before us. As such, the following
question arises for our consideration:
Whether respondent No.1 has made out any
ground warranting interference with the order
dated 29.06.2026 passed by the learned Single
Judge in W.P.No.35414/2025?
V. ANALYSIS & REASONS:
12. Upon perusal of the pleadings, the order of the
Controlling Authority and the Appellate Authority, the order
dated 29.06.2026 passed by the learned Single Judge in W.P.
No. 35414/2025, and upon hearing the learned counsel
appearing for the parties, we are of the considered view that
the present intra-court appeal deserves to be allowed.
13. The question is not merely whether respondent
No.1 had completed five calendar years from the date on which
he joined the service of the petitioner, but whether his
eligibility for gratuity has to be determined by reading Section
4(1) of the Act, along with the definition of “continuous service”
under Sections 2(c) and 2A of the Act.
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14. Respondent No.1 was appointed as an Assistant
Engineer under the appointment order dated 09.06.2017 and
reported for duty on 06.07.2017. He tendered his resignation
on 19.03.2022 and was relieved from service on 18.04.2022,
having rendered service for four years, nine months and twelve
days. He sought gratuity by representations dated 12.04.2022
and 13.06.2022, but the Corporation did not settle the claim.
The Controlling Authority, by order dated 22.10.2024, directed
payment of Rs.1,75,846/- with interest at 10% from
18.05.2022. The petitioner’s appeal was dismissed on
22.09.2025 by the Appellate Authority. Both the Controlling
Authority and the Appellate Authority thus considered the claim
and directed payment, whereas the learned Single Judge set
aside their orders on 29.06.2026 primarily on the ground that
respondent No.1 had not completed five years of service.
15. The Act is an important piece of social security
legislation intended to provide an employee with a statutory
monetary benefit in recognition of service rendered to the
employer. In this regard, we may reproduce certain provisions
of the Act, which are relevant for the present adjudication:
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Relevant portion of Section 2(c):
“2. Definitions. — In this Act, unless the context
otherwise requires, —
(c) “continuous service” means continuous service
as defined in Section 2A ;”
Relevant portion of Section 2A:
“2A. Continuous service. — For the purposes of this
Act, —
(1) an employee shall be said to be in continuous service
for a period if he has, for that period, been in
uninterrupted service, including service which may be
interrupted on account of sickness, accident, leave,
absence from duty without leave (not being absence in
respect of which an order treating the absence as break
in service has been passed in accordance with the
standing orders, rules or regulations governing the
employees of the establishment), lay-off, strike or a
lock-out or cessation of work not due to any fault of the
employee, whether such uninterrupted or interrupted
service was rendered before or after the commencement
of this Act;
(2) where an employee (not being an employee
employed in a seasonal establishment) is not in
continuous service within the meaning of clause
(1), for any period of one year or six months, he
shall be deemed to be in continuous service under
the employer —
(a) for the said period of one year, if the employee
during the period of twelve calendar months
preceding the date with reference to which
calculation is to be made, has actually worked
under the employer for not less than —
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(i) one hundred and ninety days, in the case of an
employee employed below the ground in a mine or
in an establishment which works for less than six
days in a week; and
(ii) two hundred and forty days, in any other
case ;”
Relevant portion of Section 4(1):
“4. Payment of gratuity.— (1) Gratuity shall be
payable to an employee on the termination of his
employment after he has rendered continuous
service for not less than five years ,—
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or
disease:”
(emphasis supplied)
16. Gratuity is not a bounty or a payment made at the
discretion of the employer; it is a statutory entitlement when
the conditions prescribed by the Act are satisfied. Section 4(1)
stipulates the requirement of five years of continuous service,
subject to the exceptions contained therein. That provision,
however, cannot be read in isolation from Section 2(c), which
defines “continuous service” with reference to Section 2A.
Section 2A provides the statutory test for determining
continuous service and, in the circumstances specified under
sub-section (2), deems an employee to have been in
continuous service for the prescribed period where the
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employee has actually worked for not less than 240 days during
the relevant period of twelve calendar months.
17. The deeming provision is not an incidental
consideration; it forms part of the statutory scheme by which
continuous service is to be assessed. Therefore, the
determination cannot be made solely by calculating the
calendar interval between the date of joining and the date of
cessation of employment, without considering the number of
days actually worked and the applicability of Section 2A of the
Act. The material question in the present case is, whether the
service of respondent No.1 during the fifth year satisfies the
statutory requirement, and whether the benefit of the deeming
provision is available to him on the facts established before the
statutory authorities.
18. The Hon’ble Supreme Court in Surendra Kumar
Verma v. Central Govt. Industrial Tribunal-cum-Labour
2
Court , while considering Section 25-B(2)(a)(ii) of the
2
(1980) 4 SCC 443
.
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Industrial Disputes Act, 1947 (for short ‘ID Act’ ), which is pari
materia to Section 2A(2)(a)(ii) of the Act, observed as follows:
“The provision appears to be plain enough. Section 25-F
requires that a workman should be in continuous service
for not less than one year under an employer before that
provision applies. While so, present Section 25-B(2)
steps in and says that even if a workman has not
been in continuous service under an employer for
a period of one year, he shall be deemed to have
been in such continuous service for a period of one
year, if he has actually worked under the employer
for 240 days in the preceding period of twelve
months. There is no stipulation that he should
have been in employment or service under the
employer for a whole period of twelve months. In
fact, the thrust of the provision is that he need not
be. That appears to be the plain meaning without
gloss from any source. ”
(emphasis supplied)
19. The decision of the Hon’ble Supreme Court in
Surendra Kumar Verma (supra) was followed by the Madras
High Court in Mettur Beardsell Ltd. v. Regional Labour
3
Commissioner (Central) , wherein the Madras High Court
considered the very question of entitlement to gratuity where
the employee had rendered four years, ten months and
eighteen days of service. The employee had worked for more
than 240 days during the last period of service. The Court held
that Section 2A had to be applied while interpreting the five-
3
1996 SCC OnLine Mad 344 .
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year requirement in Section 4(1), and that the employee was to
be deemed to have completed five years of continuous service.
The Court rejected the contention that completion of five full
calendar years was indispensable in the face of the statutory
definition of continuous service. The relevant observations of
the Madras High Court are reproduced hereinbelow:
“5. Section 2-A defines continuous service.
According to this section, if an employee renders
continuous service for a period of 240 days in a
year he will be deemed to have continued in
service for one year. This deeming provision
contained in S. 2-A must be applied in interpreting
the period of five years mentioned in S. 4(1).
Section 2(b) also supports this interpretation
because as per the said section completed year of
service means continuous service for one year.
Therefore, these provisions are emphatic in stating
that if an employee serves continuously for a
period of 240 days in a year, he must be deemed
to have continuously served for one year . In this
case admittedly the third respondent has served for 4
years, 10 months and 18 days. 10 months and 18 days
service is definitely more than 240 days. Therefore when
the third respondent was relieved from service he has
thus completed five years of service….”
(emphasis supplied)
20. The reasoning in Mettur Beardsell (supra) is
directly relevant to the issue raised in this appeal, as
respondent No.1 herein had rendered four years, nine months
and twelve days of service and has worked for more than 240
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days during the fifth year. The legal test is not whether
respondent No.1 remained on the rolls for five complete
calendar years, but whether the statutory fiction under Section
2A applies to the service actually rendered. The said decision,
therefore, supports respondent No.1’s contention that the
qualifying period under Section 4(1) must be considered with
due regard to Section 2A and not by applying a purely
arithmetical calendar-year test.
21. The same approach was adopted by the Kerala High
Court in Sreeja B.V. v. Regional Joint Labour
4
Commissioner . We may note some of the observations made
by the Kerala High Court while interpreting Section 2A and its
effect on Section 4(1) of the Act:
“3. By sub section (1) continuous service means
uninterpreted service including interruption, on account
of sickness, accident, leave, absence from duty without
leave etc., as long as the absence is not treated as a
break in service, by a specific order. Sub-section (2)
specifically deems continuous service within any period
of one year, not coming within the meaning of clause
(1), to be continuous service, if in the preceding period
of twelve calendar months, the workman has worked for
240 days. Hence by a deeming provision, the
statute provides for the service in any twelve
months of a five year period to be treated as
4
2015 SCC OnLine Ker 8625
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continuous service, if the employee has more than
240 days of service .
4. Section 25B(2) of the ID Act provides in pari materia
deeming provision, wherein a workman who is not in
continuous service for a period of one year or six months
is deemed to be in continuous service, if he has, during
the period of twelve calendar months preceding the date
of calculation, 240 days service. The Hon'ble Supreme
Court, considering the same in Surendra Kumar
Verma v. The Central Government Industrial Tribunal
Cum Labour Court, New Delhi [(1980) 4 SCC 443] held
so:-
“The provision appears to be plain enough.
S.25F requires that a workman should be in
continuous service for not less than one year
under an employer before that provision applies.
While so, present S.25B(2) steps in and says
that even if a workman has not been in
continuous service under an employer for a
period of one year, he shall be deemed to have
been in such continuous service for a period of
one year, if he has actually worked under the
employer for 240 days in the preceding period of
twelve months. There is no stipulation that he
should have been in employment or service
under the employer for a whole period of twelve
months. In fact, the thrust of the provision is
that he need not be. That; appears to be the
plain meaning without gloss from any source.
3. Following the aforesaid decision, the Madras
High Court in a decision reported in 1998 LLR
1072 Mettur Beardsell Ltd. v. Regional Labour
Commissioner held that the principle squarely
applies in the case of the provisions of the Gratuity
Act. This Court is inclined to follow the said
decision, which is in consonance with the deeming
provision .”
(emphasis supplied)
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22. The decision in Mettur Beardsell (supra) was also
followed by the Delhi High Court in TV Today Network Ltd. v.
5
Ankita Sodhi and Another wherein, the employee had
resigned after rendering four years, eleven months and twenty
days of service, and the employer disputed her entitlement on
the ground that she had fallen short of five years. The Delhi
High Court considered Section 2A along with Section 4 of the
Act and the earlier decision in Mettur Beardsell (supra) to
hold in the following words:
“ 37. Upon perusal of the above cited extracts, it is clear
that the term “continuous services” needs to be
interpreted liberally where the services rendered by a
labour need to be 240 days in a year to make them
meet the criteria as enshrined under Section 4 of the
Act.
38. In the instant case, the respondent workman had
joined the petitioner entity on 7th August, 2006, and
worked there till the time she rendered her resignation
dated 26th July, 2011 and had completed services of 4
years, 11 months and 20 days .
39. Therefore, on the basis of same, this Court is of the view
that the learned Court below rightly rejected the said
contention of the petitioner and held that the respondent
workman had duly completed the minimum period for being
eligible for the payment of gratuity accrued towards her.”
(emphasis supplied)
23. These decisions recognize that the statutory
definition of continuous service has to be given effect when the
5
2024 SCC OnLine Del 3542.
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five-year qualifying period is considered. The interpretation
advanced by the petitioner, if accepted without examining
Section 2A, would render the deeming provision ineffective in
precisely the circumstances for which it was enacted. We are
persuaded by the reasoning in these decisions, which gives
effect to the language of the Act and its social security purpose.
24. The principle of beneficial interpretation is also
supported by the decisions of the Supreme Court in Jeewanlal
(1929) Ltd. v. Appellate Authority under the Payment of
6
Gratuity Act and Surendra Kumar Verma (supra). In
Jeewanlal (supra) , the Supreme Court recognised the
beneficial character of the Act and the need to construe it in a
manner that advances the protection afforded by the
legislation, within the limits of its language. We may reproduce
some relevant observations hereinbelow:
“11. In construing a social welfare legislation, the
court should adopt a beneficent rule of
construction; and if a section is capable of two
constructions, that construction should be
preferred which fulfils the policy of the Act, and is
more beneficial to the persons in whose interest
the Act has been passed. When, however, the
language is plain and unambiguous, the Court
6
(1984) 4 SCC 356 .
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must give effect to it whatever may be the
consequence, for, in that case, the words of the
statute speak the intention of the Legislature.
When the language is explicit, its consequences are for
the Legislature and not for the courts to consider. The
argument of inconvenience and hardship is a dangerous
one and is only admissible in construction where the
meaning of the statute is obscure and there are two
methods of construction. In their anxiety to advance
beneficent purpose of legislation, the courts must not
yield to the temptation of seeking ambiguity when there
is none.”
(emphasis supplied)
25. Further, in Surendra Kumar Verma (supra) ,
while considering the provisions of the ID Act, the Supreme
Court explained the approach to be adopted in construing
labour welfare legislation and emphasised that a statutory
deeming provision must be given its intended effect. Likewise,
in Mohan Lal v. Management of M/s. Bharat Electronics
7
Ltd. , the Supreme Court considered the operation of the
deeming provision concerning continuous service under Section
25B of the ID Act and explained that the statutory fiction must
be applied in accordance with the terms enacted by the
legislature.
7
(1981) 3 SCC 225.
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26. Though those two decisions arose under the
Industrial Disputes Act and not the Payment of Gratuity Act,
the interpretive principle they explain is relevant when
construing a comparable statutory provision defining
continuous service. The direct application of Section 2A to
gratuity entitlement is addressed in Mettur Beardsell
(supra) , Sreeja B.V. (supra) and TV Today Network
(supra) . Read together, these authorities require the Court to
give effect to the statutory definition rather than allow the
requirement of five years in Section 4(1) to be treated as a
calendar-period condition divorced from Section 2A.
27. Significantly, the Madras High Court, in its latest
decision on the issue, in State Bank of India v. Deputy Chief
8
Labour Commissioner (Central), Chennai , reiterated the
principle that where an employee has rendered 240 days of
service during the fifth year, the qualifying period for gratuity
may be treated as five years, following its earlier judgment in
9
Dhanalakshmi Mills Ltd. v. Presiding Office r. The said
decision lends support to the interpretation that the statutory
8
W.P. No. 3764 of 2026, decided on 12.02.2026 .
9
2021 SCC OnLine Mad 2685 .
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requirement under Section 4(1) must be considered alongside
the provisions governing continuous service.
28. The petitioner had relied upon the decision of this
Court in Alvas Institute of Engineering and Technology
(supra) in support of its challenge before the learned Single
Judge. We have considered the said decision in the light of the
authorities referred to above. To the extent that the reasoning
in M/s.Alvas Institute of Engineering and Technology
(supra) proceeds on the footing that completion of 240 days
during the fifth year cannot assist an employee in satisfying the
five-year requirement under Section 4(1), without giving effect
to Section 2A of the Act, we are unable to accept that
interpretation. Section 2A is part of the same enactment and
expressly provides the statutory method for determining
continuous service.
29. The later decision of the Delhi High Court in TV
Today Network (supra) considered the same statutory
question with reference to Mettur Beardsell (supra) and
Sreeja B.V. (supra) and upheld the gratuity authorities'
determination in favour of an employee who had fallen short of
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five calendar years but had worked for more than 240 days
during the fifth year. We, therefore, hold that the approach
which treats the calendar period alone as decisive, without
considering the effect of Section 2A, does not give full effect to
the statutory scheme. Our conclusion rests on the language of
Sections 2(c), 2A and 4(1), read together, and the authorities
interpreting the concept of continuous service; it is not founded
merely on the beneficial object of the enactment.
30. The record further discloses that respondent No. 1
entered the witness box and produced material in support of his
claim before the Controlling Authority. As urged in the writ
appeal, the petitioner did not cross-examine him or lead oral
evidence to rebut his evidence. The Controlling Authority, by its
order dated 22.10.2024, allowed the claim to the extent of
Rs.1,75,846/- and directed payment of interest at 10% from
18.05.2022. The petitioner thereafter availed itself of the
statutory appellate remedy, but the Appellate Authority, by
order dated 22.09.2025, dismissed the appeal and affirmed the
determination.
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31. These orders were thus not passed without notice
to the employer or without consideration of its challenge. The
writ court was required to examine whether the statutory
authorities had committed an error of law, acted beyond their
jurisdiction, violated the principles of natural justice or reached
a finding that was perverse on the record. The power under
Articles 226 and 227 is not an ordinary appellate jurisdiction
enabling the Court to substitute its own conclusion merely
because it may take a different view of the facts. Though a
patent error in the interpretation of the Act would undoubtedly
warrant interference, the orders of the statutory authorities
cannot be displaced without addressing the relevant statutory
provisions and the basis on which the authorities reached their
conclusions. In the present case, the order of the learned
Single Judge does not adequately examine the contention of
respondent No.1, who has placed specific reliance on Section
2A, or the gratuity authorities interpreting the 240-day
requirement. In those circumstances, the interference with the
statutory orders by the learned Single Judge cannot be
sustained.
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32. Applying the above principles to the facts of the
present case, respondent No.1 was in service from 06.07.2017
until 18.04.2022. His period of service was admittedly less than
five calendar years, but the claim before the statutory
authorities was that he had worked for more than 240 days
during the fifth year. The significance of that fact had to be
tested under Section 2A, read with Section 4(1), rather than
rejected merely because the total calendar period fell short of
five years. Respondent Nos.2 and 3 had considered the claim
and directed payment of gratuity and the petitioner has not
shown a sufficient basis for setting aside those orders on the
ground that respondent No. 1 did not complete five calendar
years.
33. The case of respondent No.1 is not that Section
4(1) should be ignored, but that the qualifying period
prescribed by that provision must be understood in the manner
laid down by the Act itself. In our view, that contention has
substance. The learned Single Judge's order dated 29.06.2026,
which proceeded on the shortfall in calendar service without
properly considering the statutory deeming provision and the
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decisions interpreting it, is liable to be set aside. The statutory
orders directing payment of gratuity deserve to be restored.
VI. CONCLUSION:
34. For the reasons stated above, we hold that Section
4(1) of the Act cannot be read in isolation from Sections 2(c)
and 2A of the Act. The definition of continuous service and the
deeming provision contained in Section 2A must be given effect
while determining whether the qualifying period for gratuity has
been completed. The decisions in Mettur Beardsell (supra) ,
Sreeja B.V. (supra) and TV Today Network (supra) , read
with the principles of beneficial construction explained by the
Supreme Court in Jeewanlal (1929) Ltd. (supra) , Surendra
Kumar Verma (supra) and Mohan Lal (supra) , support the
requirement that the statutory fiction be considered in
accordance with its terms. Having regard to the respondent
No.1's period of service, his claim of having worked for more
than 240 days during the fifth year, and the findings recorded
by the statutory authorities, we find that the learned Single
Judge was not justified in quashing the orders dated
22.10.2024 and 22.09.2025 without properly examining the
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effect of Section 2A. The order passed by the learned Single
Judge warrants interference in this appeal.
ORDER:
(i) Accordingly, the writ appeal is allowed ;
(ii) The order dated 29.06.2026 passed by the learned Single
Judge in W.P. No. 35414/2025 is set aside ;
(iii) The order dated 22.10.2024 passed by the Controlling
Authority in Case No.LOB-07/PGA/CR-128/2022-23,
directing payment of gratuity of Rs.1,75,846/- with
interest at 10% from 18.05.2022, as affirmed by the
Appellate Authority by order dated 22.09.2025 in Appeal
No.ALCBNG-3/PGA/Appeal/CR-108/2024-25, is restored ;
and,
(iv) There shall be no order as to costs.
Sd/-
(D K SINGH)
JUDGE
Sd/-
(H.SHANTHI BHUSHAN)
JUDGE
KNM
List No.: 1 Sl No.: 23