A purchaser accepting the transferred gratuity fund is liable for employees’ unpaid gratuity dues.

The workman retired from Bally Jute Mills on 16 January 1996, when the mill was owned by respondent no. 5, Birla Corporation Limited.

Bally Jute Company Limited later acquired the mill under a conveyance dated 20 February 2003.

The workman applied for gratuity in 2013 against Bally Jute Company Limited. The Controlling Authority directed the company to pay gratuity of Rs. 1,45,637 with admissible interest; the Appellate Authority affirmed that direction.

Bally Jute Company Limited challenged both orders, contending that gratuity was a pre-transfer liability payable by Birla Corporation. Birla Corporation argued that the conveyance transferred the gratuity funds and relevant records to Bally Jute Company Limited.

Whether Bally Jute Company Limited was liable to pay the workman’s gratuity, although he had retired before the mill’s transfer to that company.

Whether the orders of the Controlling Authority and Appellate Authority warrant interference in light of the conveyance terms and the transfer of gratuity funds and records.

The Court considered the Payment of Gratuity Act, 1972, under which the authorities had determined the workman’s gratuity claim.

It also applied the parties’ conveyance terms, particularly clause (j), recording that the purchaser had received the gratuity funds held separately or with LIC for Bally Jute Mill employees, together with relevant documents and records.

No specific statutory provision or cited precedent was identified as the basis of the Court’s decision.

The Court found that the conveyance recorded Bally Jute Company Limited’s receipt of the gratuity funds and associated records.

The workman’s claim was made after the transfer, and the gratuity proceeding had been brought against Bally Jute Company Limited.

The Court also noted that the petitioner had paid the workman’s provident fund dues.

On these facts, it concluded that the petitioner, having received the funds and records, was responsible for clearing the outstanding gratuity dues; the petitioner’s reliance on the workman’s pre-transfer retirement did not justify setting aside the authorities’ orders.

The writ petition was dismissed; connected applications were disposed of and any interim order was vacated.