Payment of Gratuity Act, 1972

[No. 39 of 19721 as amended up to Acts 25 of 19841a, 26 of 19841b and 22 of 19871]
[21st September, 1972]
 

1. Short title, extent, application and commencement

7-B. Powers of Inspectors

2. Definitions

8. Recovery of gratuity

2.A. Continuous service

9. Penalties

3. Controlling authority

10. Exemption of employer from liability in certain cases

4. Payment of gratuity

11. Cognizance of offences

4-A. Compulsory Insurance

12. Protection of action taken in good faith

5. Power to exempt

13. Protection of gratuity

6. Nomination

14. Act to override other enactments, etc

7. Determination of the amount of gratuity

15. Power to make rules

7-A. Inspectors

16. Annexure

 

17. Abstract of the Act and Rules (Form U)

 

An Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto

Be it enacted by Parliament in the Twenty-second Year of the Republic of India as follows:
 

Prefatory Note- Statement of Objects and Reasons.-(1) There is at present no Central Act to regulate the payment of gratuity to industrial workers, except the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act. 1995. The Government of Kerala enacted legislation last year for payment of gratuity to workers employed in factories, plantations, shops and establishments. The West Bengal Governor promulgated an Ordinance on the 3rd June, 1971, prescribing a similar scheme of gratuity. The Ordinance has since been replaced by the West Bengal Employees' Payment of Compulsory Gratuity Act. 1971, enacted by the President on 28th August, 1971. Gratuity is also being paid by some employers to their workers under awards and agreements.
(2) Since the enactment of the Kerala and the West Bengal Acts, some other State Governments have also voiced their intention of enacting similar measures in their respective States. It has become necessary, therefore, to have a Central Law on the subject so as to ensure a uniform pattern on payment of gratuity to the employees throughout the country. The enactment of a Central Law would also avoid different treatment to the employees of establishments having branches in more than one State when, under the conditions of their service, the employees are liable to transfer from one State to another.

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Footnotes
1. Received the assent of the President on August 21, 1972 and published in the Gazette of India, Extra., Part II, Section I, dated 22nd August, 1972, pp. 661-670.
1a. Received the assent of the President on May 18, 1984 and published in the Gazette of India, Extra, Pt. II, Section 1, dt, 18-5-1984, SI. 33. It came into force on 1-7-1984, vide Noti. No. S. 70012/2/84-FPG, dt. 14-6-1984.
1b. Received the assent of the President on May 18, 1984 and published in the Gazette of India, Extra, Pt. II, Section 1, 18-5-1984, SI.34.
1c. Received the assent of the President on August 12, 1987 and published in the Gazette of India, Extra., Pt. II, section 1,dated August13, 1987.

(3) The proposal for Central legislation on gratuity was discussed in the Labour Ministers' Conference held at New Delhi on the 24th and 25th August, 1971 and also in the Indian Labour Conference at its Session held on the 22nd and 23rd October, 1971. There was general agreement at the Labour Ministers' Conference and the Indian Labour Conference that Central legislation on payment of gratuity might be undertaken as early as possible. It is accordingly proposed to undertake such legislation.
(4) In enacting the President Act for West Bengal in August, 1971, care has been taken to so design its provisions that they could serve as far as possible as norms for the Central Law. The Bill has, therefore been drafted on the lines of the West Bengal Employees' Payment of Compulsory Gratuity Act, 1971 with some modifications which have been made in the light of the views expressed at the Indian Labour Conference relating to forfeiture of gratuity in cases of dismissal for gross misconduct.

(5) The Bill provides for payment of gratuity to employees drawing wages up to Rs. 750 per month in factories, plantations, shops, establishments and mines, in the event of superannuation, retirement, resignation and death or total disablement due to accident of disease. The quantum of gratuity payable will be 15 days wages based on the rate of wages last drawn by the employees concerned for every completed year of service or part thereof in excess of six months subject to a maximum of 15 months' wages The term "wages" will mean basic wage plus dearness allowance.
(6) It is proposed that the appropriate government for administering the Act in relation to establishment belonging to or under the control of the Central Government or a railway company, or a mine, a major port and oilfield or in relation to establishments having departments or branches in more than one State, will be the Central Government, and in relation to other establishments the State Government.
Statement of Objects and Reasons to Act 25 of 1984.-(1) The Payment of Gratuity Act, 1972 provides for payment of gratuity to the employees employed in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto.
(2) The Supreme Court had in its judgment in the case of Lalappa Lingappa v. Lakshmi Vishnu Textile Mills, Sholapur, [1981-1 LLJ 308 : (1981) 2 SCC 238:1981 SCC: (L & S) 316] held that in terms of the existing definition of "continuous service" in Section 2(c) of the Act, the permanent employees were not entitled to payment of gratuity for the years they remained absent without leave and had actually worked for less than 240 days in a year. It had been represented that the enforcement of this ruling has resulted in denial of gratuity to a number of employees, whose short term absence had remained unregularised due to lack of appreciation of its significance for the purpose of working out their entitlement to gratuity. It is, therefore not proposed to amend the definition or "continuous services" suitably and to specifically provide that  a period of absence in respect of which no punishment or penalty had been imposed would not operate to interrupt the continuity of service" to provide,-
(a) that an employee working in an establishment which works for less than six days in a week and who is not in uninterrupted service for one year, shall be deemed to be in continuous service for a period of one year if he has actually worked for 190 days in the preceding year, and
(b) that for determining the continuous period of six months for the purpose of payment of gratuity, and employee should have completed half the number of days of actually work which constitute "continuous service: for a whole year.
(3) Opportunity is also being taken to provide that  a shop or establishment once covered shall continue to be covered under the Act not withstanding that the number of persons employed therein at any time falls bellow 10. This is intended to check the tendency among the employers to artificially reduce the number of employees so as to get out of the coverage under the Act. It is also proposed to provide for grant of exemption from the operation of the Act to any person or class of persons if they are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under the Act.

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Statement of Objects and Reasons to Act 22 of 1987.- The Payment of Gratuity Act, 1972, provides for payment of gratuity to persons employed in factories, mines, oil-fields, plantations, ports, railway companies, shops and certain other establishments employing ten or more persons and for matters connected there with or incidental thereto. The Labour Ministers' Conference held in 1980 and 1982 had recommended  inter alia  that limit for payment might be prescribed in the Act itself and that there should be a suitable provision for recovery of interest in cases where the payment of gratuity is delayed. The Indian Labour Conference held in November, 1985 had recommended that  a provision for compulsory insurance of employers' liability and setting up of gratuity Fund for payment of gratuity be incorporated in the Act. The Trade Unions have been representing for suitable enhancement in the wage limit for coverage and ceiling for payment of gratuity.
(2) Based on the above recommendations and representations, it is proposed to carry out certain amendments in the Act. Some of the more important amendments are:-
(i) The coverage of the Act is being extended to persons drawing wages up to Rs. 2,500 per month and an enabling provision is being made for raising the wage limit for coverage from time to time;
(ii) Provision is being made for depositing the amount of gratuity payable to a minor with the controlling authority who shall invest the money in a bank or a financial institution for the benefit of minor;
(iii) The existing ceiling of 20 months' wages for payment of gratuity is being replaced by a monetary ceiling of Rs. 50,000;
(iv) Provision is being made for compulsory insurance of employer's liability to pay gratuity under the Act or in the alternative for the setting up of a gratuity fund under the provisions of the Act in relation to establishments employing five hundred or more employees;

(v) Provision is also being made for payment of simple interest at a specified rate, if the amount of gratuity is not paid within thirty days from the date it becomes payable;

(vi) Penalties prescribed under the Act are being made more stringent.

The other amendments proposed in the Bill are of a minor and consequential nature.

1. Short title, extent, application and commencement.-(1) This Act may be called the Payment of Gratuity Act, 1972.

(2) It extends to the whole of India:

Provide that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.

(3) It shall apply to-

(a) every factory, mine oilfield, plantation, port and railway company;

(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishment in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;

(c) such other establishment or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.

2[(3-A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.]

(4) It shall come into force on such date as the Central Government may, be notification, appoint.

Date of enforcement.-The Act came into force  on 16th September, 1972,  vide  Noti. No. S.O. 60(E) dated 16th September, 1972, published in Gazette of India, Extra, Part II, S. 3(ii),  dated 16th September, 1972, P, 1641.

Application of the Act-S. 1(3)(c)- The Act has been applied to following establishments in which ten or more persons are employed or were employed on any day of the preceding twelve months w.e.f. the dates and the notifications noted against each:-

(1) Motor Transport  w.e.f. 8-4-1974 Noti. No. G.S.R. 415, dt. 8-4-1974

(2) Local Bodies w.e.f. 23-1-1982 Noti. No. S.O. 239, dt. 8-1-1982

(3) "Solicitors offices" w.e.f. 9-1-1982 Noti No. S.O. 111, dt. 28-12-1982.

Note.- The word "establishment" in Section 1(3)(b) does not refer to "commercial establishments" alone.  State of Punjab  v. Labour Court, (1980) 1 SCC 4 : 1980 SCC (L & S) 123.

So an educational institution covered by E.P.F. Act, 1952 and T.N. Payment of Subsistence Allowance Act, is covered. S.I.E.T. Women's College  v. Md. Ibrahim, (1992) 1 LLJ 91 (Mad) (DB).

U.P. Co-operative Union is an `establishment'. U.P. Co-operative Union Prabhu Dayal Srivastava,  (1988) 2 LLN 625 : 57 FLR 70 (ALL) (DB).

A Municipal Board is an establishment. Municipal Board v. Controlling Authority.  (1987) 1 LLN

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Footnote
2. Ins. by Act 26 of 1984, S.2. 

663 (Raj): 1937 Lab IC 575. See also Municipal Bard, Khurja  v.  Appellate Authority, (1936) 2 LLN (All) 887; Municipal Corporation of Delhi  v.  Smt. V.T. Naresh,  (1986) 1 LLN 791 : (1986) 1 LLJ 323; Chanan Lal  v. Municipal Committees, 1986 Lab IC 638; Nagar Palika v.  Appellate Authority,  (1990) 2 LLJ 156 : (1988) 1 LLN 962 (All); Commissioner, Coimbatore M.E.U  v. A.V. Poulose, (1990) 1 LLN 156 (Mad).

In view of Section 2(viii) of Punjab Shops and Commercial Establishments Act, 1958, Haryana State Electricity Board is an establishment. Haryana State Electricity Board v. Controlling Authority,  1984 Lab IC 668 (P & H).

Office of Regional Commissioner is an establishment.  Regional P.F. Commissioner  v. Regional Labour Commr. (Central).,  (1985) 1 LLN 675(Kant): (1985) 2 LLJ 63.

A solicitors' firm is not a commercial establishment.  Dorab Pirojsha Singaporia  v.  Appellate Authority of I.T.,  (1986) 2 LLN 114 : (1986) 2 LLJ 501.

2. Definitions.-In this Act unless the context otherwise requires,-

(a)  "appropriate Government" means,-
(i)  in relation to an establishment-

(a)  belonging to, or under the control of, the Central Government,

(b)  having branches in more than one State,

(c) of a factory belonging to, or under the control of, the Central Government.

(d) of a major port, mine, oilfield or railway company, the Central Government.

(ii)  in any other case, the State Government;

(b) "completed year of service" means continuous service for one year.

3[(c) "continuous service" means continuous service as defined in Section 2-A;]

(d) "controlling authority" means a authority appointed by the appropriate Government under Section 3;

(e) "employee" means any person (other than an apprentice) employed on wages, not exceeding 4[two thousands and five hundred rupees per mensem, or such higher account as the Central Government may, having regards to the general level of wages, by notification specify], in any establishment, factory, mine, oilfield, plantation, railway company or shop, to do way skilled, semi-smiled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, 4[and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or  State Government and is governed by any other Act or by any rules providing for payment of gratuity.]

Explanation.- In the case of an employee, who, having been employed for  a period of not less than file year on wages and exceeding 5[the amount for the time being specified by or under clause (e) per mensem is employed at any time the after on wages exceeding 6[that amount], gratuity, in respect of the period during which such employee was employed on wages not exceeding 6[that amount], shall be determined on the basis of the wages received by him during that period;
(f)  "employer" means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company or shop-

(i)  belonging to, or under the control of the Central Government or a State Government, a person or authority appointed by the appropriate Government for the supervision and control of employees, or where no person or authority has been so appointed, the head of the Ministry or the Department concerned,

(ii) belonging to, or under the control of, any local authority, the person appointed by such authority for the supervision and control of employees or where no person has been so appointed, the chief executive officer of the local authority.

(iii)  in any other case, the person, who, or the authority which, has the ultimate control over the affairs of the establishment, factory, mine, oilfield, plantation, port, railway company or shop, and where the said affairs are entrusted to any other person, whether called a manager, managing director or by any other name, such person;

(g) "factory" has the meaning assigned to it in clause (m) of Section 2 of the Factories Act, 1948 (63 of 1948);

(h) "family", in relation to an employee, shall be deemed to consist of-

(i) in the case of a male employee, himself, his wife, his children, whether married or unmarried, his dependent parents 6[and the dependent parents of his wife and the widow] and children of his predeceased son, if any,

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Footnotes
3. Subs,
  by Act 26 of 1984,S. 3 (w.e.f. 11-2-1981). See also  S. 6 of Act 26 of 1984 later.

4. Subs.  by Act 25 of 1984 (w.e.f. 1-7-1984).

5. Subs  for "one thousand and six hundred rupees per mensem" by Act 22 of 1987, S. 2 (w.e.f. 1-10-1987).

6. Subs by Act 22 of 1987, S. 2 (w.e.f. 1-10-1987).

(ii) in the case of a female employee, herself, her husband, her children, whether married or unmarried, her dependent parents and the dependent parents of her husband and the widow and children of her predeceased son, if any:

7[*        *           *           *].

Explanation.-Where the personal law of an employee permits the adoption by him of a child, any child lawfully adopted by him shall be deemed to be included in his family, and where  a child of an employee has been adopted by another person and such adoption is, under  the personal law of the person making such adoption, lawful, such child shall be deemed to be excluded from the family of the employee;

(i) "major port" has the meaning assigned to it in clause (8) of Section 3 of the Indian Ports Act, 1908 (15 of 1908);

(i) "mine" has the meaning assigned to it in clause (j) of sub-section (1) of Section 2 of the Mines Act, 1952 (35 of 1952);

(k) "notification" means a notification published in the Official Gazette;

(f) "oilfield" has the meaning assigned to it in clause (e) of Section 3 of the oilfields (Regulation and Development) Act, 1948 (53 of 1948);

(m) "plantation" has the meaning assigned to it in clause (f) of Section 2 of the Plantations Labour Act, 1951 (69 of 1951);

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Footnote
7. Omitted  by Act 22 of 1987, S. 2. (w.e.f. 1-10-1987).

(n) "port" has the meaning assigned to it in clause (4) of Section 3 of the Indian Ports Act, 1908 (15 of 1908);

(o) "prescribed" means prescribed by rules made under this act;

(p) "railway company" has the meaning assigned to it in clause (5) of Section 3 to the Indian Railways Act, 1890 (9 of 1890);

(q) "retirement" means termination of the service of an employee otherwise than on superannuation;

8[(r) "superannuation", in relation to an employee, means the attainment by the employee of such age as is fixed in the contract or conditions of service as the age on the attainment of which the employee shall vacate the employment;]

(s) "wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
 

NOTES

The Central Government is the appropriate government only in relation to an establishment having branches in more than one State. There is no like provision in relation to such an establishment having factories in different States. Jeewanlal Ltd. v. Appellate Authority, (1984) 4 SCC 356: 1984 SCC (L & S) 753.

Public Holidays and Sundays have to be included in computing the period of employment D.B.R Mills  v. Appellate Authority, (1985) 1 LLN 6222: 1985 Lab IC 612 : (1985) 1 LLJ 181 (AP) (DB).

Whether a person was an employee, could be determined on the basis of his duties and not on the basis of his qualifications or hierarchy of the office.  Khanderao P. Rajapadhya  v. United Western Board,  (1985) 1 LLN 55 : 1984 Lab IC 1910 (Bom).

An employee appointed on a monthly salary below Rs. 1,600, may sometimes have occasion to get a salary exceeding that amount. Such an employee would be entitled to gratuity under the Act only for the period he drew less than Rs. 1,600 per month and that too on the basis of the wages received during that period.  Food Corpn. of India. v.  Dyanuba K. Nikam, (1985) 2 LLN 146 : 1986 Lab IC 333: (1985) 1 LJR 489 (Guj) (DB).

"Retirement" includes retrenchment.  State of Punjab  v. Labour Court,  (1980) 1 SCC 4: 1980 SCC (L & S) 123.


9
[2-A. 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 [* * *]10 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;

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Footnotes
8. Subs . by Act 25 of 1984, S. 2 (w.e.f. 1-7-1984).
9.  Ins. by Act 26 of 1984, S. 4 (w.e.f.  11-2-1981).  See  also S. 6 of Act 26 of 1984 later.
10. Omitted  by Act 22 of 1987, S. 3 (w.e.f. 1-10-1987).

(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous services within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be an continuous services 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-

(i) One hundred and ninety days, in the case of  employee employed below the ground in mine or in an establishment which works for less than six days in week; and

(ii) two hundred and forty days, in any other case;

(b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than-

(i) ninety-five 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) one hundred and twenty days, in any other case;

11[Explanation.-For the purpose of Clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which -

(i) he has been laid-off under an agreement or as permitted by standing orders  made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;

(ii) he has been on leave with full wages, earned in the previous year;

(iii) he has been absent due to temporary disablement cause by accident arising out of and in the course of his employment; and

(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.]

(3) where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (I), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during such period.].
 

3. Controlling authority.-The appropriate Government, may, by notification, appoint any officer to be a controlling authority, who shall be responsible for the administration of this Act and different controlling authorities may  be appointed for different areas.

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Footnote
11. Added  by Act 22 of 1987 ( w.e.f. 1-10-1987). 

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:

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employees is due to death or disablement:

12[Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.]

Explanation.- For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.

(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned:

Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period  of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:

Provided further that in the case of 13[an employee who is employed in a seasonal establishment and who is not so employed throughout the year], the employer shall pay the gratuity at the rate of seven days' wages for each season.

14a[Explanation.-In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.]

(3) The amount of gratuity payable to an employee shall not exceed 14a [fifty thousand rupees].

(4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.

(5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.

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Footnotes
12. Subs. by Act 22 of 1987, S. 4 (w.e.f. 1.2.1991) (!991 CCL-III-210).
13. Subs. by Act 25 of 1984, S. 3 (w.e.f. 1-7-1984).
14. Ins. by Act 22 of 1987, S. 4 (w.e.f. 1-10-1987).
14a. Subs. by Act 22 of 1987, S. 4(3) (w.e.f. 1-10-1987.  

(6) Notwithstanding anything contained in sub-section (1),-

(a) the gratuity of an employee, whose services have been terminated of any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extend of the damage or loss so cause;

(b) the gratuity payable to an employee 9[may be wholly or partially forfeited].

(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or

(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

15(7) For the removal of doubts, it is hereby declared that the gratuity determined in accordance with the provisions of Explanation to clause (e) of Section 2 shall be payable to an employee referred to in that clause notwithstanding that immediately, or at any time, before the termination of his employment in the manner specified in clause (a) or clause (b) or clause (c) of sub-section (1), he was in receipt of-

(i) where such termination of his employment is before the commencement of the Payment of Gratuity (Amendment) Act, 1984 (25 of 1984), wages exceeding one thousand rupees per month, and

(ii) where such termination of his employment is after such commencement, wages exceeding one thousand and six hundred rupees per month]. 

NOTES

The Punjab and Haryana High Court has held the provision in S. 4(1)(b) for eligibility on voluntary retirement to gratuity after five years service is ultra rights of computer under Article 19(1)(g) of the Constitution.  Darshan Engineering Works v. Controlling Authority,  (1984) 1 LLN 773; 1983 Lab IC 1451 (P & H) (DB).
Where the management withheld the gratuity for about 25 years on an unreasonable stand, the Supreme Court directed the amount of the  gratuity together with interest @ 15% per annum to be paid to the employee.  Sudhir Chandra Sarkar   v. Tata Iron and Steel Co. Ltd., (1984) 3 SCC 369: 1983 SCC (L & S) 540.

A partnership film converted itself into a registered company. Its employees were held entitled to gratuity on the basis of length of service under both the establishments taken together.  Bommidala Bros.  v.  Authority, Payment of Gratuity Act, (1989) 1 Cur LR 595 (AP).

An ex-worker's claim to gratuity under a agreement the provisions of the Act can be enforced not under Section 4 of the Act but under Section 33-C(2) of the Industrial Disputes Act, 1947. Dinkar Shankar Pawar  v. Elphinstone Spg. &  Wvg. Mills (1986) 2 LLN 1007 (Bom).

The Special Contribution to Provident Fund under Regulation 37 of T.N. State Electricity Board Contributory Provident Fund Regulations is not the same thing as gratuity.  Katheeja Bai v.  Suprintending Engineer,  (1984) 3 SCC 518 : 1984) SCC (L & S) 564.

Supply of free food to employees is merely an amenity. Hence, its equivalent cannot for part of wages for calculating the amount of gratuity.  Ambika Saw Mills,  v. Asst. Labour Commr, (1987) 1 LLN 364 : 1986 Lab IC 1828 (Ori) (DB).

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Footnotes
9.  Ins. by Act 26 of 1984, S. 4 (w.e.f.  11-2-1981).  See  also S. 6 of Act 26 of 1984 later.
15. Ins. by Act 25 of 1984, S. 3 and deemed always to have been  inserted. 

An employee, whose wages, at the time of termination of his employment, exceeded the limit contemplated in Section 2(e) and who otherwise satisfied-the conditions of Section 4, cannot be dented gratuity for the period during which he satisfied the definition of employee under Section 2(e).  Goodyear India Ltd. v. K.G. Devessar, (!985) 4 SCC 45:1985 SCC (L & S) 936.
An employee appointed or continuing in employment after the date of his superannuation is entitled to gratuity for the full period of service and not merely up to the age superannuation.  Darshan Engineering Works  v. Controlling Authority, (1984) 1 LLN 773: 1983 LAB IC 1451.
The "rate of fifteen days' wages" of an employee mentioned in sub-section (2) has to be calculated by dividing the monthly wages last drawn by him by 26 and multiplying the quotient by 15.  Jeewanlal Ltd. . Appellate Authority,  (1984) 4 SCC 356 : 1984 SCC (L & S) 753; Shri Digvijay Woolen Mills v. Mahendra P Buch, (1980) 4 SCC 106: 1980 SCC (L & S) 513.
The expression "twenty months" wages" in subsection (3) means 600 days wages and not 520 working days wages.  Jeewanlal Ltd.  v. Appellate Authority, (1984) 4 SCC  356: 1984 SCC (L&S) 753.
Section 4(5) covers future awards, agreements or contracts with the employer providing better terms of gratuity. Workmen v. Metro Theatre Ltd., (1981) 3 SCC 596: 1981 SCC (L & S) 546.
If a workman is guilty of a serious misconduct such as acts of violence against the management or other employees or riotous or disorderly behaviour in or near the place of employment, which though not directly causing damage, is conducive to grave indiscipline, then his gratuity can be forfeited in its entirety. (1973) 2 SCC 502: 1973 SCC (L & S) 570.
The offence of theft involves moral turpitude within the meaning of sub-section (6) (b) (ii). Bharath Gold Mines Ltd.  v. Regional Labour Commr., (1987) 1LLN 303 (Kant) (DB).
Mere holding back the possession of official premises does not justify withholding of gratuity.  Ramjilal Chimanlal Sharma  v. Elphinstone Spg. & Wvg. Mill Co. Ltd., (1985) 1 LLN 228: 1984 Lab IC 1703; Binny Ltd. v. Appellate Authority. (1984, 2 LLN 439 (Kant).

16[4-A Compulsory Insurance. -(1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of the Central Government or a State Government, shall, subject to the provision  of sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under the life measure Corporation of India Act, 1956 (31 of 956) or any other prescribed insurer:
Provided that different dates may be appointed for different establishments or class of establishments or for different areas.
2. The appropriate Government may, subject to such conditions as may be prescribed, exempt every employer  who had already established an approved gratuity fund in respect of his employees and who desires to continue such arrangement, and every employer employing five hundred or more persons who establishes an approved gratuity fund in the major prescribed  from the provisions of sub-section (1).
(3) For the purpose of effectively implementing the provisions of this section, every employer shall within such time as may be prescribed get his establishment registered with the controlling authority in the prescribed manner and no employer shall be registered under the provisions of this section unless he has  taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred to in sub-section (2).

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Footnote
16. Ins. by Act 22 of 1987, S. 5 ) w.e.f. 1-10-1987). 

(4) The appropriate Government may, by notification, make rules to give effect to the provisions of this section and such rules may provide for the composition of the Board of Trustees of the approved gratuity fund and for the recovery by the controlling authority of the amount of the gratuity payable to an employee from the Life Insurance Corporation of India or any other insurer with whom an insurance has been taken under sub-section (I), or as the case may be, the Board of Trustees of the approved gratuity fund.
(5) Where an employer fails to make any payment by way of premium to the insurance referred to in sub-section (I) or by way of contribution to an approved gratuity fund referred to in sub-section (2), he shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed payments) forthwith to the controlling authority.

(6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may extend to ten thousand rupees and in the case of a continuing offence with a further fine which may extend to one thousand rupees for each day during which the offence continues.

Explanation.-In this section" approved gratuity fund" shall have the same meaning as in clause (5) of Section 2 of the Income-tax Act, 1961 (43 of 1961).]

5. Power to exempt.- 17(1)] The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

17[(2) The appropriate Government may, be notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act, if, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.]

18(3) A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively a date not earlier than the date or commencement of this Act, but no such notifiction shall be issued so as to prejudicially affect the interests of any person.]

6. Nomination.-(1) Each employee, who has completed one year of service, shall make, within such time, in such form and in such manner, as may be prescribed, nomination for the purpose of the second proviso to subsection (1) of Section 4.

(2) An employee may, in his nomination, distribute the amount of gratuity payable to him under this Act amongst more than one nominee.

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Footnotes
17. Ins. by Act 26 of 1984, S.5.
18. Ins. by Act 22 of 1987, S.6 (w.e.f. 1-10-1987).

(3) If an  employee has a family at the time of making a nomination, the nomination shall be made in favour of one or more members of his family, and any nomination made by such employee in favour of person who is not a member of his family, shall be void.

(4) If at the time of making a nomination the employee has no family, the nomination may be made in favour of any person or persons but if the employee subsequently acquires a family, such nomination shall forthwith become invalid and the employee shall make, within such time as may be prescribed, a fresh nomination in favour of one or more members of his family.

(5) A nomination may, subject to the provisions of sub-sections (3) and (4), be modified by an employee at any time, after giving to his employer a written notice in such form and in such manner as may be prescribed, of his intention to do so.

(6) If a nominee predeceases the employee, the interest of the nominee shall revert to the employee who shall make a fresh nomination, in the prescribed form, in respect of such interest.

(7) Every nomination, fresh nomination or alteration of nomination, as the case may be, shall be sent by the employee to his employer, who shall keep the same in his safe custody.

7. Determination of the amount of gratuity.-(1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity.

(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of gratuity so determined.

19[(13) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.

 

(3-A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate19a[not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, be notification specify:

 

Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.]

 

(4) (a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity.

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Footnotes
19. Sub-sections (3) and (3-A) by Act 22 of 1987, S. 7 (w.e.f. 1-10-1987).
19a. Ten per cent per annum as the rate of simple interest specified vide Noti. No.S.O. 874(E), dated 1-10-1987.

Explanation.- 20[*          *           *]
21[(b) Where there is a dispute with regard to any matter or matters specified in clasue (a), the employer or employee or any other person raising the dispute may make an application to the controlling authority for deciding the dispute.]
22[(c) The controlling authority shall, after due inquiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter or matters in dispute and if, as a result of such inquiry any amount is found to be payable to the employee, the controlling authority shall direct the employer to pay such amount or, as the case may be, such amount as reduced by the amount already deposited by the employer.]
22[(d)] The controlling authority shall pay the amount deposited, including the excess amount if any, deposited by the employer, to the person entitled thereto.
23[(e)] As soon as may be after a deposit is made under clause (a) the controlling authority shall pay the amount of the deposit-

(i) to the applicant where he is the employee; or
(ii) where the applicant is not the employee, to the 15[nominee or as the case may be, the guardian of such nominee or] heir of the employee if the controlling authority is satisfied that there is no dispute as to the right of the applicant to receive the amount of gratuity.
(5) For the purpose of conducting an inquiry under sub-section (4), the controlling authority shall have the same powers as are vested in a court, while trying a suit, under the Code of Civil Procedure, 1908 (5 of 1908), in respect of the following matters, namely-

(a) enforcing the attendance of any person or examining him on oath

(b) requiring the discovery and production of documents:

(c) receiving evidence on affidavits;

(d) issuing commission for the examination of witnesses.
(6) Any inquiry under this section shall be  a judicial proceeding with the meaning of Sections 193 and 228, and for the purpose of Section 196, of the Indian Penal Code, 1860 (45 of 1860)
7. Any person aggrieved by an order under sub-section (4), may, within sixty days from the date of the receipt  of the order, prefer an appeal to the appropriate Government or such other authority as may be specified by the appropriate Government in this behalf:
Provided that the appropriate Government or the appellate authority, as the case may be, may if it is satisfied that the appellants was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days.

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Footnotes
20. Omitted  by Act 25 of 1984,S. 4(w.e.f. 1-7-1984).
21.  Ins by Act 25 of 1984, S. 4 (w.e.f 1-7-1984).
22. Subs  by Act 25 of 1984, S. 4 (w.e.f. 1-7-1984).
23. Subs  by Act 25 of 1984,S. 4 (w.e.f. 1-7-1984). 

24[Provided further that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to deposited under  sub-section (4),or deposits with the appellate authority such amount.]
(8) The appropriate Government or the appellant authority, as the case may be, may, after giving the parties to the appeal a reasonable opportunity of being heard, confirm, modify or reverse the decision of the controlling authority.
Note.- The expression "determine the amount of gratuity" includes the determination of my liability to pay gratuity, Madar Union Sanitorium and Hospital  V. M.B. Sathe, (1986) 1 LLN 916 : (1986) 2 LLJ 135 (RAJ).
Prior to introduction of Section 7(3-A) there  was no provision for payment of interest on delayed payment of gratuity. The controlling authority was not a court and therefore could not invoke Section 34 of the C.P.C. to award interest. S. 7(3-A) is only prospective. Charan Singh v. Birla Textiles, (1988) 4 SCC 212: 1988 SCC (L & S) 947.
Section 7(4)(a) does not exclude a dispute relating to limitation or raising a jurisdictional issue from being referred to the Controlling Authority,  Binny Ltd. v. H.K. Madiah, (1986) 2 LLN 530: 1987 Lab IC 931 (Kant).
An application claiming gratuity under a settlement at a rate higher than the statutory rate is maintainable under the provision of the Act. Ramjilal Chimanlal Sharma v. Elphinstone Spg. & Weaving Mills Co. Ltd. (1985) 1 LLN 228: 1984 Lab IC 1703.
The Appellate Authority cannot invoke Section 5 of the Limitation Act, 1963 to condone a delay of more than 120 days in preferring the appeal.  City College, Calcutta  v. State of West Bengal , (1986) 2 LLN 131: (1987) 1 LLJ 41 (Cal) (DB).
25[7-A. Inspectors.-(1) The appropriate Government may by notification, appoint as many Inspectors, as it deems fit, for the purposes of this Act.
(2) The appropriate Government may by general special order, define the area to which the authority of an Inspector so appointed shall extend and where two or more inspections are appointed for the same area, also provide, by such order, for the distribution or allocation of work to be  performed by them under this Act.
(3) Every Inspector Shall be deemed to be  a public servant within the meaning of Section 21 of the Indian Penal Code (45 of 1860).
7-B. Powers of Inspectors.-(1)Subject to any rules made by the appropriate Government in this behalf, an Inspector may, for the purpose of ascertaining whether any of the provisions of this Act or the conditions, if any, of any exemption granted thereunder, have been complied with, exercise all or any of the following powers, namely:-

(a) require an employer to furnish such information as he may consider necessary;

(b) enter and inspect, at all reasonable hours, with such assistants or any public authority, as he thinks fit, any premises of or place in any factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies, for the purpose of examining any register, record or notice or other document  required to be kept or exhibited under this Act or the rule made thereunder, or otherwise kept or exhibited in relation to the employment of any person or the payment of gratuity to the employees, and require the production thereof for inspection;

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Footnotes
24. Ins. by Act 25 of 1984, S. 4 (w.e.f. 1-7-1984).
25.Ins. by Act 25 of 1984, S. 5 (w.e.f. 1-7-1984). 

(c) examine with respect to any matter relevant to any of the purposes aforesaid, the employer or any person whom he finds in such premises or place and who, he has reasonable cause to believe, is an employee employed therein;
(d) make copies of, or take extracts from, any register, record notice, or other document, as he may consider relevant, and where he has reason to believe that any offence under this Act has been committed by an employer, search and seize with such assistance as he may think fit, such register, record, notice or other document as he may consider relevant in respect of that offence;
(e) exercise such other powers as may be prescribed.
(2) Any person required to produce any register, record, notice or other document or to give any information by an Inspector under sub-section (1) shall be deemed to be legally bound to do so within the meaning of Sections 175 and 176 of the Indian Penal Code (45 of 1860).
(3) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall so far may be, apply to any search or seizure under this sections they apply to any search or seizure made under the authority of a warrant issued  under Section 94 of that Code].
8. Recovery of gratuity.-If the amount of gratuity payable under this Act is not paid by the employer, within the prescribed time, to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the same, together with compound interest thereon 26[at such rate as the Central Government may, by notification, specify], from the date of expire of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto.

27[Provided that the controlling authority shall, before issuing a certificate under this section, give the employer a reasonable opportunity of showing cause against the issue of such certificate:

Provide further that the amount of interest payable under this section shall, in on case exceed the amount of gratuity payable under this Act.]
NOTES

The Act is a complete and self-contained Code and impliedly excludes recourse to any other statute for payment of gratuity.  State of Punjab  v. Labour Court, (1980) 1 SCC 4 : 1980 SCC (L & S) 123. It provides for the decision of all disputed questions arising under the Act (Ibid)..

In absence of a prescribed period within which gratuity has to be paid, the date on which the gratuity becomes payable will be treated at the prescribed date for its payment,  Champaran Sugar Co. Ltd.  1987 Lab IC 47 : (1987) 1 LLN 270.
The right to interest on delayed payment of gratuity is a statutory right and can be granted even in absence of an express claim for the same in the employee's application to the Controlling Authority. Champaran Sugar Co. Ltd  v. Joint Labour Commr,  1987 Lab IC 47 : (1987) 1 LLN 270 (Pat) (FB); overruling Patna Electricity Undertaking v. State of Bihar,  C.W.J.C. No 14 of 1985,dt, 25-7-1985.
It is only when the Collector issues a certificate for recovery of the dues as a public demand that interest as provided under Section 8 is admissible.  Charan Singh  v. Birla Textiles, (1988) 4 SCC 212: 1988 SCC (L & S) 947.

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Footnotes
26. Subs.  by Act 22 of 1987, S.8. (w.e.f. 1-10-1987). The Govt.. has specified 15% per annum as the rate of compound interest vide Noti. No. S.O. 1023(E), dated 1.12.1987.
27. Added  by Act 22 of 1987 (w.e.f. 1-10-1987). 

9. Penalties.-(1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to 28[ten thousand rupees] or with both.
(2) An employer who contravenes, or make default in complying with any of the provisions of this Act or any rule or order made thereunder shall be punishable with imprisonment for a term 29[which shall not be less than three months but which may extend to one year, or with fine which shall not be less than ten thousand rupees but which may extend to twenty thousand rupees, or with both]:
Provided that where the offence relates to non-payment of any gratuity payable under this Act, the employer shall  be punishable with imprisonment for  a term which shall not be less than 29[six months but which may extend to two years] unless the court trying the offence, for reasons to be recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition of a fine would meet the ends of justice.

10. Exemption of employer from liability in certain cases.-Where an employer is charged with an offence punishable under this Act, he shall be entitled, upon complaint duly made by him and on giving to the complainant not less than three clear days' notice in writing of his intention to do so, to have any other person whom he charge as the actual offender brought before the court at the time appointed for hearing the charge; and if, after the commission of the offence has been proved, the employer proves to the satisfaction of the court-
(a) that he has used due diligence to enforce the execution of this Act. and
(b) that the said other person committed the offence in question without his knowledge, consent or connivance.
That other  person shall be convicted of the offence and shall be liable to the like punishment as if he were the employer and the employer shall be discharged from any liability  under this Act in respect of such offence:
Provided that in seeking to prove as aforesaid, the employer may be examined on oath and his evidence and that of any witness whom he calls in his support shall be subject to cross-examination behalf of the person he charges as the actual offender and by the prosecutor:
Provided further that, if the person charged as the actual offender by the employer cannot be brought before the court at the time appointment from hearing the charge, the court shall adjourn the hearing from time to time for a period not exceeding three months and if by the end of the said period the person charged as the actual offender cannot still be brought the court, the court shall proceed to hear the charge against the employer and shall, if the offence be proved, convict the employer.

11. Cognizance of offences.-(1) No court shall take cognizance of any offence punishable under this Act save on a complaint made by or under the authority of the appropriate Government:

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Footnotes
28.Subs .by Act 22 to 1987, S.9 (w.e.f. 1-10-1987) for "one thousand rupees"
29 Subs. by Act 22 of 1987, S. 9 (w.e.f. 1-10-1987).

Provided that where the amount of gratuity has not been paid, or recovered, within six months from the expire of the prescribed time, the appropriate Government shall authorise the controlling authority to make a complaint against the employer, whereupon the controlling authority shall, within fifteen days from the date of such authorisation; make such complaint to a Magistrate having jurisdiction to try the offence.
(2) No court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any offence punishable under this Act.

12. Protection of action taken in good faith.-No suit or other legal proceeding shall lie against the controlling authority or any other person in respect of anything which is in good faith done or intended to be done under this Act or any rule or order made thereunder.

13. Protection of gratuity.-No gratuity payable under this Act 30[and no gratuity payable to an employee employed an any establishment, factory, mine oilfield,  plantation, port railway company or shop exempted under Section 5[ shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court.

14. Act to override other enactments, etc.-The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.

NOTES
A regulation of a company providing for deduction from pension of the amount of gratuity paid under the Act is invalid.  Som Prakash Rekhi v. Union of India, (1981) 1 SCC 449: 1981 SCC (L & S) 200.
Any specific rules for payment of gratuity, if inconsistent with the Act, shall, to the extent of such inconsistency, be ineffective. Municipal Board  v Controlling Authority,  (1987) 1 LLN 663 (Raj): 1987 Lab IC 575.

15. Power to make rules.-(1) The appropriate Government may, by notification, make rules for the purpose of carrying out the provisions of this Act.
(2) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both House agree that the rule should not be made, the rule shall, there-after have effect only in such modified form or be of no effect, as the case may be, so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

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Footnote
30. Ins. by Act 25 of 1984, S. 6 (w.e.f. 1-7-1984).  

Annexure

THE PAYMENT OF GRATUITY (SECOND AMENDMENT) ACT. 1984
[No.26 OF 1984]
[18th May,1984]
An Act further to amend the Payment of Gratuity Act, 1972


Be it enacted by Parliament in the Thirty-fifth Year of the Republic of India as follows:-

1. Short title.- This Act may be called the Payment of Gratuity (Second Amendment), Act, 1984.

2-5. [Amendments incorporated]

6. Validation.-The amendments made in the principal Act by Sections 3 and 4 shall be deemed to have been made with effect from the 11th day of February, 1981 and accordingly any action or thing taken or done or purporting to have been taken or done under the principal Act on or after said date and before the commencement of this Act, shall, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, be deemed to be, and to have always been, for all purposes, as validly and effectively taken or done as if the said amendments had been in force at all material times.
Explanation.- For the removal of doubts, it is hereby declared that no act or omission on the part of any person, before the commencement of this Act, shall be punishable as an offence which would not have been so punishable if this Act had not come into force.

NOTIFICATION

Ministry of Labour, Noti. No. S.O. 713 , dated February 24, 1987, published in the Gazette  of India, Part II, Section 3(ii), dated 14th March, 1987, p. 1097 [No. S-70025/1/86/SS.II]

In exercise of the powers conferred by Section 3 of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby appoints the officers mentioned in column (2) of the Schedule below to be the controlling authorities for the areas specified in the corresponding entries of column (3) of the said schedule and in relation to all establishments for which the Central Government is the appropriate Government under sub-section (i) of clause (a) of Section 2 of the said Act.

SCHEDULE

Serial No.

Officers

Area

1 

2

3

1.

Assistant Labour Commissioner, (Central),Lucknow.

The State of Uttar Pradesh and the Union Territory of Delhi.

2.

Assistant Labour Commissioner, (Central), Dibrugarh.

The State of Assam, Nagaland, Tripura, Manipur, Mizoram and Arunachal Pradesh.

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Footnote
1. Received the assent of the President on May 18, 1984 and published in the Gazette of India, Extra., Part II, Section 1, dated 18th May, 1984, pp. 1-5. 

THE PAYMENT OF GRATUITY (CENTRAL) RULES, 1972

 

1. Short title and commencement.-(1) These rules may be called the Payment of Gratuity (Central) Rules, 1972.

(2) These rules shall come into force on the 16th September, 1972.


2. Definitions.
-In these rules, unless there is anything repugnant in the subject or context,-

(a) "Act" means the Payment of Gratuity Act, 1972;

(b) "appellate authority" means the Central Government or the authority specified by the Central Government under sub-section (7) of Section 7;

(c) "form" means a form appended to these rules;

(d) "nomination" means nomination made under Section 6;

(e) "section" means a section of the Act.

3. Notice of opening, change or closure of the establishment.-(I) Within thirty days of the rules becoming applicable to an establishment, a notice in Form `A' shall be submitted by the employer to the controlling authority of the area.
(2) A notice in Form `B' shall be submitted by the employer to the controlling authority of the area within thirty days of any change in the name, address, employer or nature of business.
(3) Where an employer intends to close down the business he shall submit a notice in form `C' to the controlling authority of the area at least sixty days before the intended closure.
4. Display of notice.-(1) The employer shall display conspicuously a notice at or near the main entrance of the establishment in bold letters in English and in a language understood by the majority of the employees specifying the name of the officer with designation  authorised by the employer to receive on his behalf notices under the Act or the rules.
(2) A fresh notice shall be displayed immediately after the notice referred to in sub-rule (1) becomes illegible or requires a change.

5. Form of notice under proviso to Section 2(h)(ii)-(1) A notice under the proviso to sub-clause (ii) of clause (h) of Section 2 shall be in Form `D' and sent in triplicate by the employee to the employer, who shall, after recording its reception one copy thereof, return the copy to the employee and send the second copy to the controlling authority of the area.
(2) An employee may withdraw the notice referred to in sub-rule (1) by giving another notice in triplicate in Form `E' to the employer, who shall follow the same procedure as in sub-rule (1).

6. Nominations.-(1) A nomination shall be in Form `F' and submitted in duplicate by personal service by the employee, after taking proper receipt or by sending through registered post acknowledgment due to the employer,-
(i) in the case of an employee who is already in employment for a year or more on the date of commencement of these rules, ordinarily within ninety days from such date and

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Footnote
1. Vide Noti. No. G.S.R. 412(E), dated September 16, 1972, published in Gazette of India, Extra., Part II, Section 3(i), dated 16th September, 1972, pp. 1115-1138/8. 

(ii) in the case of an employee who completes one year of service after the date of commencement of these rules, ordinarily, within thirty days of the completion of one year of service:
Provided that nomination in Form `F' shall be accepted by the employer after the specified period, if field with reasonable grounds for delay, and no nomination so accepted shall be invalid merely because it was field after the specified period.
(2) Within thirty days of the receipt of a nomination in Form `F' under sub-rule (1), the employer shall get the service particulars of the employee, as mentioned in the form of nomination, verified with reference to the records of the establishment and return to the employee, after obtaining a receipt thereof, the duplicate copy of the nomination in Form `F' duly attested either by the employer or an officer authorised in this behalf by him, as  taken of recording of the nomination by the employer and the other copy of the nomination shall be recorded.
(3) An employee who has on family at the time of making nomination shall, within ninety days of acquiring a family submit in the manner specified in sub-rule (1), a fresh nomination, as required under sub-section (4) of Section 6, in duplicate in Form `G' to the employer, and thereafter the provisions of sub-rule (2) shall apply mutatis mutandis  as if it was made under sub-rule (1).
(4) A notice of modification of a nomination, including cases where a nominee predeceases an employee, shall be submitted in duplicate in Form `H' to the employer in the manner specified in sub-rule (1), and thereafter the provisions of sub-rule (2) shall apply  mutandis  as if it was made under sub-rule (1).
(5) A nomination or a fresh nomination or a notice of modification of nomination shall be signed by the employee or, if illiterate, shall bear his thumb-impression, in the presence of two witnesses, who shall also sign a declaration to that effect in the nomination, fresh nomination or notice of modification of nomination, as the case may be.
(6)  A nomination, fresh nomination or notice of modification of nomination shall take effect from the date of receipt thereof by the employer.

7. Application for gratuity.-(1) An employee who is eligible for payment of gratuity under the Act, or any person authorised in writing, to act on his behalf, shall apply, ordinarily within thirty days from the date the gratuity became payable, in Form `I' to the employer:
Provided that where the date of superannuation or retirement of an employee is known, the employee may apply to the employer before thirty days of the date of superannuation or retirement.
(2) A nominee of an employee who is eligible for payment of gratuity under the second proviso to sub-section (1) of Section 4 shall apply, ordinarily within thirty days from the date the gratuity became payable to him, in Form `J' to the employer:

Provided that an application in plain paper with relevant particulars shall also be accepted. The employer may obtain such other particulars as may be deemed necessary by him.
(3) A legal heir of an employee who is eligible for payment of gratuity under the second proviso to sub-section (1) of Section 4 shall apply, ordinarily within one year from the date the gratuity become payable to him in From `K' to the employer.
(4) Where gratuity becomes payable under the Act before the commencement of these rules the periods of limitation specified in sub-rules (1), (2) and (3) shall be deemed to be operative from the date of such commencement.
(5) An application for payment of gratuity field after  the expiry of the periods specified in this rule shall also be entertained by the employer, if the applicant adduces sufficient cause for the delay in preferring his claim, and no claim for gratuity under the Act shall be invalid merely because the claimant failed to present his application within the specified period. Any dispute in this regard shall be referred to the controlling authority for his decision.
(6) An application under this rule shall be presented to the employer either by personal service or by registered post acknowledgment due.

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8. Notice for payment of gratuity.-(1) Within fifteen days of the receipt of an application under Rules 7 for payment of gratuity, the employer shall-
(i) if the claim is found admissible on verification, issue a notice in Form `L' to the applicant employee, nominee or legal heir, as the case may be, specifying the amount of gratuity payable and fixing a date, not being later than the thirtieth day after the date of receipt of the application, from payment thereof, or

(ii) if the claim for gratuity is not found admissible, issue a notice in form `M' to the applicant employee, nominee or legal heir, as the case may be specifying the reasons why the claim for gratuity is not considered admissible.
In either case a copy of the notice  shall endorsed to the controlling authority.
(2) In case payment of gratuity is due to be made in the employer's office, the date fixed for the purpose in the notice in Form `L' under clause (i) of sub-rule (I) shall be re-fixed by the employer, if a written application in this behalf is made by the payee explaining why it is not possible for him to be present in person on the date specified.
(3) If the claimant for gratuity is a nominee or a legal heir, the employer may ask for the such witness or evidence as may be deemed relevant from establishing his identify or maintainability of his claim as the case may be. In that case the time-limit specified for issuance of notice  under sub-rule (1) shall be operative with effect from the date such witness or evidence as the case may be called for by the employer is furnished to the employer.
(4) A notice in Form `L' or Form `M' shall be served on the applicant either by personal service after taking receipt or by registered post with acknowledgment due.
(5) A notice under sub-section (2) of Section 7 shall be in the Form `L'.

9. Mode of payment of gratuity.- The gratuity payable under the Act shall be paid in cash or, if so desired by the payee, in Demand Draft or Bank Cheque to the eligible employee, nominee or legal heir, as the case may be;
Provided that in case the eligible employee, nominee or legal heir, as the case may be, so desires and the amount of gratuity payable is less than one thousand rupees, payment may be made by postal money order after deducting the postal money order commission thereof from the amount payable:
Provided further that intimation about the details of payment shall also be given by the employer to the controlling authority of the area:
1[Provided further that in the case of nominee, or an heir, who in minor, the controlling authority shall invest the gratuity amount deposited with him for the benefit of such minor in term deposit with the State Bank of India or any of its subsidiaries or any Nationalised Bank.
Explanation:  "Nationalised Bank" means a corresponding new bank specified in the First Schedule to the Banking Companies (Acquisition and transfer of Undertakings) Act, 1970 (5 of 1970). or a corresponding new bank specified in the First Schedule of the Banking companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980)
10. Application to controlling authority for direction.-(1) If an employer-
(i) refuses to accept a nomination or to entertain an application sought to be filed under Rule 7, or

(ii) issues a notice under sub-rule (1) of Rule 8 either specifying an amount of gratuity which is considered by the applicant less than what is payable or rejecting eligibility to payment of gratuity, or
(iii) having received an application under Rule 8 within the time specified therein.
The claimant employee, nominee or legal heir, as the case may be, may with in ninety days of the occurrence of the cause for the application, apply, in From `N' to the controlling authority for issuing a direction under sub-section (4) of Section 7 with as many extra copies as are the opposite parties:
Provided that the controlling authority may accept any application under this sub-rule, on sufficient cause being shown by the applicant after the expiry of the specified period.
(2) Application under sub-rule (1) and other documents relevant to such an application shall be presented in person to the controlling authority or shall be sent by registered post acknowledgment due.

11. Procedure for dealing with application for direction.-(1) On receipt of an application under Rule 10 of the controlling authority shall, by issuing a notice in Form `O', call upon the applicant as well as the employer to appear before him on a specified date, time and place, either by himself or through his authorised representative together with all relevant documents and witnesses, if any.

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Footnote
1. Ins. by Noti. No. G.S.R. 77, dated 22.1.1991 (w.e.f.1.2.1991). 

(2) Any person desiring to act on behalf of an employer or employee, nominee or legal heir, as the case may be, shall present to the controlling authority a letter of authority from the employer or the person concerned, as the case may be, on whose behalf he seeks to act together with a written-statement explaining his interest in the matter and praying for permission so to act. The controlling authority shall record thereon an order either according his approval or specifying, in the case of refusal to grant the permission prayed for, the reasons for the refusal.
(3) A party appearing by an authorised representative shall be bound by the acts of the representative.
(4) After completion of hearing on the date fixed under sub-rule (1), or after such further evidence, examination of documents, witnesses, hearing and enquiry, as may be deemed necessary, the controlling authority shall record his finding as to whether any amount is payable to the applicant under the Act. A copy of the finding shall be given to each of the parties.
(5) If the employer concerned fails to appear on the specified date of hearing after due service of notice without sufficient cause, the controlling authority may proceed to hear and determine the application  ex parte. If the applicant fails to appear on the specified date of hearing without sufficient cause, the controlling authority may dismiss the application:
Provided that an order under this sub-rule may, on good cause being shown within thirty days of the said order be reviewed and the application re-heard after giving not less than fourteen days notice to the opposite party of the date fixed for re-hearing of the application.
12. Place and time of hearing.-The sittings of the controlling authority shall be held at such times and at such places as he may fix and he shall inform the parties of the same in such manner as he thinks fit.

13. Administration of oath.-The controlling authority may authorise a clerk of his office to administer oaths for the purpose of making affidavits.

14. Summoning and attendance of witness.-The controlling authority may, at any stage of the proceedings before him, either upon or without an application by any of the parties involved in the proceedings before him, and on such terms as may appear to the controlling authority just, issue summons to any person in Form `P' either to give evidence or to produce documents or for both purposes on a specified date, time and place.

15. Service of summons or notice.-(1) Subject to the provisions of sub-rule (2) any notice, summons, process or order issued by the controlling authority may be served either personally or by registered post acknowledgment due or in any other manner as prescribed under the Code of Civil Procedure, 1908 (Act 5 of 1908).

(2) Where there are numerous persons as parties to any proceeding before the controlling authority and such persons are members of any trade union or association or are represented by an authorised person, the service of notice on the Secretary, or where there is no Secretary, on the principal officer of the trade union or association, or on the authorised person shall be deemed to be service on such persons.

16. Maintenance of records of cases by the controlling authority.-(1) The controlling authority shall record the particulars of each case under Section 7, in Form `Q' and at the time of passing order shall sign and date particulars so recorded.
(2) The controlling authority shall, while passing orders in each case, also record the findings on the merits of the case and file it together with the memoranda of evidence with the order sheet.
(3) Any record, other than a record of any order or direction, which is required by these rules to be signed by the controlling authority, may be signed on behalf of and under the direction of the controlling authority by any subordinate officer appointed in writing for this purpose by the controlling authority.

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17. Direction for payment of gratuity.-If a finding is recorded under sub-rule (4) of Rule 11 that the applicant is entitled to payment of gratuity under the Act, the controlling authority shall issue a notice to the employer concerned in Form `R' specifying the amount payable and directing  payment thereof to the applicant under intimation to the controlling authority within thirty days from the date of receipt of the notice by the employer. A copy of the notice shall be endorsed to the applicant employee, nominee or legal heir, as the case may be.

 

18. Appeal.-(1) The Memorandum of appeal under sub-section (7) of Section 7 of the Act shall be submitted to the appellate authority with a copy thereof to the opposite party and the controlling authority either through delivery in person or under registered post acknowledgment due.
(2) The Memorandum of appeal shall contain the facts of the case, the decision of the controlling authority, the grounds of appeal and the relief sought.
(3) There shall be appended to the Memorandum of appeal a certified copy of the finding of the controlling authority and direction for payment of gratuity.
(4) On receipt of the copy of Memorandum of appeal, the controlling authority shall forward records of the case to the appellate authority.
(5) Within 14 days of the receipt of the copy of the Memorandum of appeal, the opposite party shall submit his comments on each paragraph of the memorandum with additional pleas, if any, to the appellate authority with a copy to the appellant.
(6) The appellate authority shall record its decision after giving the parties to the appeal a reasonable opportunity of being heard. A copy of the decision shall be given to the parties to the appeal and a copy thereof shall be sent to the controlling authority returning his records of the case.
(7) The controlling authority shall, on receipt of the decision of the appellate authority, make necessary entry in the records of the case maintained in Form `Q' under sub-rule (1) of Rule 16.
(8) On receipt of the decision of the appellate authority, the controlling authority shall, if required under that decision, modify his direction for payment of gratuity and issue a notice to the employer concerned in Form `S' specifying the modified amount payable and directing payment thereof to the applicant, under intimation to the controlling authority within fifteen days of the receipt of the notice by the employer. A copy of the notice shall be endorsed to the applicant employee, nominee or legal heir, as the case may be, and to the appellate authority.
19.  Application for recovery of gratuity.-Where an employer fails to pay the gratuity due under the Act in accordance with the notice by the controlling authority under Rule 17 or Rule 18, as the case may be, the employee concerned, his nominee or legal heir, as the case may be, the employee concerned, his nominee or legal heir, as the case may be, to whom the gratuity is payable may apply to the controlling authority in duplicate in Form `T' for recover there of under Section 8 of the Act.
20. Display of abstract of the Act and Rules.-The employer shall display an abstract of the Act and the Rules made thereunder [as given in Form `U']2 in English and in the language understood by the majority of the employees at a conspicuous place at or near the main entrance of the establishment.

FORM `U' 1
ABSTRACT OF THE ACT AND RULES


1. Extent of the Act.-The Act extends to the whole of India:
Provided that i so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir. (Section 1(2)]

2. To whom the Act Applies.-The Act applies to (a) every factory, mine, oil field plantation, port and railway company; (b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months; and (c) such other establishments or class of establishments, in the which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf. [Section 1(3)]

3. Definitions-(a) "Appropriate Government" means (i) in relation to an establishment-
(a) belonging to, or under the control of, the Central Government,
(b) having branches in more than one State,
(c) of a factory belonging to, or under the control of, the Central Government,
(d) of a major port, mine, oil field or railway company, the Central government,
(ii) in any other case, the State Government. [Section 2(a)].
(b) "Completed year of service" means continuous service for one year. [Section 2(b)].
(c) "Continuous Service" means uninterrupted service and includes service which is interrupted by sickness, accident leave, lay-off strike or  a lock-out or cessation of work not due to any fault of the employees concerned, whether such un-interrupted or interrupted service was rendered before or after the commencement of this Act.
Explanation I.- In the case of an employee who is not in unmterrupted service for one year, he shall be deemed to be in continuous service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than-
(i) 190 days, if employed below the ground in a mine, or
(ii) 240 days, in any other case, except when he is employed in a seasonal
  establishment.
Explanation II.- An employee of a seasonal establishment shall be deemed to be in continuous service if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during the year. [Section 2(d)].

(d) "Controlling authority" means authority appointed by an appropriate Government under Section 3. [Section 2(d)]

(e) "Family', in relation to an employee, shall be deemed to consist of-

(i) in the case of a male employee, himself, his wife, his children, whether married or unmarried, his dependent parents and the widow and children, of his predeceased son, if any,

(ii) in the case of a female employee, herself, her husband, her children, whether married or unmarried, her dependent parents and the dependent parents of her husband and the widow and children of the predeceased son, if any;

Provided that if a female employee, by a notice in writing to the controlling authority, expresses her desire to exclude her husband from her family, the husband and his dependent parents shall no longer be deemed, for the purposes of this Act, to be included in the family of such female employee unless the said notice is subsequently withdrawn by such female employee.

Explanation.- Where the personal law of an employee permits the adoption by him of a child, any child lawfully adopted by him shall be deemed to be included in his family and where a child of an employee has been adopted by another person and such adoption is, under the personal law of the person making such adoption, lawful, such child shall be deemed to be excluded from the family of the employee. [Section 2(h)].

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Footnote
3. Ins. by Noti. No. GSR 2868, dated 22 nd November 1975. 

4. Nomination.-(1) Each employee, who has completed one year of service, after the commencement of the Payment of Gratuity (Central) Rules, 1972 shall make within thirty days of completion of one year of service, a nomination. [Section 6(1) read with Rule 86(1).].

(2) If an employee has a family at the time of making a nomination, the nomination shall be made in favour of one or more members of his family and any nomination made by such employee in favour of a person who is not  a member of his family shall be void.
[Section 6(3)].
(3) If at the time of making a nomination, the employee has no family, the nomination can be made in favour of any person or persons, but if the employee subsequently acquires a family, such nomination shall forthwith become invalid and the employee shall make within 90 days fresh nomination in favour of one or more members of his family.

[Section 6(4) read with Rule 6(3)].
(4) A nomination or a fresh nomination or a notice of modification of nomination shall be signed by the employee or, if illiterate, shall bear his thumb-impression in the presence of two witness, who shall also sign declaration to that effect in that nomination, fresh nomination or notice of modification of nomination as the case may be . (Rule 6(5)].
(5) A nomination may, subject to the provisions of sub-sections (3) and (4) of Section 6 be modified by an employee any time after giving to his employer a written notice of his intention to do so. [Section 6(5)].
(6) A nomination or fresh nomination or notice of modification of nomination shall take effect from the date of receipt of the same by the employer.[Rule 6(6)].

5. Application for gratuity.-(1) An employee who is eligible for payment of gratuity under the Act, or any person authorised, in writing, to act on his behalf, shall apply ordinarily within thirty days from the date gratuity become payable:

Provided that where the date of superannuation or retirement of an employee is known, the employee may apply to such employer before thirty days of the date of supernnuation or retirement. [Rule 7(2)].
(2) A nominee of an employee who is eligible for payment of gratuity shall apply, ordinarily within thirty days from the date of the gratuity became payable to him, to the employer. [Rule 7(3)].
(4) An application for payment of gratuity field after the expire of the periods specified above shall also be entertained by the employer if the applicant adduces a sufficient cause for the delay. [Rule 7(5)].

6. 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:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement.
Disablement means such disablement which incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement. [Section 4(1)].
(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for  a period of three months immediately proceeding the termination of his employment, and, for his purpose, the wages paid for any overtime work shall not be taken into account:
Provided further that in the case of an employee employed in a seasonal establishment, the employer shall pay the gratuity at the rate of seven days' wages for each season. [Section 4(2)].
(3) The amount of gratuity payable to an employee shall  not exceed twenty months wages. [Section 4(3)].

7. Forfeiture of gratuity.-(1) The gratuity of an employee, whose services have been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extend of the damage or loss so caused.
(2) The gratuity payable to an employee shall wholly be forfeited-
(a) if the services of such employee have been terminated for his riotous or disorderly conduct or of any other act of violence on his part, or
(b) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. [Section 4(6)].

8. Notice of opening, change or closure of the Establishment.-(1) A notice shall be submitted by the employer to the controlling authority of the area within thirty days of any change in the name, address, employer or nature of business. [Rule 3(2)].
(2) Where an employer intends to close down the business he shall submit a notice to the controlling authority of the area at least sixty day's before the intended closure. [Rule 3(3)].

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9. Application to Controlling Authority for direction.-It an employer-
(i) refuses to accept a nomination or to entertain an application for payment of gratuity, or
(ii) issues a notice either specifying an amount of gratuity which is considered by the applicant less than what is payable or rejecting eligibility to payment of gratuity, or
(iii) having received an application for payment of gratuity, fails to issue notice within fifteen days; the claimant employee, nominee, or legal heir, as the case may be, may within ninety days of the occurrence of the cause for the application, apply to the controlling authority for issuing a direction under sub-section (4) of Section 7 with as many extra copies as are the opposite party:
Provided that the controlling authority may accept any application  on sufficient cause being shown by the applicant, after the expire of the period of ninety days. [Rule 10].

10. Appeal.-Any person aggrieved by an order of the controlling authority may, within sixty days from the date of the receipt of the order, prefer an appeal to the Regional Labour Commissioner (Central) of the area, who has been appointed as the appellate authority by the Central Government:
Provided that the appellate authority may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days. [Section 7(7)].

11. Machinery for enforcement of the Act or Rules in Central sphere.-All Assistant Labour Commissioners (Central) have been appointed as Controlling Authorities and all the Regional Labour Commissioners (Central) as Appellate Authorities.

12. Powers of the Controlling Authority.-The Controlling Authority for the purpose of conducting an inquiry as to the amount of gratuity payable to an employee or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, shall have same powers as are versed in a court, under the Code of Civil Procedure, 1908, in respect of the following matters, namely-
(a) enforcing the attendance of any person or examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits; and
(d) issuing commissions for the examination of witnesses. [Section 7(5)].

13. Recovery of gratuity.-If the amount of gratuity payable is not paid by the employer, within the prescribed time, to the person entitled thereto the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the same, together with compound interest thereon at the rate of nine per cent per annum, from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto.[Section 8].

14. Protection of gratuity.-No gratuity payable under the Payment of Gratuity Act and the rules made thereunder shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court. [Section 13].

15. Penalties for offences.-(1) Whoever, for the purpose of avoiding any payment to be made by himself or of enabling any other persons to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees or with both. [Section 9(1)].
(2) An employer who contravenes, or makes default in complying with, any of the provisions of the Act or any rule or order made thereunder shall be punishable with imprisonment for a term which may extend one year, or with fine which may extend to one thousand rupees, or with both:
Provided that if the offence relates to non-payment of any gratuity payable under the Payment of Gratuity Act, the employer shall be punishable with imprisonment for a term which shall note be see than three months unless the court trying the offence for reasons to be recorded by it in writing, is of opinion that a lesser term of imprisonment or the imposition of a fine would meet the ends of justice. [Section 9(2)].

16. Display of Notice.-The employer shall display conspicuously a notice at or near the main entrance of the establishment in bold letters in English and in the language understood by the majority of the employees specifying the name of the Officer with designation authorised by the employer to receive on his behalf notices under the Payment of Gratuity Act or the rules made thereunder. [Rule 4].

17. Display of Abstract of the Act and Rules.-The employer shall display an abstract of the Payment of Gratuity Act and the rules made thereunder in English and in the language understood by the majority of the employees at a conspicuous place at or near the main entrance of the establishment. [Rule 20].

STATE RULES
For State Rules, see K.D. SRIVASTAVA'S COMMENTARIES ON PAYMENT OF GRATUITY Act, 1972, 4th Edn., (1988) where the following are included:
1.         Payment of Gratuity (Andhra Pradesh) Rules, 1972
2.         Payment of Gratuity (Assam) Rules, 1972

3.         Payment of Gratuity (Bihar) Rules, 1972

4.         Payment of Gratuity(Delhi) Rules, 1972

5..        Goa, Daman & Diu Paymnent of Gratuity Rules, 1973

6.         Payment of Gratuity (Gujarat) Rules, 1973

7.         Haryana Payment of Gratuity Rules, 1972

8.         Payment of Gratuity (Karnataka) Rules, 1972

9.         Kerala Payment of Gratuity Rules, 1973

10.        Payment of Gratuity (Madhya Pradesh) Rules, 1973

11.        Payment of Gratuity (Maharashtra) Rules. 1972

11.A     Payment of Gratuity (Orissa) Rules.

12.        Pondicherry Payment of Gratuity Rules, 1973

13.        Payment of Gratuity (Punjab) Rules, 1973

14.        Rajasthan Payment of Gratuity Rules, 1973

15.        Payment of Gratuity (Tamil Nadu) Rules, 1973

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