Contractual gratuity entitlement under consent terms was enforceable by the Company Law Board, with quantum fixed on undisputed material.

A consent settlement recorded in company proceedings can create an enforceable gratuity obligation even where objection is raised that the recipient is not an employee under the Payment of Gratuity Act, 1971. The statutory gratuity framework does not prevent parties from agreeing to better contractual or settlement-based terms, and the company's trust deed could not defeat the entitlement created by the consent terms. Where liability had already been admitted in an order under the Companies Act, 1956, the Company Law Board could enforce that order and determine the gratuity quantum on undisputed salary material without sending the parties to the gratuity authorities.

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Issues: (i) Whether the respondent was entitled to gratuity under the consent terms notwithstanding the objection that he was not an employee within the meaning of the Payment of Gratuity Act, 1971; (ii) Whether the Company Law Board had jurisdiction to enforce the gratuity payment and determine its quantum instead of relegating the parties to the authorities under the Payment of Gratuity Act, 1971.

Issue (i): Whether the respondent was entitled to gratuity under the consent terms notwithstanding the objection that he was not an employee within the meaning of the Payment of Gratuity Act, 1971.

Analysis: The settlement recorded before the Company Law Board contained an express agreement that gratuity would be paid to the respondent on his resignation. The statutory scheme under the Payment of Gratuity Act, 1971 does not exclude the right of an employee to obtain better terms of gratuity under an award, agreement, or contract. The respondent was shown on record as a whole-time employee and was included in the gratuity arrangements maintained by the company. The definition in the company's trust deed for compulsory insurance purposes did not control the contractual entitlement created by the consent terms.

Conclusion: The respondent was entitled to gratuity under the consent terms, and the objection that no gratuity was payable to him was rejected.

Issue (ii): Whether the Company Law Board had jurisdiction to enforce the gratuity payment and determine its quantum instead of relegating the parties to the authorities under the Payment of Gratuity Act, 1971.

Analysis: The dispute was not an original claim for gratuity under the Payment of Gratuity Act, 1971. It was an application to enforce a consent order already passed in proceedings under Sections 397, 398 and 402 of the Companies Act, 1956. Since liability to pay gratuity had already been admitted and incorporated into the consent order, the only remaining exercise was to work out the amount on the basis of undisputed salary particulars. In those circumstances, the matter was within the Company Law Board's jurisdiction as enforcement of its own order, and the calculation of quantum was a ministerial exercise.

Conclusion: The Company Law Board had jurisdiction to enforce the gratuity clause and accept the claimed quantum.

Final Conclusion: The impugned order was affirmed, and the appeal failed in entirety because the gratuity obligation arose from the parties' consent settlement and was enforceable before the Company Law Board.

Ratio Decidendi: A contractual or consent-based gratuity obligation, once incorporated into an order passed in company proceedings, may be enforced by the Company Law Board and quantified on undisputed material, and such enforcement is not displaced merely because the Payment of Gratuity Act, 1971 contains the ordinary statutory mechanism for gratuity disputes.

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