TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 91
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.... settlement pursuant to which consent terms came to be filed by the parties in the company petition. The consent terms inter alia provided for exit of the Respondent from Appellant No.1 company, with exclusive charge and control of the management of the affairs of Appellant No.1 company being made over to Appellant No.2. As part of this settlement, the consent terms inter alia provided for payment of gratuity and provident fund to the Respondent on account of his resignation from Appellant No.1 company. The relevant clause, namely, Clause No.17, in the consent terms provided as follows : "17. It is agreed and confirmed that the Gratuity and Provident Fund payable to the Respondent Nos.2 and 3 on account of their resignation from the Respondent No.1 company shall be processed and paid by the Respondent Company within two months from the date of handing over of management of the Respondent Company to the Petitioner." Though the amount of provident fund was duly paid to the Respondent, the gratuity was not so paid. The Respondent, in the premises, applied for directions of the CLB for payment of gratuity in pursuance of the consent terms. The Appellants opposed this application. It ....
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....hts to make any contract with any employee for payment of gratuity and it was bound to perform such contract irrespective of compulsory provisions concerning gratuity payable under the Act. It is submitted that the Respondent was not only a director but a bona fide whole-time employee of the company. It is submitted that the company had made suitable provisions towards payment of gratuity to its employees including whole time directiors till 2001 and thereafter, as part of the scheme of gratuity registered with the Life Insurance Corporation ('LIC') under Section 4-A of the Act. It is submitted that having regard to the consent terms containing an acknowledgement of admissibility of gratuity payable to the Respondent and an agreement to pay such gratuity, the Respondent could not be relegated to approaching the authorities under the Act for determination of any disputes and the CLB was well within its rights to adjudicate the matter, which anyway concerned enforcement of its own order passed by consent of parties. 5 At the outset, it needs to be noted that the Act provides for gratuity to be paid to an employee on termination of his employment. The employee is defined unde....
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....t has no force for two reasons. Firstly, any scheme made by an employer for the purposes of compulsory insurance under Section 4-A of the Act is not exhaustive of the rights and liabilities of the parties concerning payment of gratuity. In fact, sub-section (5) of Section 4 of the Act, which deals with payment of gratuity, makes it clear that nothing in that section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer. Even if an employee does not fall within the meaning of the definition provided in the trust deed prepared for the purposes for Section 4-A of the Act, nothing prevents an employer company from entering into any agreement with an employee for payment of gratuity. For this purpose, the 'employee' means any person who is employed for wages in or in connection with the work of any establishment in accordance with the definition in the Act noted above and 'wages' means all emoluments earned by an employee also as noted above. Appellant No.1 ran an establishment to which the Act applied; the Respondent was employed with Appellant No.1 and received regular emoluments. There is n....
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....ent entitled to receive gratuity but that suitable provisions were made throughout towards payment of such gratuity. The last clinching evidence in this behalf is the consent terms themselves where there is an unequivocal admission of liability to pay gratuity to the Respondent coupled with a promise to pay the same. 6 As for the argument that disputes between an employer and an employee concerning payment of gratuity, either regarding admissibility of such payment or as regards the quantum of such payment, can only be entertained by the authorities under the Act, it is pertinent to note that this is not a case for payment of gratuity under an application made under the Act. Here is a case where the parties have solemnly agreed on the aspect of the admissibility of the payment of gratuity. Under the consent terms filed before the CLB, it was agreed and confirmed that gratuity shall be paid to the Respondent on account of his resignation from the first Appellant company within two months from the date of handing over of the management by the Respondent. There is no need to take the dispute before the authorities under the Act. This is rather a case for enforcement of consent terms f....