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Corporate Legal Framework

Notes controlling authority to the effect that he has deposited with the controlling authority an amount
equal to the amount of gratuity required to be deposited or deposits with the appellate authority
such amount.
An aggrieved employee can file an application to the controlling authority for recovery of the
amount of gratuity. The controlling authority will issue a certificate to the collector for recovery
of that amount, together with compound interest, at the rate of 9% per annum from the date of
expiry of the prescribed time as arrears of land revenue, and pay the same to the person entitled
to it.

Offences and Penalties

Section 9 declares certain acts as offences and prescribes penalties for them. Whoever, for the
purpose of avoiding any payment, makes any false statement or false representation is punishable
with imprisonment up to 6 months and/or fined up to 1000.

Offence Penalty
1. Making a false statement or false Imprisonment up to 6 months of fine of
representation to avoid any payment 10,000/- or both.
under the Act
2. Contravention or non-compliance of any Imprisonment up to 1 years or fine up to
provision of the Act or the Rules 20,000/- or both (minimum imprisonment for
3 months and fine up to 10,000
3. Non-payment of any gratuity payable Imprisonment up to two years (minimum 6
under the Act months) or fine up to 20,000 (Minimum
10,000) or both
4. Failure to make payment by way of Fine up to 10,000 and 1,000 for each day
premium for compulsory insurance u/s during which the offence continues.
4A(1) or by way of contribution to an
approved gratuity fund.

Appraisal of the Act

In Gratuity Act, minimum service is 5 years experience to claim the gratuity but in some cases in
the company knows the particular employee(s) are reaching his 5 years period so we can terminate
them due to some reasons. By that they can exempt themselves from paying the gratuity.

15 Day’s Wages
Case Study

he word "15 day's wages" has been interpreted differently by different judicial
authorities. Dig Vijay Woolen Mills Ltd. and Shri Mahendra Prataprai Buch appealed
Tto the court for the calculation of 15 days wages for gratuity payment. In this
appeal, the question came up how to calculate 15 days' wages for the purpose of Payment
of Gratuity in terms of Section 4(2) of the Payment of Gratuity Act. The appellant-company
calculated the amount of gratuity on the basis that fifteen days' were half of the company
wages last drawn. The respondents demanded an additional sum as gratuity on the ground
that their monthly wages should be taken as what they got for 26 working days and their
daily wages should be ascertained on that basis, but not by just taking half of the wages for
a month of 30 days, or fixing their daily wages by dividing monthly wages by 30. According
Contd...

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