Page 125 - DMGT306_MERCANTILE_LAWS_II

Mercantile Laws – II

Notes (e) Whoever contravenes the above provisions shall be punishable with a fine which may
extend to 10,000 and if it continues, a further fine extending to 1,000 per day till the offence
continues.
(v) Provisions regarding Nomination: According to Section 6,each employee who has completed
one year of service shall make nomination for the purpose of payment of gratuity in case of his
death. Different legal provisions regarding nomination are given below-
(1) Time of Nomination: Under Section 6(1) each employee who has completed one year of
service, shall make within 80 days of completion of one year of service a nomination.
(2) No of Nominees: Under Section 6(2) an employee may in his nomination distribute the
amount of gratuity payable to him under this Act amongst more than one nominee or may
nominate one person only for whole amount of gratuity. According to Section 6(3) if an employee
has a family at the time of making nomination, then the nomination shall be made in favour of
one or more members of his family. According Section 6(4) if at the time of making a nomination
the employee has no family member then the nomination may be made in favour of any
persons or persons.
(3) Modification: Under Section 6(5), nomination may be modified by an employee at any time
after giving to his employer a written notice in such form and in such a manner as may be
prescribed.
(4) Death of Nominee: As per Section 6 (6) if the nominee dies before the employee, the interest
of the nominee shall revert to the employee, who will have to make a fresh nomination.
(5) Safe Custody of Nomination: Under Section 6 (7), every nomination, a fresh nomination or
alternation of nomination, as the case may be shall be sent by the employee to his employer
who will Kept the Same in his custody.
(vi) Provisions of Inspectors: The Payment of Gratuity (Amendment) Act 1984 has added two
new sections. such as, Section 7-A and Section 7-B to the original Act dealing with the appointment
of Inspectors and their power.

Appointment of Inspectors: Under the Section 7-A, the government may, by notification, appoint
as many inspectors as it deems fit.
Power of Inspectors: Under the Section 7-B inspectors have the power to ask an employer to
furnish necessary information. Moreover, inspectors have the power to enter and inspect any
place in any factory, mine etc. and to examine the employer and the employees. Inspectors can
make copies or take extacts from register or record etc.
(vii) Provisions regarding penalties: According to Section 9 (1) any person who knowingly
makes any false statement for avoiding any payment to be made by him under this act shall be
punishable with imprisonment upto six months or with fine upto 10,000 or with both. Under
section 9(2), an employer who contravenes or makes default in complying with, any of the
provisions of the Act, or rule, order made thereunder shall be punishable with imprisonment
for a period which may extend to one year or with fine which may extend to one thousand
rupees or both.
(iii) Provisions regarding appropriate Government's powers to make rules: Under Section 15 the
appropriate Government may make rules for carrying out the provisions of the Act. every rule
made by the Central Government under this Act shall be laid before each house of parliament
while it is in session for a total period of thirty days which may be comprised in one sessions or
in two or more successive sessions.

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