✦ High Court of India · 11 Aug 2025

Mr. Tushar Mudgil, Advocate v. ASSISTANT LABOUR COMMISSIONER ORS

Case Details High Court of India · 11 Aug 2025

Court

High Court of India

Decided

11 Aug 2025

Bench

TARA VITASTA GANJU TARA VITASTA GANJU ICE TARA VITASTA GANJU TARA VITASTA GANJU

Length

7,476 words

Acts & Sections

Payment of Gratuity Act 1972

Judgment

1. The present Petition has been filed on behalf of the Petitioner seeking to challenge an office order bearing No.ALC-III/36/RC to 134/2020-SK dated

02.03.2022 [hereinafter referred to as the “Office Order”] and the recovery certificate dated 09.09.20222 bearing Memo No.1872/DRA [hereinafter referred to as the “Recovery Certificate”] issued against the Petitioner for recovery of an amount of Rs.62,94,754/-.

2. The grievance of the Petitioner as articulated in the Petition is that although the demand was raised against on the Petitioner, the recovery certificate was issued without following the procedure as laid down in Section 8 of the Payment of Gratuity Act, 1972 [hereinafter referred to as “Act”] as well as Rules 17 and 19 of the Payment of Gratuity (Central) Rules, 1972 which mandates issue of a show cause notice before issue of a recovery Signature Not Verified Digitally Signed By:HONEY ARORA Signing Date:02.09.2025 19:02:29 W.P.(C) 14953/2022 Page 1 of 27 certificate. It is the case of the Petitioner that no such show cause notice was ever received by the Petitioner.

3. This Court, on 24.01.2023, after examining the matter, had passed the following directions: “6. Issue notice. Learned counsel for the respondent no.1 accepts notice and submits that since the only grievance of the petitioner is that the recovery certificate has been issued without issuance of any show-cause notice to it, he may be granted time to obtain instructions as to whether the said respondent would be willing to recall the recovery certificate with liberty to issue a fresh recovery certificate after due show-cause notice to the petitioner in accordance with law.

7. It is expected that till the next date, the respondents will not take any coercive steps against the petitioner.”

3.1 Thereafter, the Respondent No.1 filed a Short Affidavit dated

19.07.2023 [hereinafter referred to as the “Affidavit”] to set out that the show cause notices were duly issued to the Petitioner at all addresses on 24.12.2021 in terms of the Annexure A-1 (Colly) to the Affidavit.

4. Learned Counsel for the Petitioner submits that no show cause notices were ever received by the Petitioner. In addition, it is contended that the Annexure A-1 (Colly) which has been filed along with the Short Affidavit shows that show cause notices were sent out to the Petitioner at the same addresses, however he submits, that the speed post number for each of these show cause notices is the same being ED 956733845IN.

5. Learned Counsel for the Respondent No.1 submits the show cause notices were sent and that the relevant extract of the dispatch register has also been placed on record.

6. It is the case of the Respondent that several Claim Petitions were filed Signature Not Verified Digitally Signed By:HONEY ARORA Signing Date:02.09.2025 19:02:29 W.P.(C) 14953/2022 Page 2 of 27 under the Act against the Petitioner. On receipt of these claims, notices were issued to the parties and show cause notices were issued to the Petitioner at its address as well. The Affidavit also states that the details of the show cause notices are annexed to the Affidavit as well as the extract of the dispatch register.

6.1 It is apposite to set out paragraph 7 and 8 of the Short Affidavit, below: “7. Thereafter, Show Cause Notices were issued to M/ s. A2Z Infra Services Ltd. at all the addresses which have been detailed above, with the request to show cause within 15 days from the date of receipt of Show Cause Notices as to why recovery certificate should not be issued against the Non-Applicant. The details of Show Cause Notices issued to the Petitioner by the Respondent No. 1 as per office records along with copies of the same are as per ANNEXURE A-1 (COLLY).

8. That the relevant pages of the Despatch Register as maintained by the concerned office have been attached as ANNEXURE A-2 (COLLY).” [Emphasis Supplied]

7. Annexure A-1 to the Affidavit is a tabular chart which sets out 264 entries stated to be show cause notices dated 24.12.2021 dispatched on

31.12.2021. 132 of these entries have been sent to the Petitioner at one address and under speed post no. ED956733845 while the remaining notices from 133 to 264 have also dated 24.12.2021 stated to be dispatched on 31.12.2021 at second address and under speed post no. ED 956733845IN. It is apposite to extract Annexure A-1 as reproduced in the Affidavit which is below: Sl No. Show Cause Notice No. Date of Show Cause Date of Despatch Address of Non-Applicant

1. ALC- III/36/36/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana Speed Post No. ED 956733845 Signature Not Verified Digitally Signed By:HONEY ARORA Signing Date:02.09.2025 19:02:29 W.P.(C) 14953/2022 Page 3 of 27

2. ALC- III/36/37/2020

3. ALC- III/36/38/2020

4. ALC- III/36/39/2020

5. ALC- III/36/40/2020

6. ALC- III/36/41/2020

7. ALC- III/36/42/2020

8. ALC- III/36/43/2020

9. ALC- III/36/44/2020

10. ALC- III/36/45/2020

11. ALC- III/36/46/2020

12. ALC- III/36/47/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana ED 956733845 ED 956733845 ED 956733845 ED 956733845 ED 956733845 ED 956733845 ED 956733845 ED 956733845 ED 956733845 ED 956733845 ED 956733845 Signature Not Verified Digitally Signed By:HONEY ARORA Signing Date:02.09.2025 19:02:29 W.P.(C) 14953/2022 Page 4 of 27

13. ALC- III/36/48/2020

14. ALC- III/36/49/2020

15. ALC- III/36/50/2020

16. ALC- III/36/51/2020

17. ALC- III/36/52/2020

18. ALC- III/36/53/2020

19. ALC- III/36/54/2020

20. ALC- III/36/55/2020

21. ALC- III/36/56/2020

22. ALC- III/36/57/2020

23. ALC- III/36/58/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

24. ALC- III/36/59/2020

25. ALC- III/36/60/2020

26. ALC- III/36/62/2020

27. ALC- III/36/63/2020

28. ALC- III/36/64/2020

29. ALC- III/36/65/2020

30. ALC- III/36/66/2020

31. ALC- III/36/67/2020

32. ALC- III/36/68/2020

33. ALC- III/36/69/2020

34. ALC- III/36/70/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

35. ALC- III/36/71/2020

36. ALC- III/36/72/2020

37. ALC- III/36/73/2020

38. ALC- III/36/74/2020

39. ALC- III/36/75/2020

40. ALC- III/36/76/2020

41. ALC- III/36/77/2020

42. ALC- III/36/78/2020

43. ALC- III/36/79/2020

44. ALC- III/36/79/2020

45. ALC- III/36/80/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

46. ALC- III/36/81/2020

47. ALC- III/36/82/2020

48. ALC- III/36/83/2020

49. ALC- III/36/84/2020

50. ALC- III/36/85/2020

51. ALC- III/36/86/2020

52. ALC- III/36/87/2020

53. ALC- III/36/88/2020

54. ALC- III/36/89/2020

55. ALC- III/36/90/2020

56. ALC- III/36/91/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

57. ALC- III/36/92/2020

58. ALC- III/36/93/2020

59. ALC- III/36/94/2020

60. ALC- III/36/95/2020

61. ALC- III/36/96/2020

62. ALC- III/36/97/2020

63. ALC- III/36/98/2020

64. ALC- III/36/99/2020

65. ALC- III/36/100/2020

66. ALC- III/36/101/2020

67. ALC- III/36/102/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

68. ALC- III/36/103/2020

69. ALC- III/36/104/2020

70. ALC- III/36/105/2020

71. ALC- III/36/106/2020

72. ALC- III/36/107/2020

73. ALC- III/36/108/2020

74. ALC- III/36/109/2020

75. ALC- III/36/110/2020

76. ALC- III/36/111/2020

77. ALC- III/36/112/2020

78. ALC- III/36/113/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

79. ALC- III/36/114/2020

80. ALC- III/36/115/2020

81. ALC- III/36/116/2020

82. ALC- III/36/117/2020

83. ALC- III/36/118/2020

84. ALC- III/36/119/2020

85. ALC- III/36/120/2020

86. ALC- III/36/121/2020

87. ALC- III/36/122/2020

88. ALC- III/36/123/2020

89. ALC- III/36/124/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

90. ALC- III/36/125/2020

91. ALC- III/36/126/2020

92. ALC- III/36/127/2020

93. ALC- III/36/128/2020

94. ALC- III/36/129/2020

95. ALC- III/36/131/2020

96. ALC- III/36/132/2020

97. ALC- III/36/133/2020

98. ALC- III/36/134/2020

99. ALC- III/36/135/2020

100. ALC- III/36/136/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

101. ALC- III/36/137/2020

102. ALC- III/36/138/2020

103. ALC- III/36/139/2020

104. ALC- III/36/140/2020

105. ALC- III/36/141/2020

106. ALC- III/36/142/2020

107. ALC- III/36/143/2020

108. ALC- III/36/144/2020

109. ALC- III/36/146/2020

110. ALC- III/36/148/2020

111. ALC- III/36/149/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

112. ALC- III/36/150/2020

113. ALC- III/36/151/2020

114. ALC- III/36/152/2020

115. ALC- III/36/153/2020

116. ALC- III/36/154/2020

117. ALC- III/36/155/2020

118. ALC- III/36/156/2020

119. ALC- III/36/157/2020

120. ALC- III/36/158/2020

121. ALC- III/36/159/2020

122. ALC- III/36/160/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

123. ALC- III/36/161/2020

124. ALC- III/36/162/2020

125. ALC- III/36/163/2020

126. ALC- III/36/164/2020

127. ALC- III/36/165/2020

128. ALC- III/36/166/2020

129. ALC- III/36/167/2020

130. ALC- III/36/168/2020

131. ALC- III/36/169/2020

132. ALC- III/36/170/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., Plot No. B-38, Industrial Area, Sec-32, Jharsa Chowk, Gurugram, Haryana

133. ALC- III/36/36/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., O- 116,Arjun Marg, DLF City,-1, Gurugram, Haryana ED 956733845I N Signature Not Verified Digitally Signed By:HONEY ARORA Signing Date:02.09.2025 19:02:29 W.P.(C) 14953/2022 Page 15 of 27

134. ALC- III/36/37/2020

135. ALC- III/36/38/2020

136. ALC- III/36/39/2020

137. ALC- III/36/40/2020

138. ALC- III/36/41/2020

139. ALC- III/36/42/2020

140. ALC- III/36/43/2020

141. ALC- III/36/44/2020

142. ALC- III/36/45/2020

143. ALC- III/36/46/2020

144. ALC- III/36/47/2020

145. ALC- III/36/48/2020

146. ALC- III/36/49/2020

147. ALC- III/36/50/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., O- 116,Arjun Marg, DLF City,-1, Gurugram, Haryana ED 956733845I N

148. ALC- III/36/51/2020

149. ALC- III/36/52/2020

150. ALC- III/36/53/2020

151. ALC- III/36/54/2020

152. ALC- III/36/55/2020

153. ALC- III/36/56/2020

154. ALC- III/36/57/2020

155. ALC- III/36/58/2020

156. ALC- III/36/59/2020

157. ALC- III/36/60/2020

158. ALC- III/36/62/2020

159. ALC- III/36/63/2020

160. ALC- III/36/64/2020

161. ALC- III/36/65/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., O- 116,Arjun Marg, DLF City,-1, Gurugram, Haryana ED 956733845I N

162. ALC- III/36/66/2020

163. ALC- III/36/67/2020

164. ALC- III/36/68/2020

165. ALC- III/36/69/2020

166. ALC- III/36/70/2020

167. ALC- III/36/71/2020

168. ALC- III/36/72/2020

169. ALC- III/36/73/2020

170. ALC- III/36/74/2020

171. ALC- III/36/75/2020

172. ALC- III/36/76/2020

173. ALC- III/36/77/2020

174. ALC- III/36/78/2020

175. ALC- III/36/79/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., O- 116,Arjun Marg, DLF City,-1, Gurugram, Haryana ED 956733845I N

176. ALC- III/36/79/2020

177. ALC- III/36/80/2020

178. ALC- III/36/81/2020

179. ALC- III/36/82/2020

180. ALC- III/36/83/2020

181. ALC- III/36/84/2020

182. ALC- III/36/85/2020

183. ALC- III/36/86/2020

184. ALC- III/36/87/2020

185. ALC- III/36/88/2020

186. ALC- III/36/89/2020

187. ALC- III/36/90/2020

188. ALC- III/36/91/2020

189. ALC- III/36/92/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., O- 116,Arjun Marg, DLF City,-1, Gurugram, Haryana ED 956733845I N

190. ALC- III/36/93/2020

191. ALC- III/36/94/2020

192. ALC- III/36/95/2020

193. ALC- III/36/96/2020

194. ALC- III/36/97/2020

195. ALC- III/36/98/2020

196. ALC- III/36/99/2020

197. ALC- III/36/100/2020

198. ALC- III/36/101/2020

199. ALC- III/36/102/2020

200. ALC- III/36/103/2020

201. ALC- III/36/104/2020

202. ALC- III/36/105/2020

203. ALC- III/36/106/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., O- 116,Arjun Marg, DLF City,-1, Gurugram, Haryana ED 956733845I N

204. ALC- III/36/107/2020

205. ALC- III/36/108/2020

206. ALC- III/36/109/2020

207. ALC- III/36/110/2020

208. ALC- III/36/111/2020

209. ALC- III/36/112/2020

210. ALC- III/36/113/2020

211. ALC- III/36/114/2020

212. ALC- III/36/115/2020

213. ALC- III/36/116/2020

214. ALC- III/36/117/2020

215. ALC- III/36/118/2020

216. ALC- III/36/119/2020

217. ALC- III/36/120/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., O- 116,Arjun Marg, DLF City,-1, Gurugram, Haryana ED 956733845I N

218. ALC- III/36/121/2020

219. ALC- III/36/122/2020

220. ALC- III/36/123/2020

221. ALC- III/36/124/2020

222. ALC- III/36/125/2020

223. ALC- III/36/126/2020

224. ALC- III/36/127/2020

225. ALC- III/36/128/2020

226. ALC- III/36/129/2020

227. ALC- III/36/131/2020

228. ALC- III/36/132/2020

229. ALC- III/36/133/2020

230. ALC- III/36/134/2020

231. ALC- III/36/135/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., O- 116,Arjun Marg, DLF City,-1, Gurugram, Haryana ED 956733845I N

232. ALC- III/36/136/2020

233. ALC- III/36/137/2020

234. ALC- III/36/138/2020

235. ALC- III/36/139/2020

236. ALC- III/36/140/2020

237. ALC- III/36/141/2020

238. ALC- III/36/142/2020

239. ALC- III/36/143/2020

240. ALC- III/36/144/2020

241. ALC- III/36/146/2020

242. ALC- III/36/148/2020

243. ALC- III/36/149/2020

244. ALC- III/36/150/2020

245. ALC- III/36/151/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., O- 116,Arjun Marg, DLF City,-1, Gurugram, Haryana ED 956733845I N

246. ALC- III/36/152/2020

247. ALC- III/36/153/2020

248. ALC- III/36/154/2020

249. ALC- III/36/155/2020

250. ALC- III/36/156/2020

251. ALC- III/36/157/2020

252. ALC- III/36/158/2020

253. ALC- III/36/159/2020

254. ALC- III/36/160/2020

255. ALC- III/36/161/2020

256. ALC- III/36/162/2020

257. ALC- III/36/163/2020

258. ALC- III/36/164/2020

259. ALC- III/36/165/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., O- 116,Arjun Marg, DLF City,-1, Gurugram, Haryana ED 956733845I N

260. ALC- III/36/166/2020

261. ALC- III/36/167/2020

262. ALC- III/36/168/2020

263. ALC- III/36/169/2020

264. ALC- III/36/170/2020

24.12.2021 31.12.2021 M/s A2Z Infra Services Ltd., O- 116,Arjun Marg, DLF City,-1, Gurugram, Haryana ED 956733845I N

8. Thus, as contended by the Respondent, 264 notices have been sent by two speed post communications bearing ED 956733845 and ED 956733845IN. As proof of dispatch, an extract of the dispatch register has also been placed on record. However, no delivery receipts are present.

9. The Petitioner has contended that he did not receive any of these notices. The Respondent, on the other hand, has only been able to place on record the dispatch details without any acknowledgment or delivery proof. The Affidavit filed also does not contain any dates when these notices were stated to have been delivered to the Petitioner.

10. The first proviso to Section 8 of the Act sets out that the controlling authority, before issuing a notice for recovery of gratuity shall give the employer a reasonable opportunity of showing cause against such certificate in the following terms: “Section: 8 Recovery of gratuity. If the amount of gratuity payable under this Act is not paid by the employer, Signature Not Verified Digitally Signed By:HONEY ARORA Signing Date:02.09.2025 19:02:29 W.P.(C) 14953/2022 Page 25 of 27 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 such rate as the Central Government may, by notification, specify, from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto: 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…” [Emphasis supplied]

10.1 Rule 17 of the Payment of Gratuity (Central) Rules, 1972 also sets out that when the controlling authority finds that the applicant is entitled to payment of gratuity, a notice shall be issued to the employer concerned in Form ‘R’ specifying the amount payable and stating that the payment shall be made within 30 days from the date of the receipt of the notice. Thus receipt is built in to the provision. Rule 17 of the Payment of Gratuity (Central) Rules, 1972 is set out below: “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 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.” [Emphasis supplied]

10.2 A combined reading of these provisions shows that the controlling authority/Respondent herein is required to send notices at two stages. One notice to show cause at the stage when the claim application is received and thereafter, once the claim is adjudicated upon, another notice is to be sent for recovery if the employer fails to make payment of the gratuity due. Signature Not Verified Digitally Signed By:HONEY ARORA Signing Date:02.09.2025 19:02:29 W.P.(C) 14953/2022 Page 26 of 27

11. The Affidavit as filed does not set out whether the compliance in terms of proviso to Section 18 of the Act or the Rule 17 of the Payment of Gratuity (Central) Rules, 1972 has been carried out prior to issuing of the recovery certificate. No other details are forth coming in the hearing either.

12. In the absence of such material particulars renders insufficient to establish that due service of show cause notices was effected on the Petitioner as is the Short Affidavit thus cannot be relied upon in support of the contentions of the Respondent No.1.

13. Accordingly, in view of what is stated above, the Office Order and consequent Recovery Certificate are accordingly set aside. All consequential orders flowing therefrom are also set aside.

14. The Respondent No.1 is however at liberty to take appropriate steps in accordance with law to effect recoveries from the Petitioner, if due. The rights and contentions of both parties shall be left open in this behalf.

15. The Petition is allowed. All pending Applications stand closed.

16. The parties shall act based on the digitally signed copy of the order. AUGUST 11, 2025/ ha/pa TARA VITASTA GANJU, J Signature Not Verified Digitally Signed By:HONEY ARORA Signing Date:02.09.2025 19:02:29 W.P.(C) 14953/2022 Page 27 of 27

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