Bombay HC Orders Breach Candy Trust To Pay ₹11.67 Lakh Gratuity

The Bombay High Court has directed the Breach Candy Swimming Bath Trust to pay ₹11.67 lakh in gratuity to its former manager, Rajesh Somnath Nerkar, who served the club for 23 years.

The court's decision came on September 1, when Justice Sandeep Marne dismissed the Trust's plea challenging an order by the Controlling Authority under the Payment of Gratuity Act. The Authority had directed the Trust to pay Nerkar ₹11,67,785 along with 10% interest.

Nerkar joined the Trust in November 2000 and was later appointed manager. His services were terminated on July 2, 2023, following allegations that he had shredded original membership records during a digitisation exercise. The Trust claimed that Nerkar's actions had caused losses of ₹5 crore and argued that his gratuity could be forfeited.

However, the court noted that the City Civil Court had held Nerkar's termination to be illegal, though appeals against that decision are pending. The court also observed that the Trust had failed to avail of several opportunities available under the law and could not later bypass the statutory remedy by directly approaching the High Court.

The court rejected the Trust's contention that it had not been properly served with notices in the gratuity proceedings. Justice Marne held that the notices had been duly served through the Trust's Administrative Manager. The court also noted that the Trust had failed to challenge the gratuity order within the statutory period.

The legislative intent, the court observed, is not to permit the errant employer to keep the employee under long litigation. The judge said the Trust had consciously not availed multiple opportunities available to it and could not subsequently file a direct petition before the High Court.

On the merits of the case, the court found no valid reason to deny gratuity. It noted that the Trust had not issued the mandatory notice required for forfeiture of gratuity. The court said that merely because there are disputes between the two managing committees, it does not mean that Nerkar should be denied gratuity for the 23 long years of service rendered by him.

The petition was dismissed, with the court directing the Trust to pay the dues and costs within six weeks. The court also imposed costs of ₹1 lakh on the Trust.

The decision highlights the importance of employers fulfilling their obligations towards employees, particularly with regards to gratuity payments. It also underscores the need for employers to follow the proper procedures and avail of the opportunities available under the law.

The case has significant implications for employers and employees in Mumbai, particularly in the context of gratuity payments and termination of services. The court's decision is a reminder that employers cannot keep employees waiting endlessly for gratuity and must fulfill their obligations in a timely manner.

In conclusion, the Bombay High Court's decision in this case is a significant one, emphasizing the importance of employers fulfilling their obligations towards employees. The decision is likely to have far-reaching implications for employers and employees in Mumbai and beyond.