M/S Duckback Information System Pvt. Ltd. Vs Union of India and Ors.

The appeal is directed against a judgement and/or order dated 3^rd April, 2025 passed by a Single Bench of this Court. By the said order, the Single Bench has upheld the order of the appellate authority under the Payment of Gratuity Act dated 8^th July, 2024.

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Learned senior counsel for the appellant, Mr. Bhattacharya has placed the facts of the case. It appears that the respondent/employee was engaged by the appellant since 1995 and was last holding the post of business head equivalent of Chief Operating Officer. The respondent/employee unceremoniously resigned from the employment of the company by tendering a letter of resignation. The said letter was, however, not received by the appellant/company. It was received by

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an officer subordinate to the respondent/employee. It is difficult for the Court to believe that the subordinate officer, who later also left the employment of the appellant/company, did not communicate the same to the Directors of the appellant/company.

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Be that as it may, the respondent/employee stopped attending work from May 2013. The appellant/ company took no steps against the respondent until 2018 when an alleged internal enquiry was conducted. Several lapses of omission and commission were detected against the respondent/employee and a letter of termination was issued.

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The respondent/employee much prior thereto in 2014 approached the appellant/company for release of his gratuity. The appellant/company did not respond to the same. The respondent/employee approached the controlling authority under the Payment of Gratuity Act, which the appellant/company duly contested.

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The controlling authority in a cryptic and unreasoned order dated 3^rd March, 2020 directed gratuity to be released to the respondent/employee. In the meantime, several proceedings ensued at the instance of the appellant/company before this Court for preferring appeal against the order of the controlling authority without mandatory pre-deposit.

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Under a scheme of the appellant/company the Life Insurance Corporation of India was holding the gratuity fund payable to the employees of the appellant/company. The Life Insurance Corporation of India has refused to comply with order of the controlling authority. But subsequently, in course of proceedings before this Court, particularly that of a coordinate Bench, Life Insurance Corporation of India deposited the gratuity amount payable to the respondent/ employee with the controlling authority. The appellant’s appeal was admitted and heard in the presence of the respondents. The appellant authority by a reasoned order dated 8^th July, 2024 directed payment of gratuity to the respondent/employee.

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Learned senior counsel for the appellant would contend before this Court that while the respondent/employee was engaged in the employment of the appellant/company, he floated a parallel company and conducted the same business causing severe losses to the appellant/company.

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It is also submitted that due to the acts and omissions of the respondent/employee the name of the appellant/company came to be struck off from records of the ROC, Kolkata and subsequently restored. Civil and criminal proceedings have been initiated by the appellant/company against the respondent/employee.

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It is lastly argued by Mr. Bhattacharya, learned senior counsel for the appellant/company that since there was an order of termination issued by the appellant in the year 2018, the same was based on misconduct of the respondent/employee, he is not entitled to be paid any gratuity. He submits that both the controlling and the appellant authority have failed to notice the same.

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This Court has carefully heard the arguments advanced by learned counsel for the appellant and the respondents. Indeed it is true that there have been some proceedings initiated by the appellant/company against the respondent/employee, whose services were terminated for misconduct. Such proceedings are, however, belated. It does not appear that the appellant/company took any steps against the respondent/employee for any unauthorized absence.

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The respondent/employee applied for gratuity in the year 2014. At the relevant point of time, there were no proceedings pending against the respondent/ employee initiated by the appellant/company.

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A belated proceedings five years after the respondent/employee’s resignation and the appellant/company accepting the same by conduct, in not initiating any proceedings against him, had ended the master servant relationship within a reasonable

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time after a letter of resignation was accepted by conduct or after the respondent/employee failed to turn up for employment.

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In the backdrop of the above, the order of the controlling and appellate authority did not call for any interference as rightly found by the Single Bench. While it is true that the Single Bench ought to have given more reasons and discussed the facts of the case in some detail, the ultimate result of the writ petition before the Single Bench is justified in fact and law.

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It is, however, made clear that the payment of gratuity to the respondent/employee at the instance of the appellant/company shall not have any bearing or effect on the civil and criminal proceedings initiated by the appellant/company against the respondent/ employee. The same shall precede in accordance with law and shall not be influenced or affected by any letter of resignation or receipt of gratuity or any other service benefits by the respondent/employee from the appellant/company.

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The issue whether the resignation of the respondent/employee was at all received by the appellant/company is kept open being adjudicated in the other civil and criminal proceedings initiated by the appellant/company.

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With the aforesaid observations, MAT 533 of 2025 is disposed of. Consequently, CAN 1 of 2025 is also disposed of.

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There shall be no order as to costs.

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All parties shall act on the server copy of this order duly downloaded from the official website of this Court.

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(Rajasekhar Mantha, J.)

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(Rai Chattopadhyay, J.)

M/S Duckback Information System Pvt. Ltd. v. Union of India and Ors.

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M/S Duckback Information System Pvt. Ltd. v. Union of India and Ors.

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