Failure to Produce Employment Records Results in Adverse Inference: Calcutta High Court Upholds Gratuity Payment for 37-Year Badli Worker
Isabella Mariam
In a recent judgement, the Calcutta High Court, sitting in its Constitutional Writ Jurisdiction on the Appellate Side, dismissed a writ application challenging the payment of gratuity to a worker who served as a badli employee for 37 years. The Single Bench, of Justice Shampa Dutt (Paul), upheld the decisions of the Controlling Authority and the Appellate Authority, confirming the worker’s entitlement to gratuity under the Payment of Gratuity Act, 1972.
The petitioner, Hooghly Infrastructure Pvt. Ltd., filed the writ application seeking to set aside the orders dated November 21, 2023, and September 18, 2024, passed by the Controlling Authority and the Appellate Authority, respectively. The case revolved around a claim made by the respondent, a former badli worker, who sought gratuity following his superannuation on July 1, 2015.
The petitioner contended that the respondent, engaged as a badli worker since May 24, 1978, had never completed five years of continuous service as required under the Act. They argued that the respondent worked only as a substitute for absent permanent employees, which, according to them, disqualified him from gratuity benefits. The petitioner maintained that a badli worker is engaged temporarily and, therefore, cannot be considered a continuous employee under the Act.
The respondent countered by asserting that he had worked continuously for 37 years and provided documentary evidence to support his claim. The documents submitted included an Employees’ State Insurance (ESI) card and a wage slip from June 30, 2015. The respondent argued that despite being designated as a badli worker, his employment was uninterrupted and met the conditions required for gratuity eligibility under the Payment of Gratuity Act, 1972.
Upon receiving the gratuity claim, the Controlling Authority examined the matter and cited in favor of the respondent. The order directed the petitioner to pay Rs. 2,15,520 as gratuity and Rs. 1,79,600 as interest, totalling Rs. 3,93,120. Dissatisfied with the decision, the petitioner challenged the judgement before the Appellate Authority, which upheld the decision of the Controlling Authority.
The High Court examined the case in detail, analysing the submissions from both parties. It noted that the employer had failed to produce any records that could substantiate its claim that the respondent had not completed the required period of continuous service. Justice Shampa Dutt (Paul) recorded:
“The petitioner company did not produce any documents despite the fact that it is the duty of the employer to maintain all documents relating to its employee and other matters, to be maintained and preserved as per law.”
The court observed that under Section 25D of the Industrial Disputes Act, an employer is required to maintain muster rolls of workmen, ensuring accurate records of employment. Since the employer failed to provide such records, the court drew an adverse inference against the petitioner, in line with established legal principles.
Referring to relevant case laws, the court cited Sriram Industrial Enterprises Ltd. Vs Mahak Singh & Others (AIR 2007 SC 1370; 2007(4) SCC 94) and Ranbir Singh vs S.K. Roy, Chairman, Life Insurance (Misc. Application No. 1150 of 2019, decided on April 27, 2022), which held that where an employer fails to provide proper employment records, an adverse inference must be drawn. The court noted:
“The employer’s failure to maintain the employment records or produce relevant evidence as per statutory requirements raises a strong presumption in favor of the employee.”
The court also took note of the fact that the respondent had been a member of the Employees’ Provident Fund (EPF) scheme since 1981, further affirming the continuous nature of his employment. The judgment further stated:
“The employee has now superannuated after 37 years and if such conduct of the employer is ignored, there shall be clear abuse of the process of law.”
The court stated that gratuity is a statutory right under beneficial legislation and that an employee who has served in a regular capacity over such an extended period cannot be denied retirement benefits. The petitioner’s claim that the respondent was not entitled to gratuity due to his designation as a badli worker was rejected by the court, as the actual nature of his employment suggested otherwise.
The High Court upheld the orders of the Controlling Authority and the Appellate Authority, judgement that the petitioner must comply with the payment directives. The court stated:
“Thus, the order under challenge being in accordance with law requires no interference by this Court.”
The court ordered that the gratuity amount, including interest, be paid to the respondent within the prescribed period. Any failure to comply with the order would attract further legal consequences under the Payment of Gratuity Act, 1972.
Advocates Representing the Parties
For the Petitioner: Mr. S. K. Singh, Mr. R. K. Dubey.
For the State: Mr. Srinath Singha Roy.
For the Respondent No. 1: Mr. Uddipan Banerjee, Mr. Subhra Kanti Samanta.
For the Senior Government Advocate: Mr. Soumitra Bandyopadhyay.
Case Title: Hooghly Infrastructure Pvt. Ltd. Vs. Sk. Alam Ismail & Ors.
Case Number: WPA 28770 of 2024
Bench: Justice Shampa Dutt (Paul)
[Read/Download order]
