The Payment of Gratuity Act, 1972
# THE PAYMENT OF GRATUITY ACT, 1972
 ______________

 ARRANGEMENT OF SECTIONS
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SECTIONS

1. Short title, extent, application and commencement.
2. Definitions.
2A. Continuous service.
3. Controlling authority.
4. Payment of gratuity.
4A. Compulsory insurance.
5. Power to exempt.
6. Nomination.
7. Determination of the amount of gratuity.
7A. Inspectors.

7B. Powers of Inspectors.

8. Recovery of gratuity.
9. Penalties.
10. Exemption of employer from liability in certain cases.
11. Cognizance of offences.
12. Protection of action taken in good faith.
13. Protection of gratuity.
14. Act to override other enactments, etc.
15. Power to make rules.

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# THE PAYMENT OF GRATUITY ACT, 1972

 ACT NO. 39 OF 1972

[21st August, 1972.]

# An Act to provide for a scheme for the payment of gratuity to employees engaged in factories,
 mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Twenty-third Year of the Republic of India as follows:—

**1. Short title, extent, application and commencement.—(1) This Act may be called the Payment of**

Gratuity Act, 1972.

(2) It extends to the whole of India:

Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu

and Kashmir*.

(3) It shall apply to—

(a) every factory, mine, oilfield, plantation, port and railway company;

(b) every shop or establishment within the meaning of any law for the time being in force in

relation to shops and establishments in a State, in which ten or more persons are employed, or were
employed, on any day of the preceding twelve months;

(c) such other establishments or class of establishments, in which ten or more employees are

employed, or were employed, on any day of the preceding twelve months, as the Central Government
may, by notification, specify in this behalf.

1[(3A) A shop or establishment to which this Act has become applicable shall continue to be governed

by this Act notwithstanding that the number of persons employed therein at any time after it has become
so applicable falls below ten.]

(4) It shall come into force on such date[2] as the Central Government may, by notification, appoint.

**2. Definitions.—In this Act, unless the context otherwise requires,—**

(a) “appropriate Government” means,—

(i) in relation to an establishment—

(a) belonging to, or under the control of, the Central Government,

(b) having branches in more than one State,

(c) of a factory belonging to, or under the control of, the Central Government,

(d) of a major port, mine, oilfield or railway company, the Central Government,

(ii) in any other case, the State Government;

(b) “completed year of service” means continuous service for one year;

3[(c) “continuous service” means continuous service as defined in section 2A;]

(d) “controlling authority” means an authority appointed by the appropriate Government under

section 3;

1. Ins. by Act 26 of 1984, s. 2 (w.e.f. 18-5-1984).
2.16th September, 1972, vide notification No. S.O. 601(E), dated 16th September, 1972, see Gazette of India, Extraordinary, Part

II, sec. 3(ii).

3. Subs. by Act 26 of 1984, s. 3, for clause (c) and the Explanations (w.e.f. 18-5-1984).
*. Vide notification No. S.O. 3912(E), dated 30th October, 2019, this Act is made applicable to the Union territory of Jammu and

Kashmir and the Union territory of Ladakh.

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1[(e) “employee” means any person (other than an apprentice) who is employed for wages,

whether the terms of such employment are express or implied, in any kind of work, manual or
otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway
company, shop or other establishment to which this Act applies, but does not include any such person
who holds a post under the Central Government or a State Government and is governed by any other
Act or by any rules providing for payment of gratuity;]

(f) “employer” means, in relation to any establishment, factory, mine, oilfield, plantation, port,

railway company or shop—

(i) belonging to, or under the control of, the Central Government or a State Government, a

person or authority appointed by the appropriate Government for the supervision and control of
employees, or where no person or authority has been so appointed, the head of the Ministry or the
Department concerned,

(ii) belonging to, or under the control of, any local authority, the person appointed by such

authority for the supervision and control of employees or where no person has been so appointed,
the chief executive officer of the local authority,

(iii) in any other case, the person, who, or the authority which, has the ultimate control over

the affairs of the establishment, factory, mine, oilfield, plantation, port, railway company or shop,
and where the said affairs are entrusted to any other person, whether called a manager, managing
director or by any other name, such person;

(g) “factory” has the meaning assigned to it in clause (m) of section 2 of the Factories Act, 1948

(63 of 1948);

(h) “family”, in relation to an employee, shall be deemed to consist of—

(i) in the case of a male employee, himself, his wife, his children, whether married or

unmarried, his dependent parents [2][and the dependent parents of his wife and the widow] and
children of his predeceased son, if any,

(ii) in the case of a female employee, herself, her husband, her children, whether married or

unmarried, her dependent parents and the dependent parents of her husband and the widow and
children of her predeceased son, if any:

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_Explanation.—Where the personal law of an employee permits the adoption by him of a_

child, any child lawfully adopted by him shall be deemed to be included in his family, and where
a child of an employee has been adopted by another person and such adoption is, under the
personal law of the person making such adoption, lawful, such child shall be deemed to be
excluded from the family of the employee;

(i) “major port” has the meaning assigned to it in clause (8) of section 3 of the Indian Ports Act,

1908 (15 of 1908);

(j) “mine” has the meaning assigned to it in clause (j) of sub-section (1) of section 2 of the Mines

Act, 1952 (35 of 1952);

4[(k) “notification” means a notification published in the Official Gazette and the expression

“notified” shall be construed accordingly];

(l) “oilfield” has the meaning assigned to it in clause (e) of section 3 of the Oilfields (Regulation

and Development) Act, 1948 (53 of 1948);

1. Subs. by Act 47 of 2009, s. 2, for clause (e) (w.e.f. 3-4-1997).
2. Subs. by Act 22 of 1987, s. 2, for “and the widow” (w.e.f. 1-10-1987).
3. The proviso omitted by s. 2, ibid. (w.e.f. 1-10-1987).
4. Subs. by Act 12 of 2018, s. 2, for clause (k) (w.e.f. 29-3-2018).

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(m) “plantation” has the meaning assigned to it in clause (f) of section 2 of the PlantationsLabour

Act, 1951 (69 of 1951);

(n) “port” has the meaning assigned to it in clause (4) of section 3 of the Indian Ports Act, 1908

(15 of 1908);

(o) “prescribed” means prescribed by rules made under this Act;

(p) “railway company” has the meaning assigned to it in clause (5) of section 3 of the Indian

Railways Act, 1890 (9 of 1890);

(q) “retirement” means termination of the service of an employee otherwise than on

superannuation;

1[(r) “superannuation”, in relation to an employee, means the attainment by the employee of such

age as is fixed in the contract or conditions of service as the age on the attainment of which the
employee shall vacate the employment;]

(s) “wages” means all emoluments which are earned by an employee while on duty or on leave in

accordance with the terms and conditions of his employment and which are paid or are payable to him
in cash and includes dearness allowance but does not include any bonus, commission, house rent
allowance, overtime wages and any other allowance.

2[2A. Continuous service.—For the purposes of this Act,—

(1) an employee shall be said to be in continuous service for a period if he has, for that period,

been in uninterrupted service, including service which may be interrupted on account of sickness,
accident, leave, absence from duty without leave (not being absence in respect of which an order [3]***
treating the absence as break in service has been passed in accordance with the standing orders, rules
or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation
of work not due to any fault of the employee, whether such uninterrupted or interrupted service was
rendered before or after the commencement of this Act;

(2) where an employee (not being an employee employed in a seasonal establishment) is not in

continuous service within the meaning of clause (1), for any period of one year or six months, he shall
be deemed to be in continuous service under the employer—

(a) for the said period of one year, if the employee during the period of twelve calendar

months preceding the date with reference to which calculation is to be made, has actually worked
under the employer for not less than—

(i) one hundred and ninety days, in the case of an employee employed below the ground

in a mine or in an establishment which works for less than six days in a week; and

(ii) two hundred and forty days, in any other case;

(b) for the said period of six months, if the employee during the period of six calendar

months preceding the date with reference to which the calculation is to be made, has actually
worked under the employer for not less than—

(i) ninety-five days, in the case of an employee employed below the ground in a mine or

in an establishment which works for less than six days in a week; and

(ii) one hundred and twenty days, in any other case.

1. Subs. by Act 25 of 1984, s. 2, for clause (r) (w.e.f. 1-7-1984).
2. Ins. by Act 26 of 1984, s. 4 (w.e.f. 18-5-1984).
3. The words “imposing a punishment or penalty or” omitted by Act 22 of 1987, s. 3 (w.e.f. 1-10-1987).

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1[Explanation.—For the purposes of clause (2), the number of days on which an employee

has actually worked under an employer shall include the days on which—

(i) he has been laid-off under an agreement or as permitted by standing orders made

under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the
Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the
establishment;

(ii) he has been on leave with full wages, earned in the previous year;

(iii) he has been absent due to temporary disablement caused by accident arising out of

and in the course of his employment; and

(iv) in the case of a female, she has been on maternity leave; so, however, that the total

period of such maternity leave does not exceed [2][such period as may be notified by the
Central Government from time to time];]

(3) where an employee, employed in a seasonal establishment, is not in continuous service within

the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in
continuous service under the employer for such period if he has actually worked for not less than
seventy-five per cent. of the number of days on which the establishment was in operation during such
period.]

**3. Controlling authority.—The appropriate Government may, by notification, appoint any officer to**

be a controlling authority, who shall be responsible for the administration of this Act and different
controlling authorities may be appointed for different areas.

**4. Payment of gratuity.—(1) Gratuity shall be payable to an employee on the termination of his**

employment after he has rendered continuous service for not less than five years,—

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease:

Provided that the completion of continuous service of five years shall not be necessary where the

termination of the employment of any employee is due to death or disablement:

3[Provided further that in the case of death of the employee, gratuity payable to him shall be paid to

his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a
minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same
for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such
minor attains majority.]

_Explanation.—For the purposes of this section, disablement means such disablement as incapacitates_

an employee for the work which he was capable of performing before the accident or disease resulting in
such disablement.

(2) For every completed year of service or part thereof in excess of six months, the employer shall

pay gratuity to an employee at the rate of fifteen days’ wages based on the rate of wages last drawn by the
employee concerned:

Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of

the total wages received by him for a period of three months immediately preceding the termination of his
employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:

1. Explanation inserted by Act 22 of 1987, s. 3 (w.e.f. 1-10-1987).
2. Subs. by Act 12 of 2018, s. 3, for “twelve weeks” (w.e.f. 29-3-2018).
3. Subs. by Act 22 of 1987, s. 4, for the second proviso (w.e.f. 1-10-1987).

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Provided further that in the case of [1][an employee who is employed in a seasonal establishment and

who is not so employed throughout the year], the employer shall pay the gratuity at the rate of seven days’
wages for each season.

2[Explanation.—In the case of a monthly rated employee, the fifteen days’ wages shall be calculated

by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by
fifteen.]

(3) The amount of gratuity payable to an employee shall not exceed [3][ [4][such amount as may be

notified by the Central Government from time to time] ].

(4) For the purpose of computing the gratuity payable to an employee who is employed, after his

disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be
the wages received by him during that period, and his wages for the period subsequent to his disablement
shall be taken to be the wages as so reduced.

(5) Nothing in this section shall affect the right of an employee receive better terms of gratuity under

any award or agreement or contract with the employer.

(6) Notwithstanding anything contained in sub-section (1),—

(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission

or negligence causing any damage or loss to, or destruction of, property belonging to the employer,
shall be forfeited to the extent of the damage or loss so caused;

(b) the gratuity payable to an employee [5][may be wholly or partially forfeited]—

(i) if the services of such employee have been terminated for his riotous or disorderly conduct

or any other act violence on his part, or

(ii) if the services of such employee have been terminated for any act which constitutes an

offence involving moral turpitude, provided that such offence is committed by him in the course of
his employment.

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7[4A. Compulsory insurance.—(1) With effect from such date as may be notified by the appropriate

Government in this behalf, every employer, other than an employer or an establishment belonging to, or
under the control of, the Central Government or a State Government, shall, subject to the provisions of
sub-section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the
gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance
Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:

Provided that different dates may be appointed for different establishments or class of establishments

or for different areas.

(2) The appropriate Government may, subject to such conditions as may be prescribed, exempt every

employer who had already established an approved gratuity fund in respect of his employees and who
desires to continue such arrangement, and every employer employing five hundred or more persons who
establishes an approved gratuity fund in the manner prescribed from the provisions of sub-section (1).

(3) For the purpose of effectively implementing the provisions of this section, every employer shall

within such time as may be prescribed get his establishment registered with the controlling authority in
the prescribed manner and no employer shall be registered under the provisions of this section unless he

1. Subs. by Act 25 of 1984, s. 3, for “an employee employed in a seasonal establishment” (w.e.f. 1-7-1984).
2. Explanation inserted by Act 22 of 1987, s. 4 (w.e.f. 1-10-1987).
3. Subs. by Act 15 of 2010, s. 2, for “three lakhs and fifty thousand rupees” (w.e.f. 24-5-2010).
4. Subs. by Act 12 of 2018, s. 4, for “ten lakh rupees” (w.e.f. 29-3-2018).
5. Subs. by Act 25 of 1984, s. 3, for “shall be wholly forfeited” (w.e.f. 1-7-1984).
6. Sub-section (7) omitted by Act 34 of 1994, s. 3 (w.e.f. 24-5-1994).
7. Ins. by Act 22 of 1987, s. 5.

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has taken an insurance referred to in sub-section (1) or has established an approved gratuity fund referred
to in sub-section (2).

(4) The appropriate Government may, by notification, make rules to give effect to the provisions of

this section and such rules may provide for the composition of the Board of Trustees of the approved
gratuity fund and for the recovery by the controlling authority of the amount of the gratuity payable to an
employee from the Life Insurance Corporation of India or any other insurer with whom an insurance has
been taken under sub-section (1), or as the case may be, the Board of Trustees of the approved gratuity
fund.

(5) Where an employer fails to make any payment by way of premium to the insurance referred to in

sub-section (1) or by way of contribution to an approved gratuity fund referred to in sub-section (2), he
shall be liable to pay the amount of gratuity due under this Act (including interest, if any, for delayed
payments) forthwith to the controlling authority.

(6) Whoever contravenes the provisions of sub-section (5) shall be punishable with fine which may

extend to ten thousand rupees and in the case of a continuing offence with a further fine which may
extend to one thousand rupees for each day during which the offence continues.

_Explanation.—In this section “approved gratuity fund” shall have the same meaning as in clause (5)_

of section 2 of the Income-tax Act, 1961 (43 of 1961).]

**5. Power to exempt.—[1][(1)] The appropriate Government may, by notification, and subject to such**

conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield,
plantation, port, railway company or shop to which this Act applies from the operation of the provisions
of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory,
mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits
not less favourable than the benefits conferred under this Act.

2[(2) The appropriate Government may, by notification and subject to such conditions as may be

specified in the notification, exempt any employee or class of employees employed in any establishment,
factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the
operation of the provisions of this Act, if, in the opinion of the appropriate Government, such employee or
class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits
conferred under this Act.]

3[(3) A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively a

date not earlier than the date of commencement of this Act, but no such notification shall be issued so as
to prejudicially affect the interests of any person.]

**6. Nomination.—(1) Each employee, who has completed one year of service, shall make, within such**

time, in such form and in such manner, as may be prescribed, nomination for the purpose of the second
proviso to sub-section (1) of section 4.

(2) An employee may, in his nomination, distribute the amount of gratuity payable to him under this

Act amongst more than one nominee.

(3) If an employee has a family at the time of making a nomination, the nomination shall be made in

favour of one or more members of his family, and any nomination made by such employee in favour of a
person who is not a member of his family shall be void.

(4) If at the time of making a nomination the employee has no family, the nomination may be made in

favour of any person or persons but if the employee subsequently acquires a family, such nomination
shall forthwith become invalid and the employee shall make, within such time as may be prescribed, a
fresh nomination in favour of one or more members of his family.

1. Section 5 renumbered as sub-section (1) thereof by Act 26 of 1984, s. 5 (w.e.f. 18-5-1984).
2. Ins. by s. 5, ibid. (w.e.f. 18-5-1984).
3. Ins. by Act 22 of 1987, s. 6 (w.e.f. 1-10-1987).

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(5) A nomination may, subject to the provisions of sub-sections (3) and (4), be modified by an

employee at any time, after giving to his employer a written notice in such form and in such manner as
may be prescribed, of his intention to do so.

(6) If a nominee predeceases the employee, the interest of the nominee shall revert to the employee

who shall make a fresh nomination, in the prescribed form, in respect of such interest.

(7) Every nomination, fresh nomination or alteration of nomination, as the case may be, shall be sent

by the employee to his employer, who shall keep the same in his safe custody.

**7. Determination of the amount of gratuity.—(1) A person who is eligible for payment of gratuity**

under this Act or any person authorised, in writing, to act on his behalf shall send a written application to
the employer, within such time and in such form, as may be prescribed, for payment of such gratuity.

(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in

sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the
person to whom the gratuity is payable and also to the controlling authority specifying the amount of
gratuity so determined.

1[(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it

becomes payable to the person to whom the gratuity is payable.

(3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the

period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes
payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the
Central Government from time to time for repayment of long-term deposits, as that Government may, by
notification specify:

Provided that no such interest shall be payable if the delay in the payment is due to the fault of the

employee and the employer has obtained permission in writing from the controlling authority for the
delayed payment on this ground.]

(4)(a) If there is any dispute as to the amount of gratuity payable to an employee under this Act or as

to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the
person entitled to receive the gratuity, the employer shall deposit with the controlling authority such
amount as he admits to be payable by him as gratuity.

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3[(b) Where there is a dispute with regard to any matter or matters specified in clause (a), the

employer or employee or any other person raising the dispute may make an application to the controlling
authority for deciding the dispute.]

4[(c) The controlling authority shall, after due inquiry and after giving the parties to the dispute a

reasonable opportunity of being heard, determine the matter or matters in dispute and if, as a result of
such inquiry any amount is found to be payable to the employee, the controlling authority shall direct the
employer to pay such amount or, as the case may be, such amount as reduced by the amount already
deposited by the employer.]

5[(d)] The controlling authority shall pay the amount deposited, including the excess amount, if any,

deposited by the employer, to the person entitled thereto.

6[(e)] As soon as may be after a deposit is made under clause (a), the controlling authority shall pay

the amount of the deposit—

(i) to the applicant where he is the employee; or

1. Subs. by Act 22 of 1987, s. 7, for sub-section (3) (w.e.f. 1-10-1987).
2. The Explanation omitted by Act 25 of 1984, s. 4 (w.e.f. 1-7-1984).
3. Ins. by s. 4, ibid. (w.e.f. 1-7-1984).
4. Subs. by s. 4, ibid., for clause (c) (w.e.f. 1-7-1984).
5. Clause (c) re-lettered as clause (d) thereof by s. 4, ibid. (w.e.f. 1-7-1984).
6. Clause (d) re-lettered as clause (e) thereof by s. 4, ibid. (w.e.f. 1-7-1984).

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(ii) where the applicant is not the employee, to the [1][nominee or, as the case may be, the guardian

of such nominee or] heir of the employee if the controlling authority is satisfied that there is no
dispute as to the right of the applicant to receive the amount of gratuity.

(5) For the purpose of conducting an inquiry under sub-section (4), the controlling authority shall

have the same powers as are vested in a court, while trying a suit, under the Code of Civil Procedure,
1908 (5 of 1908), in respect of the following matters, namely:—

(a) enforcing the attendance of any person or examining him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits;

(d) issuing commissions for the examination of witnesses.

(6) Any inquiry under this section shall be a judicial proceeding within the meaning of sections 193

and 228, and for the purpose of section 196, of the Indian Penal Code (45 of 1860).

(7) Any person aggrieved by an order under sub-section (4) may, within sixty days from the date of

the receipt of the order, prefer an appeal to the appropriate Government or such other authority as may be
specified by the appropriate Government in this behalf:

Provided that the appropriate Government or the appellate authority, as the case may be, may, if it is

satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said
period of sixty days, extend the said period by a further period of sixty days:

2[Provided further that no appeal by an employer shall be admitted unless at the time of preferring the

appeal, the appellant either produces a certificate of the controlling authority to the effect that the
appellant has deposited with him an amount equal to the amount of gratuity required to be deposited
under sub-section (4), or deposits with the appellate authority such amount.]

(8) The appropriate Government or the appellate authority, as the case may be, may, after giving the

parties to the appeal a reasonable opportunity of being heard, confirm, modify or reverse the decision of
the controlling authority.

3[7A. Inspectors.—(1) The appropriate Government may, by notification, appoint as many

Inspectors, as it deems fit, for the purposes of this Act.

(2) The appropriate Government may, by general or special order, define the area to which the

authority of an Inspector so appointed shall extend and where two or more Inspectors are appointed for
the same area, also provide by such order, for the distribution or allocation of work to be performed by
them under this Act.

(3) Every Inspector shall be deemed to be a public servant within the meaning of section 21 of the

Indian Penal Code (45 of 1860).

**7B. Powers of Inspectors.—(1) Subject to any rules made by the appropriate Government in this**

behalf, an Inspector may, for the purpose of ascertaining whether any of the provisions of this Act or the
conditions, if any, of any exemption granted thereunder, have been complied with, exercise all or any of
the following powers, namely:—

(a) require an employer to furnish such information as he may consider necessary;

(b) enter and inspect, at all reasonable hours, with such assistants (if any), being persons in the

service of the Government or local or any public authority, as he thinks fit, any premises of or place
in any factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which
this Act, applies, for the purpose of examining any register, record or notice or other document
required to be kept or exhibited under this Act or the rules made thereunder, or otherwise kept or

1. Subs. by Act 25 of 1984, s. 4, for “nominee” (w.e.f. 1-7-1984).
2. The proviso ins. by s. 4, ibid. (w.e.f. 1-7-1984).
3. Ins. by s. 5, ibid. (w.e.f. 1-7-1984).

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exhibited in relation to the employment of any person or the payment of gratuity to the employees,
and require the production thereof for inspection;

(c) examine with respect to any matter relevant to any of the purposes aforesaid, the employer or

any person whom he finds in such premises or place and who, he has reasonable cause to believe, is
an employee employed therein;

(d) make copies of, or take extracts from, any register, record, notice or other document, as he

may consider relevant, and where he has reason to believe that any offence under this Act has been
committed by an employer, search and seize with such assistance as he may think fit, such register,
record, notice or other document as he may consider relevant in respect of that offence;

(e) exercise such other powers as may be prescribed.

(2) Any person required to produce any register, record, notice or other document or to give any

information by an Inspector under sub-section (1) shall be deemed to be legally bound to do so within the
meaning of sections 175 and 176 of the Indian Penal Code (45 of 1860).

(3) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall so far as may be, apply

to any search or seizure under this section as they apply to any search or seizure made under the authority
of a warrant issued under section 94 of that Code.]

**8. Recovery of gratuity.—If the amount of gratuity payable under this Act is not paid by the**

employer, 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 [1][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:

2[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:

Provided further that the amount of interest payable under this section shall, in no case exceed the

amount of gratuity payable under this Act.]

**9. Penalties.—(1) Whoever, for the purpose of avoiding any payment to be made by himself under**

this Act or of enabling any other person to avoid such payment, knowingly makes or causes to be made
any false statement or false representation shall be punishable with imprisonment for a term which may
extend to six months, or with fine which may extend to [3][ten thousand rupees], or with both.

(2) An employer who contravenes, or makes default in complying with, any of the provisions of this

Act or any rule or order made thereunder shall be punishable with imprisonment for a term [4][which shall
not be less than three months but which may extend to one year, or with fine which shall not be less than
ten thousand rupees but which may extend to twenty thousand rupees, or with both]:

Provided that where the offence relates to non-payment of any gratuity payable under this Act, the

employer shall be punishable with imprisonment for a term which shall not be less than [5][six months but
which may extend to two years] unless the court trying the offence, for reasons to be recorded by it in
writing, is of opinion that a lesser term of imprisonment or the imposition of a fine would meet the ends
of justice.

**10. Exemption of employer from liability in certain cases.—Where an employer is charged with an**

offence punishable under this Act, he shall be entitled, upon complaint duly made by him and on giving
to the complainant not less than three clear days' notice in writing of his intention to do so, to have any
other person whom he charges as the actual offender brought before the court at the time appointed for

1. Subs. by Act 22 of 1987, s. 8, for “at the rate of nine per cent. per annum” (w.e.f. 1-10-1987).
2. The provisos inserted by s. 8, ibid. (w.e.f. 1-10-1987).
3. Subs. by s. 9, ibid., for “one thousand rupees” (w.e.f. 1-10-1987).
4. Subs. by s. 9, ibid., for certain words (w.e.f. 1-10-1987).
5. Subs. by s. 9, ibid., for “three months” (w.e.f. 1-10-1987).

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hearing the charge; and if, after the commission of the offence has been proved, the employer proves to
the satisfaction of the court—

(a) that he has used due diligence to enforce the execution of this Act, and

(b) that the said other person committed the offence in question without his knowledge, consent

or connivance,

that other person shall be convicted of the offence and shall be liable to the like punishment as if he were
the employer and the employer shall be discharged from any liability under this Act in respect of such
offence:

Provided that in seeking to prove as aforesaid, the employer may be examined on oath and his

evidence and that of any witness whom he calls in his support shall be subject to cross-examination on
behalf of the person he charges as the actual offender and by the prosecutor:

Provided further that, if the person charged as the actual offender by the employer cannot be brought

before the court at the time appointed for hearing the charge, the court shall adjourn the hearing from time
to time for a period not exceeding three months and if by the end of the said period the person charged as
the actual offender cannot still be brought before the court, the court shall proceed to hear the charge
against the employer and shall, if the offence be proved, convict the employer.

**11. Cognizance of offences.—(1) No court shall take cognizance of any offence punishable under**

this Act save on a complaint made by or under the authority of the appropriate Government:

Provided that where the amount of gratuity has not been paid, or recovered, within six months from

the expiry of the prescribed time, the appropriate Government shall authorise the controlling authority to
make a complaint against the employer, whereupon the controlling authority shall, within fifteen days
from the date of such authorisation, make such complaint to a magistrate having jurisdiction to try the
offence.

(2) No court inferior to that of a [1][Metropolitain magistrate or a Judicial Magistrate of the first class]

shall try any offence punishable under this Act.

**12. Protection of action taken in good faith.—No suit or other legal proceeding shall lie against the**

controlling authority or any other person in respect of anything which is in good faith done or intended to
be done under this Act or any rule or order made thereunder.

**13. Protection of gratuity.—No gratuity payable under this Act** [2][and no gratuity payable to an

employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or
shop exempted under section 5] shall be liable to attachment in execution of any decree or order of any
civil, revenue or criminal court.

**14. Act to override other enactments, etc.—The provisions of this Act or any rule made thereunder**

shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than
this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.

**15. Power to make rules.—(1) The appropriate Government may, by notification, make rules for the**

purpose of carrying out the provisions of this Act.

(2) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it

is made, before each House of Parliament while it is in session, for a total period of thirty days which may
be comprised in one session or in two or more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid, both Houses agree in making any
modification in the rule or both Houses agree that the rule should not be made, the rule shall, thereafter,
have effect only in such modified form or be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity of anything previously done under
that rule.

1. Subs. by Act 34 of 1994, s. 4, for “Presidency Magistrate or a Magistrate of the first class” (w.e.f. 24-5-1994).
2. Ins. by Act 25 of 1984, s. 6 (w.e.f. 1-7-1984).

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