Bombay High Court in Anil Govind Ganu vs. Innovative Technomics Pvt. Ltd. and Ors. (W.P No. 160/2024) rejected the gratuity claims of directors based on a balance sheet entry for gratuity payments. The Court noted that the directors were not included in the list of employees covered by a gratuity insurance policy under Section 4A of the Payment of Gratuity Act, 1972 (“Gratuity Act“). It observed that, even if a specific agreement under Section 4(5) of the Gratuity Act was provided, it would have been necessary to substantiate the claim. The Court determined that a balance sheet entry made shortly before the sale of the directors’ stake in the company did not constitute a valid agreement under the Gratuity Act.
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