Karnataka High Court Clarifies Five-Year Service Requirement for Gratuity
The Karnataka High Court, in Bengaluru Metro Rail Corporation Ltd. v. Nandeesh H.V., held that an employee who resigned after completing only 4 years, 9 months and 12 days was not entitled to gratuity under Section 4 of the Payment of Gratuity Act, 1972. Since the employee had not completed the mandatory five years of continuous service and no statutory exception applied, the Court quashed the gratuity orders passed by the Controlling and Appellate Authoritie
Completion of five years of continuous service remains an important condition for gratuity entitlement where employment ends by resignation. However, the five-year requirement is subject to statutory exceptions, including cases involving death or disablement of the employee. Employers should therefore examine the reason for cessation of employment and the applicable statutory provisions before deciding a gratuity claim.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF JUNE, 2026 BEFORE THE HON’BLE MS. JUSTICE JYOTI M WRIT PETITION NO. 35414 OF 2025 (L-PG) BETWEEN: M/s. Bengaluru Metro Rail Corporation Limited BMTC Complex, K.H. Road, Bengaluru – 560027. Represented by Mr. Robin Vanaraj J., Deputy General Manager (HR). …Petitioner (By Sri. S. Santhosh Narayan, Advocate) AND: Sri. Nandeesh H.V. S/o Sri. H.V. Veerappaji, Aged about 34 years, No. 456/5, 6th Main, 3rd Cross, Kengeri Satellite Town, Bengaluru – 560060. The Labour Officer and Controlling Authority Under the Payment of Gratuity Act, Sub-Division-07, Karmika Bhavan, Bannerghatta Road, Bengaluru – 560029. The Assistant Labour Commissioner and Appellate Authority Under the Payment of Gratuity Act, 1972, Division-03, Karmika Bhavan, Bannerghatta Road, Bengaluru – 560029. …Respondents (By Sri. Naveen Kumar, Advocate for Sri. S.B. Mukkannappa, Advocate for Respondent No. 1; Sri. K.P. Yoganna, AGA for Respondents Nos. 2 and 3) ORDER This writ petition is filed under Articles 226 and 227 of the Constitution of India, seeking the following reliefs: i. To set aside the order dated 22.10.2024 passed by Respondent No. 2 in Case No. LOB-07/PGA/CR-128/2022-23. ii. To set aside the order dated 22.09.2025 passed by Respondent No. 3 in Appeal Case No. Assistant Labour Commissioner, Bengaluru Division-3, PGA/Appeal CR No. 108/2024-25. iii. To call for the records in Case No. LOB-07/PGA/CR-128/2022-23 from the offices of Respondent Nos. 2 and 3. iv. To pass such other appropriate order as this Hon’ble Court may deem fit in the facts and circumstances of the case and in the interest of justice and equity. Sri S. Santhosh Narayan, learned counsel for the petitioner; Sri Naveen Kumar, learned counsel appearing on behalf of Sri S.B. Mukkannappa for Respondent No. 1; and the learned Additional Government Advocate for Respondent Nos. 2 and 3 have appeared in person. The first respondent was appointed by the petitioner on 09.06.2017. He tendered his resignation after rendering 4 years, 9 months and 12 days of service on 19.03.2022. The first respondent thereafter made an application before the Controlling Authority seeking payment of gratuity. The Controlling Authority, by order dated 22.10.2024, determined the gratuity payable and directed the petitioner to make payment. Aggrieved by the said order, the petitioner preferred an appeal before the Appellate Authority. The Appellate Authority, by order dated 22.09.2025, dismissed the appeal. Hence, the petitioner has approached this Court. Learned counsel for the respective parties advanced several contentions. I have heard the arguments and carefully perused the papers on record. The facts are sufficiently stated and do not require reiteration. The issue falls within a narrow compass and relates to the payment of gratuity to the first respondent. It is undisputed that the first respondent rendered service for a period of 4 years, 9 months and 12 days and had not completed five years of service as contemplated under Section 4 of the Payment of Gratuity Act, 1972. Suffice it to note that Section 4 of the Payment of Gratuity Act, 1972 provides for payment of gratuity on termination of employment for the reasons stated therein, subject to fulfilment of the prescribed period of service. It is needless to say that Section 4 of the Act provides that gratuity shall be payable to an employee on termination of his employment after he has rendered continuous service for not less than five years. The Gratuity Authorities failed to take into consideration the relevant statutory requirement and disregarded relevant matters. For the reasons stated above, the orders passed by the Gratuity Authorities are liable to be set aside. Accordingly, the said orders are set aside. The writ of certiorari is ordered. The order dated 22.10.2024 passed by the Controlling Authority vide Annexure-D and the order dated 22.09.2025 passed by the Appellate Authority vide Annexure-E are hereby quashed. Consequently, the writ petition is allowed. In view of the disposal of the writ petition, any amount deposited, if any, is directed to be released or refunded in favour of the petitioner.