Employer Withholding Best Evidence, Grounds To Draw Adverse Inference In Favor Of Employee: Calcutta HC

Background

Alam Ismail was engaged as a badli worker by Hooghly Infrastructure in 1978. His provident fund membership commenced in 1981, and he continued in service until 2015. Upon retirement, he applied for gratuity before the Controlling Authority. However, the employer contested the claim and submitted that Ismail had not completed 240 days of service/year for five years. Thus, he argued, that Ismail was not eligible for gratuity.

Nevertheless, the Controlling Authority ruled in Ismail's favor and directed the employer to pay gratuity. Aggrieved, the employer appealed before the Appellate Authority. The Authority dismissed the appeal and also directed the employer to pay the amount. The employer then challenged these orders before the High Court.

Arguments

Counsel for the employer, Mr. S.K. Singh, contended that Ismail, as a badli worker, was never in permanent employment and was merely substituting for absent employees. He argued that Ismail's employment was irregular, and he failed to prove 240 days of work annually over five years. Further, he claimed that gratuity entitlement does not extend to badli workers who do not meet the requisite statutory criteria.

Counsel for the employee, Mr. Uddipan Banerjee, argued that Ismail had been engaged for 37 years in a continuous capacity, and the employer failed to provide any evidence to contradict this fact. He contended that under the Payment of Gratuity Act, a badli worker can qualify as an employee if he works for 240 days in a year. He further submitted that the employer's failure to produce employment records should lead to an adverse inference against them.

Court's Findings

Firstly, the court noted that Ismail was working for 37 years, and there was no dispute regarding his joining date, superannuation date, or last drawn wages. The only contention was if he met the eligibility criteria under the Payment of Gratuity Act or not.

Secondly, the court ruled that the burden of proving non-eligibility was on the employer, and not the employee. Relying on Union of India v. Ibrahim Uddin (2012 INSC 288), the court held that where an employer fails to produce employment records, an adverse inference must be drawn against him. Further, the court ruled that the employer is statutorily bound to maintain attendance registers under Section 25D of the Industrial Disputes Act.

Thirdly, the court cited Sriram Industrial Enterprises Ltd. v. Mahak Singh (Supreme Court, SLPs (C) Nos. 16456-60 of 2005), and held that an employer withholding best evidence allows the court to draw an adverse inference in favor of the employee. The court ruled that since Ismail had produced his ESI card and wage slip, the employer's failure to present counter-evidence supported his claim.

Lastly, the court ruled that beneficial legislations like the Payment of Gratuity Act should be interpreted in favor of employees, especially those who have served for decades in permanent roles. The court stressed that a worker who has provided service for 37 years is entitled to retiral benefits without unnecessary obstruction. Consequently, the court dismissed the writ petition.

Decided on: 18-03-2025

Case No.: WPA 28770 of 2024 | Hooghly Infrastructure Pvt. Ltd. v. Sk. Alam Ismail & Ors.

Counsel for the Petitioner: Mr. S.K. Singh, Mr. R.K. Dubey

Counsel for the Respondent: Mr. Uddipan Banerjee, Mr. Subhra Kanti Samanta

Counsel for the State: Mr. Srinath Singha Roy

For the Sr. Govt. Adv.: Mr. Soumitra Bandyopadhyay