HC Orders Breach Candy Club to Pay Rs 11.67 Lakh Gratuity to Ex-Manager
The Bombay High Court has dismissed a petition filed by the Breach Candy Swimming Bath Trust in south Mumbai and upheld an order directing the club to pay Rs 11.67 lakh in gratuity to its former manager, Rajesh Somnath Nerkar, who served the establishment for 23 years.
Justice Sandeep Marne, while passing the order on September 1, also imposed costs of Rs 1 lakh on the Trust. The judge observed that an employer cannot keep an employee waiting endlessly for statutory dues and noted that the Trust had failed to take advantage of multiple opportunities provided under the law before directly approaching the High Court.
The ruling upheld an earlier decision by the Controlling Authority under the Payment of Gratuity Act. In November 2025, the authority had directed the Trust to pay Nerkar Rs 11,67,785 along with 10% interest.
Nerkar joined the Trust in November 2000 and was later appointed as its manager. His employment was terminated on July 2, 2023, following accusations that he had shredded original membership records during a digitisation exercise. The Trust had claimed that his actions resulted in financial losses amounting to Rs 5 crore, arguing that his gratuity could legally be forfeited.
The High Court noted that the City Civil Court had already held Nerkar's termination to be illegal, although appeals against that ruling are currently pending.
The Trust challenged the gratuity directive before the High Court on the grounds that it had not been properly served with notices during the initial proceedings. Justice Marne rejected this claim, ruling that the notices had been duly served through the Trust's Administrative Manager.
The court observed that the legislative intent of the law is not to permit an errant employer to keep an employee embroiled in prolonged litigation. It noted that the Trust had failed to challenge the gratuity order within the statutory period and could not later bypass the legal framework.
On the merits of the dispute, the court found no valid ground to forfeit the gratuity, observing that the Trust had failed to issue the mandatory notice required for forfeiture. The court added that internal disputes between two managing committees could not be used as a justification to deny an employee terminal benefits for 23 years of service.
The petition was dismissed, and the High Court directed the Trust to pay the outstanding gratuity dues and the Rs 1 lakh costs within six weeks.
