Authority: Supreme Court of India

Order Date: 09-09-2026

Case Overview

  • Parties: Appellant M/S Oil and Natural Gas Corporation Ltd (ONGC) versus multiple private respondents, including Suryakand D. Lad, Subramaniam S. Arjun, Ramanathan A. Yogishwaran, Mohd. Hanif Ismail Hakam, and others, across Civil Appeals No. 498/2024, 27228/2023, 27407/2023 and 499/2024.
  • Background: The Bombay High Court, in a common order dated 23‑08‑2023, fastened liability on ONGC to pay gratuity to the private respondents under the Gratuity Act.
  • Legal Issues: Whether the Controlling Authority had jurisdiction to decide gratuity liability; whether the respondents qualified as “employees” of ONGC; applicability of Section 4 of the Gratuity Act, Section 21(4) of the Contract Labour (Regulation and Abolition) Act, 1970, and Clause 12.4 of the contract between ONGC and the contractor; and the relevance of the Municipal Council v. K. Jayaram precedent (16‑12‑2025).
  • Submissions: Solicitor General Tushar Mehta argued that no employer‑employee relationship existed, the Controlling Authority exceeded its jurisdiction, and the Gratuity Act did not apply. He cited the Municipal Council case supporting the view that workers engaged through a contractor cannot claim an employer‑employee relationship with the principal employer. Respondent‑8’s counsel contended that ultimate liability rests with the principal employer (ONGC). Counter‑affidavits from respondents 1‑7 emphasized long service with ONGC but did not rebut the legal arguments.

Final Outcome

  • The Supreme Court allowed the appeal, held that the Controlling Authority lacked competence to adjudicate the grievance, set aside the High Court order, and revived the Appellate Authority’s order that ONGC is not liable for gratuity.
  • The Court observed that the gratuity amounts claimed by the respondents had already been paid by ONGC pursuant to a Court order dated 15‑12‑2023; consequently, no further recovery will be made.
  • Procedural directions: unserved respondents are to be re‑served through regular mode and paper publication within four weeks; applications for condonation of delay in filing spare copies are allowed; the Registry is directed to issue notice.

Topics: Gratuity Liability, Supreme Court Judgment