Dear Umakanthan sir,
I learnt a lot from your comments in which you give suggestions as laid down in various acts or court verdicts.
However, on this topic it is not so important that PE is liable or not. But more important is whether on first instance gratuity should be paid by the contractor or by the PE.
Above I described various situations through which we can ascertain who is primarily responsible to pay the gratuity.
We all know under CLRA Act if contractor fail to pay any statutory obligation the PE is responsible. But here being the immediate employer the contractor has primary liability for gratuity payment.
Moreover, under Gratuity Act Principal Employer is not mentioned anywhere. I would like to state the matter is more related to Gratuity Act instead of CLRA Act.
Coming to the reference of Madras High Court Judgement, I have gone through an article which describes,
“The liability of principal employer for the payment of gratuity to the contract labor under the P.G Act 1972 is also in the twilight as there are divergent views among different High Courts. For instance, in Cominco Binani Zinc Ltd. V. Pappachan [1989 LLR 123] the Kerala High Court held that neither the C.L.R. Act nor the P.G Act provide that the employees engaged thru the contractor would be entitled to gratuity from the principal employer and as such the principal employer would not be liable to pay gratuity to the contract labor. On the contrary, the Madras High Court has held in Madras Fertilizers Ltd.v. C.A under the P.G Act [2003 LLR 244] that the principal employer can be directed to pay gratuity to his contract labor subject to reimbursement by way of recovery from the contractor”.
Pls refer to 02nd last line "Principal Employer can be directed". That itself explained if contractor failed to pay than only PE can be held responsible.
So on basis of my experience and practical approach I will again suggest first check where the Gratuity cost was absorbed. If Gratuity cost was not paid in the bills than how we can ask the contractor to pay gratuity. But if the contract was comprehensive nature and contractor accepted to bear all statutory cost then the contractor is liable to pay gratuity.
I share same views in below link (related to payment for increased wages as per MW Act).
https://www.citehr.com/630526-princi...c-arrears.html
In the end I would like Mr RAJEKc5Q to visualize the case and give proper inputs, so that senior members can give most relevant solutions.