Bengaluru, Feb 2 (.) The Karnataka High Court has imposed costs of ₹50,000 on Wipro Enterprises Pvt Ltd for “abusing the process of law” by denying payment of a contractually promised ex-gratia amount to a former employee and subjecting him to prolonged litigation.
Justice Sachin Shankar Magadum dismissed the company’s appeal challenging a Bengaluru city civil court order that directed Wipro to pay ₹6.32 lakh as ex-gratia along with 10 per cent interest to its former regional manager, Ratnesh Pandey.
Observing that a corporate entity is expected to act fairly and responsibly, the High Court said the appeal reflected a vexatious and unjustified resistance to an admitted liability, compelling the employee to undergo unnecessary litigation to secure a legitimate claim.
Pandey, aged 51, was employed with the company from 2005 to 2017 in various capacities. Upon his resignation in August 2017, Wipro had offered him an ex-gratia amount of ₹6.32 lakh, payable after 18 months, subject to three conditions — that he should not solicit or influence Wipro employees, disclose details if approached by any employee, and not join specified competing companies including Philips India Ltd and Bajaj Electricals Ltd during the stipulated period.
The company later declined to make the payment, contending that Pandey had not formally accepted the ex-gratia offer letter dated September 18, 2017.
However, the civil court, while decreeing the suit on July 23, 2024, held that the offer letter did not prescribe any deadline for acceptance and noted that Wipro’s representative had acknowledged receipt of the acceptance letter on March 22, 2019. The court further observed that the company had never alleged breach of any of the three stipulated conditions by the employee.
Accordingly, the civil court ordered Wipro to pay the ex-gratia amount with 10 per cent interest from February 19, 2019, the date on which the 18-month period had ended.
In its appeal before the High Court, Wipro argued that the offer stood revoked due to non-acceptance within a reasonable time under the Indian Contract Act, 1872, and that acceptance after 18 months could not be considered valid.
Rejecting the contention, the High Court held that the contractual scheme clearly showed that the employee’s right to receive ex-gratia was contingent upon compliance with the stipulated conditions and not on formal communication of acceptance.
The court said the concluding line in the offer letter seeking a signed copy for records could not be treated as a mandatory condition precedent for crystallisation of rights.
The court further observed that even in the absence of express written acceptance, acceptance could be inferred from the conduct of the employee, particularly since there was no allegation of breach of any condition.
Holding that the company had raised hyper-technical objections to defeat a legitimate contractual claim, the High Court said such a defence ran contrary to Sections 7 and 8 of the Indian Contract Act and settled principles laid down by the Supreme Court.
. . CDS