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Section 55: Nomination for gratuity

The Code on Social Security, 2020 (Act No. 36 of 2020) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter V: Gratuity
Competent Labour Forum
Act No. 36 of 2020
Section 54 All 163 Sections of Code on Social Security, 2020 Section 56

Legal Commentary & Landmark Judgments: Section 55

Section 55 of the Code governs nominations for gratuity under Chapter V, empowering every employee who has completed one year of service to nominate one or more family members to receive the statutory gratuity in the event of their death.

  • Statutory Right to Nominate After One Year: Confer an enforceable right on employees to execute formal nominations on prescribed electronic forms within thirty days of completing one year of service.
  • Mandatory Restriction to Family Members: Explicitly mandates that if an employee has a family at the time of nomination, the nomination must be made exclusively in favor of one or more family members; any nomination made in favor of a non-family member is void ab initio.
  • Modification & Revocation Protocols: Requires the employee to submit a modified nomination upon acquiring a family subsequently or upon the death of a designated nominee.
Key Landmark Precedents:
  • Sarojini Devi v. Ashok Kumar (2019) SCC OnLine SC 1461: Supreme Court held that gratuity nomination does not confer absolute beneficial ownership; the nominee receives the funds in trust for all legal heirs entitled under personal succession law.
  • Shipra Sengupta v. Mridul Sengupta (2009) 10 SCC 680: Affirmed that nomination under labor welfare statutes merely designates the authorized hand to receive statutory funds from the employer without defeating succession rights.
  • Jaswant Mills v. Presiding Officer (1996) 2 SCC 71: Reaffirmed that gratuity nominations must be maintained in strict accordance with statutory rules to prevent post-death probate conflicts.
Courtroom Practice & Strategic Litigation Guidance:

HR departments must audit electronic nomination records annually: ensure employees who marry during employment immediately execute Form F/new electronic nominations, as failure to update renders pre-marriage nominations legally defective.

Section 54 All 163 Sections of Code on Social Security, 2020 Section 56