Judgment Ram Mohan Reddy, J. 1. Road Transport Corporation aggrieved by the Order dt. 26.10.2009 Annexure-B of the Controlling Authority-2nd respondent determining Rs. 2,08,376/- as gratuity, preferred an appeal whence the order was modified reducing the gratuity to Rs. 1,89,794/- by accepting the deduction of Rs.18,582/- by Order dt. 20.12.2010 Annexure-D of the 1st respondent-Appellate Authority, under the Payment of Gratuity Act, 1972, for short ‘Act’. Hence this petition. 2. Learned Counsel for the petitioner advances the following contentions: i) Petitioner – Corporation issued circular instructions Ex.R6 requiring the recording of entries in Part VI of the Service Register Ex.R7 only if employees borne on the badli list completed continuous service of 180/240 days, before being brought on times scale or on probation. According to the Learned Counsel, the 3rd Respondent was on the badli list of drivers from 13.5.1965 to 1.4.1969, and brought on probation in the year 1969 whence the service register, Ex.R7 was opened, and no entries recorded in Part-VI of the Register means that the 3rd respondent had not rendered continuous service when in the badly list; ii) 3rd respondent thought retired on 31.3.05, filed the application under Rule 10 of the Payment of Gratuity (Central) Rules, for short ‘Rules’, on 12.12.2007 and hence delay defeats the claim, and; iii) 3rd respondent having addressed a letter dt. 1.4.2005 Ex.R3 to the Accounts Officer authorising the deduction of Rs. 1,65,412/- from gratuity and remit it the Banks to discharge unpaid loans due, as mentioned in the letter and to makeover the balance, the deductions were in accordance with law. 3. Per contra Learned Counsel for the 3rd respondent contends; i) that records relating to the discharge of duties while on the badli list in the custody of the petitioner-Corporation when not placed before the Controlling Authority, the period of service from 13.5.1965 to 1.4.1969 was justifiably considered as ‘active service’ eligible for determining gratuity. Learned counsel submit that Circular Ex.R6 issued by the petitioner-Corporation under the ‘Act’ has no force of law. Learned counsel further submits that in the absence of essential proved facts, no inference can be drawn only on the basis that nothing is recorded in Part-VI of the Service Register, Ex.R7 over rendering continuous service while in the badli list; ii) Learned counsel points to the order dt. 26.10.2009 Annexure-B of the Controlling Authority making reference to the order dt. 26.10.2009 Annexure-B of the Controlling Authority making reference to the order dt. 13.11.2008 of the said Authority accepting the explanation to condone the delay in filing the application under Rule 10 of the ‘Rules’ which when not challenged in the appeal proceedings, is final, and; iii) that the 3rd respondent is not due to any financial institutions except Rs.18,582/- to BMTC Credit Co-operative Society, nor has the petitioner Corporation placed material relating to proceedings for recovery of the alleged sums, muchless notice to the 3rd respondent before effecting deductions from out of the gratuity. Learned counsel submits that 3rd respondent does neither admits Ex.R3 nor the alleged authorisation, or that it is proved in evidence. 4. Having heard the Learned Counsel for the parties, perused the pleadings and examined the orders impugned, the only question for decision making is, “whether in the facts and circumstances the orders of the authorities under the Act, are just, legal and valid?” 5. The first contention deserves to be rejected at the threshold. Petitioner-Corporation cannot dispute and it is not disputed that under the memorandum of settlement between the petitioner-Corporation and the Trade Union, employees borne on in the badli list are entitled to be brought on Time Scale of Pay or on probation immediately after completion of 180 or 240 days of continuous service respectively subject to available vacancies. Thus, the condition precedent to bring an employee on time scale of pay or on probation is the existence of vacancy in a substantive post, as in the present case, the post of driver. 6. If, as admitted, the 3rd respondent was brought on probation during the year 1969, then he must have completed 240 days of continuous service and there must have been a vacancy in the substantive post of driver and therefore entries in Part-VI of the Service Record Ex.R7 ought to have been recorded. Petitioner-Corporation, custodian of the records constituting substantial legal evidence of the said facts, having failed to place them before the Controlling Authority, requires the drawing of adverse inference. In the factual matrix, it is impermissible to surmise, conjecture or draw an inference that the 3rd respondent did not work continuously during the period while on badli list, on the sole premise that Part-VI of the service register Ex.R7 does not record the said fact. In the factual matrix, it is impermissible to surmise, conjecture or draw an inference that the 3rd respondent did not work continuously during the period while on badli list, on the sole premise that Part-VI of the service register Ex.R7 does not record the said fact. In the absence of relevant material it cannot but be said that the Controlling Authority was fully justified in reckoning as ‘Active service’ the period from 13.5.65 to 1.4.69 whence the 3rd respondent’s name was on the badli list of drivers eligible for gratuity under the Act. 7. The second contention of the Learned Counsel for the petitioner is frivolous. The Controlling Authority accepted the cause shown for filing the application on 12.12.2007, though the 3rd respondent attained the age of superannuation on 31.3.2005 and condoned the delay by Order dt. 13.11.2008, which when not challenged in appeal has attained finality. Sri.L.Shekhar, Learned Counsel for the 3rd respondent, on instructions, submits that the 3rd respondent does not press the claim for interest at 10% p.a. on the difference of gratuity for the period from 31.5.2005 to 11.2.2007, though the Controlling Authority condoned the delay. 8. The last contention advanced by the Learned Counsel for the petitioner, too, is meritless. It is alleged that the 3rd respondent while in the service of the Corporation raised loans with financial institutions, which when not repaid as on the date of superannuation, addressed a letter Ex.R3 to the Accounts Officer, and hence the deduction of Rs. 1,65,415/- and remittance of the same to the financial institutions. Ex.R3 is discloses a manuscript, in Kannada language, addressed to the Accounts Officer of the petitioner-Corporation, stating that the 3rd respondent is entitled to gratuity on attaining the age of superannuation on 31.3.05, and that the petitioner-Corporation may deduct from out of the gratuity and make payment to discharge the following dues: (a) Varun Co-op. Bank Rs.40,500/- (b) Hanumanthanagar Co.op. Bank ------------ (c) Bangalore City Co-op. Bank Rs.1,06,330/- (d) BMTC credit Co-op. Society Rs.18,582/- Rs. 1,65,412/- That letter bears the signature of one Siddarama. Interestingly the Accounts Officer, to whom Ex.R3 is addressed is not examined, and the signature on Ex.R3, is not proved to be that of the 3rd respondent. In addition there is neither material to establish dues to the financial institutions, nor proof of remittances to those institutions by the petitioner. 1,65,412/- That letter bears the signature of one Siddarama. Interestingly the Accounts Officer, to whom Ex.R3 is addressed is not examined, and the signature on Ex.R3, is not proved to be that of the 3rd respondent. In addition there is neither material to establish dues to the financial institutions, nor proof of remittances to those institutions by the petitioner. Again it is unknown to which account numbers in the said institutions the amounts were remitted/credited, in the absence of the counter foils or remittance challans, much less the dates of remittances and manner of remittances and manner of remittances either by cash, cheque or demand draft, etc. 9. Learned Counsel for petitioner is unable to point to any provision of the Act, Rule or Regulation permitting the petitioner-Corporation, to deduct from out of the gratuity and remit it to financiers to whom the 3rd respondent was due. In the absence of a specific provision under the Act, regard being had to Sections 13 and 14 of the ‘Act’ relating to protection of gratuity and the overriding power of the Act over anything inconsistent therewith including a contract, coupled with permissible deductions under Section 4(6) of the Act, it is too far fetched for the petitioner to contend that, as an employer, is invested with a right to deduct monies from out of the employee’s gratuity and remit to financial institutions, in discharge of debts of its employees. 10. Even otherwise petitioner failed to extend an opportunity of hearing to the employee, or in the last a notice to show cause over the alleged deductions, and therefore it cannot but be said that the Controlling Authority was justified in declining to accept the deductions from out of gratuity payable to the 3rd respondent. 11. It is true that the Appellate Authority accepted the deduction of Rs.18,552/- towards dues to BMTC Credit Co-operative Bank, since 3rd respondent admitted the said dues and accordingly, modified the order of the Controlling Authority which is not challenged by the 3rd respondent. 12. In the circumstances, the findings recorded by the Authorities under the Act are not perverse, calling for interference in exercise of ‘judicial review’ which in its inherent nature has limitations. (See M.C. Chamaraju vs. M/s. Hind Nippon Rural Industrial Private LTD., ( (2007) 8 SCC 501 ). 12. In the circumstances, the findings recorded by the Authorities under the Act are not perverse, calling for interference in exercise of ‘judicial review’ which in its inherent nature has limitations. (See M.C. Chamaraju vs. M/s. Hind Nippon Rural Industrial Private LTD., ( (2007) 8 SCC 501 ). In the result, petition is allowed in part, the orders impugned are modified, entitling the 3rd respondent to interest at 10% p.a. on the gratuity from 12.2.07, and in all other respects remains unaltered.