Patna Electricity Supply Co. Ltd. v. Panchkauri Ram
1979-08-10
UMESH CHANDRA SHARMA
body1979
DigiLaw.ai
Judgment Uday Sinha, J. 1. By this application under Articles 226 and 227 of the constitution the Patna Electric Supply Company Ltd. , has prayed for quashing of annexure 2 by which the Controlling Authority under the Payment of Gratuity act, 1972 (Act No.39 of 1972) (hereinafter referred as the Act directed the petitioner to pay sum of Rs.1940 in full and final settlement of the claim to gratuity claimed by respondent No.1. 2. The short point which falls for consideration in this application is whether gratuity due to a workman under a Wage Board Award made prior to the enactment of the Payment of Gratuity Act, 1972 is gratuity under the act. The application arises in the circumstances hereinafter state 1, 3. Respondent no.1 Panchkauri Ram retired from the service of the company on 21.7.1973 after completing 44 years 5 months and 21 days. At the time of retirement he was earning Rs.190 as basic wages besides dearness allowance and variable dearness allowance of Rs.131, thus making up a total of Rs.321. The Company and its workmen were at that me governed by a gratuity scheme. In terms of the Scheme an employee with more than 15 years continuous service was to receive gratuity at the rate of one months basic wages for every completed year of qualifying service. There was no maximum limit of the amount which could be earned. Before the respondent superannuated, the Payment, of Gratuity Act (Act 39 of 1972)came into being. In terms of the Act an employee is entitled to payment of gratuity at the rate of 15 days wages for every completed year of service. Under the Act, however, wages was defined as all emoluments including dearness allowance and not only basic wages. The Act also laid down the maximum gratuity which could be earned. In terms of the Act gratuity payable to an employee cannot exceed twenty months basic wages. It is manifest that so far as the respondent no.1 is concerned, the scheme for payment of gratuity prior to the enactment of the act was more favourable to the respondent than that under the Act. On. the retirement of the contesting respondent, the petitioner Company offered to the respondent Rs.6,420 as gratuity. This sum was paid in accordance with the provisions of the Payment of Gratuity Act and not in terms of the Scheme of the Company.
On. the retirement of the contesting respondent, the petitioner Company offered to the respondent Rs.6,420 as gratuity. This sum was paid in accordance with the provisions of the Payment of Gratuity Act and not in terms of the Scheme of the Company. Respondent no.1 received the sum offered to him under protest contending that he was entitled to Rs.8,550 in terms of the Companys scheme. He, therefore, filed an application under section 7 (4) (a) of the act before the Controlling Authority, repondent No".2, appointed under section 3 of the Act. The said Authority after hearing the parties passed an award for Rs.1,940 besides the sum of Rs.6,420 paid already to respondent no.1. The petitioner being aggrieved by order of the Controlling Authority contained in Annexure 2 has moved this Court by the present application for quashing it. 4. From the facts stated above, it is patent that respondent no.1 claimed and Controlling Authority has awarded gratuity, not in terms of the Act but in terms of the Scheme of the petitioner Company which was in existence prior to the enactment of the Payment of Gratuity Act. Mr. K. D. Chatterji, counsel for the petitioner has contended that the Controlling Authority had no jurisdiction to make an award in respect of sum due otherwise than under the act. It was contended that sums due or sums payable as gratuity only under the Act fell within its purview and not sums payable as gratuity under some scheme or Wages Board Award or agreement. Learned counsel for the petitioner drew our attention to section 3 of the Act which lays down that the appropriate government may appoint an officer to be Controlling Authority, who shall be responsible for the administration of this Act. Sec.7 of the Act lays down the principles for determination of the amount of gratuity. Sub section (1)thereof lays down that "a person who is eligible for paymen of gratuity under this Act" shall send a written application to the employer. The expression "this Act" recurs in sections 8, 9, 10, 11, 13, 14 etc. of the Act. It is manifest that the Controlling Authority can make award only in respect of gratuity payable under the Payment of Gratuity Act, 1972. Question which falls for determination is whether the sum due to respondent no. \ under the Companys scheme was gratuity under this Act.
of the Act. It is manifest that the Controlling Authority can make award only in respect of gratuity payable under the Payment of Gratuity Act, 1972. Question which falls for determination is whether the sum due to respondent no. \ under the Companys scheme was gratuity under this Act. In my view, sums due under a private scheme of gratuity would also be gratuity payable under this Act. This effect must flow from the content of section 4 (5) of the Act which lays down that nothing in this section shall effect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer". Sec.5 of the Act empowers the State Government to exempt any establishment, factory mine etc. from the operation of this Act, if the employees of such establishment, factory, mine etc. are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act. It is thus obvious that although sums payable as gratuity to employees under scheme, agreements or contracts favourable to the employees have found statutory recognition prior to the enactment of this Act, there was no law in regard to payment of gratuity. Payment therefore was governed by a contract, agreement or award. In order to make a comprehensive law in regard to gratuity, the payment of Gratuity Act was brought into being. This Act covers all aspects of gratuity and encompasses the whole law in regard to payment of gratuity. Thus the full effect of section 4 (1), 4 (5), and section 5 of the Act must be the gratuity under any award or agreement or contract also fell within the purview of the Act. If this was not the intention, there was no point in enacting section 4 (5) If section 4 (5) had not found place in Statute Book, the Act could not have nullified the impact of any award, agreement or contract which provided better terms of gratuity than under the Act. The Statute is social and welfare legislation and must be liberally construed. In the State Bank of india V/s. Shri N. Sundara Money, (AIR 1976 Supreme Court 1111 ). Krishna iyer, 3. laid down that when courts consider welfare legislation with an economic justice bias, cannot turn on cold print glorified as a grammatical construction but on teleological purpose and protective intendment.
In the State Bank of india V/s. Shri N. Sundara Money, (AIR 1976 Supreme Court 1111 ). Krishna iyer, 3. laid down that when courts consider welfare legislation with an economic justice bias, cannot turn on cold print glorified as a grammatical construction but on teleological purpose and protective intendment. That principle must be adopted in interpreting the provisions of section 4 (5) of the Act in the background of submission urged on behalf of the petitioner. We cannot go hay were in interpreting the provisions ignoring the text and context. To me, therefore, it is obvious that the payment of gratuity to respondent No.1 in terms of the Companys scheme would also fall within the purview of the Act and Controlling Authority. 5. Learned counsel for the petitioner did not doubt for a moment that the respondent would be entitled to payment of gratuity under the Companys scheme, but according to him, the forum would be the Labour Court under section 33 (c) of the Industrial Disputes Act and not under the Payment of gratuity Act. I am unable to accede to this submission. If a workman moves the Labour Court under section 33 (c), the Labour Court will have to consider whether the scheme offers better terms or the Act does and if the Labour court comes to the conclusion that the scheme or contract does not provide more favourable terms to the workman or employee, it will have to stay its ands and direct the claimant to move the Controlling Authority under the payment ot Gratuity Act. That may lead to unnecessary harassment to the employees, I am therefore, of the view that the Payment of Gratuity Act prescribe i the Controlling Authority under section 3 of the Act as the only authority to decide question of admissibility and the quantum of gratuity payable to an employee. I am, therefore, unable to accept the submission urged on behalf of the petitioner that the Controlling Authority in this case had no jurisdiction to adjudicate and pass an award in terms of the old scheme. I am firmly of the view that sum due under the Companys scheme to respondent no.1 as gratuity was also gratuity under the Payment of Gratuity Act.
I am firmly of the view that sum due under the Companys scheme to respondent no.1 as gratuity was also gratuity under the Payment of Gratuity Act. In the view that I have taken of the question invoved in this application, I am re-inforced by Bench decisions of this Court in C. W. J. C. Nos.1857 and 1858 of 1976 (The Patna Electric Supply Co. Ltd. V/s. Sri Gopal Banerjee and others)dated 23.1.1979 and CWJC No.1510 of 1975 (The Patna Electric Supply Co. Ltd. V/s. Jamoon No.1 and another) dated 26.6.1979. 6. For the. reasons stated above, I find no merit in this application and it is accordingly dismissed with costs. Hearing fee Rs.150.