HAFFKINE BIO-PHARMACEUTICAL CORPORATION LIMITED v. V. M. PATKI
1987-09-18
H.H.KANTHARIA
body1987
DigiLaw.ai
JUDGMENT : H.H. Kantharia, J.—The first respondent joined the services of Haffkine Institute on and from 16th April, 1946. The said institute was a department of the erstwhile Government of Bombay. By a Government Resolution, dated 26th November, 1973, it was converted into two autonomous bodies, viz. (i) Haffkine Institute for Training, Research and Testing and (ii) Haffkine Bio-Pharmaceutical Corporation Ltd. Thereafter, by a Government Resolution dated 30th April, 1975 it was decided that the Haffkine Institute working as a Government department should be closed down and the new institute and the Corporation should start functioning with effect from 1st September, 1975. The first respondent opted to serve under the present petitioners. He was given an appointment letter dated 31st August 1975 by the Managing Director of the petitioners treating him as an employee of the petitioners with effect from 1st September, 1975. He was accordingly discharged from the services of the Government of Maharashtra on 31st August, 1975 and a sum of Rs. 15,297,50 Ps. was transferred by the Government as gratuity on the basis of the gratuity scheme applicable to the Government servants and credited the same in the provident fund account of the first respondent along with interest at Rs. 5,041.55 Ps., on basis of the services rendered by him to the Government from 16th April, 1946 to 31st August, 1975. The first respondent retired on 31st July, 1981 when the petitioners paid to him Rs. 8,352.90 Ps as gratuity for the service rendered by him to the petitioners from 1st September, 1975 to 31st July, 1981. 2. The first respondent on 14th June, 1982, filed an application u/s 33C(2) of the Industrial Disputes Act, 1947 (hereinafter referred to as the I.D. Act) in the Labour Court presided over by the Second respondent, being Application (IDA) No. 623 of 1982 for computation of his gratuity amount and thus claimed Rs. 25,070/- with interest at the rate of %.
The first respondent on 14th June, 1982, filed an application u/s 33C(2) of the Industrial Disputes Act, 1947 (hereinafter referred to as the I.D. Act) in the Labour Court presided over by the Second respondent, being Application (IDA) No. 623 of 1982 for computation of his gratuity amount and thus claimed Rs. 25,070/- with interest at the rate of %. His application was resisted by the petitioners inter alia contending that prior to 1st September, 1975 he was a Government servant and had already received gratuity from the Government of Maharashtra for the period from 16th April, 1946 to 31st August, 1975 and that he was also paid gratuity by the petitioners for the services rendered to them from 1st September, 1975 to 31st July, 1981, although he was not eligible for gratuity under the provisions of the Payment of Gratuity Act, 1972 (hereinafter referred to as "the Gratuity Act"), because his salary exceeded Rs. 1,000/- per month and he was on the supervisory and administrative staff and he cannot claim gratuity twice. The petitioners further contended that the first respondent was claiming gratuity under the provisions of the Gratuity Act and, therefore, an application u/s 33C(2) of the I.D. Act was not maintainable. 3. On such pleadings before him, the second respondent framed appropriate issues and on considering the material placed before him, he came to the conclusion that an application u/s 33C(2) of the I.D. Act was maintainable and the first respondent was in the deemed continuous service of the petitioners from 16th April, 1946 to 31st July 1981 for the purpose of gratuity and he was, therefore, entitled to gratuity for his entire period of service on the basis of the last drawn salary from the petitioners. In other words, it was held that it would be improper and incorrect to bifurcate the services of the first respondent under the Government and under the petitioners for payment of gratuity. He, accordingly by his order dated 21st January, 1983, directed the petitioners to deposit in his Court a sum of Rs. 25,070.30 p. being balance of the gratuity amount payable to the first respondent within one month from the date of the order and that the said amount, if deposited, should be paid to the first respondent. The petitioners have impugned the said order in this petition under Article 226 of the Constitution: 4. Mr.
25,070.30 p. being balance of the gratuity amount payable to the first respondent within one month from the date of the order and that the said amount, if deposited, should be paid to the first respondent. The petitioners have impugned the said order in this petition under Article 226 of the Constitution: 4. Mr. Shetye, learned Counsel appearing for the petitioners, submits that gratuity was to be paid to the first respondent as per the provisions of the Gratuity Act and, therefore, an application u/s 33C(2) of the said Act was not maintainable in the court of the second respondent. His further submission is that for the purpose of calculating gratuity amount payable to the first respondents, his entire service period cannot be taken into consideration as services rendered to the petitioners because he was already paid gratuity by his previous employer viz. the Government of Maharashtra and the present petitioners have also already separately paid to him the gratuity for the period of services rendered by him to them. Thus the points made by Mr. Shetye here are the same as canvassed in the Labour Court. 5. Dr. Kulkarni, learned Counsel appearing for the first respondent, submits that the first respondent was not covered by the provisions of the Gratuity Act, being a member of the supervisory and administrative staff drawing salary exceeding the limit of Rs. 1,000/- per month as was provided then in the Gratuity Act. The submission is that the first respondent is entitled to gratuity as per the terms and conditions stated in his appointment letter dated 31st August, 1975 issued by the petitioners coupled with the Government Resolution dated 31st July, 1975 according to which the services rendered by him to the Government was to be counted for pensionary and all other benefits as if he was in the services of the petitioners. Dr. Kulkarni further submits that the first respondent claimed gratuity as per a settlement dated 4th December, 1981 between the petitioners and the Supervisory Staff Association and not as per the provisions of the Gratuity Act and as such an application u/s 33C(2) of the I.D. Act was maintainable. Mr. Gokhale, appearing on behalf of the third respondent-State of Maharashtra, supports the impugned order passed by the second respondent. 6.
Mr. Gokhale, appearing on behalf of the third respondent-State of Maharashtra, supports the impugned order passed by the second respondent. 6. Now, it is pertinent to note that the appointment letter issued to the first respondent by the petitioner on 31st August, 1975 states in clear terms that the services of the first respondent should be governed as per the rules and regulations made by the petitioners and the same shall not be less favourable than the existing terms and conditions of service with the Government of Maharashtra pertaining to the pay and allowances, pensionary benefits, provident fund, leave, medical benefits, facility for Government accommodation and other benefits. It was further made clear therein that the services rendered by him under the Government would be counted for his pensionary and other benefits as if he had rendered services under the petitioner. This promise held out to the petitioner also finds place in the Government Resolution dated 30th April, 1975. Friday, the 18th September, 1987. 7. Thus, it is clear that the first respondent was entitled to gratuity for the entire period of his service with the Government and the petitioners as if he was in continuous service of the petitioners. It would mean that for calculating his gratuity the entire period of his service of 35 years will have to be considered as if he had put in 35 years of service with the petitioners. It is important to note that if the first respondent is paid gratuity for his six years of service with the petitioners and the earlier long period of service with the Government he would suffer a great monetary loss. The gratuity amount is calculated on the basis of the last salary drawn by an employee and in our case the last salary of the first respondent was drawn while in employment with the petitioners. That salary was higher than what he had earlier received from the Government. The appointment letter and the Government Resolution in question do not permit us to draw any other inference except the one that the first respondent should be held to be in the employment of the petitioner for a continuous period of 35 years for the purpose of calculating his gratuity benefits. That would be the only reasonable inference one can draw in the facts and circumstances of this case.
That would be the only reasonable inference one can draw in the facts and circumstances of this case. But if there is any doubt about such an inference the benefit of it should go to the first respondent as was held by the Supreme Court in case of K.C.P. Employees' Association, Madras v. Management of K.C.P. Ltd. 1977 I LLJ 322 as under :- "In industrial law interpreted and applied in the perspective of Part IV of the Constitution, the benefit of reasonable doubt, on law and facts, if there be such doubt, must go to the weaker section-labour". Therefore, I find no substance in the submission of Mr. Shetye that the first respondent is not entitled to gratuity for continuous service of 35 years as if he was in the service of the petitioners for the entire period. 8. As regards the other contention of Mr. Shetye that for the payment of gratuity amount provisions of Section 33C(2) of the I.D. Act cannot be invoked for which he relied upon judgment of the Supreme Court in State of Punjab Vs. Labour Court Jullunder and Others, (1980) 1 SCC 4 . All that I have to say that if an employee is governed by the provisions of the Gratuity Act, the submission of Mr. Shetye is correct and the gratuity will have to be claimed under that Act alone for which proper forums are provided. There is no doubt that if a workman is governed by the provisions of the Gratuity Act, then for claiming gratuity he has to file an application before the Controlling Authority and if he is dissatisfied with the decision of the said Authority, he should file an appeal before the Appellate Authority. The fact in our case is that the first respondent was not governed by the provisions of the Gratuity Act, and, therefore, he could not have filed an application before the Controlling Authority for claiming gratuity amount. It may be noted here that the first respondent was working in the supervisory and administrative capacity and his wages exceeded the limit of Rs. 1,000/- as was then prevailing and, therefore, under the provisions of the Gratuity Act he was not entitled to the benefits of gratuity.
It may be noted here that the first respondent was working in the supervisory and administrative capacity and his wages exceeded the limit of Rs. 1,000/- as was then prevailing and, therefore, under the provisions of the Gratuity Act he was not entitled to the benefits of gratuity. He was entitled to such benefit only in accordance with the settlement between the petitioners and the Supervisory Staff Association, entered into on 4th December, 1981 and his appointment letter and the Government Resolution dated 30th April, 1975. But for such a settlement and understanding between the parties, ordinarily, the first respondent was not entitled to gratuity. Therefore, it would not be correct to say that the first respondent could claim gratuity only under the provisions of the Gratuity Act and had to file an application before the Controlling Authority. 9. Mr. Shetye drew my attention to Clause 15-of the Settlement dated 4th December, 1981 which reads that it is agreed by and between the parties that supervisors shall be covered by the Payment of Gratuity Act and the Rules framed thereunder from time to time by the appropriate authorities. He submits that this term of settlement clearly shows that the first respondent was covered by the Gratuity Act and the Rules framed thereunder and if he wanted gratuity he should have made an application before Controlling Authority and not the one u/s 33C(2) of the I.D. Act. I am not able to persuade myself to agree with the submission of Mr. Shetye for the simple reason that if the first respondent was to aproach the Controlling Authority under the Gratuity Act he would have been told that as a supervisory and administrative staff and because he was drawing wages more than 1,000/- per month he was not entitled to make an application for gratuity before the Controlling Authority. In My opinion, proper interpretation of Clause 15 of the Settlement would be that under the settlement the supervisory and administrative staff was given a right of gratuity and the gratuity amount was to be calculated as per the provisions of the Gratuity Act, and not that for the purpose of claiming gratuity they should make an application before the Controlling Authority under the said Act.
When we say that the amount of gratuity is to be worked out and calculated as per the provisions of the Gratuity Act is only means that the first respondents should be paid 15 days wages for each year of his continuous service and the daily wages are to calculated by dividing the monthly wages by 26 days. This is the only reasonable interpretation of Clause 15 of the settlement dated 4th December, 1981. 10. Mr.Shetye then submits that even if the first respondent was to get gratuity as per the settlement he cannot claim it by application u/s 33C(2) of the I.D. Act and in support of his contention he relied upon a judgment of this Court in Bamjilal Chimanlal Sharma v. Elphinstone Spinning and Weaving Mills Ltd. 1984 LIC 1703. The facts of that case were entirely different and, I am afraid, the judgment is of no use to Mr. Shetye. There, the Controlling Authority had held that the amount of gratuity which could be awarded to the petitioner would be one according to the rates fixed under the said Act and the claim of the petitioner permissible under the terms of settlement will have to be left for determination in a proceedings u/s 33C(2) of the I.D. Act. This Court thus observed :- "The right to claim gratuity is conferred under the Act and what is done by the settlement or an award is merely to vary the rate of amount of gratuity. The settlement between the parties in the present case does not create a fresh right to claim gratuity, but the right is conferred by a statutory provisions, the Act prescribes certain rate of amount of gratuity and what the parties did under the settlement was to improve upon that rate. It is difficult to comprehend that the petitioner could not approach the authority for enforcing his right to get the gratuity and claim that the amount should be determined not in accordance with the rate prescribed by the Act but in accordance with the settlement. The 'Appellate Authority has overlooked the distinction between 'right to claim gratuity' and the rate at which it is to be granted.
The 'Appellate Authority has overlooked the distinction between 'right to claim gratuity' and the rate at which it is to be granted. Therefore, in that case also, it was held that if the parties are governed by the provisions of Gratuity Act, proper forum would be the Controlling Authority under the said Act and not by an application u/s 33C(2) of the I.D. Act. As pointed out by Dr. Kulkarni, in the said case, employees were governed by the Gratuity Act and the rate of gratuity was enhanced by and between the parties through a settlement but the amount of gratuity was to be claimed under the Gratuity Act and, therefore, the proper forum was the Controlling Authority and not by an application u/s 33C(2) of the I.D. Act. In our case, the first respondent, as stated above, was not at all governed by the provisions of the Gratuity Act and, therefore, he could not have approached the Controlling Authority under that Act. Hence his application u/s 33C(2) of the I.D. Act was maintainable. 11. With the help of the learned Counsel appearing for both the sides, I have carefully gone through the impugned order passed by the second respondent and the contentions raised before him are the same which are raised in this Court and I find that the second respondent considered the contentions raised before him very well. I find no error, legal or otherwise, apparent on the face of the record in the impugned order passed by him. He calculated the gratuity amount payable to the first respondent in accordance with the provisions of Gratuity Act as was argued upon by the parties under the settlement and came to a correct conclusion that the first respondent was entitled to Rs. 48,720/- as gratuity. He then deducted Rs. 23,649.70 Ps. from that amount and held that the first respondent will be entitled to Rs. 25,-70.30 Ps. Therefore, the first respondent had not asked for and was not granted gratuity twice as contended by Mr. Shetye. In fact, what he has received earlier was deducted from Rs. 48,720/- and thus what is awarded to the first respondent is the correct amount of gratuity due to him. 12.
25,-70.30 Ps. Therefore, the first respondent had not asked for and was not granted gratuity twice as contended by Mr. Shetye. In fact, what he has received earlier was deducted from Rs. 48,720/- and thus what is awarded to the first respondent is the correct amount of gratuity due to him. 12. I thus find no substance in this writ petition and am otherwise also not inclined to interfere with the impugned order because the amount of gratuity which is a terminal benefit to an employee is not so big. I am of the view that even if there is some substance in the contentions raised by Mr. Shetye, this is not a fit and proper matter in which the impugned order should be interfered with, while exercising, though very wide, discretionary powers of this Court under Article 226 of the Constitution. Under Article 226 of the Constitution, justice is to be promoted and not defeated. After 35 years of service, the first respondent is given a sum of Rs. 25,070/- as gratuity. I do not think that he should be denied that meagre amount by invoking Article 226 of the Constitution. All in all. I am more than convinced that in equity, justice and good conscience there is no warrant to interfere with the impugned order. 13. In the result, the petition fails and the same is dismissed. The rule is accordingly dischargcd with costs quantified at Rs. 2000/- to the first respondent. At the time of admission of this matter, petitioners had deposited a sum of Rs. 25,000/- in this Court and the first respondent was granted liberty to withdraw the said amount by furnishing nationalised Bank's guarantee. The Bank gurantee is discharged.