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1998 DIGILAW 938 (MAD)

Alagannan v. Appellate Authority Under Payment of Gratuity Act (Deputy Commissioner of Labour), Coimbatore and Others

1998-07-15

P.SATHASIVAM

body1998
Judgment :- SATHASIVAM, J. Aggrieved against the orders of the Respondents 1 and 2 dated December 28, 1988 and January 31, 1988 respectively, the petitioner has approached this Court to quash those orders and also for direction, directing the third respondent-Management to pay the petitioner the differential amount of gratuity together with an interest at the rate of 6 per cent. 2. The case of the petitioner is briefly stated hereunder :- According to him, he joined the service of third respondent mills on January 16, 194 1. He was superannuated on January 29, 1987 after rendering a continuous service of years in the mills. It is further stated that as per the provisions of the Payment of Gratuity Act, 1972, he was entitled to a sum of Rs. 31, 080/- as gratuity on the basis of his total length of service. However, the third respondent paid an amount of Rs. 19, 567/- as gratuity calculating only 27 years of service. According to the third respondent, his date of joining had to be taken into account only from July 12, 1960 and he is entitled for gratuity for a period of 27 years of service only. Since the gratuity paid by the third respondent was not in accordance with the provisions of the Gratuity Act, the petitioner filed an application before the 2nd respondent being G.A. Case No. 125 of 1987 claiming the differential amount of Rs. 11, 543/-. The matter was contested by third respondent. The case of the third respondent was that the petitioner was on leave from October 27, 1958 to August 8, 1959 and was absent for 3 days from August 9, 1959 and therefore the petitioner had lost lien over his employment as per Clause II of the Standing Orders and that his name was included as Badli subsequently and he was taken on in the permanent muster roll in July, 1960. According to the third respondent, there was break in service and the earlier service cannot be taken into account. On the basis of this submission, the 2nd respondent rejected his claim and also stated the Amending Act 22 of 1987 will not apply to his case. Petitioner preferred an appeal before the first respondent in AGA No. 4 of 1988 and the same was also dismissed on December 28, 1988 confirming the order of the 2nd respondent. On the basis of this submission, the 2nd respondent rejected his claim and also stated the Amending Act 22 of 1987 will not apply to his case. Petitioner preferred an appeal before the first respondent in AGA No. 4 of 1988 and the same was also dismissed on December 28, 1988 confirming the order of the 2nd respondent. The first respondent also rejected Mile appeal on the ground that there (sic.) was a break in service and that period cannot be treated as one of continuous service. It is further stated that the action of the first and second respondents in giving a go-bye to 19 years of service and depriving him of substantial gratuity is wholly illegal, unjust and liable to be interfered with by this Court. 3. Third respondent-Management has filed a counter affidavit wherein it is stated that the third respondent is having a textile mill at Ondipudur, Coimbatore-16. The mill has been in existence since 1938. It has got certified Standing Orders. As per Clause 11 of the said Standing Orders, in case the workman loses his lien on his appointment, he shall be entitled to be kept on the 'Badii List'. The petitioner was employed by the third respondent from 1948. He was on leave from October 27, 1958 to August 8, 1959. He absented without leave on August 9, 10 and 11, 1959. He not only did not return within 3 days of expiry of his leave, but also failed to give any explanation of his inability to return to duty after expiry of leave. Hence, in terms of Standing Order Clause 11, his name was removed from the muster roll and was kept in the Badli List. On July 12, 1960 he offered himself for employment and as there was a permanent vacancy, he was taken as a doffing boy in the permanent employment of the third respondent. Since then, the date of his entry in service has been entered in the mill records as July 12, 19W. The petitioner reached the age of superannuation on January 29, 1987 when he was superannuated. At the time of his retirement, he was getting a monthly wage of Rs. 1257.49 and his gratuity was Calculated as Rs. 19, 587.96. The owner received the gratuity and also passed a receipt in full and final settlement of his claim for gratuity. The petitioner reached the age of superannuation on January 29, 1987 when he was superannuated. At the time of his retirement, he was getting a monthly wage of Rs. 1257.49 and his gratuity was Calculated as Rs. 19, 587.96. The owner received the gratuity and also passed a receipt in full and final settlement of his claim for gratuity. Thereafter, on March 8, 1987 the petitioner preferred a claim before the 2nd respondent alleging that he was in the service of the third respondent from January 16, 1941, that his last drawn wage was Rs. 51.80 per day, that he was entitled to gratuity of Rs. 3 however, he was paid only a sum of Rs. 19, 587.96 and he was entitled to the balance amount of Rs. 11, 543/-. In the light of the Standing Orders, particularly Clause 11, both the Respondents 1 and 2 have rightly rejected his claim and dismissed his petition and appeal. Since the order of the Respondents 1 and 2 are based on the Standing Orders and the petitioner himself has accepted and received a sum of Rs. 19, 587.96 as full and final settlement for his amount of gratuity, there is no merit in the present writ petition. 4. In the light of the above pleadings, 1 have heard the learned counsel for the petitioner, learned Government Advocate of Respondents 1 and 2 and learned counsel for third respondent-management. 5. After taking me through the order of the Respondents 1 and 2 as well as the Standing Orders, Mr. Hari Paranthaman, learned counsel for the petitioner-workman has submitted that as per Section2-A of the Payment of Gratuity Act, his services have to be calculated from January 16, 1941 and, in any event, from 1948 atleast. He also submitted that even though he has absent for 3 days after expiry of the sanctioned leave, inasmuch as the third respondent-management did not terminate his services, and in the light of Clause 11, the petitioner being treated as Badli Worker, his entire services have to be calculated for settlement of gratuity. He also submitted that even though he has absent for 3 days after expiry of the sanctioned leave, inasmuch as the third respondent-management did not terminate his services, and in the light of Clause 11, the petitioner being treated as Badli Worker, his entire services have to be calculated for settlement of gratuity. On the other hand, learned counsel appearing for the management-third respondent, after taking me through the relevant Standing Orders, as per Clause 11, has submitted that after expiry of the leave inasmuch as the petitioner was absented for 3 days without an cause, and no explanation was offered, he lost his lien automatically, accordingly his service from July 12, 1960 when he was offered re-employment alone has to be considered and the same has been rightly taken note of by them. He also submitted that no formal order of termination is required since as per Clause 11 of the Standing Orders, the same takes place automatically. He also submitted that inasmuch as the above aspect has been considered by two authorities and the claim of the petitioner has been rejected, the same cannot be lightly interfered with by this Court exercising jurisdiction under Article 226 of the Constitution of India. 6. I have carefully considered the rival submissions. 7. Even though it is stated that the petitioner was appointed on January 16, 1941 in the third respondent's Mill, even according to the third respondent, the petitioner was employed by them only from 1948. Admittedly the petitioner was on leave from October 27, 1958 to August 8, 1959. He absented without leave on August 9, 10 and 11, 1959. He not only did not return within 3 days of expiry of the leave, but also failed to give any explanation of his inability to return to duty after expiry of leave. This factual position has not been disputed. However, according to the learned counsel for the petitioner, as per Clause 11 of the Standing Orders, he was allowed to continue as Badli Worker in the third respondent-management, accordingly his entire service at least from 1948 has to be considered for gratuity. In order to appreciate the rival contentions, it is but proper to refer Clause 11 of the Standing Orders. It is settled legal position that the Standing Orders have statutory force and are binding on both parties. In order to appreciate the rival contentions, it is but proper to refer Clause 11 of the Standing Orders. It is settled legal position that the Standing Orders have statutory force and are binding on both parties. Now I shall refer Clause 11 of the Standing Order which runs as follows : "Draft Standing Orders submitted by the Kasthuri Mills Ltd. Singanallur P.O., Coimbatore Dt. xx x xx x xx x xx x 11. Any operative who desires to obtain leave of absence shall apply in person; in case of inability to attend, by a letter; and in case of sickness, with a medical certificate from the Registered Medical Practitioner, to the head of the department or any officer appointed by the Manager for the purpose who, if he thinks fit may grant leave for a period not exceeding three days. In special cases the Manager may grant leave for period exceeding three working days. For all leave so granted the officer granting it, shall keep a record, and also make entries in his daily attendance card for the grant of such leave. If the workman remains absent beyond the period of leave originally granted or sub-sequently extended, he shall lose his lien on his appointment unless he (1) returns within three days of the expiry of the leave and (2) has given explanation to the satisfaction of the authority granting leave of his inability to return before the expiry of leave. In case the workman loses his lien on his appointment he shall be entitled to be kept on the "Badli List".The second part of Clause 11 is relevant for our consideration. It makes the position clear that if any workman remains absent beyond the period of leave originally granted or sub-sequently extended, he shall lose his lien on his appointment. However, there are two exceptions, namely, if he returns within 3 days of the leave or has given explanation to the satisfaction of the authority granting leave of his inability to return before the expiry of the leave, he cannot lose his lien on his appointment. I have already stated that admittedly the petitioner did not return within 3 days after expiry of leave. He was on leave from October 27, 1958 to August 8, 1959. He failed to give any explanation of his inability to return to duty after expiry of leave. I have already stated that admittedly the petitioner did not return within 3 days after expiry of leave. He was on leave from October 27, 1958 to August 8, 1959. He failed to give any explanation of his inability to return to duty after expiry of leave. Hence, according to the third respondent-management, as per the latter part of Clause 11, the petitioner-workman has lost his lien on his appointment. On July 12, 1960 he offered himself for employment, and as there was permanent vacancy, he was taken as a doffing boy in the permanent employment of the third respondent. Since then the date of his entry in service has been entered in the Mill records as July 12, 1960. 8. Mr. Hari Paranthaman, learned counsel the last 2 sentences from the Stand-services of the petitioner were never terminated by the management and he continued to he 'Badli' worker; hence his earlier services have to be considered. No doubt, the relevant clause says that" in case the workman loses his lien an appointment, he shall be kept on the 'Badli List; Mr. Hari Paranthaman has very much relied on the following passage in Lalappa Lingappa v. Laxmi Vishnu Textile Mills (1981-I-LLJ-308) (SC) : "As regards Badli employees, there can be no doubt that they are not in uninterrupted service and, therefore, they do not fall within the substantive part of the definition "continuous service" in Sec. 2(c), but are covered by Explanation 1. In Delhi Cloth and General Mills Co. v. Its Workmen, (1969-II-LLJ-755)(SC), the Court, while dealing with a gratuity scheme, repelled the contention urged on behalf of the badli employees that since they had to register themselves with the management of the textile mills and were required every day to attend the mills for ascertaining whether work would be provided to them or not, the condition requiring that they should have worked for not less than 240 days in a year to qualify for gratuity was unjust and observed :If the gratuity is to be paid for service rendered, it is difficult to appreciate the grounds on which it can be said that because for maintaining his name on the record of the badli workmen, a works is required to an attend the mills he may be deemed to have rendered service and would on that account be entitled also to claim gratuity. Standing Order No. 3 as settled by the Industrial Court under Sec.36(3) of the Bombay Industrial Relations Act, 1946, for Operatives in Cotton Textile Mills in so far as material, provides : 3. Operatives shall be classed as (1) Permanent; (2) Probationer; (3) Badlis; (4) Temporary Operatives; and (5) Apprentices. x x x A 'badli" is one who is employed on the post of a permanent operative or probationer who is temporarily absent. x x x It is not denied that the Management has got a separate register for the badli employees and that those who need work and when they call at the gate of the mills for work, such, number of them are employed by the mills' to fill up the vacancies of permanent operatives or probationers who are absent on a particular day either on account of illness or for any other cause. "9. He also relied on another decision reported in D. K. Yadav v. J. M. A. Industries Ltd. (1993-II-LLJ-696)(SC). By relying on this decision, he submitted that in order to comply with the principles of natural justice irrespective of the Standing Order, the third respondent-Management could have passed an order after affording an opportunity to the petitioner. Per contra, it is the case of the third respondent-Management that in the light of specific provisions in the Standing Order, namely, Clause 11, inasmuch as the petitioner did not return to duty after the expiry of 3 days and in the absence of any valid explanation, he loses his lien on his earlier appointment automatically. No formal order is required. I have already extracted the relevant Clause, viz., Clause 11 in the Standing Order. In this regard, a decision of the Supreme Court ordered in National Engineering Industries Ltd. v. Hanuman (1967-II-LLJ-883). In that decision, Their Lordships of the Supreme Court have held that the Standing Order is inartistically worded, but it seems clear that when the Standing Order provides that a workman will lose his lien on his appointment in case he does not join his duty within eight days of the expiry of his leave, it obviously means that his services are automatically terminated on the happening of the contingency. Their Lordships further observed that it is not understood how a workman who has lost his lien on his appointment can continue in service thereafter. Their Lordships further observed that it is not understood how a workman who has lost his lien on his appointment can continue in service thereafter. Their Lordships also observed that where therefore a Standing Order provides that a workman would lose his lien on his appointment if he does not join his duty within certain time after his leave expires, it can only mean that his service stands automatically terminated when the contingency happens. The above observation of Their Lordships of the Supreme Court and Clause 11 of the Standing Order support the case of the management. 10. Now I shall consider the status of Badli worker. In Prakash Cotton Mills P. Ltd. v. The Rashtriya Mill Mazdoor Sangh (1987-I-LLJ-97)(SC) it was held that Badli workmen have no right to claim compensation on account of closure. The following conclusion of Their Lordships in that decision is relevant :" The next question that remains to be considered is whether the Industrial Court is justified in directing payment of compensation to some of the Badli workmen. It is not in dispute that Badli workmen get work only in the absence, temporary or otherwise, of regular employees, and that they do not have any guaranteed right of employment. Their names are not borne on the muster rolls of the establishment concerned. Indeed, a Badli workman has no right to claim employment in place of any absentee employee. In any particular case, if there be some jobs to be performed and the employee concerned is absent, the Company may take in a Badii workman for the purpose. Badli workmen are really casual employees without any right to be employed. It has been rightly submitted by the learned counsel for the appellant that the Badli employees could; not be said to have been deprived of any work to which they had no right and, consequently they are not entitled to any compensation for the closure. Indeed, the Industrial Court has itself observed that to allow the claim of Badli workmen would' tantamount to penalising the appellant. In site of the said observation, the Industrial Court directed payment of compensation to the Badli workmen in place of certain categories of regular employees. We fail to understand how the Industrial Court can direct payment of compensation to the Badli workmen when admittedly, such Badli workmen as noticed already have no right to, be employed. In site of the said observation, the Industrial Court directed payment of compensation to the Badli workmen in place of certain categories of regular employees. We fail to understand how the Industrial Court can direct payment of compensation to the Badli workmen when admittedly, such Badli workmen as noticed already have no right to, be employed. It may be that the Company may not Have to pay closure compensation to the three categories of employees, as mentioned by the Industrial Court, but that does not mean that the Company has to pay compensation to the Badli workmen in lace of these categories of employees. In this connection, we may refer to Section25-C of the Industrial Disputes Act, 1947 which excludes a Badli Workman or a casual workman from the benefit of compensation in the case of lay-off. "Even in the case referred to by the learned counsel for the petitioner, namely (1981-I-LLJ-308)(SC) cited (supra), the position of Badli employees have been considered by their Lordships. They have concluded thus :" The Report of the Badli Labour Enquiry Committee, Cotton Textile Industry, 1967, no doubt shows that the badli employees are an integral part of the textile industry and that they enjoy most of the benefits of the permanent employees; but there may not be any continuity of service as observed by this Court in the Delhi Cloth Mills' case (1969-II-LLJ-755). The badli employees are nothing but substitutes. They are like "sparemen" who are not "employed while waiting for a job : (Conlon v. Glasgow, 36 Scottish Law Reporter 652, Vallabhdas Kanji (P) Ltd. v. Esmail Koya and Others 1978 Lab. I.C.809, taking the view to the contrary, d&s not appear to lay down a good law. Accordingly, we uphold the view that the badli employees are not covered by the substantive part of the definition of" continuous service' in Sec.2(c), but came within Explanation 1 and therefore, are not entitled @o payment of gratuity for the badli period, i.e., in respect of the years in which there was no work allotted to them due to their failure to report to duty." 11. In the light of law laid down by the Apex Court, particularly the last two decisions referred to above and in the light of the factual position that the petitioner was on leave from October 27, 1958 to August 8, 1959 and absented without leave for three days, i.e., on August 9, 10 and 11, 1959 and he did not return within three days of expiry of the leave and also failed to give any explanation of his inability to return to duty after expiry of leave and in the light of Clause 11 of the Standing Order, the orders passed by the Respondents 1 and 2 cannot be said to be either erroneous or contrary to any of the statutory provisions. Accordingly, 1 hold that the Badli employee is not covered by substantive part of the definition 'Service' as defined in Section2-A of the Payment of Gratuity Act, 1972. Hence the contention of the Con petitioner's date purpose of gratuity, July 12, 1960 and the order of the Appellate Authority confirming the same are in order. Accordingly, I do not find any merit in the writ petition and the same i is dismissed. However, there shall be no order as to costs.