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Rajasthan High Court · body

2000 DIGILAW 8 (RAJ)

Municipal Board, Gangapur City v. Salim Khan

2000-01-04

ARUN MADAN

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Honble MADAN, J.–By this writ petition, the Municipal Board Gangapur City (for short ``Board) seeks a writ of quo-warranto for declaring that the Controlling Authority under the Payment of Gratuity Act, 1972 (for short the ``Act 1972), District Sawaimadhopur (respondent No.2) (for brevity, ``respondent authority) has no jurisdiction in the matter of Salim Khan (respondent No.1 employee) to pass order dated 18.2.1997 (Ann. 3) in Suit No. PGA 12/96, whereby the respondent authority held that the respondent employee is entitled to get balance payment of Rs. 32919/-from the petitioner Board with interest @ 12% per annum with effect from 31.5.95 till payment directed to be made within 30 days. (2). Succinctly stated the facts leading to this writ petition are that admittedly the respondent No.1 was an employee of the Board having been initially appointed on 1.10.64 at its Octroi Post Guard and he had retired from service on 31.5.95 when he was paid retirement gratuity of Rs. 19,673/-. However, the respondent employee being dissatisfied with payment of gratuity made by the Board at the time of his retirement, preferred a petition on 20.8.96 (Ann. 1) before the respondent authority claiming gratuity to the tune of Rs. 51,855/-under the Act on the assertions inter alia that at the retirement on 31.5.95, he had completed service for 30 years & 8 months and last pay drawn was Rs. 1290/-plus Rs. 1613/-as dearness allowance totalling to Rs. 2903/-and therefore, on the basis of last pay at Rs. 2903/-he was entitled to total gratuity to a sum of Rs. 51,855.25 as per provisions of Section 2(s) of the Act, 1972, whereas he was only paid Rs. 19,673/-by the Board. Reply (Ann. 2) to the claim petition was also filed by the petitioner Board on 16.10.96 wherein admitting the fact of the respondent being employed and after having rendered 30 years 8 months, retired with payment of gratuity to a sum of Rs. 19,673/-by the Board. Reply (Ann. 2) to the claim petition was also filed by the petitioner Board on 16.10.96 wherein admitting the fact of the respondent being employed and after having rendered 30 years 8 months, retired with payment of gratuity to a sum of Rs. 19,673/-under the Rajasthan Municipalities (Contributory Provident Fund & Gratuity) Rules, 1969 (for short ``Gratuity Rules 1969), the Board raised objection as to the jurisdiction of the Authority (respondent No.2) to entertain claim of the Municipality employee and the employee (respondent No.1) of the Municipal Board is entitled to the gratuity only under the Gratuity Rules 1969 and not under the Act, 1972 because the Municipality is a local self institution having its own Service Rules inasmuch as the claimant employee being a permanent servant of the Board did not come within the purview of a workman, who used to receive daily wages having been worked at muster roll. (3). After having heard the parties and considered the material on record, the respondent Authority by its judgment (Ann. 3) ordered to make payment of balance gratuity sum of Rs. 32,919/-with interest as referred to above. Hence this writ petition at the instance of the Board. (4). Shri S.R. Surana, learned counsel for the petitioner Board contended that Payment of Gratuity Act 1972 is not applicable to the employees of the Municipalities when Gratuity Rules 1969 are in existence having application to them under which Rs. 19,673/-has already been paid to the respondent employee and that apart, the petitioner Board being not an industry within the meaning of Section 2(s) of the Act, 1972, does not have application under the provisions of the Act 1972 and moreso, Rule 11 of the Rules defines pay which does not include dearness allowance. Shri Surana also urged that the Act, 1972 was enforced on 1.3.82 and therefore, the services could not be counted as per the Act, 1972 but only the Municipality Gratuity Rules, 1969 is applicable. (5). Shri Surana also urged that the Act, 1972 was enforced on 1.3.82 and therefore, the services could not be counted as per the Act, 1972 but only the Municipality Gratuity Rules, 1969 is applicable. (5). The case of the respondent employee as canvassed on his behalf by Shri S.K. Jain, learned counsel is that notwithstanding the fact that he is an employee of the Board yet for the purpose of settlement of payment of his gratuity as on the date of his retirement, he is governed by the Act 1972, which is a Central legislation and which has over riding effect to the Gratuity Rules 1969 which the petitioner Board had taken into consideration before settling his case. (6). I have heard the learned counsel for the parties and considered their rival contentions and legal aspect on the subject with regard to the Act 1972 as also Gratuity Rules 1969. (7). The first and foremost issue arising for consideration is, whether the respondent No.1 an employee of the Municipal Board was entitled to payment of gratuity under the Act, 1972 (Central Legislation) or under the Gratuity Rules, 1969) State Rules). Allied question to the above is, whether the Act, 1972 being Central Legislation shall have over-riding effect to the State Rules of Gratuity, 1969. Section 14 of the Act, 1972 reads as follows: ``14. Act to over-ride other enactments, etc. The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment over this Act or in any instrument of contract having effect by virtue of any enactment over this Act. (8). As per Scheme of the Act, 1972 being Central Legislation, in its preamble, it is clearly laid down that its provisions shall have over-riding effect on any other legislation, which is inconsistent to the provisions of State enactment because its Section 14 makes it explicitly clear that ``notwithstanding anything inconsistent therewith contained in any enactment over this Act or in any instrument of contract having effect by virtue of any enactment, provisions of this Act shall prevail over it. Thus viewed, the Act, 1972 by virtue of its Section 14, will have over-riding effect on all other laws. Thus viewed, the Act, 1972 by virtue of its Section 14, will have over-riding effect on all other laws. Having regard to the wordings embodied in Section 14 of the Act, 1972, it follows as a legal corollary thereto that notwithstanding any order having been passed by the Municipality with reference to its Gratuity Rules, 1969 or in any instrument of contract having effect, yet by virtue of provisions of Section 14 of the Act, 1972, it will have over-riding effect thereto, inasmuch as nothing inconsistent or repugnant to the scheme on central legislation should not be given effect to, since otherwise very purpose of central enactment will stand lost and defeated, which preamble of the central legislation never intended. (9). I am fortified with the law laid down by this Court in Municipal Board, Gangapur vs. Controlling Authority under the Act, 1972, Bhilwara (1) wherein this Court held that the Gratuity Rules, 1969 will have no role to play so far as they are inconsistent with the Act, 1972, which would cover the Municipalities, for payment of gratuity and not the Gratuity Rules, 1969. It has further been held that the Municipalities are covered under definition of establishment as embodied in Section 1(3)(b) of the Act, 1972, Recently in similar circumstances, in Municipal Corporation of Delhi vs. Dharam Prakash Sharma (2) dealing with a case of employee of Delhi Municipality which had adopted provisions of Central Civil Service (Pension) Rules, 1972 providing for both pension and gratuity, the Apex Court held that Municipality employee remains entitled to payment of gratuity under the Act, 1972 unless employer (Municipality) invokes powers of Government u/s 5, seeking exemption from operation of provisions of the Act on the ground that its employee are in receipt of gratuity or pension benefits not less favourable than those provided by the Act, 1972. The Apex Court then held that the employees of the Delhi Municipalities would be entitled to the payment of gratuity under the Act, 1972 notwithstanding the fact that the provisions of the pension rules have been made applicable to them for determination of the pension. (10). The Apex Court then held that the employees of the Delhi Municipalities would be entitled to the payment of gratuity under the Act, 1972 notwithstanding the fact that the provisions of the pension rules have been made applicable to them for determination of the pension. (10). The decision of this Court cited by Shri Surana, in Achaldas vs. Municipal Council Jodhpur (3) dealt with question of industry under the Industrial Disputes Act, where case of the petitioner was that by virtue of application of Industrial Disputes Act, 1947 and the Industrial Employment (Standing Orders) Act, 1946, in Rajasthan in 1950, the Jodhpur Municipality is an ``industry as defined u/s 2 (j) of the Industrial Disputes Act 1947 and, therefore, the petitioner claiming himself an employee of this industry on a salary of less than Rs. 500/-per month claimed that he was a ``workman within the meaning of Section 2(s) of that Act. Thus, the controversy being entirely different than those involved in the present case, the authority cited by Shri Surana does not have application to render assistance to advancement of this case in this writ petition. (11). However, applying the principles of law laid down in the decisions (supra) and ratio of the decisions cited by respondent employee and referred to by the respondent authority, I am of the considered view that the contentions advanced by Shri Surana has no force and, therefore, are rejected. I therefore, hold that the respondent Authority has rightly held the Act, 1972 as applicable to the Municipalities and accordingly rightly held the respondent employee entitled to the payment of gratuity under the Act, 1972 and not under the Municipalities Gratuity Rules, 1969. In my considered view, the respondent Authority cannot be declared to have no jurisdiction to pass impugned order dated 18.2.97 (Ann. 3) by issuing a writ of quo-warranto as sought by the petitioner Board because the Act, 1972 is applicable to the employees of the Municipalities having over-riding effect on the Gratuity Rules, 1969 by virtue of clear provisions in Section 14 of the Act, 1972. Consequently, the impugned order Ann. 3, deserves to be upheld. (12). 3) by issuing a writ of quo-warranto as sought by the petitioner Board because the Act, 1972 is applicable to the employees of the Municipalities having over-riding effect on the Gratuity Rules, 1969 by virtue of clear provisions in Section 14 of the Act, 1972. Consequently, the impugned order Ann. 3, deserves to be upheld. (12). Once the Act, 1972 is held applicable and Gratuity Rules 1969 as inapplicable to the employees of the Municipalities, rest of the contentions raised by Shri Surana on behalf of the Municipality, as to the dearness allowance for being not included in the pay under Rule 11 and the service rendered prior to 1.3.82 when the Act 1972 came into force, for being not included for computation of gratuity under the Act, 1972 fall flat to the ground. (13). As a result of the above discussion, this writ petition is dismissed. No order as to costs. The impugned order dated 18.2.1997 (Annexure 3) passed by the Controlling Authority under the Payment of Gratuity Act, 1972 District Sawai Madhopur (respondent No.2) is upheld, the petitioners Municipal Board Gangapur City & its Chairman are directed to implement the impugned order dated 18.2.1997 (Ann. 3) within six weeks from the date of receipt of certified copy of this order upon submission by the respondent employee, failing which the respondent employee will be entitled to interest @ 18% per annum instead of rate of interest of 12% as awarded under the impugned order (Annex. 3) till the payment.