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2002 DIGILAW 327 (KER)

Rajan P. v. Union of India

2002-05-28

JACOB BENJAMIN KOSHY

body2002
JUDGMENT J.B. Koshy, J. 1. Constitutional validity of S.5(1) (a) (i) of the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955 (hereinafter referred to as 'the Working Journalist Act') is challenged here. Under S.5 of the Working Journalist Act, a Working Journalist who has been in continuous service for not less than three years in a newspaper establishment is entitled to gratuity on termination of his employment otherwise than a punishment inflicted by way of disciplinary action. If he voluntarily resigns from the service after ten years of service also, he is entitled to get gratuity. 2. Relevant provisions of S.5 of the Working Journalist Act is quoted below: "5. Payment of gratuity. (1) Where .......... If he voluntarily resigns from the service after ten years of service also, he is entitled to get gratuity. 2. Relevant provisions of S.5 of the Working Journalist Act is quoted below: "5. Payment of gratuity. (1) Where .......... (a) any working journalist has been in continuous service, whether before or after the commencement of this Act, for not less than three years in any newspaper establishment, and (i) his services are terminated by the employer in relation to that newspaper establishment for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action; or (ii) he retires from service on reaching the age of superannuation; or (b) any working journalist has been in continuous service, whether before or after the commencement of this Act, for not less than ten years in any newspaper establishment, and he voluntarily resigns on or after the 1st day of July, 1961, from service in that newspaper establishment on any ground whatsoever other than on the ground of conscience; or (c) any working journalist has been in continuous service, whether before or after the commencement of this Act, for not less than three years in any newspaper establishment, and he voluntarily resigns on or after the 1st day of July 1961, from service in that establishment on the ground of conscience; or (d) any working journalist dies while he is in service in any newspaper establishment, the working journalist or, ink the case of his death, his nominee or nominees or, if there is no nomination in force at the time of the death of the working journalist, his family, as the case may be, shall, without prejudice to any benefits or rights accruing under the Industrial Disputes Act, 1947, be paid, on such termination, retirement, resignation or death, by the employer in relation to that establishment gratuity which shall be equivalent to fifteen days' average pay for every completed year of service or any part thereof in excess of six months: Provided that in the case of a working journalist referred to in clause (b), the total amount of gratuity that shall be payable to him shall not exceed twelve and half months' average pay: "XXXXXXXXXXXXXXXX" 3. Petitioner commenced service in the second respondent's establishment on 1st August, 1961. After more than 25 years of service he was dismissed from service on 20th June 1988. Petitioner commenced service in the second respondent's establishment on 1st August, 1961. After more than 25 years of service he was dismissed from service on 20th June 1988. He was not paid gratuity because under S.5 (1) (a) (i) of the Working Journalist Act, gratuity is not payable if service is terminated as a punishment inflicted by way of disciplinary action. Gratuity is payable under the Payment of Gratuity Act (hereinafter referred to as 'the Gratuity Act'), under such circumstances. Under S.4 (6) of the Gratuity Act, gratuity can be denied for dismissal or termination of service only on the following contingencies: "4. (6) Notwithstanding anything contained in sub-section (1), (a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or lose to, or destruction of property-belonging to the employer, shall be forfeited to the extent of the damage or loss so caused; (b) the gratuity payable to an employee may be wholly or partially forfeited, (i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or (iii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment." Petitioner was not paid gratuity under the Gratuity Act also. 4. The first question to be considered is if he is not entitled to gratuity under the Working Journalist Act, whether he will be entitled to gratuity under the Gratuity Act. Under S.4 of the Payment of Gratuity Act, gratuity is payable to an employee on the termination of his employment if he had tendered continuous service for not less than five years. But, there was a ceiling of gratuity during the relevant time as 20 months' salary. S.4 (5) of the Payment of Gratuity Act provides as follows: "4. (5), Nothing in this section shall affect the right of an employee to receive better terms ,of gratuity under any award or agreement or contract with the employer." 5. It is the definite contention of the employer that in view of S.16 of the Working Journalist Act, Gratuity Act is not applicable.Section 16 of the Working Journalist Act is quoted below: 16.Effect of laws and agreements inconsistent with the Act. It is the definite contention of the employer that in view of S.16 of the Working Journalist Act, Gratuity Act is not applicable.Section 16 of the Working Journalist Act is quoted below: 16.Effect of laws and agreements inconsistent with the Act. (1) The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law or in the terms of any award, agreement or contract of service, whether made before or after the commencement of this Act: Provided that where under any such award, agreement, contract of service or otherwise, a newspaper employee is entitled to benefits in respect of any matter which are more favourable to him than those to which he would be entitled under this act, the newspaper employee shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that he receives benefits in respect of other matters under this Act. (2) Nothing contained in this act shall be construed to preclude any newspaper employee from entering into an agreement with an employer for granting him rights or privileges in respect of any matter which are more favourable to him than those to which he would be entitled under this Act." It is also contended by the Counsel for the second respondent that the Working Journalist Act is a special enactment applicable to Working Journalists as held i by the Constitution Bench of the Supreme Court in Express Newspaper Limited v. Union of India 1961 (1) LLJ 339 . The contention of the Counsel for the second respondent is that in view of S.16 of the Working Journalist Act which is a special legislation as far as Working Journalists are concerned, provisions of the Payment of Gratuity Act is not applicable. But, Payment of Gratuity Act which is a special legislation with regard to payment of gratuity. S.14 of the same provides as follows: "14. Act to override other enactments etc.The provisions of this act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this act or in any instrument or contract having effect by virtue of any enactment other than this Act." 6. S.14 of the same provides as follows: "14. Act to override other enactments etc.The provisions of this act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this act or in any instrument or contract having effect by virtue of any enactment other than this Act." 6. The Supreme Court in Sarvan Singh v. Kasturilal AIR 1977 SC 265 held that in case of conflict of non obstante clauses in more than one statute, such conflict has to be resolved on consideration of policy and purpose underlying the enactment and the language used therein. Non obstante clause relied on in two different statute has to be reconciled and given an interpretation which makes both the enactments workable as held by the Supreme Court in R. S. Reghunath v. State of Karnataka AIR 1992 SC 81 . The general principle as held by , the Supreme Court in Ajay Kumar v. Union of India 1984 (1) LLJ 368 is generalia Specialibus non derogant, that is, special law would yield to a later general law if either of the two deals with the same subject. But, there should be an express provision. S.14 of the Payment of Gratuity Act is an -express provision. Further, the preamble of the Payment of Gratuity Act reads as follows: "An Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oil fields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto." 7. I may also quote the statement of objects and reasons of the "Payment of Gratuity Act: "There is at present no Central Act to regulate the payment of gratuity to industrial workers, except the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955. The Government of Kerala enacted legislation last year for payment of gratuity to workers employed in factories, plantations, shops and establishments. The West Bengal Governor promulgated an Ordinance on the 3rd June 1971 prescribing a similar scheme of gratuity. This Ordinance has since been replaced by the West Bengal Employees' Payment of Compulsory Gratuity Act, 1971, enacted by the President on 28th August 1971. Gratuity is also being paid by some employers to their workers under awards and agreements. The West Bengal Governor promulgated an Ordinance on the 3rd June 1971 prescribing a similar scheme of gratuity. This Ordinance has since been replaced by the West Bengal Employees' Payment of Compulsory Gratuity Act, 1971, enacted by the President on 28th August 1971. Gratuity is also being paid by some employers to their workers under awards and agreements. Since the enactment of the Kerala and the West Bengal Acts, some other State Governments have also voiced their intention of enacting similar measures in their respective States. It has become necessary, therefore, to have a Central law on the subject so as to ensure a uniform pattern of payment of gratuity to the employees throughout the Country. The enactment of a Central law would also avoid different treatment to the employees of establishments having branches in more than one State when, under the conditions of their service, the employees are liable to transfer from one State to another." The Central Act intend to provide uniform payment of gratuity. The objects and reasons show that while, enacting the payment of Gratuity Act, they have considered the provisions of the Working Journalists (Condition of Service) and Miscellaneous Provisions Act. After considering those provisions only S.14 of the Payment of Gratuity Act, a non obstante clause was enacted. However, if better terms are available for the Working Journalists under the Working Journalist Act, they are entitled to the same in view of S.4 (5) of the Gratuity Act. Therefore, a view is possible that gratuity can be calculated under the Working Journalises Act and under the Payment of Gratuity Act and an employee will get the gratuity which is more favourable to him. If gratuity is not payable under the Working Journalist Act like a case of this kind, gratuity is payable under the Gratuity Act and such an interpretation makes both the Act workable with the regard to the question of payment of gratuity. 8. The learned Counsel for the second respondent pointed out that Karnataka High Court in Management of Indian Express Madurai (P) Limited, Bangalore v. Jeswant J. M. and others 1998 (11) LLJ 916 held a different view and in view of the non obstante clauses in Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, Payment of Gratuity Act is not applicable. A similar view was taken by the Rajasthan High Court in Daily Navajyoti, Ajmer v. Appointed Authority under S.17 (1) of Working Journalists Act and another 1998 (11) LLJ 705. I am prima facie, of the view that considering (1) the pronouncements of the Supreme Court regarding the effect of non obstante clauses in two enactments; (2) both are beneficial legislations; (3) the Working Journalists Act was specifically considered while enacting the payment of Gratuity Act as can be seen from the objects and reasons; (4) Payment of Gratuity Act is a subsequent legislation, it cannot be stated that Working Journalists are excluded from the purview of Gratuity Act. Otherwise specific exclusion would have been made in the subsequent Act. However, if better terms of gratuity is payable under the Working Journalists Act, that should be receivable in view of section 4 (5) of the Gratuity Act; but gratuity under the Gratuity Act cannot be denied to Working Journalists even if no gratuity is payable under the Working Journalists Act. Therefore, I have reservation over the correctness of the Judgments of the Rajasthan and Karnataka High Courts referred to earlier. In this connection, I also refer to the decision of this Court in Raveendranatha Prabhu v. Rajappan 1998 (1) LLJ 204. As observed by Gajendra Gadker, J. in Alembic Chemical Works Co. Ltd. v. Its Workmen 1961 (1) LLJ 326 (SC) at page 381, "it is well settled that in construing the provisions of welfare legislation, Court should adopt what is sometimes described as beneficial rule of construction. .........". However, the contention of the petitioner that part of the Working Journalists Act with regard to calculation of gratuity without any ceiling etc. and part of the Gratuity Act regarding eligibility conditions whichever is beneficial can be selected by the employees cannot be accepted. But, I am not deciding that question whether Gratuity Act is applicable to Working Journalists also in spite of S.16 of the Working Journalists Act as petitioner herein is not seeking gratuity under the Gratuity Act. His contention is that S.5 (1) (a) (i) of the Working Journalists Act is unconstitutional. If that clause is unconstitutional, he is entitled to gratuity under the Working Journalists Act itself. His contention is that S.5 (1) (a) (i) of the Working Journalists Act is unconstitutional. If that clause is unconstitutional, he is entitled to gratuity under the Working Journalists Act itself. It is pointed out by both sides that there are no reported decisions on the point by the Apex court or any of the High Courts and validity of the section was not challenged earlier. 9. Gratuity was paid originally as a gratuitous payment to the workman on retirement for efficient and faithful service rendered for a considerable period of time. Later, such rights were protected by way of settlements. Schemes were also framed by certain companies for payment of gratuity. Industrial Tribunals also after adjudication started framing schemes for payment of gratuity. Working Journalists Act is the first Statute giving statutory recognition for payment of gratuity. Later, Kerala and West Bengal States also made statutory provision for payment of gratuity to all employees on; completion of five years of service. Later, payment of Gratuity Act was enacted enabling all employees to get gratuity as of right. Now, payment of gratuity is recognised as a legal retirement benefit entitled to the employees as of right. Once gratuity is recognised as a legal right and it is earned by service, it cannot be denied or forfeited on unreasonable conditions as held by the apex court in Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd 1984 (3) SCC 369 . Law is not static and Court cannot ignore the development of law especially in industrial law. We have seen that once a gratuitous payment became a legal right by industrial adjudication, judicial pronouncements and subsequently by legislation. In Express Newspaper's case (supra) a Constitution Bench held that provision to give gratuity to Working Journalists, even if he voluntarily retires after three years of service is unreasonable. The Court opined that in such cases at least he must have completed 15 years of service to get gratuity. But, in subsequent case law, Supreme Courts had held that provision for payment of gratuity on resignation also on completion of five years like other employees is not unconstitutional. See: Garment Cleaning Works, Bombay v. The Workmen AIR 1962 SC 673 M/s British Paints (India) Ltd. v. Their Workmen AIR 1966 SC 732 and M/s May and Baker (India) Ltd. v. Their Workmen AIR 1967 SC 678 . See: Garment Cleaning Works, Bombay v. The Workmen AIR 1962 SC 673 M/s British Paints (India) Ltd. v. Their Workmen AIR 1966 SC 732 and M/s May and Baker (India) Ltd. v. Their Workmen AIR 1967 SC 678 . Similar provision in the Payment of Gratuity Act was also upheld by the apex court. Since, now gratuity is recognised as a legal right for services rendered at least for five years, the, earned gratuity after long years of service can be forfeited only in exceptional circumstances. 10. The question now to be considered is whether the provisions of the Working Journalists Act denying payment of gratuity if service was terminated on disciplinary ground irrespective of the nature of the misconduct is valid despite the long service of an employee. In other words, whether provision in the Working Journalists Act for forfeiture of gratuity if a person is dismissed or terminated on disciplinary ground, whatever be the nature of the misconduct, is legally valid at a time when payment of gratuity is accepted as a legal retirement benefit. The Supreme Court had occasion to consider in detail the various circumstances in which gratuity will be liable to forfeiture for misconduct of a particular nature. In Delhi Cloth and General Mills Co. Ltd. v. Their Workmen 1969 (2) LLJ 755 it was held that the object of having a gratuity scheme is to provide a retiring benefit to workmen who have rendered long and unblemished service to the employer and thereby contributed to the prosperity of the employer and, therefore, it is not correct to say that no misconduct, however grave, may not be visited with forfeiture of gratuity. The Supreme Court held that misconduct could be of three kinds: (1) technical misconduct which leaves no trail of indiscipline; (2) misconduct resulting in damage to the employer's property which might be compensated by forfeiture of gratuity or part thereof, and (3) serious misconduct such as acts of violence against the management or other employees or riotous or disorderly behaviour in or near the place of employment, which, though not directly causing damage, is conducive to grave indiscipline. The first should involve no forfeiture, the second may involve forfeiture of the amount equal to the loss directly suffered by the employer in consequence of the misconduct and the third will entail forfeiture of gratuity due to the workman. The first should involve no forfeiture, the second may involve forfeiture of the amount equal to the loss directly suffered by the employer in consequence of the misconduct and the third will entail forfeiture of gratuity due to the workman. In other words, according to this decision, if a workman is guilty of a serious misconduct of the third category, then, his gratuity can be forfeited in its entirety. 11. In Remington Rand of India Limited v. Their Workmen 1968 (1) LLJ 542 the Supreme Court followed the above decision and held that if the misconduct is a grave one involving violence, riotous behaviour, etc., the qualifying period should be limited. The decision of Delhi Cloth Mill's case (supra) was given statutory effect when Payment of Gratuity Act was framed and under S.4 (6) of the Gratuity Act, gratuity can be forfeited only if services of a workman are terminated for his riotous or disorderly conduct or any other" act of violence on his part or if his services were terminate for any act which constitutes an offence involving moral turpitude. There is also a provision that gratuity of an employee can be forfeited to the extent of damage because if service of a person is terminated for any act, wilful omission or negligence causing damage or loss to, or destruction of property belonging to the employer. In Tournamulla Estate v. Their Workmen 1973 (11) LLJ 241 a person was dismissed for riotous or disorderly behaviour. The Labour Court held that gratuity can be forfeited. This Court reversed the above decision and in appeal, the Supreme Court followed the decision in Delhi Cloth and General Mill's case (supra) and held that if a person is dismissed for riotous or disorderly behaviour, gratuity can be forfeited and forfeiture of gratuity depends on the nature of misconducts proved. The Labour Court noted the Judgment of the Supreme Court in State of Punjab v. Suraj Prakash Kapur 1962 (2) SCR 711 wherein the general argument that in all cases where services of an employee are terminated for misconduct, gratuity should not be paid was not accepted. The Labour Court noted the Judgment of the Supreme Court in State of Punjab v. Suraj Prakash Kapur 1962 (2) SCR 711 wherein the general argument that in all cases where services of an employee are terminated for misconduct, gratuity should not be paid was not accepted. The Supreme Court also referred to the provisions of the Payment of Gratuity Act even though dismissal was before the Payment of Gratuity Act to show that in view of S.4 (6) of the Gratuity Act, dismissal of all kind should not be taken together and a different treatment should be taken with regard to different kinds of misconducts. 12. As far as gratuity is concerned, first State legislation on the subject was Kerala Industrial Employees' Payment of Gratuity Act, 1970. Under S.4 of the above Act, gratuity is payable to the employee on superannuation or on retirement, resignation, retretchment, discharge of dismissal from service after completion of a minimum period of five years of continuous service The above provision was challenged. When the matter came up for consideration before a Full Bench of this Court in V. N. Sunder and others v. State of Kerala and others 1975 KLT 867 (F.B.) and the Full Bench held as follows: "26. In Assan Rawther v. Ammu Umma ( 1971 KLT 684 ) Krishna Iyer, J. observed:- "Judicial salvage of statutory provision by limiting the semantic sweep of the expressions used and tailoring it to the constitutional requirements, if that is possible without a re-writing of the provision is a sound practice honoured and adopted by eminent judges." 27. We have already dealt with the nature of the legislation with which we are concerned in this batch of cases. We have said that the statute is an expression of the social consciousness of the community, that it is in the interests not only of the work men but of the employers and in the larger interest of the general public. In a statute of that nature it is inconceivable that the legislature would have intended that a workman dismissed for disorderly or riotous behaviour or for commission of offences involving moral turpitude or acts or emissions which resulted in less to the company should also be paid gratuity disregarding the nature and gravity of the misconduct committed by him. Such a provision will not serve the purpose or the object of the Act. Such a provision will not serve the purpose or the object of the Act. In fact, it will be detrimental to the society. It would place a premium on indiscipline which will disrupt the growth or even the continuance of industries and thus adversely affect the general public. Such a provision would be an unreasonable restriction on the right to carry on any business, trade or occupation and would be violative of Art.19(1)(g) of the Constitution. We have, therefore, no hesitation in coming to the conclusion that the word dismissal in S.4 (1) (b) of the Act must be understood as dismissal for misconduct not involving riotous or disorderly behaviour or violence. Dismissals for offences involving moral turpitude or misconduct causing damage or loss to the employer are also excluded." (Judgment by Govindan Nair, C.J.) The Full Bench followed the principles adopted by the Parliament subsequently while enacting the Payment of Gratuity Act as well as the decisions of the Supreme Court to come to such a conclusion. 13. I also note that in the concurrent Judgment given by Justice V. P. Gopalan Nambiyar, it was held as follows: "4. But I was much troubled by the provision in S.4 of the Act, which makes gratuity payable to an employee, even on 'dismissal' from service [vide S.4 (1)(b) of the Act]. All things considered, I think this provision in the statute has to be read down. Under S.4 (1) (b) gratuity shall be payable to an employee, inter alia on his dismissal from service, after completion of a minimum period of five years of continuous service. It did seem shocking that gratuity should be exigible even where a workman had been dismissed for a glaring misconduct or for offences involving violence or riotous and disorderly behaviour or moral turpitude, such as murder, assault, or any outrage on the employer or the members of his family and the like. Does S.4 (1) (b), on a proper rendering of it, make gratuity payable on dismissal from service, even for such causes? If it does, it seems to ride roughshod over the principle settled by the Delhi Cloth and General Mill's case ( AIR 1970 S.C. 919 ) which, after examining and reconciling the prior decisions, settled that long and unblemished service is required for the payment of gratuity. If it does, it seems to ride roughshod over the principle settled by the Delhi Cloth and General Mill's case ( AIR 1970 S.C. 919 ) which, after examining and reconciling the prior decisions, settled that long and unblemished service is required for the payment of gratuity. It graded the classes of cases where gratuity could be wholly withheld or merely docked, depending upon the severity of the misconduct of the employee. Technical misconduct, not affecting payment of gratuity, misconduct involving riotous and disoiderly behaviour and involving moral turpitude, justifying forfeiture of gratuity, and misconduct liable to-be dealt with only as giving rise to a financial claim against the employee these were the classes of misconduct elucidated by Shah, J. who spoke for the court. In Remington Rand's case [1971 (39) Factory Journal Reports 437 at 448] forfeiture of gratuity for gross misconduct involving violence was held justified. After this current of judicial decisions, to state that gratuity is payable even on dismissal from service, without any qualification, seems to put the clock back." 14. According to the petitioner's Counsel, after coming into force of the Payment of Gratuity Act, all employees in India, whether working in private or public sector, are entitled to gratuity even if they are dismissed from service and gratuity is forfeited only in specified cases, that is, termination of employment for riotous behaviour in the premises of the establishment or if their services are terminated for an offence involving moral turpitude or to the extent of the actual (not estimated or anticipated) damages caused to the establishment directly on account of the act of the employee concerned. But, working Journalists alone are discriminated and denied gratuity if their services are terminated by way of punishment for disciplinary action, whatever may be the nature of misconduct. Even if services of a Working Journalist having more than 25 years of good long service (like in this case) is terminated for a misconduct which is not specified in the Payment of Gratuity Act, gratuity is forfeited. Now, only Working Journalists are faced with the situation. Therefore, last part of S.5 (1) (a) (i) of the Working Journalists Act is violative of Art.14 of the Constitution of India and it should be set aside. Now, only Working Journalists are faced with the situation. Therefore, last part of S.5 (1) (a) (i) of the Working Journalists Act is violative of Art.14 of the Constitution of India and it should be set aside. Since gratuity is now recognised as a retirement benefit legitimately earned by the employee by his length of service in the establishment, a case has been made out by the petitioner for reading down the words "otherwise than as a punishment inflicted by way of disciplinary action" used in S.5 (I) (a) (i) of the Working Journalists Act so as to be in tune with S.4 (6) of the Payment of Gratuity Act as was done by the Full Bench in V. N. Sunder's case (supra). In view of the various decisions of the Apex Court referred to above and since payment of gratuity is now recognised as a legal retirement benefit of the industrial employees, I am of the view of that instead of declaring S.5 (1) (a) (i) of the Working Journalists Act as invalid, it has to be read down and disciplinary action mentioned in that sub-section will mean only disciplinary action for riotous disorderly conduct or any other act of violence on his part or any act which constitutes an offence involving moral turpitude provided that such offence is committed by him in the course of employment. Gratuity can also be forfeited if his services have been terminated for any act, wilful omission or negligence causing any damage or loss to or destruction of property belonging to the employer to the extent of the loss so caused. 15. In this case, the employee was dismissed not for an offence involving moral turpitude or riotous or disorderly behaviour. There is no case for the management that because of the proved misconduct any actual damage or loss was occurred. Therefore, petitioner who had more than 25 years of service is entitled to gratuity. I direct the second respondent to pay the gratuity as provided under the Working Journalists Act to the petitioner with 9 percent interest from the date of his retirement. The original petition is allowed.