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2007 DIGILAW 630 (JHR)

Gauri Chakraborty v. Tata Iron And Steel Co. Ltd.

2007-08-06

M.KARPAGAVINAYAGAM, N.N.TIWARI

body2007
JUDGMENT Narendra Nath Tiwari, J. 1. This appeal arises out of the order passed in WP(S) No. 1418/ 03. The appellant was the 3rd respondent in the said writ petition. M/S TISCO had filed the said petition challenging the order dated 24.2.2003 passed by the Dy. Labour Commissioner-cul-Authority under the Payment of Gratuity Act, 1972. By the said order M/S TISCO were directed to pay the amount of gratuity to the appellant observing that they cannot withhold the gratuity for not vacating companys quarter by her. in view of the provision contained in Section 4(6) of the Payment of Gratuity Act. 2. Before proceeding further with the case, it is pertinent to mention here that during the pendency of the writ petition, the 3rd respondent-appellant vacated the Companys quarter and has received the amount of gratuity. However, that culmination was preceded by the events which will be discussed in the succeeding paragraphs. 3. After the Companys quarter was vacated by the 3rd respondent-appellant and the amounts of gratuity and other dues were paid to her, learned single Judge might have thought that the purpose of the writ petition was achieved and nothing further remained to be decided in the writ petition. Learned single Judge thus disposed of the writ petition as hereunder: Having regard to the fact that the 3rd respondent has vacated the quarter of the TISCO and substantial admitted dues have been paid by the petitioner, this Court is not inclined to give any finding with regard to claim and counter claim, made by the parties.... He also set aside the order date 24.2.2003 passed by the said Authority. 4. Learned single Judge further directed the TISCO to forward a chart to the 3rd respondent showing details of deductions and payments etc with liberty to the appellant to bring to the notice of the competent authority, if there is any miscalculation or non-consideration of the relevant facts according to her. The concerned authority was directed to consider and decide any such claim made by the appellant. 5. The concerned authority was directed to consider and decide any such claim made by the appellant. 5. Though the appellant has vacated the Companys quarter, got her gratuity and other benefits and has also been given liberty to make her claim, if any, before her employer with a direction to the employer to consider and decide any such claim, the appellant is not satisfied with the impugned order and has preferred this appeal with a prayer to set aside the said order of learned single Judge, probably unmindful fo the facts that even if the impugned order is set aside the main purpose of the writ petitioner has already been served as soon as she vacated the Companys quarter. Such being the position, the. purposed this appeal is not quite clear. 6. Mr. Mahesh Tiwari, learned Counsel appearing on behalf of the appellant, explaining the purpose of the appeal, submitted that a judicial decision is required in his appeal as a future guideline for the benefits of the other employees of the TISCO who are governed by the provisions of Tata Iron and Steel Company Limited Retiring Gratuity Rules, 1937 which, according to learned Counsel, are subject to the provisions of the Payment of Gratuity Act, 1972, under which the Deputy Labour Commissioner-cum-Authority had directed the TISCO to pay the gratuity payable to the appellant without compelling her to vacate the Companys quarter. 7. The said issue might have some relevance at the earlier point of time, but is now non-existent between the parties. The appellant has not been litigating in a representative capacity nor has got such authority on record to raise such issue for other employees or to expouse their cause. We, therefore, see np locus stand of the appellant to raise such issue for the purpose of other employees of the TISCO and demand a decision of this Court as a guideline for an apprehended future controversy. 8. More so when the said issue has been raised by a superannuated employee who has claimed/received all the benefits in accordance with the provisions of the said Gratuity Rules of the Company, taking exception of only Rule 20 of the said Rules, which provides for adjustment of the house rent against the amount of gratuity. 9. 8. More so when the said issue has been raised by a superannuated employee who has claimed/received all the benefits in accordance with the provisions of the said Gratuity Rules of the Company, taking exception of only Rule 20 of the said Rules, which provides for adjustment of the house rent against the amount of gratuity. 9. Coming to the facts, it is relevant to mention here that the TISCO framed a Retiring Gratuity Rules for the benefits of the retiring employees, in the year 1937, long before the Payment of Gratuity Act, 1972 was passed by the legislation. 10. The Payment of Gratuity Act, 1972 did not abrogate or exclude such gratuity rules framed by the employers. Such rules were allowed to operate by making specific provisions under Sub-section (5) of Section 4 of the Payment of Gratuity Act, 1972 which reads as follows: Section 4(5)--Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award of agreement or contract with the employer. 11. The TISCO claimed that the Gratuity Rules, 1937 of the Company provide better terms of gratuity than what have been provided under the provisions of the Payment of Gratuity Act, 1972. The benefits provided by the Fratuity Rules are also approved by the Commissioner of Income Tax, Mumbai and the gratuity paid under the said Scheme is calculated for exemption from income tax under Section 10(10)(ii) of the Income Tax Act, 1961. 12. As per the Gratuity Rules of the Company, for every completed year of continuous service up to 30 years, the retiring gratuity is computed equal to half a months wages last drawn by the employees. For continuous service beyond 30 years, the retiring gratuity is computed equal to one months wages last drawn by them for every completed year of service beyond 30 years. Whereas according to the Scheme of the Payment of Gratuity Act, 1972, only 15 days wages is computed for every completed year of continuous service irrespective of the total number of years put in by the employees. Under the Companys Gratuity Rules, there is provision for payment of proportionate gratuity for the last incomplete year of service and any period in excess of six months. Under the Companys Gratuity Rules, there is provision for payment of proportionate gratuity for the last incomplete year of service and any period in excess of six months. In case of superannuation for the last incomplete year of service, gratuity is paid for the full year of service, if the period is 180 days or more. Proportionate gratuity is paid, if it is less than 180 days. However, Rule 20 of the said Gratuity Rules authorizes the Company to adjust the house rent against the amount of gratuity. 13. The appellant Smt. Gauri Chakraborti superannuated on attaining her age of retirement on 1.1.2000 after completing a little over 43 years. According to the Companys Gratuity Rules, she had already received Rs. 85,474.00 being 25% of her total amount of gratuity immediately on her retirement on 25.1.2000. The remaining amount of gratuity was to be paid on vacating the Companys quarter as the Companys rule makes it mandatory upon the employee to vacate the Companys quarter before full payment of the gratuity amount. 14. In stead of vacating the quarter and getting full gratuity amount, she filed a complaint before the Deputy Labour Commissioner-cum-Authority under the Payment of Gratuity Act, 1972 alleging that she was entitled to receive the gratuity of Rs. 2,56,422/ but the same was not paid to her. 15. Notice was issued to the TISCO. The Company filed reply challenging the maintainability of the claim petition and stating, inter alia, that 25% of the Gratuity amount was paid to her and the balance is payable after vacating the quarter occupied by her and on adjusting the house rent/ penal rent. The complaint was filed against the Managing Director of the TISCO who is not responsible for payment of the gratuity amount and that the claim is barred by limitation. It was specifically averred that the Company is always ready to pay the full gratuity, if the said employee vacates the Companys quarter and pay the arrears of rent, electricity charge etc as she is not entitled to retain the Companys accommodation after her superannuation. 16. The Deputy Labour Commissioner-cum-Authority under the Payment of Gratuity Act, accepting the appellants plea held that the Company has no right to withhold the gratuity of the employees and put a condition of vacating the quarter for payment of gratuity. 16. The Deputy Labour Commissioner-cum-Authority under the Payment of Gratuity Act, accepting the appellants plea held that the Company has no right to withhold the gratuity of the employees and put a condition of vacating the quarter for payment of gratuity. He also directed the Company to pay the amount of gratuity to the petitioner. 17. The said order led the Company to prefer the writ petition questioning the authority of the Dy. Labour Commissioner to pass such order contrary to the provision of the Companys Gratuity Rules. 18. The writ petition was admitted for hearing by order dated 24.11.2004, giving time to the respondent No. 3-appellant to vacate the Companys quarter by 31.1.2005. Liberty was given to the writ petitioner to evict the respondent No. 3-appellant in accordance with law on her failure to comply with the said order, and to move the Court for initiation of contempt proceeding. The Company, on the other hand, was directed to pay the remaining amount of gratuity after adjusting the normal rent and the electricity charges payable by a domestic consumer within 15 days from the date of vacating the quarter by the respondent No. 3-appellant. 19. The appellant did not comply with the said order. By order dated 9.2.2005, extended opportunity was given to the respondent No. 3 to vacate the quarter by 1.3.05. The appellant did not vacate the quarter even thereafter. The Company then took steps for eviction of the appellant before the Court of learned Special Judge, Jamshedpur. 20. On 21.4.2004 the appellant once "again prayed for extension of time for vacating the Companys quarter. By order dated 21.4.2005, further time was allowed to the appellant to vacate the quarter by 31.5.2005. It was made clear that if she fails to vacate the quarter, the Company will be at liberty to adjust the cost of Rs. 20,000/- from the amounts payable to her in addition to the rent and other charges. The Courts order was not complied with this time, too. By order dated 28.7.2005, learned single Judge issued show cause notice against the 3rd respondent asking as to why a proceeding for contempt be not initiated against her for violating the undertaking and filing a false affidavit. 21. The Courts order was not complied with this time, too. By order dated 28.7.2005, learned single Judge issued show cause notice against the 3rd respondent asking as to why a proceeding for contempt be not initiated against her for violating the undertaking and filing a false affidavit. 21. The appellant then filed an application praying for recalling the earlier orders giving the following undertakings: (i) Out of rest of the retiral benefits, if the petitioner will hand over a cheque/demand draft of Rs, One lakh to her, she will vacate the quarters by 16.11.05 After verification that she has vacated the quarters, the petitioner will pay the balance dues after adjusting the rent, electricity bill etc by 23.11.2005. Order was passed by the Court in the said terms of the appellants undertaking. On 4.10.2005 an account payee cheque of Rs. 1,00,000/- was handed over to the appellant "in the Court. 22. When the appellant informed this Court that she has vacated the quarter and the remaining amount of gratuity was paid to her, learned single Judge passed the impugned order dated 30.11.2005 taking into consideration that she had vacated the quarter of the TISCO and substantial admitted dues have been paid to her and since the Court was not inclined to enter into further claim and counter claim of the parties. The petitioner-company was directed to forward a chart to the appellant showing details of deductions and other payments etc and the appellant was given liberty to bring to the notice of the Company-authority, in case of any miscalculation etc which, in turn, was to be decided by the Company within three months. The earlier order imposing cost of Rs. 20,000/- against the appellant was also recalled. With the said factual matrix, learned Counsel for the parties addressed the Court and tried to bring home their respective points. 23. Mr. Rajiv Ranjan, learned Counsel appearing on behalf of the respondents-Company in this appeal, has submitted that there is no substance in this appeal as no cause survives after vacating the quarter by the appellant and payment of her remaining dues by the company. The appellant having accepted the provisions of the Gratuity Rules of the Company is estopped from turning round and taking resort to any provision of the Payment of Gratuity Act, 1972. The appellant having accepted the provisions of the Gratuity Rules of the Company is estopped from turning round and taking resort to any provision of the Payment of Gratuity Act, 1972. The provisions made in the Companys Retiring Gratuity Rules, 1937 are also well recognised and validated by the provisions of Sub-section (5) of Section 4 of the Payment of Gratuity Act, 1972. As per the accepted provisions of the said rules, the appellant was. bound to vacate the quarter before claiming the full amount of gratuity and the Deputy Commissioner-cum-Authority under the Payment of Gratuity Act, 1972 had no jurisdiction to pass an order directing the Company to pay the remaining amount even before vacating the quarter. The said order was wholly illegal and arbitrary and the same was rightly set aside by the learned single Judge. There is absolutely no infirmity or illegality in the order of learned single Judge. Learned Counsel also relied on a decision of the Supreme Court in the Secretary, O.N.G.C. Ltd. and Anr. v. V.U. Warden wherein it has been held by the Supreme Court that the amount of gratuity can be withheld, if an employee does not vacate the quarter. Learned Counsel submitted that the appellant is not entitled to get any further amount much less any interest on the amount of gratuity, as the delay was not on the part of the Company, rather the same was caused by the appellant by not vacating the quarter after her retirement. Learned Counsel relied on a decision of the Supreme Court reported in 1998 (11) SCC 112. 24. Mr. Mahesh Tiwari, learned, counsel appearing on behalf of the appellant, submitted that the Payment of Gratuity Act, 1972 has over riding effect over the Companys Retiring Gratuity Rules, 1937 and the Company cannot compel a person to vacate the quarter as a condition for payment of the remaining amount of gratuity. It has been submitted that with holding of the appellants gratuity amount by the Company was wholly Illegal and contrary to the provisions of Payment of Gratuity. Act, 1972 and learned Deputy Labour Commissioner had rightly exercised his power conferred under the provisions of Payment of Gratuity Act, 1972 and had directed the Company to pay the amount of gratuity without imposing the condition of vacating the quarter by the appellant. Act, 1972 and learned Deputy Labour Commissioner had rightly exercised his power conferred under the provisions of Payment of Gratuity Act, 1972 and had directed the Company to pay the amount of gratuity without imposing the condition of vacating the quarter by the appellant. Learned Counsel reiterated that though the appellant has now vacated the quarter and received the payment, the said point requires decision by this Court in order to safeguard the interest of other employees of the Company. The contentions of learned Counsel for the appellant failed to convince this Court. 25. The issue as to whether the appellant is liable for vacating the quarter before payment of the entire amount of gratuity became otiose, as she has already vacated the quarter and has got the amount of the gratuity. Secondly, if the object for litigating the matter is to safe guard the interest of other employees for future, nothing has been brought on record to show that the appellant has been given any such authority by other employees or she is otherwise entitled or competent to espouse the cause of other employees. Thirdly, the appeal is confined to the points involved in the writ petition, but no such purpose was pleaded before learned single Judge. The said point is thus beyond the scope of the appeal. Fourthly, Sub-section (5) of Section 4 of the Payment of Gratuity Act, 1972 recognizes such rules of the employees in clear terms that the provisions of this section shall not affect the right of an employee to receive better terms of gratuity under any award of agreement or contract with "the employer. Neither the prayer has been made to declare the Companys Gratuity Rules ultra vires nor any material has been placed on record to show that the provisions of Payment of Gratuity Act, 1972 have overriding effect over the Companys Gratuity Rule, and/or an employee, who opted for the benefits of the Company Gratuity Rules, can subsequently switch over to the provisions of Payment of Gratuity Act, 1972. 26. In Secretary, O.N.G.C. Ltd., supra, the Apex Court has held that the gratuity cannot be allowed, if an employee does not vacate the quarter. In 1998 (11) SCC 112, the Supreme Court has held that the interest is not payable on the amount of gratuity, if the same is withheld for the fault of an employee. 27. 26. In Secretary, O.N.G.C. Ltd., supra, the Apex Court has held that the gratuity cannot be allowed, if an employee does not vacate the quarter. In 1998 (11) SCC 112, the Supreme Court has held that the interest is not payable on the amount of gratuity, if the same is withheld for the fault of an employee. 27. For the reasons aforementioned, we find no merit in this appeal, which is, accordingly, dismissed. However, there shall be no order as to costs.