Judgment :- Though the matter is listed for preliminary hearing, since the area of dispute appeared to be in a narrow compass, with the consent of the learned advocates appearing for the parties, the appeal was heard for final disposal. 2. The appellants (for short, referred to as ‘the employees’) were the employees of respondent-1 (for short, referred to as ‘the employer’). The respondent-establishment was engaged in the manufacture of cotton and polyester yarn, being one of the units of National Textile Corporation, a Government of India undertaking. The employer had announced Voluntary Retirement Scheme in 1996, in furtherance of which about 250 employees including the appellants exercised the option, which was accepted, and they were relieved from service, by paying terminal benefits. 3. The appellants have subsequently filed separate applications for directions, in Form ‘N’ under sub-rule (1) of Rule 10 of the Payment of Gratuity (Central) Rules, 1972, (for short, referred to as ‘the Rules’), before the Assistant Labour Commissioner (Central), Hubli, and controlling Authority, under the payment of Gratuity act, 1972 (for short, referred to as ‘the Act’), stating that there was short payment of gratuity. The Controlling Authority has issued notices in Form ‘O’ for appearance of the parties before him, together with all relevant documents and witnesses, if any. The respondent has filed its statement of objections, inter alia contending that, the applications as not maintainable, barred by limitation, the trainees are not entitled to gratuity during the period of training, Badli workers will not be entitled for gratuity, if they have not put in 240 days of work in a year, the employees will not be entitled for gratuity when unauthorised absence, is treated as break in service as per the Certified Standing Orders of the company. 4. The Controlling Authority after conducting an enquiry and on completion of hearing, has recorded his findings and has allowed the applications of the appellants by passing an order under Section 7 (4) of the Act, for payment of difference of gratuity amount. 5. The employer, feeling aggrieved on account of the orders of the Controlling Authority allowing the applications of the employees, has filed appeals under sub-section (7) of Section 7 of the Act, before the Appellate Authority, which were registered as Appeal Nos.1-25/00. 5. The employer, feeling aggrieved on account of the orders of the Controlling Authority allowing the applications of the employees, has filed appeals under sub-section (7) of Section 7 of the Act, before the Appellate Authority, which were registered as Appeal Nos.1-25/00. Since the appeals involved common questions of fact and law, the same have been clubbed, heard and a common order dated 31.2001 has been passed by the Appellate Authority under the Act, dismissing the appeals. 6. Theemployer, feeling aggrieved, had filed W.P.16581/01 to quash the said common order dated 31.2001. The learned single Judge, by order dated 30.5.2006, held that trainees could at best, be considered as workmen in terms of the definition under Section 2(s) of the Industrial Disputes Act, 1947, but in the absence of any statutory provision under the Act, a trainee cannot be entitled to wages like regular employees, which would render the tenor of Section 2(e) of the Act entirely unfavourable to employees. Placing reliance on the case of Lalapaplingappa & Others .Vs. Laxmi Vishnu Textile Mills, Sholapur [1981 (I) LLJ SC 308], the learned Single Judge held that there can be no claim towards gratuity. It was further held that the period an employee remained absent without leave and had actually worked for less than 240 days and the Badli employees are not covered by the substantive part of the definition of ‘continuous service’ under section 2(c) of the Act and as such are not entitled to payment of gratuity for the Badli period. The learned single Judge has further that there is an error of law resulting in miscarriage of justice and therefore, has allowed the writ petition and has quashed the order passed by the Appellate Authority. This appeal is directed against the said order passed by the learned single Judge. 7. We have heard Sri H.N. Venkatesh, learned advocate for the appellants and Sri K. Ramachandran, learned advocate for respondent-1. We have perused the record of the writ appeal. 8. Thepayment of Gratuity Act has been enacted to introduce a scheme for payment of gratuity for certain industrial and commercial industrial and commercial establishments as a measure of social security. The object for which the Act was enacted, has been stated by the Supreme Court in the case of Jeevanlal (1929) Limited etc. 8. Thepayment of Gratuity Act has been enacted to introduce a scheme for payment of gratuity for certain industrial and commercial industrial and commercial establishments as a measure of social security. The object for which the Act was enacted, has been stated by the Supreme Court in the case of Jeevanlal (1929) Limited etc. .vs. Appellate Authority under the Payment of Gratuity Act and Others ( AIR 1984 SC 1842 ) as follows: ‘8. The Payment of Gratuity Act 1972 is enacted to introduce a scheme for payment of gratuity for certain industrial and commercial establishments as a measure of social security. It has now been universally recognized that all persons in society need protection against loss of income due to unemployment arising out of incapacity to work due to invalidity, old age, etc. For wage-earning population security of income when the worker becomes old or infirm is of consequential importance. The provisions of social security measures, retiral benefits like gratuity, provident fund and pension (known as the triple-benefits) are of special importance. In bringing the Act on the statute-book the intention of the legislature was not only to achieve uniformity and reasonable degree of certainty but also to create and bring into force a self-contained all-embracing complete and comprehensive code relating to gratuity. The significance of this legislation lies in the acceptance of the principle of gratuity as a compulsory statutory retiral benefit’. 9. After the Act has come into force, a person falling under the definition of Section 2(c) of the Act, whose employment comes to an end, he is entitled to payment of gratuity for the period during which he has worked. The Hon’ble Supreme Court in the case of Management of Good Year (India) Limited .vs. K.G. Deveddar ( AIR 1985 SC 1759 ), has held as follows: ‘We think the only reasonable way of construing Section 4 in the light of the definition of employee in Sec.2(e) is to hold that a person whose services are terminated for any of the reasons mentioned in Sec.4(1), after the coming into force of the Act, is entitled to the payment of gratuity, if he has rendered continuous service for not less than five years, for that period during which he satisfied the definition of employee under Section 2(e) of the Act’. 10. 10. The points that arise for our consideration in this appeal are: (a) Whether the period of service rendered by the appellants in the respondent establishment, as trainees, prior to the respective date of their confirmation, could be considered, as employees, under Section 2(e) of the Act, for the purpose of payment of gratuity under Section 4 of the Act? (b) Whether there was ‘continuous service’ as defined under Section 2-A of ‘the Act’, by the appellants, with the employer? 11. Re.point (a): There is no dispute of employee and employer relationship between the appellants and respondent-1. The details with regard to the respective date of joining the establishment, date of confirmation therein and date of retirement, of the appellants with respondent-1 as contained in the order of the Appellate Authority, is admitted to be correct, by the learned advocate for respondent-1. The details with regard to the said aspects are as follows: 12. The learned counsel for the employer contended that the appellants service prior to the respective dates of their confirmation was only as ‘trainees’ and as such, the said period cannot be taken into account for the purpose of payment of gratuity under sub-sec.(2) of Section 4 of the Act. The learned counsel, in support of his contention, placed reliance on the following judgments: 1) 2006 SCC (L&S) 323 (Regional Provident Fund Commissioner, Mangalore .vs. Central Arecanut & Coca Marketing and Processing Co-op. Ltd., Mangalore) 2) 2004 SCC (L&S) 1128 (Mukesh K Tripathi .vs. Senior Divisional Manager, L.I.C. & Others) 3) 1999-III-LLJ (Supp) 243 (Regional Provident Fund Commissioner .Vs. Management of Hotel Lhighway Limited, Mysore) 4) (1981) 2 SCC 238 (Lalappa Lingappa & Others .Vs. Laxmi Vishnu Textile Mills Ltd.) 5) 1976-I llj 81 (Employees’ State Insurance Corporation & Another .vs. Tata Engineering & Locomotive CO. Limited & Another) and 6) For (Vol.6) 329 (Tungabhadra Sugar Works (P) Ltd. .vs. Labour Court, Mangalore, & Another) 12.1 We do not find merit in the submission of the learned counsel. It is not the case of the employer that, the appellants were appointed as ‘Apprentices’ under the Apprentices Act, 1961. The term ‘Apprentice’ has been defined in Section 2(a) of the Apprentices Act, 1961, as to mean ‘a person who is undergoing Apprenticeship training in the designated trade in pursuance to a contract of Apprenticeship. It is not the case of the employer that, the appellants were appointed as ‘Apprentices’ under the Apprentices Act, 1961. The term ‘Apprentice’ has been defined in Section 2(a) of the Apprentices Act, 1961, as to mean ‘a person who is undergoing Apprenticeship training in the designated trade in pursuance to a contract of Apprenticeship. The employer has neither pleaded nor placed any material to establish that the appellants were employed for being subjected to Apprenticeship training in the designated trade, in pursuance of a contract of Apprenticeship. In the absence of material to show the contract of Apprenticeship of the appellants with the employer, it cannot be held that merely because prior to the date of confirmation, the appellants were treated as trainees, they would fall within the purview of ‘Apprentices’. The question to be decided is, whether the appellants were employees under Section 2(e) of ‘the Act’, for the purpose of payment of gratuity. 12.2 A reading of the provisions of Section 2(e) of ‘the Act’ shows that it excludes only Apprentices from the application of the Act. Whether the word ‘Apprentice’ includes a trainee also, and in the absence of any definition of Apprentice under ‘the Act’, it has to be considered, with reference to the interpretation of the provision of Section 2(e) of ‘the Act’, with reference to the object of ‘the Act’, coupled with the definition of ‘Apprentice’ or trainee, in any other labour legislation. Mere nomenclature of the post is not of much consequence and what is to be seen is the nature of the duties performed by the concerned, to arrive at a conclusion as to whether he is an employee within the meaning of Section 2(e) of the Act. It is not in dispute that the employer had appointed the appellants not for learning a trade, but they were initially appointed as trainees, for the purpose of employment and subsequently their service has been confirmed. Therefore, it cannot be held that the appellants were Apprentices prior to the date of their confirmation in service by the employer. In our view, an Apprentice will necessary be a trainee, but on the converse, a trainee need not always be an Apprentice. Therefore, it cannot be held that the appellants were Apprentices prior to the date of their confirmation in service by the employer. In our view, an Apprentice will necessary be a trainee, but on the converse, a trainee need not always be an Apprentice. An Apprentice appointed pursuant to a contract in terms of the Apprentices Act, has no right to be appointed, whereas a person initially appointed as a trainee, just like a person appointed on probation, has to right to hold the post and seek confirmation. The appellants who are not appointed as Apprentices under the Apprentices Act, 1961, prior to the date of confirmation by the employer, cannot be termed by the employer as Apprentices and deprive them of the period of service rendered prior to the respective dates of confirmation. Since the service of the appellants has been confirmed by the employer, without subjecting them to any recruitment process, it follows that they were substantially appointed to the posts and were only treated as trainees, and on satisfactory completion of the training period, they have been confirmed in service. 12.3 The judgments relied upon by the learned counsel for the employer, i.e. Tungabhadra Sugar Works (FJR (Vol.6 329) & Mukesh Tripathi (2004 SCC (L&S) 1128) pertain to the interpretation of ‘workman’ under Section 2(s) of the Industrial Disputes Act, 1947. The judgments in the cases of Regional Provident Fund Commissioner, Mangalore, Employees’ State Insurance Corporation and Regional Provident Fund Commissioner .Vs. Management of Hotel Highway Limited, Mysore, pertain to the interpretation of employee under Section 2(f) of the Employees Provident Fund & Miscellaneous Provisions Act, 1952. The case of Lalappa Lingappa and Others pertains to the interpretation of Section 2(c) of the Act prior to its amendment under Act 26 of 1984. As such, the cases relied on by the learned counsel for the employer, in our view, have no application in deciding the point which has arisen for our consideration. Further, the contention of the employer is not that, any of the appellants were only trainees on the date they were relieved from service. What is contended is that the period of service rendered by the appellants as trainees prior to the respective dates of their confirmation in service, could not be considered. Further, the contention of the employer is not that, any of the appellants were only trainees on the date they were relieved from service. What is contended is that the period of service rendered by the appellants as trainees prior to the respective dates of their confirmation in service, could not be considered. Since it is not in dispute that the appellants had ceased to be trainees and were confirmed in the establishment of the employer, they fall within the definition of employee under Section 2(e) of the Act, and having rendered continuous service of not less than five years, they are entitled to the payment of gratuity, in terms of subsection (2) of Section 4 of the Act. 12.4 It will be useful to refer to Section 14 of ‘The Act’. Section 14 of ‘The Act’ provides that the provisions of the Act or any rule made there-under shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than ‘The Act’ or any instrument or contract having effect by virtue of any enactment other than ‘The Act’. Therefore, any thing inconsistent with the Act, has to give way to the provisions specifically made in ‘The Act’. Hence, the contention of the learned counsel for the employer relying upon the provisions of the definitions of ‘employee’ contained in Section 2(S) of the Industrial Disputes Act, 1947, and Section 2(f) of the Employees Provident Fund & Miscellaneous Provisions Act, 1952, cannot be accepted. Point (a) is accordingly answered. 13. Point (b): It is not in dispute that the appellants were employed by respondent-1. They have all been issued the E.S.I. card. Accepting their offer of voluntary retirement scheme, they have been relieved from service by the employer. The table shown supra, shows the respective date of initial entry into service, date of confirmation and the date on which they have been relieved from service. The contention of the learned advocate for the employer is that in terms of the Certified Standing Orders of the employer, whenever there was unauthorized absence of employees, a break in service has come to occur, and as such, the appellants cannot claim to be in continuous service. The contention of the learned advocate for the employer is that in terms of the Certified Standing Orders of the employer, whenever there was unauthorized absence of employees, a break in service has come to occur, and as such, the appellants cannot claim to be in continuous service. The learned advocate contended that excluding such break, taking into account the period, which could be taken as continuous service, the admissible amount of gratuity has been paid, and the appellants cannot claim to be in continuous service and seek payment of gratuity for the entire period. 14. Section 2(c) of the Act states that ‘continuous service’ means continuous service as defined under Section 2-A. The relevant portion of Section 2-A of the Act is as follows: ‘2-A. Continuous service- for the purposes of this Act, (1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;’ 15. Section 4 of the Act states that gratuity shall be payable to an employee on the termination of his employment after he has rendered service for not less than five years. Gratuity is payable on account of any of the happening of the events, stated in clauses (a) to (c) of sub-section (1) of Section 4 of the Act. From the perusal table supra, of the service details as could be seen in the appellants were in employment for five years or more with the employer. The contention of Sri Ramachandran, learned counsel for the employer is that, the appellants did not actually work for 240 days or more in certain years, and they were not entitled to gratuity during those years, taking into account the provisions contained in Section 2- A(2) of the Act. Payment of gratuity during the other years has not been disputed. 16. Payment of gratuity during the other years has not been disputed. 16. The learned counsel, relied upon the judgment of the Hon’ble Supreme Court in the case of Lalappa Lingappa & Others for the proposition that a permanent employee is entitled to payment of gratuity only for such years in which the employee has ‘actually worked’ for not less than 240 days in a calendar year. We are unable to agree with the contention of the learned counsel. The case of Lalappa Lingappa cannot be applied for the said proposition, in view of the fact that, after the said judgment was rendered, by Act 26 of 1984, with effect from 12.1981, Section 2-A was inserted by amendment of ‘the Act’. In the case of Lalappa Lingappa, the Hon’ble Supreme Court has interpreted Section 2© of ‘the Act’, as it then existed. However, the position, is different, after the insertion of Section 2-A of ‘the Act’. 17. The reasons which necessitated the amendment of Section 2(c) of the Act has been stated by the Hon’ble Supreme Court in Jeevanlal’s case as follows: ‘It has been our unfortunate experience that a beneficent measure like Payment of Gratuity Act 1972 providing for a scheme of retrial benefit has been beset with many difficulties in its application. It need not be over emphasized that a legislation of this kind must not suffer from any ambiguity. In the recent past the Court in Lalappa Lingappa V. Laxmi Vishnu Textile Mills Lts. (1981) 2 SCR 796 : ( AIR 1981 SC 852 ) faced with the problem as to whether the expression “actually employed” in Explanation I to S.2(c) of the Act must in the context in which it appeared meant “actually worked”. The inclusive part of the definition of ‘continuous service’ in S.2(c) is to amplify the meaning of the expression by including interrupted service under certain contingencies which but for such inclusion would not fall within the ambit of the expression ‘continuous service’. But the use of the words ‘actually employed’ in Explanation I to S.2© of the Act created a difficulty. The court observed that it was not permissible to attribute redundancy to the words ‘actually employed’ and accordingly held that the expression ‘actually employed’ in Explanation I to S.2© of the Act meant ‘actually worked’. But the use of the words ‘actually employed’ in Explanation I to S.2© of the Act created a difficulty. The court observed that it was not permissible to attribute redundancy to the words ‘actually employed’ and accordingly held that the expression ‘actually employed’ in Explanation I to S.2© of the Act meant ‘actually worked’. The law declared by this Court in Lalappa Lingappa’s case (supra) resulted in denial of gratuity to a large number of permanent employees whose short term absence had remained unregularised due to lack of appreciation of the significance for the purpose of working our their entitlement to gratuity. It is to be regretted that the Government waited for a period of three years before introducing the Payment of Gratuity (Amendment) Bill 1984 to remove the lacuna in the definition of continuous service in S.2© of the Act by specifically providing that a period of absence in respect of which no punishment or penalty has been imposed would not operate to interrupt the continuity of service for the purpose of payment of gratuity. It also amplified the definition of continuous service under S.2© of the Act. Such a belated legislation must have worked great injustice to a large number of permanent employees’. (emphasis supplied) 18. Section 2-A(1) of the Act shows that every service rendered by the employee shall be continuous service for a period, even if there is interruption during the period on account of sickness, accident, leave, absence from duty without leave, except when there is break of service under orders passed as per the certified Standing Orders, rules or regulations and/or lay off, strike, lock-out or cessation of work, not due to any fault of the employee concerned. All interruptions of the said type will have to be ignored and will not result in depriving the employee of the benefit of ‘continuous service’. It is only when the employee had absented from duty without leave and further, if any order is passed by the employer treating absence from duty without leave as break in service in accordance with the Standing Orders, rules or regulations, then it would not amount to ‘continuous service’ during that period. It is only when the employee had absented from duty without leave and further, if any order is passed by the employer treating absence from duty without leave as break in service in accordance with the Standing Orders, rules or regulations, then it would not amount to ‘continuous service’ during that period. It is not in dispute that no orders were passed by the employer in accordance with the Certified Standing Orders to the effect that the absence of the appellants at any point of time, was to be treated as a break in service. Thus, we hold that appellants have rendered ‘continuous service’ within the meaning of Section 2-A(1) of the Act, and therefore, it is not open to the employer to contend that there was a break in service and the appellants are not entitled to gratuity. It is only when the case of the employee does not fall within the meaning of Section 2-A (1) of the Act, the provisions of Section 2-A(2) will come into play. Hence, the contention of the learned counsel for the employer is devoid merit. In our view, Section 2-A(2) or the case of Lalappa Lingappa, cannot be applied to the appellants. In view of the amendment by insertion of Section 2-A of the Act, the employer cannot rely on Lalappa’s case, to deny the relief to the appellants. 19. In our view, the learned single Judge was not justified in allowing the writ petition of the employer by relying upon the judgment rendered in the case of Lalappa. The appellants having ceased to be in employment of the employer on the respective dates shown against their names in the table supra, long after the said amendment under Act 26 of 1984 has come into the statute book, and with the insertion of Section 2-A in ‘the Act’, it is not open to the employer contend that Lalappa’s case is applicable to this case and consequently the appellants are not entitled to gratuity in terms of subsection (2) of Section 4 of ‘the Act’. 20. From the record, it is clear that the question which was raised before the controlling Authority and the Appellate Authority under the Act was, whether the appellants had completed five years of continuous service, so as to be eligible to claim gratuity under the Act. 20. From the record, it is clear that the question which was raised before the controlling Authority and the Appellate Authority under the Act was, whether the appellants had completed five years of continuous service, so as to be eligible to claim gratuity under the Act. The employer has not placed any material on record to come to the conclusion that the appellants were not in continuous service and that there was any break in service. The employer has not issued any orders terminating the service or effecting a break in service, on the appellants, at any point of time. Merely because the Certified Standing Orders provided for treating unauthorised absence, if any, to effect a break in service, unless the employer by following the principles of natural justice, has passed an order of break in service and also served the same on the concerned employee, it is not open to the employer to contend that there was automatic cessation of service or a break in service as having come into being. For this purpose, authority can be found in the case decided by the Hon’ble Supreme Court in the case of Uptron India Limited .Vs. Shammi Bhan ( AIR 1998 SC 1681 ). 21. It is well settled from the law laid down by the Hon’ble Supreme Court that the Act has been enacted with a view to grant benefit to workers, a ‘weaker section’. When the benefit has been extended by the authorities under the Act to the employees by recording a finding that they have completed the requisite continuous service of five years, to be eligible to get gratuity, the same was not liable to be quashed, unless it was a case of perverse exercise of jurisdiction by the concerned authorities. Having perused the orders passed by the Controlling Authority and Appellate Authority, we are satisfied that the authorities have conducted the enquiry in accordance with law, and the findings recorded there under are based on relevant material and that they had not committed any arbitrariness or illegality, much less had acted in excess of jurisdiction not vested in them. In the said view of the matter, in our view, the learned single Judge was not justified in allowing the writ petition. Point (b) is answered accordingly. 22. In view of the above findings, we pass the following order: 1) The writ appeal is allowed. In the said view of the matter, in our view, the learned single Judge was not justified in allowing the writ petition. Point (b) is answered accordingly. 22. In view of the above findings, we pass the following order: 1) The writ appeal is allowed. 2) The order dated 30.5.2006 passed by the learned single Judge in W.P.16581/01 is hereby set aside. 3) The writ petition filed by the 1st respondent employer stands dismissed. 4) No costs.