Sabarkantha District Central Co-Op. Bank Ltd. v. Ramanbhai M. Patel
2010-02-26
S.R.BRAHMBHATT
body2010
DigiLaw.ai
JUDGMENT : S.R. Brahmbhatt, J. 1. Heard Learned Counsel Shri G.M. Joshi for the Petitioner. Rule. Shri Pathak, Learned Counsel for Respondent No. 1 waives service of notice of rule. This matter is taken up for final hearing with the consent of the counsels for the respective parties. 2. The Petitioner, i.e. Sabarkantha District Central Cooperative Bank Ltd, established under the provisions of Gujarat Cooperative Societies Act 1961, has approached this Court under Article 226 of the Constitution of India, challenging the order dated May 27, 2009 passed by the Respondent No. 3 Appellate Authority under the Payment of Gratuity Act, 1972 in Gratuity Appeal No. 12/2009; which confirmed the order passed by the Controlling Authority for payment of wages to Respondent No. 1 to the tune of Rs. 1,47,331/- with interest at 10% per annum. 3. The facts in brief deserve to be set out as under. (1). At the relevant time the workman-Respondent No. 1 herein was working as Development Officer at Prantij branch of the Petitioner bank. He committed serious financial irregularities in connivance and collusion with other persons causing financial loss to the member societies of the petitoner bank. Therefore he was dismissed from service vide order dated July 28, 2005. Inquiry was conducted against him and ultimately order of dismissal came to be passed. The order of dismissal was much prior to the date of regular superannuation of the Respondent which fell on May 31, 2006. The Respondent preferred T-Application No. February 1, 2005 before the competent Court at Himmatnagar, and said application is pending adjudication wherein he has prayed for all the reliefs which are permissible under the law. (2). Despite there being pendency of, T-Application No. February 1, 2005, the Respondent workman approached Payment of Gratuity Authority under payment of Gratuity Act 1972 by preferring application dated July 28, 2005. The bank appeared and contested the same before the controlling authority on account of the fact that the application was not maintainable as the workman was not entitled to receive any gratuity amount. Learned controlling authority appointed under the Payment of Gratuity Act vide order dated August 6, 2008 directed the bank to pay Rs.1,95,115/- together with simple interest @ 9%, ignoring the fact that the workman had not been superannuated at all and he was required to be dismissed on account of his misconduct. (3).
Learned controlling authority appointed under the Payment of Gratuity Act vide order dated August 6, 2008 directed the bank to pay Rs.1,95,115/- together with simple interest @ 9%, ignoring the fact that the workman had not been superannuated at all and he was required to be dismissed on account of his misconduct. (3). The Petitioner thereafter preferred an appeal being Gratuity Appeal No. 12/2009 before the appellate authority under Payment of Gratuity Act, taking out same contentions that the controlling authority has not taken into consideration the fact that the workman had not been eligible for receiving gratuity amount in view of the peculiar facts and circumstances of the case. However, same was not accepted by the appellate authority and the appellate authority vide its judgment and order dated May 27, 2009 partly accepted the case of the Petitioner in respect of the amount of gratuity but rejected the same on merits and directed the bank to pay an amount of Rs.1,47,331/- as ordered by the controlling authority, but increased the rate of interest from 9 % to 10% per annum. 4. Being aggrieved and dissatisfied by the said order in judgment present petition is preferred on the grounds stated there under. 5. Shri Joshi Learned Counsel for the Petitioner relied upon the following decisions which relates to the provisions of the Gratuity Act and stated that the gratuity never becomes payable automatically. In support of his submissions, following decisions are cited at the Bar. Calcutta Insurance Co. Ltd. Vs. Their Workmen, AIR 1967 SC 1286 The Management of Tournamulla Estate Vs. Workmen, (2007) 1 SCC 663 Central Bank of India Vs. State of Kerala and Others, (2009) 4 SCC 94 And submitted that the factum of payment of gratuity is absolutely clear as it provides for payment of gratuity to an employee who has served for a given number of years as envisaged u/s 4 of the Payment of Gratuity Act. Section 4 of the said Act reads as under: 4. Payment of gratuity (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,- (a). on his superannuation, or (b). on his retirement or resignation, or (c). on his death or disablement due to accident or disease.
Payment of gratuity (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,- (a). on his superannuation, or (b). on his retirement or resignation, or (c). on his death or disablement due to accident or disease. Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement. (Provided further that in the case of death of the employee, gratutity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority) Explanation: For the purposes of this Section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement. (2). For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned: Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account: Provided further that in the case of (an employee who is employed in a seasonal establishment and who is not so employed throughout the year), the employer shall pay the gratuity at the rate of seven days' wages for each season. (Explanation: In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.) xxxx xxxx 6.
(Explanation: In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.) xxxx xxxx 6. Thus the payment of gratuity is governed by Section 4 of the Payment of Gratuity Act and especially Section 4(1)(2) would clearly show that this Section which comes into play only on account of following eventualities, viz; (a) on account of superannuation, (b) retirement or resignation or? death or disablement due to accident or disease. Now, if any of the aforesaid 3 eventualities is not happening and the services are severed on account of termination from employment rendering continuous service for not less than 5 years employer is not liable to pay gratuity. In the instant case when the employee has already moved the competent Court with an appropriate application seeking remedy that includes all consequential reliefs which necessarily would include non payment of gratuity also on his termination from service being declared illegal and unlawful by the competent Court. Unless and until above said eventualities have arisen and unless and until dismissal of the employee is pronounced to be illegal by the competent Court, in my view the eventuality of payment of gratuity would not come into play. In support of his submissions Shri Pathak, Learned Counsel for the Respondent employee has cited following decisions: (2007) 1 SCC 663 2007 I LLJ 440 Panchmahal Dist. Co-op. Bank Ltd. Vs. Harjivandas Purshottamdas Prajapati, (2009) 122 FLR 1022. The decisions cited at Bar by Shri Pathak are of no avail. In no one of them the eventuality and facts as it is attending in this case are mentioned and or rather available. Rather the facts and decisions followed there under shall have no applicability to the present case. Therefore this Court is not inclined to pronounce upon the admissibility of gratuity in favour of the Respondent employee. Moreover the Respondent workman had already moved competent authority for seeking reliefs, including the relief of payment of gratuity which is pending. In the instant case Sub-section (6) of Section 4 shall be applicable and the petition therefore requires to be allowed and is accordingly allowed. 7. In the result, order of Competent authority under the Payment of Gratuity Act and the order passed by the appellate authority are quashed and set aside.
In the instant case Sub-section (6) of Section 4 shall be applicable and the petition therefore requires to be allowed and is accordingly allowed. 7. In the result, order of Competent authority under the Payment of Gratuity Act and the order passed by the appellate authority are quashed and set aside. The fact remains to be noted that this quashing of the order of competent authority under Payment of Gratuity Act as well as the appellate authority would not come in the way of the workman in the pending application in which he has challenged his order of dismissal. With these observations, this petition is disposed of. Rule made absolute to the said extent. However, there shall be no order as to costs.