JUDGMENT : SATYENDRA SINGH CHAUHAN, J. 1. This writ petition has been filed challenging the orders dated January 31, 2008 and October 31, 2009 passed by the Prescribed Authority and the Appellate Authority respectively. 2. The facts in short giving rise to the present petition are that opposite party No. 3 was employed with the Petitioner on the basis of the contract entered into between the parties on a consolidated salary. The said contract was entered for a period from February 22, 2002 to February 21, 2003 and thereafter from February 22, 2003 to September 30, 2005 and from November 1, 2006 to September 30, 2007. Services of opposite party No. 3 were dispensed with by giving one month’s salary on May 15, 2007 and on June 13, 2007 he was discharged from service. Opposite party No. 3 moved an application before the Prescribed Authority for payment of gratuity as contemplated u/s 7 of the Payment of Gratuity Act, 1972 (for short “the Act”). Opposite party No. 3 stated that he has worked for more than five years continuously and therefore, he is entitled for payment of gratuity. The Prescribed Authority allowed the claim of opposite party No. 3 against which an appeal was filed by the Petitioner. The: said appeal also came to be dismissed by means of the order dated October 31, 2009 by the appellate authority. Hence this writ petition. 3. Submission of learned Counsel for the Petitioner is that the gratuity is available to an employee, who is being paid wages. Opposite party No. 3 was not being paid wages and therefore, he is not entitled for gratuity. It is also submitted that he did not work continuously but there was a break in service for short intervals and therefore, he is not covered within the definition ‘continuous service’ as contemplated u/s 2A of the Act. 4. Opposite party No. 3 has appeared in person and he has submitted that he was appointed on contractual basis and according to the terms of the contract, he is entitled for payment of gratuity.
4. Opposite party No. 3 has appeared in person and he has submitted that he was appointed on contractual basis and according to the terms of the contract, he is entitled for payment of gratuity. He further submits that both the authorities have taken into consideration the arguments raised by the learned Counsel for the Petitioner and they have come to the conclusion that he (opposite party No. 3) has rendered more than five years’ continuous service, as such, he is entitled for salary irrespective of the fact that his employment was of a contractual nature. He also submits that Section 14 of the Act has been given overriding effect and therefore, any other; provision of any other Act will not effect his right. Opposite party No. 3 has relied upon the judgments rendered in the cases of Ahmedabad Pvt. Primary Teachers’ Association Vs. Administrative Officer and Others, AIR 2004 SC 1426 and Royal Boot House and Others Vs. State of Jammu & Kashmir and Others, AIR 1985 SC 1758 5. I have heard learned Counsel for the parties and gone through the record. Clause (b) of Section 2 of the Act defines “completed year of service” means continuous service for one year. In Clause (c) of Section 2 of the Act “continuous service” has been defined means continuous service as defined in Section 2A. Section 2A of the Act reads as under: Section:2A. 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.
(2) Where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of Clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer - (a) For the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than- (i) One hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and (ii) Two hundred and forty days, in any other case; (b) For the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than - (i) Ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and (ii) One hundred and twenty days, in any other case; (Explanation: For the purposes of Clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which - (i) He has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment; (ii) He has been on leave with full wages, earned in the previous years; (iii) He has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and (iv) In the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.) (3) Where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of Clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventy-five per cent, of the number of days on which the establishment was in operation during such period.) 6.
The wages for the purposes of this Act have been defined under Clause (s) of Section 2 of the Act. Section 2(s) reads as under: (s) “wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and other allowance. 7. Opposite party No. 3 has stated that Section 14 of the Act requires appreciation of this Court on account of the fact that the Act has been given overriding effect. Section 14 of the Act reads as under: 14. Act to override other enactments, etc. -The provisions of this Act or any rule made there-under 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. 8. The Petitioner, U.P. Bhumi Sudhar Nigam (for short “the Corporation”), happens to be a Corporation. The said Corporation falls within the definition of the establishment as defined in Section 2(f) of the Act wherein it has been provided that the “employer” means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company or shop- (i) Belonging to, or under the control of, the Central Government or a State Government, a person or authority appointed by the appropriate Government for the supervision and control of employees, or where no person or authority has been so appointed, the head of the Ministry or the Department concerned. From the definition of the establishment, there is no doubt in coming to the conclusion that Nigam falls under the aforesaid provisions of the Act and the provisions of the Act if read together, then the wages have been defined to mean all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment. 9. Terms and conditions of the employment of opposite party No. 3 are evident by means of various agreements entered into between the parties from time to time.
9. Terms and conditions of the employment of opposite party No. 3 are evident by means of various agreements entered into between the parties from time to time. The Act does not talk of salary but the Payment of Gratuity Act has cautiously used the word “wages” and has linked the same with the terms and conditions of the employment. The terms and conditions of the employment are evident from the contract. Thus, the services of opposite party No. 3 would be deemed to be a fixed service as contemplated u/s 2A of the Act and the fixed amount paid to him would be included within the ambit of the wages, defined u/s 2(s) of the Act. The terms’ “completed year of service” and “continuous service” as defined in Section 2(b), 2(c) and 2A of the Act also lead to only one interpretation that employment of opposite party No. has to be treated as a continuous employment. Provisions of Section 14 of the Act go to indicate that the Act has been given overriding effect, therefore, any other provisions which are contrary and agreement will not prevail upon opposite party, No. 3 but looking to the language implied in’ Section 14 of the Act, the provisions of the Act will prevail and govern the field. 10. The Apex Court in the case of Ahmedabad Pvt. Primary Teachers’ Association Vs. Administrative Officer and Others, 6. The Act is a piece of social welfare legislation and deals with the payment of gratuity which is a kind of retiral benefit like pension, provident fund etc. As has been explained in the concurring opinion of one of the learned Judges of the High Court “gratuity in its etymological sense is a gift, especially for services rendered, or return for favours received”. 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 the wage-earning population, security of income, when the worker becomes old or infirm, if of consequential importance. The provisions contained in the Act are in the nature of social-security measures like employment insurance, provident fund and pension. The Act accepts, in principle, compulsory payment of gratuity as a social-security measure to wage-earning population in industries, factories and establishments. 7.
For the wage-earning population, security of income, when the worker becomes old or infirm, if of consequential importance. The provisions contained in the Act are in the nature of social-security measures like employment insurance, provident fund and pension. The Act accepts, in principle, compulsory payment of gratuity as a social-security measure to wage-earning population in industries, factories and establishments. 7. Thus, the main purpose and concept of gratuity is to help the workman after retirement, whether retirement is a result of rules of superannuation or physical disablement or impairment of vital part of the body. The expression “gratuity” itself suggests that it is a gratuitous payment given to an employee on discharge, superannuation or death. Gratuity is an amount paid unconnected with any consideration and not resting upon it, and has to be considered as something given freely, voluntarily or without recompense. It is a sort of financial assistance to tide over post-retiral hardships and inconveniences. 11. In the case of AIR 1985 1759 (SC) .... Gratuity will have to be paid to all those persons whose employment came to an end after the coming into force of the Act for that period during which he came within the definition of an employee within the meaning of Section 2(e) of the Payment of Gratuity Act. To hold otherwise may render a whole class of persons who all their lives got wages of less than Rs.1000 per month, but on the eve of their retirement started getting wages of Rs.1000 per month. Surely that could not have been the intention of Parliament. We think the only reasonable way of construing Section 4 in the light of the definition of employee in Section 2(e) is to hold that a person whose services are terminated for any of the reasons mentioned in Section 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 u/s 2(e) of the Act. 12. Having considered the aforesaid dictum of the Apex Court as well as the provisions of the Act, the inevitable conclusion is that opposite party No. 3 is entitled for gratuity as he has rendered more than five years of continuous service.
12. Having considered the aforesaid dictum of the Apex Court as well as the provisions of the Act, the inevitable conclusion is that opposite party No. 3 is entitled for gratuity as he has rendered more than five years of continuous service. I find no illegality in the orders passed by the Prescribed Authority as well as by the Appellate Authority. Learned Counsel for the Petitioner could not raise any substantial legal point to indicate that the orders suffer from any illegality in any manner. The writ petition is devoid of merit. It is accordingly dismissed.