Research › Search › Judgment

Himachal Pradesh High Court · body

2013 DIGILAW 446 (HP)

RAM KRISHAN v. RAM KRISHAN PRADESH

2013-05-20

RAJIV SHARMA

body2013
JUDGMENT RAJIV SHARMA, J. 1. PETITIONER No. 1 was appointed on daily wage basis in the respondent -Corporation in the year, 1993. Petitioner No. 2 was appointed on daily wage basis in the year, 1994. They were declared surplus on 20.08.2007. Petitioner No. 1 was regularized as Water Carrier in the office of Superintendent of Police Kinnaur, District Kinnaur, Himachal Pradesh. Petitioner No. 2 was regularized as Attendant in the Animal Husbandry Department vide order, dated 20.08.2007. Petitioner No. 1 made a representation for payment of gratuity to the respondent - Corporation on 11.09.2011. The representation made by the petitioner was rejected on 29.09.2011 vide Annexure P -3. 2. MR. Devender Sharma, learned vice counsel for the petitioners has vehemently argued that his clients are entitled to gratuity under the Payment of Gratuity Act, 1972/ as per Clause 1 Whether the reporters of the local papers may be allowed to see the judgment Yes. 3.6(1) of Service Bye -laws of the Corporation. He also contended that his clients are entitled to statutory bonus as per Section 8 of The Payment of Bonus Act, 1965. Mr. Bhupender Thakur, learned counsel for the respondents has argued that since the petitioners were working on daily wage basis, they are neither entitled to gratuity nor to the bonus. 3. I have heard the learned counsel for the parties and gone through the pleadings carefully. 4. IT is clear from Annexure P-3 that as per Clause 3.6(1) of Service Bye -laws of the Corporation, an officer/other employees of the Corporation on termination of his/her employment is entitled to gratuity after rendering continuous service for not less than five years. The expression used in the Bye-laws is 'employee '. The 'employee ' would also cover daily waged workman. Petitioners have rendered 15 years ' uninterrupted service with the respondent -Corporation. They have been declared surplus and regularized in the State Government on 20.08.2007. The expression 'surplus ' in the case of the petitioner will amount to termination of their employment from Corporation. They have put in more than 5 years of continuous service and the gratuity cannot be denied to them only on the ground that they are working on daily wage basis. A Division Bench of this Court in Chaudhary Sarwan Kumar Himachal Pradesh Krishi Vishvavidyalaya, Palampur Vs. They have put in more than 5 years of continuous service and the gratuity cannot be denied to them only on the ground that they are working on daily wage basis. A Division Bench of this Court in Chaudhary Sarwan Kumar Himachal Pradesh Krishi Vishvavidyalaya, Palampur Vs. Nag, 2011 (3) Shimla Law Cases 365 has held that as per the statutory provisions of Payment of Gratuity Act, 1972, it does not make any difference as to whether an employee is paid daily wages or weekly wages or monthly wages. The only condition is that he should be employed by the employer on wages in an establishment covered by the Act and should be in continuous service, as required under Section 2 -A of the Act. The Division Bench has further held that even seasonal employees and piecerated employees are covered by the Act subject to their fulfilling the prescribed requirements. Therefore, a daily waged employee was held covered by the Act. The Division Bench has held as under: ''3. A perusal of the statutory provisions, as extracted above, would clearly show that the Act does not make any difference as to whether an employee is paid daily wages or weekly wages or monthly wages. The condition is only that he should be employed by the employer on wages in an establishment covered by the Act and should be in continuous service, as required under Section 2-A of the Act. Even seasonal employees and piece -rated employees are covered by the Act subject to their fulfilling the prescribed requirements. Therefore, a daily waged employee is, thus, covered by the Act. 4. It is the contention of the University that its service conditions do not provide for gratuity. Section 14 of the Act provides as follows: - ''The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactments other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act. '' The petitioner's establishment does not have a scheme for payment of gratuity to daily waged employees in case they otherwise qualify for gratuity under the Act, since the Payment of Gratuity Act has an overriding effect over other enactments. Therefore, the daily waged employees of the petitioner's University, subject to their fulfilling other conditions, are entitled for gratuity. '' The petitioner's establishment does not have a scheme for payment of gratuity to daily waged employees in case they otherwise qualify for gratuity under the Act, since the Payment of Gratuity Act has an overriding effect over other enactments. Therefore, the daily waged employees of the petitioner's University, subject to their fulfilling other conditions, are entitled for gratuity. This issue in principle has been decided by the Supreme Court in Municipal Corporation of Delhi vs. Dharam Prakash Sharma, AIR 1991 SUPREME COURT 293. At paragraph 2 of this judgment, it has been held as follows: - ''The short question that arises for consideration is whether an employee of the MCD would be entitled to payment of gratuity under the Payment of Gratuity Act when the MCD itself has adopted the provisions of the CCS (Pension) Rules, 1972 (hereinafter referred to as the "Pension Rules"), where under there is a provision both for payment of pension as well as of gratuity. The contention of the learned counsel appearing for the appellant in this Court is that the payment of pension and gratuity under the Pension Rules is a package by itself and once that package is made applicable to the employees of the MCD, the provisions of payment of gratuity under the Payment of Gratuity Act cannot be held applicable. We have examined carefully the provisions of the Pension Rules as well as the provisions of the Payment of Gratuity Act. The Payment of Gratuity Act being a special provision for payment of gratuity unless there is any provision therein which excludes its applicability to an employee who is otherwise governed by the provisions of the Pension Rules it is not possible for us to hold that the respondent is not entitled to the gratuity under the Payment of Gratuity Act. The only provision which was pointed out is the definition of 'employee' in S. 2(e) which excludes the employees of the Central Government and the State Governments receiving pension and gratuity under the Pension Rules but not an employee of the MCD. The MCD employee, therefore, would be entitled to the payment of gratuity under the Payment of Gratuity Act. The mere fact that the gratuity is provided for under the Pension Rules will not disentitle him to get the payment of gratuity under the Payment of Gratuity Act. The MCD employee, therefore, would be entitled to the payment of gratuity under the Payment of Gratuity Act. The mere fact that the gratuity is provided for under the Pension Rules will not disentitle him to get the payment of gratuity under the Payment of Gratuity Act. In view of the overriding provisions contained in S. 14 of the Payment of Gratuity Act, the provision for gratuity under Pension Rules will have no effect. Possibly for this reason, S. 5 of the Payment of Gratuity Act has conferred authority on the appropriate Government to exempt any establishment from the operation of the provisions of the Act if in its opinion the employees of such establishment are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act. Admittedly MCD has not taken any steps to invoke the power of the Central Government under S. 5 of the Payment of Gratuity Act. In the aforesaid premises we are of the considered opinion that the employees of the MCD would be entitled to the payment of gratuity under the Payment of Gratuity Act notwithstanding the fact that the provisions of the Pension Rules have been made applicable to them for the purpose of determining the pension. Needless to mention that the employees cannot claim gratuity available 'under Pension Rules. '' 5. Coming to the facts of the case, the Controlling Authority as well as Appellate Authority in the impugned orders, after the required inquiry, has come to the conclusion that the employees concerned are having continuous service, as required under the Act, and they are entitled for gratuity in terms of the Act. Since the petitioner is bound under law to provide gratuity and there being no dispute as to the calculation either, we find no merit in these writ petitions, which are accordingly dismissed. '' 5. IT will not make any difference in this case also whether the petitioners were paid daily wages or regular monthly salary. A person should be only employee of the Corporation and on termination of his/her employment, he/she should have rendered at least five years service. Petitioners have put in more than 15 years continuous service. They have not sought regularization voluntarily. It was a policy decision. They were regularized in the State Government. A person should be only employee of the Corporation and on termination of his/her employment, he/she should have rendered at least five years service. Petitioners have put in more than 15 years continuous service. They have not sought regularization voluntarily. It was a policy decision. They were regularized in the State Government. Their services, which they have rendered with the Forest Corporation, cannot be rendered nugatory/otiose and they are entitled to gratuity strictly as per the Service Bye -laws of the respondent -Corporation. 6. NOW, the Court will advert to the question whether the petitioners are entitled to statutory bonus under The Payment of Bonus Act, 1965. This question is also no more res integra in view of the judgment of Division Bench of this Court in HPSEB & Ors. Vs. Presiding Officer, Labour Court & Ors., CWP No. 546 of 1993 and analogous writ petitions, decided on 06.04.2010. The Division Bench after going through various provisions of The Payment of Bonus Act, 1965 has laid down that the Act does not make any difference as to whether an employee is a temporary, ad -hoc, permanent, daily wager etc. The only pre -condition for entitlement is work in the establishment for not less than 30 days in that year. The respondent -Corporation has not disputed that the provisions of The Payment of Bonus Act, 1965 are applicable to the establishment. The petitioners have put in more than 15 years continuous service with the respondent - Corporation. The Division Bench has held that the daily wage workmen of the Corporation are entitled to bonus under The Payment of Bonus Act, 1965. The petitioners have only sought statutory bonus at the prescribed rate. The Division Bench has held as under: ''The provisions, as extracted above, would clearly show that the payment of Bonus Act, 1965 does not make any difference as to whether an employee is a temporary, ad -hoc, permanent, daily wager etc. The only pre-condition for entitlement is work in the establishment for not less than 30 days in that year of course, the question as to whether the Act would apply to a public sector undertaking in terms of Section 20, is a matter to be examined with reference to the factual matrix. The only pre-condition for entitlement is work in the establishment for not less than 30 days in that year of course, the question as to whether the Act would apply to a public sector undertaking in terms of Section 20, is a matter to be examined with reference to the factual matrix. The contention fo learned counsel appearing for the writ petitioners is that whenever there is any dispute with regard to the bonus payable under the Act between the employer and employee, the same has to be referred as per Section 22 of the Payment of Bonus Act, 1965.'' The Apex Court in M/s. Jalan Trading Co. Private Ltd. Vs. Mill Mazdoor Sabha, AIR 1967 Supreme Court 691 has held that the Scheme of the Payment of Bonus Act, broadly stated, is four dimensional. The Apex Court has held as under: ''17. The scheme of the Act, broadly stated, is four dimensional: (1) to impose statutory liability upon all employer of every establishment covered by the Act to pay bonus to employees in the establishment; (2) to define the principle of payment of bonus according to the prescribed Formula; (3) to provide for payment of minimum and maximum bonus and linking the payment of bonus with the scheme of "set-off and set-on"; and (4) to provide machinery for enforcement of the liability for payment of bonus. Ordinarily a scheme imposing fresh liability, would, it is apprehended, be made prospective, leaving the pending disputes to be disposed of according to the law in force before the Act. But the Legislature has given by S. 33 retrospective operation to the Act to certain pending disputes, and has sought to provide by S. 34 while extinguishing all pre -existing agreements, settlements or contracts of service for freezing the ratio which existed in the base year on which the bonus would be calculated in subsequent years. '' 7. THEIR Lordships of the Hon'ble Supreme Court in H. Gangahanume Gowda Vs. Karnataka Agro Industries Cropn. Ltd. (2003) 3 Supreme Court Cases 40 have held that payment of interest on delayed payment is mandatory and not discretionary, if delay is not due to the fault of the employee and employer has not obtained permission from controlling authority for delayed payment on that ground. The Apex Court has held as under: ''7. Karnataka Agro Industries Cropn. Ltd. (2003) 3 Supreme Court Cases 40 have held that payment of interest on delayed payment is mandatory and not discretionary, if delay is not due to the fault of the employee and employer has not obtained permission from controlling authority for delayed payment on that ground. The Apex Court has held as under: ''7. It is evident from Section 7(2) that as soon as gratuity becomes payable, the employer, whether any application has been made or not, is obliged to determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of gratuity. Under Section 7(3), the employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable. Under subsection 3(A) of Section 7, if the amount of gratuity is not paid by the employer within the period specified in subsection (3), he shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate not exceeding the rate notified by the Central Government from time to time for repayment of long term deposits; provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on that ground. From the provisions made in Section 7, a clear command can be seen mandating the employer to pay the gratuity within the specified time and to pay interest on the delayed payment of gratuity. No discretion is available to exempt or relieve the employer from payment of gratuity with or without interest as the case may be. However, under the proviso to Section 7 (3A), no interest shall be payable if delay in payment or gratuity is due to the fault of the employee and further condition that the employer has obtained permission in writing from the controlling authority for the delayed payment on that ground. Under Section 8, provision is made for recovery of gratuity payable under the Act, if not paid by the employer within the prescribed time. Under Section 8, provision is made for recovery of gratuity payable under the Act, if not paid by the employer within the prescribed time. The Collector shall recover the amount of gratuity with compound interest thereon as arrears of land revenue and pay the same to the person entitled. A penal provision is also made in Section 9 for non -payment of gratuity. Payment of gratuity with or without interest as the case may be does not lie in the domain of discretion but it is a statutory compulsion. Specific benefits expressly given in a social beneficial legislation cannot be ordinarily denied. Employees on retirement have valuable rights to get gratuity and any culpable delay in payment of gratuity must be visited with the penalty of payment of interest was the view taken in State oj Kerala and Ors. vs. M. Padmanabhan Nayyar (1985) 50 FLR 145. Earlier there was no provision for payment of interest on the delayed payment of gratuity. Sub -section (3A) was added to Section 7 by an amendment, which came into force with effect from 1st October, 1987. In the case of Charan Singh vs. M/s Birta Textiles and Another [(1988) 57 FLR 543 SC] this aspect was noticed in the following words. "There was no provision in the Act for payment of interest when the same was quantified by the Controlling Authority and before the Collector was approached for its realization. In fact, it is on the acceptance of the position that there was a lacuna in the law that Act 22 of 1987 brought about the incorporation of sub-section 3(A) in Section 7. That provision has prospective application. 9. It is clear from what is extracted above from the order of learned Single Judge that interest on delayed payment of gratuity was denied only on the ground that there was doubt whether the appellant was entitled to gratuity, cash equivalent to leave etc., in view of divergent opinion of the courts during the pendency of enquiry. The learned Single Judge having held that the appellant was entitled for payment of gratuity was not right in denying the interest on the delayed payment of gratuity having due regard to Section 7(3A) of the Act. The learned Single Judge having held that the appellant was entitled for payment of gratuity was not right in denying the interest on the delayed payment of gratuity having due regard to Section 7(3A) of the Act. It was not the case of the respondent that the delay in the payment of gratuity was due to the fault of the employee and that it had obtained permission in writing from the controlling authority for the delayed payment on that ground. As noticed above, there is a clear mandate in the provisions of Section 7 to the employer for payment of gratuity within time and to pay interest on the delayed payment of gratuity. There is also provision to recover the amount of gratuity with compound interest in case amount of gratuity payable was not paid by the employer in terms of Section 8 of the Act. Since the employer did not satisfy the mandatory requirements of the proviso to Section 7(3A), no discretion was left to deny the invest to the appellant on belated payment of gratuity. Unfortunately, the Division Bench of the High Court, having found that the appellant was entitled for interest, declined to interfere with the order of the learned Single Judge as regards the claim of interest on delayed payment of gratuity only on the ground that the discretion exercised by the learned Single Judge could not be said to be arbitrary. In the first place in the light of what is stated above, the learned Single Judge could not refuse the grant of interest exercising discretion as against the mandatory provisions contained in Section 7 of the Act. The Division Bench, in our opinion, committed an error in assuming that the learned Single Judge could exercise the discretion in the matter of awarding interest and that such a discretion exercised was not arbitrary. 10. In the light of the facts stated and for the reasons aforementioned, the impugned order cannot be sustained. Consequently, it is set aside. The respondent is directed to pay interest @ 10% on the amount of gratuity to which the appellant is entitled from the date it became payable till the date of payment of the gratuity amount. The appeal is allowed accordingly with cost quantified at Rs. 10,000/ -. ''8. THEIR Lordships of Hon'ble Supreme Court in Ahmedabad Pvt. Primary Teachers ' Assn. Vs. The appeal is allowed accordingly with cost quantified at Rs. 10,000/ -. ''8. THEIR Lordships of Hon'ble Supreme Court in Ahmedabad Pvt. Primary Teachers ' Assn. Vs. Administrative Officer and others (2004) 1 Supreme Court Cases 755 has explained the concept of gratuity and have also explained the expression ''skilled '', ''semi skilled '' and ''unskilled '' as under: ''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 employment 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, is 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 sort of financial assistance to tide over post-retiral hardships and inconveniences. 22. In construing the above mentioned three words which are used in association with each other, the rule of construction noscitur a soclis may be applied. The meaning of each of these words is to be understood by the company it keeps. It is a legitimate rule of construction to construe words in an Act of Parliament with reference to words found in immediate connection with them. The actual order of these three words in juxtaposition indicates that meaning of one takes colour from the other. The meaning of each of these words is to be understood by the company it keeps. It is a legitimate rule of construction to construe words in an Act of Parliament with reference to words found in immediate connection with them. The actual order of these three words in juxtaposition indicates that meaning of one takes colour from the other. The rule is explained differently : 'that meaning of doubtful words may be ascertained by reference to the meaning of words associated with it'. [See Principles of Statutory Interpretation by Justice G.P. Singh (8th Ed.), Syn. 8 at pg. 379]. 23. The word 'unskilled' is opposite of the word 'skilled' and the word 'semi -skilled' seems to describe a person who falls between the two categories i.e. he is not fully skilled and also is not completely unskilled but has some amount of skill for the work for which he is employed. The word 'unskilled' cannot, therefore, be understood dissociated from the word 'skilled' and 'semi -skilled' to read and construe it to include in it all categories of employees irrespective of the nature of employment. If the Legislature intended to cover all categories of employees for extending benefit of gratuity under the Act, specific mention of categories of employment in the definition clause was not necessary at all. Any construction of definition clause which renders it superfluous or otiose has to be avoided. 24. The contention advanced that teachers should be treated as included in expression 'unskilled' or 'skilled' cannot, therefore, be accepted. The teachers might have been imparted training for teaching or there may be cases where teachers who are employed in primary schools are untrained. A trained teacher is not described in industrial field or service jurisprudence as a 'skilled employee'. Such adjective generally is used for employee doing manual or technical work. Similarly, the words 'semiskilled' and 'unskilled' are not understood in educational establishments as describing nature of job of untrained teachers. We do not attach much importance to the arguments advanced on the question as to whether 'skilled', 'semi -skilled' and 'unskilled' qualify the words 'manual', 'supervisory', 'technical' or 'clerical' or the above words qualify the word 'work'. Even if all the words are read disjunctively or in any other manner, trained or untrained teachers do not plainly answer any of the descriptions of the nature of various employments given in the definition clause. Even if all the words are read disjunctively or in any other manner, trained or untrained teachers do not plainly answer any of the descriptions of the nature of various employments given in the definition clause. Trained or untrained teachers are not 'skilled', 'semi -skilled', 'unskilled', 'manual', 'supervisory', 'technical' or 'clerical' employees. They are also not employed in 'managerial' or 'administrative' capacity. occasionally, even if they do some administrative work as part of their duty with teaching, since their main job is imparting education, they cannot be held employed in 'managerial' or 'administrative' capacity. The teachers are clearly not intended to be covered by the definition of 'employee'. '' Their Lordships of the Hon'ble Supreme Court in A.P. Foods Vs. S. Samuel and others (2006) 5 Supreme Court Cases 469 have held that the High Court should not have entertained the writ petition under the Payment of Bonus Act, 1965 and should have directed the petitioners to avail statutory remedy. Their Lordships have held as under: ''6. In a catena of decisions it has been held that writ petition under Article 226 of the Constitution of India, 1950 (in short 'the Constitution') should not be entertained when the statutory remedy is available under the Act, unless exceptional circumstances are made out. 12. A bare reading of Section 22 of the Act makes the position clear that where the dispute arises between an employer and employees with respect to the bonus payable under the Act or with respect to the application of the Act in public sector then such dispute shall be deemed to be an industrial dispute within the meaning of ID Act. '' 9. SIMILARLY, the Apex Court in Hamdard (Wakf) Laboratories Vs. Dy. Labour Commissioner and others (2007) 5 Supreme Court Cases 281 has held that determination of payment of bonus is decided by the machinery stipulated under the Industrial Disputes Act, 1947. 10. THE petitioners need not to be relegated to the alternative remedy, since the only defence taken by the respondent -Corporation in the reply is that daily wage workmen are not entitled to bonus under The Payment of Bonus Act, 1965. This question has already been decided by a Division Bench of this Court. 10. THE petitioners need not to be relegated to the alternative remedy, since the only defence taken by the respondent -Corporation in the reply is that daily wage workmen are not entitled to bonus under The Payment of Bonus Act, 1965. This question has already been decided by a Division Bench of this Court. Moreover, no evidence is required to be led in this case since the petitioners were employees of the Forest Corporation and have put in requisite number of years service for the purpose of gratuity and bonus. Accordingly, the writ petition is allowed. The order, dated 29.09.2011, is quashed and set aside. The respondents are directed to pay the petitioners gratuity with interest under the Service Bye -laws and also statutory bonus alongwith statutory interest, within a period of six weeks from today. The pending application(s), if any, also stand(s) disposed of.