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Gujarat High Court · body

2019 DIGILAW 1133 (GUJ)

Chief Officer v. Arjanbhai Tapubhai Vadhia

2019-12-11

A.P.THAKER, S.R.BRAHMBHATT

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ORDER : S.R. BRAHMBHATT, J. 1. Heard learned advocates for the parties. 2. The appellant, original respondent in Special Civil Application No. 17918 of 2013, filed by the present respondent employee for challenging the part of the order of Appellant Authority under the Payment of Gratuity Act in Appeal No.47 of 2013 dated 10.10.2013, so far as it modified the order of Controlling Authority in respect of payment of gratuity, and as the same was allowed by learned Single Judge, has approached this Court by way of this Letters Patent Appeal under Clause 15 of the Letters Patent Appeal for the reasons stated hereinunder. 3. The facts shorn of unnecessary details and required only for the purpose of appreciation of controversy in question and as can be gathered from the papers of Appeal and petition, deserves to be set-out as under:- 3.1 The appellant hereinafter in this judgment and order referred to as employer respondent and respondent is hereinafter referred to as employee-original petitioner for sake of convenience. 3.2 The employee petitioner was working as Store Keeper since 25.3.1976 and he attained the age of superannuation on 31.3.2012. The amount of gratuity payable on his superannuation was erroneously and under incorrect premise withheld, compelling the petitioner to move appropriate authority under the Payment of Gratuity Act (hereinafter referred to as 'Gratuity Act') vide Gratuity Case No.75/2012. The respondent employer in that proceedings contended that the employee was facing serious criminal charges of forgery and, therefore, he was under suspension and during the period of suspension when he attained the age of superannuation, he retired and his claim to receive gratuity was not justified. The employer placed reliance upon their Rules qua Upleta Municipality Recruitment and Conditions of Service of Employees Rules, 1989 and laid emphasis upon Rule 15 indicating therein that the Gujarat Civil Service (Conduct) Rules 71 have been applicable to the employees of the Nagarpalika and as could be seen from Rule 15 of Upleta Municipality Recruitment and Conditions of Services of Employees Rules, 1989, the employee concerned was not entitled to receive gratuity as claimed by him. The Controlling Authority did not accept such contention on the reasoning that the Payment of Gratuity Act has over-riding effect. The Controlling Authority did not accept such contention on the reasoning that the Payment of Gratuity Act has over-riding effect. 3.3 The contentions of the employer based upon their Service Rules is that the Controlling Authority should not have allowed the application of the employee- Petitioner and ordered payment of gratuity of Rs.4,24,315/- with 10% simple interest vide its order dated 22.2.2013. 4. The said order was challenged by the employer in the appeal proceedings under the Payment of Gratuity Act by way of Payment of Gratuity Appeal No.47 of 2013 in which the Appellate Authority though did not disturb the other findings of the Controlling Authority, however, accepted the contention of the Municipality-Employer and reduced the gratuity amount calculating the payment of gratuity on the basis of last drawn wages being subsistence allowance vide its order dated 10.10.2013. 5. Being aggrieved and dissatisfied with the said order, the petitioner preferred the Writ Petition being SCA No.17918 of 2013, which came to be allowed by the learned Single Judge of this Court on the ground that the reasoning adopted by the Appellate Authority for reducing the gratuity amount was wholly incorrect and unjustified and, therefore, the order passed by the Controlling Authority deserves to be restored and it was restored and the Special Civil Application No.17918 of 2013 was allowed vide Order dated 25.01.2019, which has been assailed in the present Appeal under Clause 15 of the Letters Patent Appeal. 6. Learned counsel appearing for the appellant contended that the order of learned Single Judge suffers from infirmity of reasoning inasmuch as the definition of “wages” under Section 2(s) of the Payment of Gratuity Act would clearly prescribe that the last drawn wages are to be reckoned for calculating the amount of gratuity and in the instant case when the employee respondent attained the age of superannuation, he was lastly drawing the subsistence allowance and, therefore the Appellate Authority was justified in ordering reduction on that count. 7. Learned counsel appearing for the employer further contended that the order of suspension was passed against the petitioner as the petitioner was said to have been involved in a very serious offence for which he was being tried and trial was on and the trial was for serious criminal charge, the employee could not have been aspiring for any other benefits except which is bare minimum admissible to him. The employee was in receipt of this subsistence allowance and, therefore, that subsistence allowance should be taken to be last drawn wages for reducing the gratuity amount. 8. Learned Counsel appearing for the employer further submitted that the seriousness of the charges and the criminal offences and the trial after having appreciated by the concerned gratuity authority as well as learned Single Judge, and therefore, the order impugned deserves to be quashed and set aside. 9. The learned Counsel appearing for the employee invited Court’s attention to the Supreme Court decision in case of State of Jharkhand and Others v. Jitendra Kumar Srivastava and Another, reported in (2013) 12 SCC 210 , to support his contention that the payment of pension and gratuity are not to be withheld, if the withholding is not supported by any law. In the instant case, when the employer failed to establish any legal support, it was unfortunate that the Appellate authority, in erroneous calculation, ordered reduction of the gratuity amount, which being illegal, the learned Single Judge has correctly restored the order of the controlling authority, and this Court, therefore, may not interfere with the order of the controlling authority and he relies upon Section 14 of the Gratuity Act to indicate that the same has over-riding effect. 10. We have heard the learned Counsel and perused the documents. It is required to be noted that the Payment of Gratuity Act and the definition of ‘employee’ under Section 2(e) would clearly indicate that there is hardly any dispute qua the petitioner being entitled and eligible to invoke the provisions of Payment of Gratuity Act, the applicability of the Act also would indicate that the present employer is not ousted therein. The Court hasten to add here that at this stage neither of the parties have made any submission to that effect before the learned Single Judge in the proceedings. In fact, there was attempt on the part of the employer before the tribunal i.e. the Court of first instance, to press into service the Upleta Services Regulations but those Service Regulations have been not accepted to be binding in view of the over-riding effect of Section 14 of the Gratuity Act. In fact, there was attempt on the part of the employer before the tribunal i.e. the Court of first instance, to press into service the Upleta Services Regulations but those Service Regulations have been not accepted to be binding in view of the over-riding effect of Section 14 of the Gratuity Act. We may observe that the Payment of Gratuity, as said by the Supreme Court in the case of State of Jharkhand and Others v. Jitendra Kumar Srivastava and Another(supra) is a matter of right and any curtailment thereof need to be on the basis of applicable law. The little attempt on the part of employer before the Controlling authority to fall back upon the Upleta Regulations naturally would be of no avail to the employer inasmuch as the gratuity is not permitted to be withheld. Even assuming that the said Regulations would apply, as by prescription it is mentioned therein that the State Rules will be applicable especially the Conduct Rules, unfortunately the Conduct Rules does not deal with the Payment of Gratuity aspect. The Rules which deals are Gujarat Civil Services Pension and Gratuity Rules, 2002 and those Rules have not been pressed into service by any one before the Authority. The Court further hasten to add that withholding of the gratuity is prescribed under the said Rules and the said Rules have not been pressed into service. 11. This brings the Court to consider the aspect of last drawn wages. In our view, the reasoning adopted by the learned Single Judge appears to be correct. The subsistence allowance cannot partake the characteristic of the wages. The definition of wages as mentioned in the Payment of Gratuity Act indicates emoluments received. The subsistence allowed per-se cannot be said to be a wage so as to calculate the same for gratuity purpose. The wages which the employee is receiving under an subsistence allowance is only the allowance when the employee is not called upon to serve and when employee is not discharging his duty, a sum is required to be paid to him for sustaining himself and his family and, therefore, this cannot be said to be in lieu of wages. The said amount is paid being part of the wages to help the employee sustain himself and his family on account of he being not permitted to work during suspension period. The said amount is paid being part of the wages to help the employee sustain himself and his family on account of he being not permitted to work during suspension period. The moment the clout is lifted and is reinstated, the wages will be paid. In that view of the matter, the subsistence allowance, in our view, were not a wage. The employer could not be given liberty to reckon gratuity amount based thereupon as it would amount to withholding part of the gratuity amount contrary to the provision of the Payment of Gratuity Act without there being legal decision thereof. Therefore, the order passed by the learned Single Judge, in our view, does not warrant any interference and the appeal fails and the deserves to be dismissed and the same is dismissed. In view of the aforesaid order, the Civil Application stands disposed of.