Madhusoodanan Nair S. S/o Late K. Sankara Pillai v. State of Kerala, Rep. by the Secretary Co-Operative Department
2019-08-21
DEVAN RAMACHANDRAN
body2019
DigiLaw.ai
JUDGMENT : 1. As is now fairly well known, the payment of Gratuity Act, 1972 provides that its provisions will apply to an establishment that has employed or is employing ten or more employees. Within the confines of this statutory stipulation, the petitioner herein asserts that since the establishment involved in this case, which is a Co-operative Society, is authorised to appoint twenty eight employees as per its approved Feeder Category Sub Rules, they must be construed to be within the rigour of the afore Act even if they have employed less than ten employees. 2. Thus, it its crux, the petitioner predicates that since the approved Feeder Category Sub Rules provides for twenty eight posts in their services, it is this number which is relevant in considering whether the Payment of Gratuity Act applies since this is the de jure number of employees and not the number of employees de facto engaged. 3. I will proceed to deal with this contention in detail, after I narrate the facts involved compendiously. 4. The petitioner says that he retired from the services of the 4th respondent-Society on 31.03.2013, after having served them for 31 years and 9 months. According to him, the 4th respondent is a Class-I Society and that it has 28 sanctioned posts, with transaction of over Rs. 30 Crores in a year and that when he retired from service, he was entitled to full gratuity calculated as per the provisions of the Payment of Gratuity Act and Rule 59 of the Kerala Co-operative Societies Rules (KCS Rules for short) but alleges that he was paid only Rs. 7,37,425/- instead of Rs. 9,10,062/- and thus that he is entitled to the balance of Rs. 1,70,637/- with interest. 5. The petitioner says that when the Society was refusing to grant him his full benefits, he was constrained to approach the concerned Joint Registrar of Co-operative Societies but that, through Ext.P4, the said Authority rejected his request holding that the Society had less than 10 employees at every given time and therefore, that they do not come within the provisions of the Payment of Gratuity Act.
He says that he preferred a Revision against this order before the Cooperative Tribunal, under Section 84 of the KCS Act, but that the said Tribunal has also rejected the same through Ext.P5 order, confirming that the Society had less than 10 employees and thus being beyond the rigour of the Payment of Gratuity Act. 6. The petitioner's specific contention is that the Society had been employing several temporary staff without appointing them permanently and therefore, that this amounts to affront on the rights of the employees of the Society, who were thus denied their legitimate benefits by making it appear that the strength of the Society is less than 10 at all time. He further submits that the conduct of the Society in having employed persons on temporary basis, even though they had 28 sanctioned posts, is clearly in violation of the statutory obligations cast upon them and it amounts to exploitative labour practices. He, therefore, prays that Exts.P4 and P5 be set aside and he be directed to be given his eligible gratuity benefits. 7. In answer to the afore submissions made by Sri. B. Mohan Lal-learned counsel for the petitioner, Sri. R. Sunil Kumar-learned Standing Counsel for the Society, submits that the afore allegations of the petitioner are completely untenable because, as is clear from Ext.P10 produced by the petitioner himself, the number of staff in the Society, including the alleged temporary workers, never exceeded 10 at any point of time. He adds that the temporary workers were not working against the sanctioned posts, but were engaged on daily wage basis as Data Entry Operators and this is not, in any manner, contrary to the Feeder Category Sub Rules, but that such engagements were being made only on account of exigencies of service, never being permanent or for long durations. He, therefore, prays that this Writ Petition be dismissed. 8. Sri. N.B. Sunil Nath-learned Government Pleader, appearing on behalf of the official respondents, submits that he has little to comment on the opposing claims of the parties in this case because the dispute of the petitioner is against the Society and it is for them to answer it.
He, therefore, prays that this Writ Petition be dismissed. 8. Sri. N.B. Sunil Nath-learned Government Pleader, appearing on behalf of the official respondents, submits that he has little to comment on the opposing claims of the parties in this case because the dispute of the petitioner is against the Society and it is for them to answer it. He then adds that Ext.P5 cannot be faulted because the Joint Registrar has found that even though there was a sanctioned strength of 28, the Society had never employed more than 10 persons at any given time and therefore, that the Payment of Gratuity Act does not apply to them. He concluded by saying that, from the records available, the payment of Gratuity to the petitioner appears to have been made by the Society under Section 62 and Rule 59 of the KCS Act and Rules. 9. Once, I see the rival contentions as afore, its assessment will certainly have to be made on the touchstone of the provisions of the Payment of the Gratuity Act, particularly Section 1(3)(b) thereof, which reads as under: “Every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State in which ten or more persons are employed, or were employed, on any day of the preceding twelve months.” 10. It is indubitable from the afore provision that the respondent-Society would come within the fold of the Payment of Gratuity Act only if they had employed 10 or more persons on any given day of the preceding 12 months prior to the petitioner's retirement. The words used in the Section is "employed or were employed" and therefore, it is incontestable that the number of employees who actually worked is relevant than the number of employees who could have worked. This is vital because, the submissions of Sri. B. Mohan Lal is that even though the Society had a sanctioned strength of 28, as per their approved Feeder Category Sub-Rules, they employed only 5 permanent staff and retained another four or five as temporary Data Entry Operators and axiomatically that they are acting with an intend to defeat the provisions of the Act and to exploit their employees. 11.
11. Even though the above submissions may look worthy at the first glance, I am afraid that it cannot aid the petitioner to claim full gratuity in this case unless he is able to establish that the Society had actually employed 10 or more persons at any given time, since that is the true import of the afore section. Even if an employer may be entitled to employ any number of employees, the rigour of the Payment of Gratuity Act will apply to the establishment only if ten or more employees are/or have been employed. Hence, what is decisive is the actual number of employees who have worked and not the capacity or capability of an employer to employ. 12. Hence, it can leave no doubt that the Society in this case may have been capacitated in employing ten or more employees, the approved Feeder Category Sub Rules sanctioning twenty eight posts, the acme query is if they did so. This is more so because, the aforementioned Sub Rules only prescribe the posts that are sanctioned, but does not obligate a Society to fill up all such posts, it being left to them to decide based on the applicable and relevant criterion, including the financial capacity and the requirement of service. 13. This, essentially, is a question of fact and not something that this Court can delve into affirmatively while acting under Article 226 of the Constitution of India. 14. That said, however, I notice that neither in Exts.P4 or P5 orders have the Authorities considered this aspect, particularly from the angle of the allegation of exploitation of employees by the Society as impelled by Sri. B. Mohanlal. In fact in Ext.P4, the Joint Registrar of Co-operative Societies holds that there were only five permanent employees but without reference to the temporary employment, if any, engaged in by the Society. This, in my view, is an issue that the said Authority ought to have considered and I am certainly of the opinion that to that limited extent, the orders requires to be reconsidered. 15.
This, in my view, is an issue that the said Authority ought to have considered and I am certainly of the opinion that to that limited extent, the orders requires to be reconsidered. 15. In the afore perspective, holding that it is only if the petitioner is able to establish that the Society had employed 10 or more persons at any given time, will he be entitled to the benefits sought for in this Writ Petition, I direct the Joint Registrar of Co-operative Societies to reconsider the singular question as to whether the Society had engaged such number or more persons at any given time, from the contextual purlieu of the Payment of Gratuity Act, based on all the germane and relevant materials; and to then take a decision as to whether any modification to Ext.P4 would become warranted. The question whether the admitted temporary employees can also be reckoned for this purpose, being an essential corollary of this issue, will also be decided by the Joint Registrar, adverting to the provisions of the Payment of Gratuity Act. 16. I make it clear that while the Joint Registrar acts in the afore manner, he will not be governed by the conclusions and contents of Ext.P5 order and that it is only if he finds that the number of employees engaged by the Society was 10 or below, at all time till the petitioner retired, will the said order operate and not otherwise. 17. To reiteratingly clarify, if the findings on fact to be arrived at by the Joint Registrar is that the Society had employed 10 or more persons, then certainly he will be entitled to issue a fresh order and Ext.P5, to the extent to which it is contrary to the same, would stand overruled. 18. The afore exercise shall be completed by the Joint Registrar, after affording an opportunity of being heard to the petitioner as well as the authorised representative of the Society, as expeditiously as is possible, but not later than three months from the date of receipt of a copy of this judgment. 19. This writ petition is thus ordered.