Talaja Taluka Sahakari Kharid Vechan Sangh Through Manager Jagatsinh Ramsinh Sarvaiya v. Appellate Authority
2025-04-02
M.K.THAKKER
body2025
DigiLaw.ai
JUDGMENT : 1. The present petition is filed under Article 226 of the Constitution of India challenging the order passed by the learned Controlling Authority and confirmed by the learned Appellate Authority directing the present petitioner to pay the amount of Rs.1,93,140/- with 10% interest to the respondent herein. 2. It is the case of the petitioner that the petitioner is a registered Co-operative Society and working at District level at small scale, and selling seeds and fertilizers to the farmers. On 07.01.1984 the respondent No.3 was appointed as a Godown Keeper by passing the Resolution being No.7, again Resolution No.6 came to be passed in the year 2013, relieving the respondent employee on attaining the age of superannuation. Thereafter, respondent was engaged as a part-timer and has worked continuously up to year 2021. The Committee has passed further resolution No.3 on 15.12.2021 relieving the respondent No.3 from the service as a part-timer. The respondent employee preferred an application being Gratuity Application No.3 of 2022 before the learned Controlling Authority, Bhavnagar claiming the gratuity amount of Rs.1,93,140/- with 10% interest. On 19.01.2023, communication was sent to the respondent-employee for the recovery of the amount of Rs.73,633/- which is advanced salary paid to the respondent by the petitioner. 2.1. Learned Controlling Authorities had passed an order on 19.06.2023 directing the present petitioner to pay the amount of gratuity as claimed in the application. Thereafter, the learned Controlling Authority has issued the certificate on 18.07.2023 certifying the amount of Rs.2,22,111/- with interest by directing the present petitioner to pay the said amount. The petitioner has deposited the amount before the learned Controlling Authority and filed the appeal before the Appellate Authority being a Gratuity Appeal No.175 of 2023 which came to be rejected on 30.10.2023. Challenging the order passed by the learned Controlling Authority, affirmed by the learned Appellate Authority the present petition is filed. 3. Heard learned advocate Mr.Dharmesh Shah for the petitioner and learned advocate Mr.Rajesh Mankad for the respondent. 4.
Challenging the order passed by the learned Controlling Authority, affirmed by the learned Appellate Authority the present petition is filed. 3. Heard learned advocate Mr.Dharmesh Shah for the petitioner and learned advocate Mr.Rajesh Mankad for the respondent. 4. Though number of contentions are raised in the memo of the petition, however, the main ground assailing the order passed by the learned Controlling Authority is that the respondent attained the age of superannuation in the year 2013 and thereafter, he was engaged as a stopgap arrangement and he was serving as a part-timer upto 2021 therefore, the order passed by the learned Controlling Authority considering the service up to 2021 is erroneous and therefore, both the orders are required to be set aside and the petition is required to be allowed. 5. Per contra learned advocate Mr.Mankad appearing for the respondent has submitted that it is true that the respondent attained the age of superannuation in the year 2013, however, there is no any date fixed by the petitioner for retirement. It is submitted by the learned advocate Mr.Mankad that on completion of these 37 years of service, with a view to avoid the liability of payment of gratuity, the back dated resolution was created by the petitioner-Society to project that the resolution was passed in the year 2013, permitting the respondent to retire from the service. It is submitted by learned advocate Mr.Mankad that till date, there is no order served to the respondent, intimating the retirement from the year 2013. Learned advocate Mr.Mankad submits that so far as the contention with regard to the advance claim is concerned, receiving the communication from the petitioner, the reply was given by the respondent on 08.02.2023 and 21.02.2023 pointing out that amount which was advanced, has already been paid immediately on 05.03.2013. The receipt with regard to the same was also issued being No.1109 and 1177. It is submitted by the learned advocate Mr.Mankad that the said reply was not responded further by the petitioner. Learned advocate has submitted that on receiving the communication dated 14.12.2021, relieving the present respondent from the service, the communication was addressed to the petitioner on 21.12.2021 wherein, also it is stated that no terminal dues were paid by the petitioner. 5.1.
Learned advocate has submitted that on receiving the communication dated 14.12.2021, relieving the present respondent from the service, the communication was addressed to the petitioner on 21.12.2021 wherein, also it is stated that no terminal dues were paid by the petitioner. 5.1. It is submitted by the learned advocate Mr.Mankad that on demanding the difference of wages as per the minimum wage by filing the recovery application, the respondent was relieved from the service. Learned advocate Mr.Mankad submits that though it was projected that respondent was engaged on part time basis, however, as per the list of the employees, his name was shown as a Godown Keeper/Peon. Learned advocate Mr.Mankad submits that after scrutinizing the evidence placed on record before the learned Controlling Authority, the learned Controlling Authority has directed the present petitioner to pay the amount of gratuity which was confirmed by the learned Appellate Authority and therefore, no interference is required. 6. Having considering the arguments advanced by the learned advocate for the respective parties and the documents placed alongwith memo of the petitions, it emerges that in the ground of the petitions, the applicability of the Act though mentioned, however, during the course of hearing, the said ground was not argued. The only argument for assailing the impugned order is that after attaining the age of superannuation in the year 2013 the respondent would not be entitled for the gratuity amount up to year 2021. 7. At this stage the provisions of the gratuity act, more particularly section 4, section 2(r) and section 2(q) of the Payment of Gratuity Act, 1972 are required to be referred to which is reproduced hereinbelow:- Section 4 (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: (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: (3) The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand] rupees.
(4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced. (5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer. (6) Notwithstanding anything contained in sub-section (1),- (a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused. (b) the gratuity payable to an employee may be wholly or partially forfeited] - (i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or (ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. (7) [***] Section 2(q) (q) "retirement" means termination of the service of an employee otherwise than on superannuation; Section 2(r) [8] [(r) "superannuation", in relation to an employee, means the attainment by the employee of such age as is fixed in the contract or conditions of service at the age on the attainment of which the employee shall vacate the employment;]” 7.1. Section 2(q) provides that entitlement to gratuity for an employee would arise only on termination of service and that amount has to be paid under section 7(3)(a) of the Payment of Gratuity Act, 1972 within a period of 30 days from the date of cessation of his employment. At this stage, reference of the judgment rendered by the Madras High Court in the case of Jeevanlal (1929) Limited And Ors. vs Controlling Authority is required to be referred to.
At this stage, reference of the judgment rendered by the Madras High Court in the case of Jeevanlal (1929) Limited And Ors. vs Controlling Authority is required to be referred to. Though in the said case, issue was with regard to the applicability of the Act, however, it was held that even after attaining the age of 58 years, which is the age of superannuation, when the employment was continued up to 01.09.1972, employee would be entitled for gratuity under the Payment of Gratuity Act, 1972, the relevant observation is reproduced herein-below:- “21. We will now take up the next batch of cases, viz., Writ Petition Nos. 338 to 340 and 492/77, 1377 to 1379/78 and 1540 to 1540 to 1542/78. These petitions have been filed by the employer, viz., Messrs. Jeevanlal Limited challenging the correctness of the orders passed by the controlling authority and the appellate authority. In these cases, the facts are slightly different. The employees concerned in these cases had reached the age of superannuation which was 58 years well before the Act came into force. They were, however, re-employed on an yearly basis and eventually, their employment came to an end on 31-12-1972 or 31-12-1973 as the case may be. Having regarded to this factor, the employees claimed that they were entitled to payment of gratuity in accordance with the terms of the Act. The Management, however, contended that their employment had come to a termination on their reaching the age of superannuation long before the Act came into force, and as such, they will be entitled to get gratuity only in accordance with the terms of the scheme or award which was in force earlier. As illustrative of the facts, we may set out the case of the worker by name Adisesha Pillai. He reached the age of superannuation of 58 years in 1968. The management informed him that this services in the company ceased on 31-12-1968, but, however, having regarded to his physical fitness and capacity, he was being given re-employment for a period of twelve months operative from 1st January, 1969 to 31st December 1969. In the same way for the subsequent years also, viz., 1970, 1971 and 1972 he was given re-employment and he stopped working in the company on and from 1-9-1972.
In the same way for the subsequent years also, viz., 1970, 1971 and 1972 he was given re-employment and he stopped working in the company on and from 1-9-1972. Since the Act came into force on 16-1-1972, the employee claimed gratuity payments in accordance with the terms of the Act. On the other hand, the management said that gratuity would be paid him only as per the scheme or award originally governing the parties, which meant that only the basic pay, and not dearness allowance, would be taken into consideration for computing gratuity. 22. Mr. Gopalan, learned counsel for the petitioner in these cases, argued that since the employees had reached superannuation, their services must be deemed to have become terminated at the end of that year, in which they reached the age of superannuation, and since that event had taken place before the Act came into force, the employees were not entitled to rely upon the provisions of the Act for payment of gratuity. In support of the contention, reliance was placed on State of W.B. v. Purenda Sen, (1977) Lab. I.C., 1978. 23. In our opinion, the contentions of the petitioner are clearly untenable. Though the employees had reached the age of superannuation before the Act came into force, they were given re-employment in such a manner that were there was no break in their services. Thus purely from a factual point of view the employees continued to serve the petitioner-company uninterruptedly. Secondly; it is common ground that on the employees reaching the age of superannuation and ceasing to be regular employees of the company, the gratuity payable to them as per scheme or award governing the parties was not paid to them by the company. If there was a legal break in their service, then it follows that the gratuity payable to them upto the date of their retirement would have been calculated and paid to them. Such a course had not been followed by the petitioner. Thirdly, it is seen that in the order of re-employment there is a clause, viz., clause (5) which provides for payment of gratuity for the period of service during re-employment also.
Such a course had not been followed by the petitioner. Thirdly, it is seen that in the order of re-employment there is a clause, viz., clause (5) which provides for payment of gratuity for the period of service during re-employment also. The clause reads as follows : "Without prejudice to any of these terms and conditions and without creating any admission or estopped by the Management against the binding character of these terms and conditions, you shall be entitled to contribute to the Company's Provident Fund Scheme and shall be also entitled to gratuity, if any, in terms of the Award (Settlement) Scheme governing you". No doubt, the words used in the clause are, "Gratuity, if any, in terms of the Award "Settlement Scheme". But, on account of the Act coming into force, the provisions of the Act would override the contract between the parties unless the terms of the contract were more favourable to the employees than what the Act has conferred on them. The order of re-employment indicates that for the period of re-employment also the worker would be entitled to gratuity benefits. As the actual stoppage of work has taken place after the Act came into force, the employees were justified in asking for payment of gratuity in accordance with the terms of the Act. State of W.B. v. Purnendu Sen, (1977) Lab. I.C., 1978, cited by the petitioner's counsel decided ones not advance the petitioner's case in any manner. The decision in that case was rendered on the basis of the construction placed on a Government Order issued by the Government of West Bengal. The decision does not lay down any general principle of law. The concerned authorities were, therefore, right in taking the view that employees should get gratuity as per the terms of the Act.” 8.
The decision in that case was rendered on the basis of the construction placed on a Government Order issued by the Government of West Bengal. The decision does not lay down any general principle of law. The concerned authorities were, therefore, right in taking the view that employees should get gratuity as per the terms of the Act.” 8. This Court is of the view that as it is provided under section 4 of the Payment of Gratuity Act, 1972 that gratuity payable to the employee on termination of his employment and sub clause (b) provides that on his retirement and resignation, reading conjointly with the definition of section 2(q) of the Payment of Gratuity Act, 1972, in which retirement, means the termination of the service of an employee otherwise then on superannuation and the actual stoppage of work or termination was made admittedly in the instant case in the year 2021, therefore, employees would be entitled for the gratuity till the year 2021 as held by the learned Controlling Authority. This Court has also referred the list of the Management Committee along with the list of employees which are produced from the year 2012 to 2021 wherein, the name of the present respondent was figured as a Godown Keeper/Peon. The list of the Management Committee dated 31.03.2022 further refers that the respondent herein has continued up to 15.12.2021. As nothing is mentioned with regard to the part time employees in the said list, this Court is of the view that petitioner was continued till 15.12.2021 on the same post in which he was working before 2013. With regard to the non clearance of the advance salary of Rs.27,400/- and Rs.9,200/- is concerned, there is no separate order passed by the petitioner-Society forfeiting the amount of gratuity to recover the advance which was taken by the present respondent. In addition to that, the respondent has contended that all the dues were cleared and for that, receipts being No.1109 and 1177 were issued which was not rebutted by the present petitioner by adducing any evidence. In that background also, the petitioner is entitled for the gratuity up to the period of 2021. 9. In view of the same, this Court did not find any merits in the present petition, hence the petition is disposed of. 10.
In that background also, the petitioner is entitled for the gratuity up to the period of 2021. 9. In view of the same, this Court did not find any merits in the present petition, hence the petition is disposed of. 10. Learned Controlling Authority shall disburse the amount in favour of the respondent-employee on completion of the appeal period.