Partly allowed

Itc Limited v. Appellate Authority Under Payment of Gratuity Act and 2 Others

Allahabad HC18 Dec 2018WRIC/41016/2018

Case brief

AI extract

What is this about?

This court held that the Appellate Authority failed to discharge its appeal jurisdiction by not applying its mind to the petitioner's challenge regarding the master-servant relationship. The finding in the Appellate Authority's order was deemed a total non-application of mind. The petition is disposed of by setting aside the Appellate Authority's order and remitting the matter for a fresh hearing.

What did the court decide?

The order dated 20.08.2018 passed by the Appellate Authority is set aside except to the extent it held the State Government was the appropriate government. The matter is remitted to the Appellate Auth

Itc Limited Vs Appellate Authority Under Payment of… — Money Laundering | Allahabad HC (2018)

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Court No. - 7

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Case :- WRIT - C No. - 41016 of 2018

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Petitioner :- Itc Limited

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Respondent :- Appellate Authority Under Payment Of Gratuity Act And 2 Others

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Counsel for Petitioner :- Kalpana Sinha,Navin Sinha (Senior Advocate),Raghav Nayar

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Counsel for Respondent :- C.S.C.,Shyam Narain,Sudhanshu Narain

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Hon'ble Saumitra Dayal Singh,J.

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Counter affidavit filed today is taken on record. Learned counsel for the petitioner does not propose to file any rejoinder affidavit.

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Heard Sri Navin Sinha, learned Senior Counsel on the behalf of the petitioner assisted by Ms. Kalpana Sinha and Sri Raghav Nayar; Sri Gopal Narain, Advocate, holding brief of Sri Sudhanshu Narain, learned counsel for the respondent workman and; learned Standing Counsel.

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The challenge in the writ petition has been raised to the order dated 20.08.2018 passed by the Appellate Authority under The Payment Of Gratuity Act, 1972 (hereinafter referred to as 'the Act'), by which that Authority has upheld the order dated 17.05.2017 passed by the Controlling Authority, providing for payment of gratuity to the respondent no. 3.

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The challenge has arisen basically on two counts being that the Appellate Authority has erred in deciding the issue of the appropriate government in favour of the respondent no. 3, inasmuch as it has been submitted that the petitioner is a Corporation having its registered office at Kolkata with its factories spread all over the country. In that fact, relying on Section 2(a) of the Act, the Central Government alone would be the appropriate government. In the present case, since the respondent no.3 had filed his application before the Controlling

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Authority, notified by the State Government, the proceedings were claimed to be without jurisdiction.

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However, learned Senior Counsel appearing on behalf of the petitioner has placed before the judgment of the Supreme Court in the case of Jeewanlal (1929) Ltd. and others Vs. The Appellate Authority Under The Payment Of Gratuity Act and others, AIR 1984 SC 1842 wherein this issue was specifically discussed and the Supreme Court has held that mere existence of different factories in different States would not be relevant for the purposes of determination of appropriate government under the Act. For that purposes, existence of different establishments in different States would be a relevant factor. In such fact, the first objection does not merit any further discussion. The findings recorded by the Appellate Authority, to that extent, are upheld.

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Second, it has been submitted that a serious dispute had been raised by the petitioner as to the existence of master servant relationship between the parties. In that regard, it has been clearly stated both before the Controlling Authority as also the Appellate Authority that the respondent no. 3 is a medical practitioner, whose services had been engaged for the purpose of compliance of the provisions of the Factories Act. That engagement had been offered by the petitioner and accepted by the respondent no. 3 on retainership basis. Thus, relying on the appointment letter dated 31.12.1990, by referring to various clauses thereof, it has been submitted that neither the petitioner had any control over the working of the respondent workman as a medical practitioner nor there was any supervisory control of the petitioner on such working. In fact, submissions have been advanced to the effect that the respondent workman was completely free to engage in private practice and in fact, he was

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engaged as a Consultant by certain other industrial establishments. Also, it has been submitted that the petitioner was free to delegate another medical practitioner in his place, in the event of his non-availability, such delegation being subject to fulfilment of certain conditions stipulated in the letter of appointment. Various other clauses have also been referred to in this regard. However, the same are not required to be adverted to in detail, in view of the facts narrated below.

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In the entirety, it has been submitted that the engagement of the respondent workman was only for the purpose of compliance of the provisions of the Factories Act, as those provisions required the factories to make available the services of the medical practitioner at the factory premises. In compliance of such provisions, it has been submitted, the contract did not give rise to the relationship of master servant between the parties. In this regard, it has been further submitted that, while the Controlling Authority had made a discussion of the facts including the claim and counter claim made by the parties and, thereafter, recorded findings which were assailed by the petitioner before the Appellate Authority, however, the Appellate Authority had not applied its mind to the ground of challenge raised by the petitioner. In this regard, reference has been made to the various ground of appeal, contained in the memo of appeal filed by the petitioner which has been annexed with this writ petition.

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Perusal of the order passed by the Appellate Authority indicates that besides discussing the issue of appropriate government, it has not made any independent or other discussion of the ground of appeal raised by the petitioner. He has cursorily dismissed the ground by making an observation that the issue had been dealt with in detail by the Controlling

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Authority in his order (that was under appeal). Thereafter, it has been observed that, no fact had been brought to the knowledge of the Appellate Authority, which may not have been discussed by the Controlling Authority.

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It is the nature of this finding which has been most seriously assailed by the learned Senior Counsel on behalf of the petitioner. In his submission, that finding suffers from the total non-application of the mind. In fact it is no finding in the eyes of law, inasmuch as the Appellate Authority has not even confirmed the finding of the Controlling Authority in any clear or explicit terms.

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Learned counsel appearing on behalf of the respondent workman submits that the order passed by the Controlling Authority is elaborate and it has dealt with each and every issue that has been raised in this writ petition. It is thus submitted that those findings being findings of fact based on appraisal of evidence as have also been upheld by the Appellate Authority, the same do not call for any interference by this Court.

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Having heard the submissions so advanced by the learned counsel for the parties, without entering the merits and without making any observation as may influence the outcome of the proceedings in the appeal, it has to be recorded that the Appellate Authority had practically failed to discharge it's appeal jurisdiction. While it was always open to the Appellate Authority to affirm/confirm the findings recorded by the original/lower authority, however, in cases where the Appellate Authority exercises jurisdiction to decide the issues of fact, he has to necessarily record his own reasoning for affirming the findings. To do so, necessary discussion of the grounds of challenge raised in the context of the findings that may have been assailed is a sine qua non before the order of the Appellate

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Authority, may be construed as an order deciding issues raised before him. It was never open to the Appellate Authority to simply sidetrack the issue that no fact has been shown as may not have been decided by the lower authority. While deciding the appeal, the Appellate Authority was not to sit as an administrative authority reviewing the conduct of a lower authority, but as a higher quasi-judicial authority it was entrusted with the obligation to decide issues of fact and law as may be raised before it, by offering it's own reasons for the same.

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Looked from that perspective, the order of the Appellate Authority needs a lot to be desired. In fact the finding that has been assailed in this petition is really no finding in the eyes of law. Therefore, the Court has no hesitation in setting aside the order dated 20.08.2018, except to the extent the Appellate Authority has held that the State Government was the appropriate government for the purpose of the proceedings against the petitioner. The matter is remitted to the Appellate Authority (respondent no. 1) to pass a fresh order, upon fresh hearing, strictly in accordance with law, as expeditiously as possible, preferably within a period of three months from the date of production of certified copy of this order.

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With the aforesaid observations, the present petition is disposed of .

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Order Date :- 18.12.2018 Prakhar

Itc Limited v. Appellate Authority Under Payment of Gratuity Act and 2 Others

Case brief

What is this about?

What did the court decide?

Itc Limited v. Appellate Authority Under Payment of Gratuity Act and 2 Others

Case brief

What is this about?

What did the court decide?

What the court decided

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