Dismissed

Nagar Nigam Gorakhpur Thru Nagar Ayukt v. Suresh Pandey and 2 Others

Allahabad HC12 Sept 2019WRIC/45310/2017

Case brief

AI extract

What is this about?

Dismissing a batch of writ petitions by Nagar Nigam Gorakhpur, the court held that the Payment of Gratuity Act, 1972 applies to municipal corporations as local bodies covered by the Central Government notification dated 08.01.1982, and that the Corporation's 1990 retirement benefit regulations cannot prevail over it absent an exemption notification under Section 5.

What the court decided

AI extract

Nagar Nigam Gorakhpur Thru Nagar Ayukt Vs… — Municipal and Town Planning | Allahabad HC (2019)

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Writ-C No. 45310 of 2017

AFR

Reserved

Court No. - 3

Case :- WRIT - C No. - 45310 of 2017

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Petitioner :- Nagar Nigam Gorakhpur Thru Nagar Ayukt Respondent :- Suresh Pandey And 2 Others

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Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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Connected With

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Case :- WRIT - C No. - 45311 of 2017

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Petitioner :- Nagar Nigam Gorakhpur Thru Nagar Ayukt Respondent :- Shahid And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45314 of 2017

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Petitioner :- Nagar Nigam Gorakhpur Thru Nagar Ayukt Respondent :- Smt. Kanti And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45316 of 2017 Petitioner :- Nagar Nigam Gorakhpur Thru Nagar Ayukt Respondent :- Kailas Chandra Singh And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45318 of 2017 Petitioner :- Nagar Nigam Gorakhpur Thru Nagar Ayukt Respondent :- Laddan And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45533 of 2017

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Writ-C No. 45310 of 2017

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Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Raju And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45536 of 2017 Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Smt. Khatun And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45542 of 2017 Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Mantbali And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45545 of 2017 Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Smt. Samirun And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45550 of 2017

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Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Mohammad Ali And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45558 of 2017 Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Smt. Sewati And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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Writ-C No. 45310 of 2017

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And

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Case :- WRIT - C No. - 45570 of 2017 Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Vindhyachal And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45581 of 2017

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Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Parag And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45589 of 2017 Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Mahesh And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45602 of 2017

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Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Rajendra Prasad Srivastava And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45605 of 2017 Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Smt. Jamuni And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45608 of 2017 Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt

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Writ-C No. 45310 of 2017

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Respondent :- Ali Raja And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45611 of 2017 Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Prem Chand And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45613 of 2017 Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Banarasi And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45641 of 2017 Petitioner :- Nagar Nigam Gorakhpur Through Nagar Ayukt Respondent :- Jhinak And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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And

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Case :- WRIT - C No. - 45751 of 2017 Petitioner :- Nagar Nigam Gorakhpur Respondent :- Ayub Khan And 2 Others Counsel for Petitioner :- Sanjay Kumar Tripathi Counsel for Respondent :- C.S.C.

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Hon'ble Dr. Yogendra Kumar Srivastava,J.

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Heard Sri Sanjay Kumar Tripathi, learned counsel for the petitioner and Sri Ajit Kumar Singh, learned Additional Advocate General assisted by Sri Mata Prasad, learned Standing Counsel appearing for the respondent nos. 2, 3 and 4.

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Writ-C No. 45310 of 2017

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The present writ petition and the connected writ petitions have been filed by the petitioner-Nagar Nigam, Gorakhpur through its Nagar Ayukt against the orders passed by the Controlling Authority under the Payment of Gratuity Act, 1972/Assistant Labour Commissioner, U.P. Gorakhpur and also the orders passed by the Appellate Authority/Deputy Labour Commissioner, U.P. Gorakhpur.

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Upon the writ petition being filed, notice was issued to the respondent no. 1 by registered post and in terms of office report dated 24.07.2019 the service of notice was deemed to be sufficient.

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The particulars with regard to the orders under challenge in the bunch of writ petitions are as follows :-

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Sl.No.	Writ Petition No.	Party N	ame	Date of order of the Controlling Authority	Date of order of the Appellate Authority
1	45310/2017	Nagar Gorakhp Suresh and othe	Nigam ur Vs. Pandey rs	25.02.2016	20.06.2017
2	45311/2017	Nagar Gorakhp Shahid others	Nigam ur Vs. and	25.02.2016	20.06.2017
3	45314/2017	Nagar Gorakhp Smt. Ka	Nigam ur Vs. nti Devi	25.02.2016	20.06.2017
4	45316/2017	Nagar Gorakhp Kailash Seth and	Nigam ur Vs. Chand others	25.02.2016	20.06.2017
5	45318/2017	Nagar Gorakhp Laddan others	Nigam ur Vs. and	25.02.2016	20.06.2017
6	45533/2017	Nagar Gorakhp Raju and	Nigam ur Vs. others	25.02.2016	20.06.2017

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7	45536/2017	Nagar Nigam Gorakhpur Vs. Smt. Khatun	25.02.2016	20.06.2017
8	45542/2017	Nagar Nigam Gorakhpur Vs. Mant Bali	23.04.2012 30.09.2016 (order passed in review)	20.06.2017
9	45545/2017	Nagar Nigam Gorakhpur Vs. Smt. Samirun and others	25.02.2016	20.06.2017
10	45550/2017	Nagar Nigam Gorakhpur Vs. Mod. Ali and others	25.02.2016	20.06.2017
11	45558/2017	Nagar Nigam Gorakhpur Vs. Smt. Sewati and others	25.02.2016	20.06.2017
12	45570/2017	Nagar Nigam Gorakhpur Vs. Vindhyachal and others	25.02.2016	20.06.2017
13	45581/2017	Nagar Nigam Gorakhpur Vs. Parag and others	23.04.2012 30.09.2016 (order passed in review)	20.06.2017
14	45589/2017	Nagar Nigam Gorakhpur Vs. Mahesh	25.02.2016	20.06.2017
15	45602/2017	Nagar Nigam Gorakhpur Vs. Rajendra Prasad and others	25.02.2016	20.06.2017
16	45605/2017	Nagar Nigam Gorakhpur Vs. Smt. Jamuni and others	25.02.2016	20.06.2017
17	45608/2017	Nagar Nigam Gorakhpur Vs. Aliraja and others	25.02.2016	20.06.2017

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18	45611/2017	Nagar Nigam Gorakhpur Vs. Premchand and others	23.04.2012 30.09.2016 (order passed in review)	20.06.2017
19	45613/2017	Nagar Nigam Gorakhpur Vs. Banarasi and others	25.02.2016	20.06.2017
20	45641/2017	Nagar Nigam Gorakhpur Vs. Jhinak	25.02.2016	20.06.2017
21	45751/2017	Nagar Nigam Gorakhpur Vs. Ayub Khan	23.04.2012 30.09.2016 (order passed in review)	20.06.2017

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The writ petitions are based on similar set of facts and with the consent of the parties they are being taken up and decided together.

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Writ-C No. 45310 of 2017 which has been treated to be leading petition seeks to challenge the order dated 25.2.2016 passed by the Controlling Authority in P.G. Case No. 38/2009 and also the order dated 20.6.2017 passed by the Appellate Authority in Appeal No. 11/2016.

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Briefly stated the facts of this case are that upon an application filed by the respondent no. 1 before the Controlling Authority for a direction under Section 7 (4) of the Payment of Gratuity Act, 1972¹ read with Rule 10 of the Uttar Pradesh Payment of Gratuity Rules, 1975, P.G. Case No. 38/2009 was registered. In terms of the aforementioned application it was stated that as against the total amount of Rs.1,10,229/- which was due to the respondent towards gratuity a payment of Rs. 69,630/- had been made by the employers, and accordingly a claim was raised 1. the P.G.Act, 1972

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for the balance amount which was said to be due.

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The aforesaid claim was contested by the petitioner-Nagar Nigam by filing objections whereunder it was stated that the entire amount of gratuity due to the respondent-employee had been paid to him and the claim which had been sought to be raised was legally untenable. It was submitted that the computation of the gratuity amount had been made as per the Regulation 3 (5) of the Gorakhpur Nagar Mahapalika Non-Centralized Employees (Retirement Benefit) Regulations, 1990² .

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The Controlling Authority upon a consideration of the facts of the case came to the conclusion that there was no dispute with regard to the last drawn wages, and also the fact that the employee was in continuous service in terms of Section 2-A of the P.G. Act, 1972, and accordingly held the employee entitled for payment of gratuity in terms of the said Act and allowed the application issuing a direction for payment of the difference of amount as claimed by the respondent-employee.

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Challenging the order passed by the Controlling Authority, an appeal was filed under Section 7 (7) of the P.G. Act, 1972 which was registered as P.G.Appeal No. 11/2016. The grounds taken in the appeal were that the provisions of the P.G. Act, 1972 are not applicable to the petitioner-Nagar Nigam and the services of its employees are governed under its own service regulations and that the respondent-employee had been paid the gratuity amount as per the terms of the aforesaid Regulations. The Appellate Authority upon considering the facts of the case held that since there was no order of exemption granted to the petitioner under Section 5 (2) of the P.G. Act, 1972 in view of the overriding provision under Section 14, the P.G. Act 1972 would override the Regulations which were sought to be relied upon by 2. the Regulations, 1990

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the Nagar Nigam and accordingly the order passed by the Controlling Authority was held to be valid and was affirmed.

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Counsel for the petitioner has sought to assail the orders passed by the Appellate Authority and the Controlling Authority by submitting that the provisions with regard to payment of gratuity under the Regulations of the Nagar Nigam are more beneficial in comparison to the provisions under the P.G. Act of 1972, and as such the employees of the Nagar Nigam were not entitled to claim gratuity under the said Act. It has been submitted that in addition to payment of gratuity the employees of the Nagar Nigam were also entitled for pension. It is further contended that the Regulations of 1990 have come into force subsequent to the enactment of the Act therefore the Regulations would override the provisions of the P.G. Act, 1972 and there was no requirement of seeking any exemption in terms of Section 5 of the said Act.

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Per contra, learned Additional Advocate General appearing for the State of U.P. submits that the Regulations 1990 upon which reliance is sought to be placed by the petitioner -Nagar Nigam have not been framed by the State Government but have been framed by the Executive Committee of the Nagar Nigam under Section 548 (1) (f) of the Uttar Pradesh Municipal Corporation Act, 1959³ and have been confirmed by the Corporation and thereafter published in the gazette.

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It is further submitted that as per the definition of the term “employee” under Section 2 (e) of the P.G. Act, 1972 only persons holding a post under the Central Government or the State Government and who are governed by any other Act or by any Rules providing for payment of gratuity can claim exclusion from the provisions of the P.G. Act, 1972, and in the absence of any exemption having been granted to the petitioner-Nagar Nigam by 3. the Act, 1959

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the State Government under Section 5, the provisions of the P.G. Act, 1972 would have overriding effect as per the provisions contained under Section 14.

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The core issue which falls for consideration in the present petition is as to whether the employees of the petitioner-Nagar Nigam who governed by the Regulations 1990 are entitled for payment of gratuity under the provisions of the Payment of Gratuity Act, 1972.

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In order to appreciate the controversy, the relevant statutory provisions under the Payment of Gratuity Act, 1972 may be adverted to :-

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“Short title, extent, application and commencement. (1) This Act may be called the Payment of Gratuity Act, 1972.

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(2) It extends to the whole of India:

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Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.

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(3) It shall apply to

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(a) every factory, mine, oilfield, plantation, port and railway company;

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(b) 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;

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(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, or, any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.

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(3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.]

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(4) It shall come into force on such date as the Central Government may, by notification, appoint.

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" 2. Definitions .—In this Act, unless the context otherwise requires,—

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x x x x x

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(b) “ completed year of service” means continuous service for one year;

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in Section 2-A;

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x x x x x

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(e) “ employee” means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity;

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x x x x x

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(s) “ wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employments and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.

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2-A. Continuous service. —For the purpose of this Act,— (1) An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;

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(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer—

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(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than—

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(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and

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(ii) two hundred and forty days, in any other case; (b) for the said period of six months, if the employee during the period of six calendar months preceding the date with

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reference to which the calculation is to be made, has actually worked under the employer for not less than—

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(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and

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(ii) one hundred and twenty days, in any other case. Explanation.—For the purpose of clause (2) the number of days on which an employee has actually worked under an employer shall include the days on which—

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(I)he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;

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(ii) he has been on leave with full wages, earned in the previous year;

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(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and

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(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.

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(3) where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during such period.

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x x x x x

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4. Payment of Gratuity .—(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,

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(a) on his superannuation, or

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(b) on his retirement or resignation, or

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(c) on his death or disablement due to accident or disease : Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement :

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Provided further that in case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is minor, the share of such minor,

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shall be deposited with the Controlling Authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.

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Explanation.—For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.

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(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:

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Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account :

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Provided further that in the case of an employee who is employed in a seasonal establishment, and who is not so employed throughout the year, the employer shall pay the gratuity at the rate of seven days' wages for each season. Explanation.—In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.

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(3) The amount of gratuity payable to an employee shall not exceed ten lakh rupees.

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(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.

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(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.

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(6) Notwithstanding anything contained in sub-section (1),

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(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 causes;

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(b) the gratuity payable to an employee may be wholly or partially forfeited.

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(i) if the services of such employee have been terminated for his riotous or disorderly conduct or

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any other act of violence on his part, or

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(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.

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5. Power to exempt :- (1) The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

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(2) The appropriate Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act, if, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

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(3) A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively a date not earlier than the date of commencement of this Act, but no such notification shall be issued so as to prejudicially affect the interests of any person.

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14. Act to override other enactments, etc. The provisions of this Act or any rule made there under shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.”

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The petitioner-Nagar Nigam is a Municipal Corporation governed in terms of the provisions contained under the Act, 1959 which was enacted to provide for the establishment of Municipal Corporations in certain cities with a view to ensure better municipal government of the said cities.

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The word 'Corporation' or 'Municipal Corporation' has been defined in terms of Section 2 of the Act, 1959 in the following terms :-

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“2.(11-A) “Corporation” or “Municipal Corporation” means the Municipal Corporation constituted for a city under sub-clause (c) of clause (1) of Article 243-Q of the constitution.”

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Chapter XXIII of the Act, 1959 deals with the subject Rules, Bye-laws and Regulations and Section 548 empowers the Executive Committee of the Municipal Corporation to frame regulations not inconsistent with the Act, the Rules and the Byelaws, and in consonance with any resolution that may be passed by the Corporation.

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For ease of reference Section 548 of the Act, 1959, referred to above, is being extracted below.

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“ 548. Regulations –(1) The Executive Committee shall from time to time frame regulations not inconsistent with this Act and the rules and bye-laws but in consonance with any resolution that may be passed by the Corporation -

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(a) fixing the amount and the nature of the security to be furnished by any Corporation officer or servant from whom it may be deemed expedient to require security;

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(b) regulating the grant of leave to Corporation officers and servants;

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(c) determining the remuneration to be paid to the persons appointed to act for any of the said officers or servants during their absence on leave;

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(d) authorizing the payment of traveling or conveyance allowance to the said officers and servants;

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(e) regulating the period of service of all the said officers and servants;

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(f) determining the conditions under which the said officers and servants, or any of them, shall on retirement or discharge receive pensions, gratuities or compassionate allowances, and under which the surviving spouse or children and in the absence of the surviving spouse or children, the parents, brothers and sisters, if any, dependent on any of the said officers and servants, shall after their death, receive compassionate allowances and the amounts of such pensions, gratuities or compassionate allowances;

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(g) authorising the payment of contributions, at certain prescribed rates and subject to certain prescribed conditions, to any pension or provident fund which may, with the approval of the Executive Committee be established by the said officers and servants or to such provident fund, if any, as may be established by the Corporation for the benefit of the said officers and servants;

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(h) prescribing the conditions under which and, the authority by whom, any officer or servant, may be permitted while on duty or during leave to perform a specified service or series of services for a private person or body or for a public body, including a local authority, or for the Government and to receive remuneration therefor;

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(i) in general, prescribing any other conditions of service of the

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said officers and servants.

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(2) The Executive Committee may also from time to time frame regulations not inconsistent with the provisions of this Act and the rules -

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(a) determining the standards of fitness of buildings for human habitation;

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(b) regulating the declaration of expenses incurred by the Municipal Commissioner under the provisions of this Act and the rules in respect of any materials or fittings supplied or work executed or thing done to,

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upon or in connection with some building or land which are recoverable from the owner or occupier to be improvement expenses;

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(c) regulating the grant of permission by the Municipal Commissioner for the construction of shops, ware-house, factories, huts or buildings designed for particular uses in any streets, portion of streets or localities specified in a declaration in force under Section 335.

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(3) No regulation under sub-section (1) or under clause (a) of sub-section (2) shall have effect until it has been confirmed by the Corporation and, if made under clause (h) of sub-section (1), until it has in addition been confirmed by the State Government and in either case, has been published in the Official Gazette.

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(4) The Corporation or the State Government may decline to confirm a regulation when placed before it under sub-section (3) or confirm it without modification or after making such modifications as it may think fit.”

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In terms of Section 2(e) of the P.G. Act, 1972, an “employee” has been defined as meaning any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies. The only exclusion is in respect of persons holding a post under the Central Government or a State Government who are governed by any other Act or any Rules providing for payment of gratuity.

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Section 4 of the P.G. Act, 1972 provides for payment of gratuity to an employee on the termination of his employment after he has rendered continuous service for not less than five years, upon occurrence of either of the following contingencies: (i)

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on his superannuation, (ii) on his retirement, (iii) on his death or disablement due to accident or disease. Sub-section (2) of Section 4 mandates that 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. The expression “completed year of service” has been defined under Section 2(b) to mean continuous service for one year. As per Section 2(c), “continuous service” means continuous service as defined in Section 2-A. Further, in terms of Section 2-A an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.

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A conjoint reading of the aforementioned provisions lead to the inference that gratuity becomes payable to an “employee” on his superannuation after he has rendered “continuous service”, for not less than five years. The computation of the amount payable as gratuity is to be made at the rate of fifteen days' wages, for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned.

¶193

The expression “completed year of service” having been defined as “continuous service” for one year and the term “continuous service” being defined under Section 2(c) as per the terms of Section 2-A of the P.G. Act, 1972 which is to mean

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uninterrupted service including service which may be interrupted on account of certain exigencies specified therein.

¶197

It, therefore, follows that the P.G. Act, 1972 does not make any distinction between an employee on the basis of the fact that the 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 P.G. Act, 1972 and that he should be in continuous service as required under Section 2-A and that he should have completed a minimum of five years of service in the said capacity. The computation of gratuity as per terms of Section 4 is to be made at the rate of fifteen days' wages for every completed year of service or part thereof in excess of six months based on the rate of wages last drawn.

¶198

The statement of objects and reasons of the P.G.Act, 1972 indicates that the need for the enactment was felt for the reason that there was no central legislation to regulate the payment of gratuity to industrial workers except the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955. The Governments of the States of Kerala and West Bengal had enacted legislations for payment of gratuity to various categories of workers but other States had not done so. It was therefore felt necessary that instead of having different legislations for different States there should be a common legislation which would ensure a uniform pattern of payment of gratuity to the employees throughout the country and accordingly the P.G. Act, 1972 came to be enacted. The preamble of the Act shows that it has been enacted to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto.

¶199

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In terms of Section 1 (3) (a), the P.G.Act, 1972 applies to every factory, mine, oilfield, plantation, port and railway company and under Section 1 (3) (b) to 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. Clause (c) of Section 1 empowers the Central Government to apply the Act to such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, by notification in this behalf.

¶202

The applicability of clause (b) of sub-section (3) of Section 1 of the P.G.Act, 1972 came up for consideration in the case of State of Punjab Vs. Labour Court, Jullundur and others⁴ , and it was held that the aforementioned provision applies to every establishment within the meaning of any law for the time being in force in relation to establishments in a State. The relevant observations made in the judgment are as follows:-

¶203

“3....Section 1(3)( b ) speaks of “any law for the time being in force in relation to shops and establishments in a State”.

¶204

The expression is comprehensive in its scope, and can mean a law in relation to shops as well as, separately, a law in relation to establishments, or a law in relation to shops and commercial establishments and a law in relation to non-commercial establishments. Had Section 1(3)( b ) intended to refer to a single enactment, surely the appellant would have been able to point to such a statute, that is to say, a statute relating to shops and establishments, both commercial and non-commercial. The Punjab Shops and Commercial Establishments Act does not relate to all kinds of establishments. Besides shops, it relates to commercial establishments alone. Had the intention of Parliament been, when enacting Section 1(3)( b ), to refer to a law relating to commercial establishments, it would not have left the expression “establishments” unqualified. We have carefully examined the various provisions of the Payment of Gratuity Act, and we are unable to discern any reason for giving the limited meaning to

¶205

(1980) 1 SCC 4

¶206

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Section 1(3)( b ) urged before us on behalf of the appellant. Section 1(3)( b ) applies to every establishment within the meaning of any law for the time being in force in relation to establishments in a State....”

¶209

The question with regard to applicability of the provisions of P.G.Act, 1972 to Municipalities was taken up for determination in the case of Chaman Lal Vs. Municipal Committee Panipat⁵ , and after noticing the provisions under Section 1 (3) (b), it was held that the Gratuity Act applies to all establishments which are covered by any law relating to establishments in a State. The relevant extracts from the judgment are as follows :-

¶210

“2. The only question that arises for determination is, whether the provisions of the Gratuity Act are applicable to the Municipalities in Haryana. In order to determine the question it is necessary to notice Section 1(3) (b) of the Gratuity Act, which reads as follows Section 1(3)" It shall apply to:

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(a) x x x x

¶212

(b) 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."

¶213

It is evident from a bare reading of the section that the Gratuity Act applies to all establishments which are covered by any law relating to the establishments in a State. If there are more than one statutes in a State dealing with the said term, the provision of the Gratuity Act can be read in conjunction with any of such statutes. The Payment of Wages Act, 1936 (referred to as the 'Wages Act') deals with establishments and is applicable to all the States including the State of Haryana. Therefore, the provisions of Wages Act can be taken into consideration to find out whether a Municipality in Haryana is an establishment or not...”

¶214

The meaning of the word “establishment” under Section 1 (3) (b) of the P.G.Act, 1972 was explained in the case of Municipal Corporation of Delhi Vs. V.T.Naresh and another⁶ , and the Municipal Corporation of Delhi was held to be an establishment within the meaning of the aforementioned Act. The observations made in the judgment are as follows :-

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(1985) 87 (1) PLR 513

¶216

(1986) I LLJ 323 Del

¶217

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“6. It will be noticed that the word "establishment" used in the aforesaid clause of Payment of Gratuity Act, 1972 is not controlled by any type of establishment. It will include commercial, public sector establishment, private sector establishment as also the non-commercial establishment. Therefore, it is merely because Municipal Corporation of Delhi which is created by Delhi Municipal Corporation Act, 1957 is also a local body or local authority, it does not mean that the Corporation will not be an "establishment" so long as it is so in relation to any law relating to "establishment". It need not multiply the instances. Only one is sufficient to make the Act applicable. I have, thus, no doubt that the Municipal Corporation of Delhi is an "establishment" within the meaning of S. 1, Sub-S. (3) Clause (b) of the Act.”

¶220

The question of applicability of the P.G.Act, 1972 to Municipalities in the State of Rajasthan whose employees were entitled for benefits under Rajasthan Municipalities (Contributory Provident Fund and Gratuity) Rules, 1969 came up for consideration in the case of Municipal Board, Gangapur, Vs. Controlling Authority under Payment of Gratuity Act, Bhilwara⁷ , and taking into consideration the provisions of Section 1 (3) (b) and Section 14, the P.G.Act, 1972 was held to be applicable. The observations made in the judgment are as follows :-

¶221

“6. ..in view of the wide definition of establishment, it is clear that the Municipal Board, Gangapur falls in this definition of establishment and is covered u/sub-(3) (b) of Section 1 of the Act. Similarly in somewhat identical circumstances Kerala and Punjab High Courts (supra) made the Gratuity Act applicable to local bodies also.

¶222

Next question that arises is that when rules have been framed for payment of gratuity to Municipal employees then how the Gratuity Act will be applicable. Mr. Lodha, learned Counsel for the petitioner submits that in view of the specific rules for payment of gratuity, these Rules of 1969 as referred to above shall cover the case of petitioner and not the Gratuity Act. This can be answered by referring to Section 14 of the Act. Section 14 of the Act very clearly lays down that this Act will have overriding effect on all other laws. Section 14 reads as under:-

¶223

Act to override other enactments etc.-The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained

¶224

1987 LAB. I.C. 575 (Raj. H.C.)

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in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.”

¶228

Section 14 overrides the other Rules or Act made on the subject by virtue by these provision. Rules of 1969 will have no role to play, so far as they are inconsistent with the Act. Thus the Payment of Gratuity Act will cover the Municipalities for the payment of gratuity and not the rules of 1969. Moreover, this is social legislation & it should be given more extensive application. Thus, this submission of Mr. Lodha has no force and rejected. I hold that the Payment of Gratuity Act is applicable to the Municipalities and in this view of matter, the appellate authorities have rightly upheld the order of the controlling authority...”

¶229

In Nagar Palika, Moradabad Vs. Appellate Authority and Additional Labour Commissioner, U.P. Kanpur and others⁸ , the question with regard to applicability of the P.G.Act, 1972 to Nagar Palika employees was considered, and it was held that the provisions of the Gratuity Act were applicable to such employees. The observations made in the judgment are being extracted below :-

¶230

“9. The argument sought to be advanced by the learned counsel for the petitioner is that the Municipal Board cannot be described as an 'establishment' because the word 'establishment' connotes some business transaction or at least it may include a public institution. Such a definition of the word 'establishment' is to be found in Black's Legal Dictionary.

¶231

I am afraid the argument is not sustainable. The activities which are carried on by the Municipal Board do go to make it a public institution undoubtedly. In fact Municipal Board, or for that matter, such local bodies do exist to cater to the needs of the general public and, therefore, many statutory duties have been conferred upon such bodies. To say that inspite of those functions which have to be carried out by those institutions in accordance with the mandate of law, those do not become public institutions is too bold an argument to be accepted.

¶232

Therefore, the Controlling Authority rightly entertained the application of the contesting respondent and was fully competent to decide the matter thus raised before it.”

¶233

The issue with regard to applicability of the P.G.Act, 1972 to a Cantonment Board was taken up for consideration in the case of

¶234

1989 LAB I.C. 173 (Alld. H.C.)

¶235

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Poona Cantonment Board Vs. S.K.Das and others⁹ , wherein it was held that the only test for applicability prescribed under Section 1 (3) (b) is that the establishment must be an establishment within the meaning of a specified type of law in a State, and in view of the qualifying test being satisfied the provisions of the Act were held to be applicable. The observations made in the judgment are as follows :-

¶238

“5... The contention, shortly put, is that the Act does not apply to the petitioner-Board, as the offices/establishments where the concerned workmen were employed do not fall within the ambit of Section 1(3)(b) so as to make the Act applicable. It is common ground that, at the relevant time, no notification within the contemplation of Section 1(3)(c) had been issued and that such a notification came to be issued only in January, 1982. It is also common ground that the petitioners' offices/establishments would not fall within Clause (a) of sub-section (3) of Section 1 of the Act. The Appellate Authority has negatived the contention by taking the view that the offices/establishments of the petitionerBoard were covered under the provisions of Section 1(3)(b) of the Act, as they satisfy the definition of the term "establishment" both under the provisions of the Contract Labour Regulation and Abolition Act 1970 and the Bombay Shops & Establishments Act, 1948.

¶239

The applicability of the Act is determined by Section 1 of the said Act. Clause (b) of sub-section (3) of Section 1, which is the only relevant provision which needs to be considered reads as under :

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"1 Short title, extent, application and commencement -

¶241

(3) It shall apply to - (a)......

¶242

(b) 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; (c)....."

¶243

7.The contention of the petitioner is that the offices/establishments where the concerned workmen were employed are not covered by the provisions of the Contract Labour Regulations and Abolition Act, 1971, and the provisions of the Bombay Shops & Establishments Act, 1948. Consequently, those establishments would not amount to "establishments" within the meaning of the said laws, contemplated by Clause (b) of sub-section (3) of Section 1. Hence, the petitioner contends

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(1993) II LLJ 487 Bom

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that the Payment of Gratuity Act would not apply.

¶248

It is difficult to accept the contention urged on behalf of the petitioner for more than one reason. In State of Punjab v. The Labour Court, Jullundur, and others (1981) I LLJ 354 SC, the Supreme Court had an occasion to consider a some what similar contention. The question arose therein as to whether the Hydel Department of the Government of Punjab, which had under taken a construction project, in which the concerned workmen were employed as work charged employees, answered the test in Section 1(3)(b) of the Payment of Gratuity Act, so as to enable the employees to claim gratuity. The State of Punjab contended that Section 1(3)(b) required that the establishment within its contemplation must be one "within the meaning of any law for the time being in force in relation to establishments in a state", which meant that it should be an establishment within the meaning of a law applicable to shops and establishments enacted by the State Legislature. This contention was emphatically rejected by the Supreme Court by pointing out (p. 355) :

¶249

"It is difficult to accept that contention because there is no warrant for so limiting the meaning of the expression 'law' in Section 1(3)(b). The expression is comprehensive in its scope, and can mean a law in relation to shops as well as, separately, a law in relation to establishments or a law in relation to shops and commercial establishments and a law in relation to non-commercial establishments. Had Section 1(3)(b) intended to refer to a single enactment, surely the appellant would have been able to point to such a statute, that is to say, a statue relating to shops and establishments, both commercial and non-commercial. The Punjab Shops and Commercial Establishments Act does not relate to all kinds of establishments. Besides shops, it relates to commercial establishments alone. Had the intention of Parliament been, when enacting Section 1(3)(b), to refer to a law relating to commercial establishments, it would not have left the expression 'establishments' unqualified. We have carefully examined the various provisions of the Payment of Gratuity Act, we are unable to discern any reason for giving the limited meaning to Section 1(3)(b) urged before us on behalf of the appellant. Section 1(3)(b) applies to every establishment within the meaning of any law for the time being in force in relation to establishments in a State. Such an establishment would include an industrial establishment within the meaning of Section 2(ii) (g) of the Payment of Wages Act."

¶250

The Supreme Court, therefore, held that the Hydel Project run by the State of Punjab was an establishment falling within Section 1(3)(b) of the Payment of Gratuity Act, and, therefore, the workmen were entitled to claim gratuity.

¶251

In my view, the reasoning adopted by the Supreme Court in the

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judgment in State of Punjab (supra) would equally apply to the case of the petitioner. The Appellate Authority has taken the view that the petitioner's offices/establishments would be 'establishments' within the meaning of the Contract Labour Regulation and Abolition Act, 1970, as defined in Section 2(1)(e). Interestingly, Section 2(1)(e) of the said Act defines the expression 'establishment' as under :

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"2(i) In this Act, unless the context otherwise requires, -

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(e) "Establishment" means -

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(i) any office or department of the Government or a local authority, or

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(ii) any place where any industry, trade, business, manufacture or occupation is carried on;"

¶259

Even a cursory look at Section 2(1)(e)(ii) is sufficient to lead to the conclusion that the establishment contemplated thereunder could be an establishment of a local authority. It is not disputed that the Pune Cantonment Board is a local authority, and, therefore, I would have though that there would be no difficulty in holding that the establishment of the Pune Cantonment Board would be establishment within the meaning of Section 2(1)(e) of the Contract Labour (Regulation and Abolition) Act, 1970.

¶260

xxxxx

¶261

11...in my view the establishments of the petitioner-Board are 'establishments' within the meaning of Section 2(1)(e)(i) of the Contract Labour (Regulation and Abolition) Act, 1970, which is a law in force in the State of Maharashtra in relation to shops and establishments in this State. Thus, the qualifying test in Section 1(3)(b) being satisfied, the Payment of Gratuity Act, 1972, was applicable, even at the relevant time, to the establishments of the petitioner Board, wherein the concerned workmen were working.”

¶262

The word “establishment” used under Clause (b) and Clause (c) of sub-section (3) of Section 1 of the P.G.Act, 1972 has been held to have wide meaning and to include commercial, public sector establishments and also non-commercial establishments. The question as to whether a Municipal Committee/Council falls within the ambit of Section 1 (3) (b) of the P.G.Act, 1972 was considered in the case of Municipal Committee Vs. A. Nathi Ram and others¹⁰ , and taking into consideration that Section 1 (3) (b) applies to every establishment covered by any law relating to

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(1998) III LLJ 1230 P&H

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establishments and applicable in a given State, and also referring to various judgments on the point by different High Courts, it was stated as follows:-

¶267

“9. There cannot be two views that the Act of 1972 is a piece of social welfare legislation enacted with a view to lay down a uniform pattern of payment of gratuity to different categories of employees who are employed in shops and establishments. While interpreting the provisions of the Act, the Court has to bear in mind that a welfare legislation must receive liberal construction keeping in view the purpose of the legislation. Therefore, if more than one interpretation can be given to the expression 'any law for the time being in force in relation to shops and establishments in a State', then the one which advances the object of the legislation will be preferred as against an interpretation which would wholly or partially defeat the legislative intendment. The Court will also refrain from interpreting a beneficent Statute like the Act of 1972 in such a manner which may curtail its wide amplitude and result in denial of benefit of gratuity to a class of employees, unless it becomes a compelling necessity.

¶268

A careful analysis of Section 1(3)(b) of the Act shows that it applies to 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. It is note worthy that the Legislature has not used the word 'commercial' between the words 'and' and 'establishments' although it must be presumed to be aware of the laws enacted by the State Legislatures in relation to the shops and commercial establishments. In order to accept Shri Chaudhary's argument, we will have to add the word 'commercial' between the words 'and' and 'establishments' in Section 1(3)(b). Simultaneously, we will have to omit the word 'any' between the words 'of and 'law'. That, in our opinion is not permissible. Our Constitution clearly defines the jurisdiction of the Legislature, the Judiciary and the Executive. The power to enact or to amend an existing law is within the exclusive domain of the Legislature and while exercising the power of judicial review, the Courts will ordinarily refrain from treading into the field occupied by the Legislature. In other words, the Court will not take upon itself the task of enacting a law or making an amendment in an existing law by addition or omission by making an unwarranted assumption that the Legislature has not acted wisely while enacting a Statute. One of the well recognised principles of interpretation is that the Court will neither add words nor supply gaps or omission nor will it subtract words from a Statute. The Court will also avoid interpreting a Statute which will result in rendering surplus a provision of the Statute or some words thereof. In Smt. Hira Devi and Ors. v. District Board, Shahjahanpur, AIR 1952 SC 362, the provisions of U.P. District Boards Act, 1922 (as amended in 1933) came up for consideration before the Supreme Court. While reversing the

¶269

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order of the Allahabad High Court, the Supreme Court observed as under :

¶272

"....It would be an unwarranted extension of the powers of suspension vested in the Board to read, as the High Court purported to do, the power of suspension of the type in question whose sanction is necessary. It was unfortunate that when the Legislature came to amend the old Section 71 of the Act it forgot to amend Section 90 in conformity with the amendment of Section 71. But this lacuna cannot be supplied by any such liberal construction as the High Court sought to put upon the expression 'orders of any authority whose sanction is necessary'. No doubt it is the duty of the Court to try and harmonise the various provisions of an Act passed by the Legislature. But it is certainly not the duty of the Court to stretch the words used by the Legislature to fill in gaps or omissions in the provisions of an Act."

¶273

In British India General Insurance Co. v. Itbar Singh AIR 1959 SC 1331, their Lordships of the Supreme Court interpreted Section 96(2) and (6) of the Motor Vehicles Act, 1939. One of the arguments urged before the Supreme Court was that the word 'also' should be added after the word 'sum' in Section 96(2). Rejecting the argument, the Supreme Court observed that it is not permissible to add words in the Section unless the Section as it stands is meaningless or of doubtful meaning. The Supreme Court further held that Section 96(2) of the Motor Vehicles Act, 1939 was neither vague nor meaningless and therefore, there was reason to add the word 'also' after the word 'sum'.

¶274

xxxxx

¶275

Keeping these principles in view, we have no hesitation to hold that the word 'commercial' cannot he added between the words ' and and 'establishments' used in Section 1(3)(b) of the Act and, therefore, the expression 'shops and establishments' used in that Section cannot be restricted to the shops and commercial establishments as defined in the Act of 1958. Rather, for giving effect to the beneficent Statute enacted by the Parliament, it will be quite legitimate to consider all those establishments falling within the ambit of Section 1(3)(b) which are governed by any law applicable in the State of Haryana. ”

¶276

The question as to whether employees of a municipality which had adopted the provisions of CCS (Pension) Rules, 1972 providing for both pension and gratuity, would remain entitled to payment under the P.G.Act, 1972, fell for consideration in the case of Municipal Corporation of Delhi Vs. Dharam Prakash Sharma

¶277

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and another¹¹ , and it was held that the gratuity as provided for under the Pension Rules would not disentitle an employee from getting the payment of gratuity under the P.G.Act, 1972 in view of the overriding provisions contained under Section 14 of the said Act. The observations made in the judgment in this regard are as follows :-

¶280

“2. 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"), whereunder 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 Section 2(e) which excludes the employees of the Central Government and 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. In view of the overriding provisions contained in Section 14 of the Payment of Gratuity Act, the provision for gratuity under the Pension Rules will have no effect. Possibly for this reason, Section 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 Section 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

¶281

(1998) 7 SCC 221

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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 the Pension Rules.”

¶285

The question with regard to applicability of the provisions of the P.G.Act, 1972 in respect of employees of the Nagar Nigam Kanpur (a Municipal Corporation defined under Section 2 (11-A) of the Act, 1959) came up for consideration in the case of Nagar Ayukt, Nagar Nigam, Kanpur Vs. Mujib Ullah Khan and others¹² , wherein it was contended that the employees of the Municipal Corporation on their retirement were entitled to payment of gratuity in terms of the Retiral Dues and General Provident Fund Regulations 1962 made under Section 548 (1) of the Act, 1959 and in view thereof the payment of gratuity in respect of such employees would be under the said Regulations. The aforementioned contention was repelled and it was held as follows :-

¶286

“5. In the present case, the contesting respondents are not Central Government or State Government employees and thus the regulation made by the Nagar Nigam, Kanpur will not exempt them from Section 14 of the Payment of Gratuity Act, 1972. The State Government has not exempted these employees from the applicability of Payment of Gratuity Act, 1972. Section 14 of the Payment of Gratuity Act, 1972 provides that the provisions of the Act shall have effect notwithstanding any thing inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act. The regularizations made under the U.P. Municipal Corporations Act, as such, would not apply for the purposes of calculation of payment of gratuity to the employees of Nagar Nigam, Kanpur.”

¶287

It has been pointed out that in terms of Section 1 (3) (c) of the P.G.Act, 1972 the Central Government had published a Notification on 08.01.1982 and specified local bodies in which ten or more persons are employed, or were employed, on any day of the preceding twelve months as a class of establishments to which

¶288

2008 (117) FLR 277 (All.H.C.)

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the Act shall apply. The Notification dated 08.01.1982 reads as under :-

¶292

“ New Delhi, the 8th January, 1982

¶293

NOTIFICATION

¶294

S.O. No. 239....-In exercise of the powers conferred by Clause (c) of Sub-section (3) of Section 1 of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specified 'local bodies' in which ten or more persons are employed, or were employed, on any day preceding twelve months, as a class of establishments to which the said Act shall apply with effect from the date of publication of this notification in the Official Gazette.

¶295

Sd/. (R.K.A. Subrahmanya) Additional Secretary (F. No. S-70020/16/77-FPG)”

¶296

Following the definition under Section 3 (31) of the General Clauses Act, 1897, a "local authority" means a municipal committee, district board etc. which are entrusted with the control or management of a municipal or local fund. The aforementioned notification dated 8^th January, 1982 which makes the P.G.Act, 1972 applicable to the local bodies would thus include Municipal Corporations also.

¶297

The question with regard to the applicability of the P.G. Act, 1972 to the Municipal Corporations of Kanpur and Gorakhpur came up for consideration in a recent judgment in the case of Nagar Ayukt Nagar Nigam, Kanpur Vs. Mujib Ullah Khan and another with Nagar Nigam, Gorakhpur Vs. Ram Shanker Yadav and another¹³ , and taking into view the provisions of the P.G.Act, 1972 and the notification dated 08.01.1982 issued under Section 1 (3) (c), the P.G.Act, 1972 was held to be applicable. The relevant observations in the aforementioned judgment are being extracted below :-

¶298

“3. The appellant, the Municipal Corporation, Kanpur is governed by the Uttar Pradesh Municipal Corporation Act, 1959, whereas,

¶299

(2019) 6 SCC 103

¶300

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the Respondent is an employee of the appellant. The employees in both cases claimed gratuity by invoking the jurisdiction of the Controlling Authorities under the Act. The argument of the Appellant before the learned Single Judge was that the gratuity is payable in accordance with the Retirement Benefits and General Provident Fund Regulations, 1962 framed Under Section 548 of the 1959 Act as amended on 11.01.1988. Such Regulations contemplate payment of gratuity at the rate of 15 days' salary per month for 16.5 months. It was found by the High Court that it is the Act which is applicable, whereby, gratuity calculated at the rate of 15 days' salary for every completed year without any ceiling of months or part thereof.

¶303

The argument raised by the appellant before the High Court is, that the gratuity is payable in terms of Rule 4(1) of the 1962 Regulations published Under Section 548 (1) of the 1959 Act as amended on 11.01.1988. Therefore, the employees of the Municipalities are entitled to gratuity only in terms of such Regulations and not under the Act.

¶304

The High Court relied upon a judgment reported as Municipal Corporation of Delhi v. Dharam Prakash Sharma AIR 1999 SC 293 to hold that only employees of Central Government or the State Government are exempt from the applicability of the Act, therefore, the employees of the Appellants would be governed by the Act and are entitled to gratuity in terms of the scale mentioned therein. It was held that the Act is not applicable only to the Central Government or State Governments in terms of definition of an “employee” under Section 2 (e) of the Act. Therefore, the employees of the Municipalities are entitled to the gratuity in terms of the provisions of the Act.

¶305

The appellant relies upon Section 3 of the U.P. Dookan Aur Vanijya Adhishthan Adhiniyam, 1962 which is to the effect that such Act will have no application to the office of Government or Local Bodies. Therefore, on the strength of such statutory provision, it was argued that the Act would not be applicable in respect of the Municipalities. The appellant is not a factory, mine, oilfield, plantation, port and railway company and that there is no notification as stipulated under Clause (c) of Section 1(3) of the Act. Therefore, the employees of the Municipalities are entitled to the gratuity in terms of the Regulations framed in exercise of powers of Section 548 of the 1959 Act and not under the Act.

¶306

On the other hand, the learned Counsel for the Respondent pointed out that the Central Government has published a notification in terms of Section 1(3)(c) of the Act on 08.01.1982 to extend the applicability of the Act to the Municipalities. Thus, the Act is applicable to the Municipalities....”

¶307

xxxxx

¶308

¶309

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¶310

In terms of the above said Section 1(3)(c) of the Act, the Central Government has published a notification on 08.01.1982 and specified local bodies in which ten or more persons are employed, or were employed, on any day of the preceding twelve months as a class of establishment to which this Act shall apply....

¶311

We find that the notification dated 08.01.1982 was not referred to before the High Court. Such notification makes it abundantly clear that the Act is applicable to the local bodies i.e. the Municipalities. Section 14 of the Act has given an overriding effect over any other inconsistent provision in any other enactment. The said provision reads as under:

¶312

“14. Act to override other enactments, etc. The provisions of this Act or any Rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.”

¶313

In view of Section 14 of the Act, the provision in the State Act contemplating payment of gratuity will be inapplicable in respect of the employees of the local bodies.

¶314

Section 2(e) of the Act alone was referred to in the judgment reported as Municipal Corporation of Delhi. The said judgment is in the context of CCS (Pension) Rules, 1972 which specifically provides for payment of Pension and Gratuity. The Act is applicable to the Municipalities, therefore, it is wholly inconsequential even if there is no reference to the notification dated 08.01.1982.

¶315

The entire argument of the appellant is that the State Act confers restrictive benefit of gratuity than what is conferred under the Central Act. Such argument is not tenable in view of Section 14 of the Act and that liberal payment of gratuity is in fact in the interest of the employees. Thus, the gratuity would be payable under the Act. Such is the view taken by the Controlling Authority.”

¶316

It may be noticed that the aforementioned judgment is a decision on an appeal filed against the decision of this Court in Nagar Ayukt, Nagar Nigam, Kanpur Vs. Mujib Ulla Khan and others , referred to in the earlier part of this judgment.

¶317

The judgment in the case of Nagar Ayukt, Nagar Nigam, Kanpur Vs. Mujib Ulla Khan and another has been followed in a recent judgment of this Court in the case of Nagar Ayukt Nagar

¶318

¶319

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¶320

Nigam Vs. Meraj Ahmad and another¹⁴ .

¶321

The sheet anchor of the argument of the petitioner is based upon the judgment of this Court in the case of Nagar Palika Parishad, Kairana, Muzaffarnagar and another Vs. Controlling Authority and others¹⁵ wherein it was held that since the employees of the municipalities concerned were covered by the provisions of the Uttar Pradesh Nagar Palika Non-Centralized Services Retirement Benefits Regulations, 1984¹⁶ which had been made by the appropriate government in exercise of powers conferred under Section 297 (2) of the U.P. Municipalities Act, 1916¹⁷ , they would be covered in terms of the said Regulations and not under the P.G. Act, 1972.

¶322

The aforementioned judgment in the case of Nagar Palika Parishad, Kairana Muzaffarnagar and another came up for consideration before this Court in the case of Nagar Ayukt, Nagar Nigam, Kanpur Nagar Vs. Brij Kishore Bajpai and another¹⁸ , wherein upon noticing the fact that the aforesaid decision was in connection with the employees of the Non-Centralized Services of Nagar Palika and not in respect to the employees of Nagar Nigam it was held that Section 14 gives an overriding effect to the P.G.Act and unless the establishment is exempt under Section 5 by issuance of a notification by the appropriate government, the same would be covered. The relevant observations made in the judgment are as follows :-

¶323

“5. In assailing the above order, the submission of Sri Sachan, learned counsel for the petitioner is that the payment of gratuity to the employees of the Nagar Nigam is governed by the provisions of Retiral Dues and General Provident fund and Regulations, 1962 as amended in 1988. The said Rules are more beneficial than the payment of gratuity under the Act. Therefore

¶324

2019 (162) FLR 278 (Alld. H.C.)

¶325

2008 (119) FLR 412 (Alld. H.C.) 16. the Regulations, 1984

¶326

the Act, 1916

¶327

2016 (4) ADJ 513

¶328

¶329

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¶330

by necessary implication the Nagar Nigam gets exempted vide Section 5 of the Act from its applicability and its employees are entitled to gratuity only according to the Regulations.

¶331

In support he has placed reliance upon the decision of this Court dated 29.8.2008 in Nagar Palika Parishad Muzaffarnagar Vs. Controlling Authority under Payment of Gratuity Act 1972 Saharanpur, 2008 (5) ESC 3105.

¶332

In the aforesaid case before this Court, the question which had cropped up was whether the gratuity would be payable to the employees of the non centralized services of Nagar Palika as per the provisions of the Act or as per the Regulations framed by the State Government.

¶333

The learned Single Judge by a detailed judgment held that the employees of the non centralized services of Nagar Mahapalika are entitled to gratuity as per the Regulations framed by the State Government and not under the payment of Gratuity Act, 1972.

¶334

The aforesaid decision was in connection with the employees of the non-centralized service of the Nagar Palika and not in respect to the employees of the Nagar Nigam and as such would not apply in the present case.

¶335

The payment of gratuity in general is governed by the provisions of the Act and it has the overriding effect over all previous enactments by virtue of Section 14 of the Act, unless the establishment is exempted by the State Government under Section 5 of the Act.

¶336

In other words, all establishments as provided vide Section 1 of the Act including Nagar Nigam are covered the provisions of the Act unless exempted.

¶337

Section 5 of the Act lays down the power of exemption. It provides if the appropriate government is satisfied that the employees of the establishment are receiving better benefits than those under the Act may by a notification exempt such an establishment from the operation of the Act. This means for exempting an establishment from the operation of the said Act there has to be a notification by the appropriate Government and that it should be satisfied that the employees were in receipt of benefits more beneficial than under the Act.

¶338

The petitioner has not pleaded or brought on record any notification issued by the appropriate government issued under Section 5 of the Act exempting Nagar Nigam from the operation of the Act and at the same time the exact benefit permissible under the Regulations vis-a-vis those under the Act to establish that benefits under the Regulations were much more than what the petitioner would receive under the Act.

¶339

In view of the aforesaid facts and circumstances, the employees of the Nagar Nigam are not outside the purview of the Act and are held entitle to gratuity under it.”

¶340

¶341

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¶342

There is another point of distinction between the facts of the case of Nagar Palika Parishad, Kairana Muzaffarnagar and another and the present case. The Regulations, 1984 which were relied upon in the case of Nagar Palika Parishad Kairana Muzaffarnagar have been made by the State Government in exercise of powers under Section 297 (2) read with Section 291 (1) (k) of the Act, 1916. Section 297 of the Act, 1916, referred to above, is being reproduced herein under :-

¶343

“297. Power to make regulations as to procedure, etc .—(1) A [Municipality] may, by special resolution make regulations consistent with this Act, or with any rule under Section 296 or regulation under sub-section (2) made by the [State Government], as to all or and of the following matters,—

¶344

(a) the time and place of the meetings of a [Municipality];

¶345

(b) the manner of convening meetings, and of giving notice thereof;

¶346

(c) the conduct of proceedings [including the asking of questions by members] at meetings, and the adjournment of meetings;

¶347

(d) the establishment of committees, other than merely advisory committees, for any purpose, and the determination of all matters relating to the constitution and procedure of such committees;

¶348

(e) the avoidance of any entry shown in the third column of Schedule II;

¶349

(f) with reference to sub-section (2) of Section 77, the augmentation of any maximum or minimum monthly salary specified in Sections 74, 75 or 76 with reference to powers over the staff;

¶350

(g) the delegation of powers, duties or functions to—

¶351

(i) the [President] of the [Municipality];

¶352

(ii) a committee constituted under clause (d);

¶353

(iii) a Chairman of such committee;

¶354

(iv) the executive officer; or

¶355

(v)[* * *] any other servant of a [Municipality];

¶356

(vi) any [person] in the service of the Government] who is employed as civil surgeon, medical officer-in-charge of a hospital

¶357

¶358

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¶359

or dispensary, medical officer of health, deputy inspector of schools or sub-deputy inspector of schools;

¶360

(h) the absentee or other allowances of the servants employed by [Municipality];

¶361

(i) the amount and nature of the security to be furnished by a servant of a [Municipality] from whom it is deemed expedient to require security;

¶362

(j) the grant of leave to servants of a [Municipality] and the remuneration to be paid to the persons, if any, appointed to act for them whilst on leave;

¶363

(k) the [conditions of service including] period of service of all servants of a [Municipality] and the conditions under which such servants, or any of them, shall, receive gratuities or compassionate allowances on retirement or on their becoming disabled through the execution of their duty, and the amount of such gratuities or compassionate allowance, and the conditions under which any gratuities or compassionate allowances may be paid to the surviving relatives of any such servants whose death has been caused through the execution of their duty;

¶364

(l) the payment of contributions, at such rates and subject to such conditions as may be prescribed in such regulations, to a pension or provident fund established by the [Municipality] or with approval of the [Municipality], by the said servants;

¶365

(m) the conditions subject to which sums due to a [Municipality], may be written off as irrecoverable, and the conditions subject to which the whole or any part of fee chargeable for distress may be remitted;

¶366

(n) all matters similar to those set forth in clauses (e) to (m) and not otherwise provided for in this sub-section; and

¶367

(o) all matters similar to those set forth in clauses (a) to (d) and not otherwise provided for in this sub-section.

¶368

(2) Provided that the [State Government] may, if it thinks fit, make regulations consistent with this Act in respect of any of the matters specified in clauses [(d) and] (h) to [(n)] of sub-section (1), and any regulations so made shall have the effect of rescinding any regulation made by the [Municipality] under the said sub-section in respect of the same matter or inconsistent therewith.”

¶369

It may be noticed that sub-section (2) of Section 297 empowers the State Government to make regulations, if it thinks fit, consistent with the provisions of the Act, 1916, in respect of

¶370

¶371

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¶372

any of the matters specified under Clauses (d) and (h to n) of subsection (1), and any regulation so made shall have the effect of rescinding any regulation made by the Municipality under the said sub-section in respect of the same matter or inconsistent therewith.

¶373

It was in exercise of the aforementioned powers under subsection (2) of Section 297 that the Regulations, 1984 were made. An extract from the notification dated October 1, 1984 notifying the U.P. Nagar Palika Non-Centralized Services Retirement Benefits Regulations, 1984 is being reproduced below :-

¶374

“No. 3898/11-6-1984-217-V-79

¶375

October 1, 1984

¶376

In exercise of the powers under sub-section (2) of section 297 of the U.P. Municipalities Act, 1916 (U.P. Act II of 1916), the Governor is pleased to make the following regulations after their previous publication with Government notification no. 2837/XI-3-79-217Miscellaneous-79, dated July 19, 1979, as required under sub-section (1) of section 300 of the U.P. Municipalities Act, 1916.

¶377

REGULATIONS

¶378

THE UTTAR PRADESH NAGARPALIKA NON-CENTRALIZED SERVICES RETIREMENT BENEFITS REGULATIONS, 1984.

¶379

PART I- PRELIMINARY

¶380

(1) Short title and Commencement- These regulations shall be called the Uttar Pradesh Nagarpalika NonCentralized Services Retirement Benefits Regulations, 1984.

¶381

They shall come into force with effect from the date of their publication in the Gazette.

¶382

…....”

¶383

The regulations in question in the present case namely Gorakhpur Nagar Mahapalika Non-Centralised Employees (Retirement Benefit) Regulations 1990 have been framed under Section 548 (1) (f) of the Act, 1959 whereunder the power to frame regulations is vested in the Executive Committee of the Municipal Corporation in contradistinction to the Regulations,

¶384

¶385

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¶386

1984 framed under Section 297 of the Act 1916 whereunder it is the State Government which is vested with the power to make regulations.

¶387

It may be taken note of that in terms of sub-section (3) of Section 548, a regulation framed under sub-section (1) or under clause (a) of sub-section 2 is to have effect upon being confirmed by the Corporation, and in respect of a regulation made under clause (h) of sub-section (1) there is a further requirement of confirmation by the State Government.

¶388

The Gorakhpur Nagar Mahapalika Non-Centralised Employees (Retirement Benefit) Regulations, 1990 i.e. the Regulations under consideration in the present case, pertain to the subject of pensions and gratuities and are referable to the provisions contained under Clause (f) of sub-section (1) of Section 548 and in terms thereof the said regulations were framed by the Executive Committee and approved by the Corporation at its meeting held on February 2, 1991 and thereafter published in the gazette dated 27^th June, 1992. The regulations framed under Section 548 (1) (f) are not required to be approved by the State Government and a specific stand to this effect has been taken by the learned Additional Advocate General appearing for the State respondents.

¶389

As noticed in the earlier part of this judgment, gratuity is payable to every “employee” covered by the definition of the term as under Section 2 (e) of the P.G.Act, 1972, on the termination of his employment after he has rendered continuous service for not less than five years, upon his superannuation, or on his retirement, or on his death or disablement due to accident or disease.

¶390

The applicability of the Act flows from the provisions under

¶391

¶392

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¶393

Section 1 of the P.G. Act, 1972. In terms of Clause (a) of subsection (3) of Section 1, the Act applies to every factory, mine, oilfield, plantation, port, railway company and in terms of Clause (b) thereof it applies to 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. Further, Clause (c) of sub-section (3) empowers the Central Government to apply the provisions of the Act to such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification specify.

¶394

The definition of the term 'employee' under clause (e) of Section 2 of the P.G.Act, 1972 excludes only persons holding a post under the Central Government or a State Government and who are governed by any other Act or by any Rules providing for payment of gratuity, from the purview of the Act.

¶395

It is thus only in respect of any establishment, factory, mine, oil field, plantation, port, railway company or shop to which the Act applies that the power to exempt under Section 5 may be exercised by the appropriate government.

¶396

The power to exempt from the operation of the provisions of the P.G.Act flows from Section 5 of the said Act and in terms thereof the appropriate government may, by notification and subject to such conditions as may be specified in the notification exempt any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which the Act applies, from the operation of its provisions, if in the opinion of the appropriate government the employees of such establishment, factory, mine,

¶397

¶398

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¶399

oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

¶400

In order to avail the benefit of exemption under Section 5 of the P.G.Act, 1972 the establishment concerned would therefore have to approach the appropriate government for invocation of the powers of exemption and the power to grant such exemption may be exercised upon the appropriate government being satisfied that the employees in such establishment are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under the P.G.Act, 1972. The appropriate government may by a notification and subject to such conditions as may be specified in the notification grant the exemption.

¶401

It thus follows that in order to claim exemption the powers in respect thereof under Section 5 would have to be necessarily invoked by the establishment concerned by approaching the appropriate government and the said exemption cannot be held to follow automatically from a mere assertion of the establishment concerned that its employees are in receipt of gratuity or pensionary benefits which are not less favourable than the benefits conferred under the P.G.Act, 1972.

¶402

In the instant case, the Act having been made applicable to local bodies which includes the Municipal Corporations in terms of the notification dated 8.1.1982 issued by the Central Government all such local bodies including Municipal Corporations would continue to be covered by the provisions of the Act unless they are exempted by the appropriate government by issuance of a notification as provided for under Section 5 of the Act.

¶403

It may be apposite to refer to Section 14 of the P.G.Act, 1972

¶404

¶405

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¶406

in terms of which the provisions of the Act are to override other enactments and are to have effect nothwithstanding anything inconsistent therewith contained in any enactment. The overriding effect of Section 14 provides a kind of immunity to the right to claim gratuity under the P.G.Act, 1972 from any deduction attributable to the statutory payment of such benefit. Section 14 clearly provides that the right to claim gratuity by an employee under the provisions of the P.G.Act, 1972 is not based on any contract but a right which arises out of the provisions of the statute itself.

¶407

There cannot be any two views that the P.G.Act 1972 is a beneficial piece of legislation enacted to introduce a scheme for payment of gratuity for certain industrial and commercial establishments as a measure social security. The significance of the legislation lies in the acceptance of the principle of payment of gratuity as a compulsory statutory retiral benefit. The Act accepts, as a principle, compulsory payment of gratuity as a social security measure to wage earning population in industries, factories and establishments. The main purpose and concept of gratuity is to provide for terminal benefits to a workman upon his superannuation, or on his retirement or resignation, or on his death or disablement due to accident or disease.

¶408

The P.G. Act, 1972 being thus a welfare legislation meant for the benefit of the employees who serve their employer for a long time, it would be the duty of the employer to pay gratuity amount to the employee rather than denying the benefit on some technical ground.

¶409

Applying the rule of beneficent construction, the provisions of the P.G. Act, 1972 are to be interpreted liberally so as to give it a wide meaning rather a restrictive meaning which may negate the very object of the enactment. A beneficial legislation, it is well

¶410

¶411

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¶412

settled, as to be construed in its correct perspective so as to fructify the legislative intent underlying its enactment.

¶413

In construing a remedial statute courts are to give it the widest amplitude which its language would permit. The principle of applying a liberal construction to a remedial legislation has been emphasised in the Construction of Statues by Crawford¹⁹ pp. 492-493 in the following terms:-

¶414

“...Remedial statutes, that is, those which supply defects, and abridge superfluities, in the former law, should be given a liberal construction, in order to effectuate the purposes of the legislature, or to advance the remedy intended, or to accomplish the object sought, and all matters fairly within the scope of such a statute be included, even though outside the letter, if within its spirit or reason.”

¶415

To a similar effect is the observation made by Blackstone in Construction and Interpretation of Laws²⁰ , by stating as under:-

¶416

“It may also be stated generally that the courts are more disposed to relax the severity of this rule (which is really a rule of strict construction) in the case of statutes obviously remedial in their nature or designed to effect a beneficent purpose.”

¶417

In the context of beneficial construction as a principle of interpretation, it has been observed in Maxwell on The Interpretation of Statutes²¹ as follows:-

¶418

“...where they are faced with a choice between a wide meaning which caries out what appears to have been the object of the legislature more fully, and a narrow meaning which carries it out less fully or not at all, they will often choose the former. Beneficial construction is a tendency, rather than a rule.”

¶419

Further, in the same treatise, in the context of industrial legislation, it has been stated as follows:-

¶420

“Industrial legislation provides a fruitful field for the application of the tendency towards beneficial construction...”

¶421

The principle of applying a liberal construction to a labour welfare legislation was emphasised in the case of The Workmen of

¶422

The Construction of Statutes by Earl T. Crawford

¶423

Construction and Interpretation of Laws by Blackstone

¶424

Maxwell on the Interpretation of Statutes, 12^th Edition by P. St. J. Langan

¶425

¶426

Writ-C No. 45310 of 2017

¶427

M/s Firestone Tyre & Rubber Company of India Pvt. Ltd. Vs. The Management & Ors.²² where in the context of the provisions of the Industrial Disputes Act, 1947, it was observed as follows:-

¶428

“35. ...We are aware that the Act is a beneficial piece of legislation enacted in the interest of employees. It is well settled that in construing the provisions of a welfare legislation, courts should adopt, what is described as a beneficent rule of construction. If two constructions are reasonably possible to be placed on the section, it follows that the construction which furthers the policy and object of the Act and is more beneficial to the employees, has to be preferred...”

¶429

The mode of interpretation of a social welfare legislation, in the context of the provisions of the Industrial Employment (Standing Orders) Act, 1946, came up for consideration in the case of B.D. Shetty & Ors. Vs. CEAT Ltd. & Anr.²³ , and it was held as follows:-

¶430

“12. ...a beneficial piece of legislation has to be understood and construed in its proper and correct perspective so as to advance the legislative intention underlying its enactment rather than abolish it. Assuming two views are possible, the one, which is in tune with the legislative intention and furthers the same, should be preferred to the one which would frustrate it.”

¶431

The principle of applying a liberal construction to a beneficial legislation having a social welfare purpose was reiterated in the context of the P.G. Act, 1972 in the case of Allahabad Bank & Anr. Vs. All India Allahabad Bank Retired Employees Association²⁴ , and it was observed as follows:-

¶432

“16. ...Remedial statutes, in contradistinction to penal statutes, are known as welfare, beneficent or social justice oriented legislations. Such welfare statutes always receive a liberal construction. They are required to be so construed so as to secure the relief contemplated by the statute. It is well settled and needs no restatement at our hands that labour and welfare legislation have to be broadly and liberally construed having due regard to the directive principles of State policy. The Act with which we are concerned for the present is undoubtedly one such welfare oriented legislation meant to confer certain benefits upon the employees working in various establishments in the country.”

¶433

(1973) 1 SCC 813 23. (2002) 1 SCC 193

¶434

(2010) 2 SCC 44

¶435

¶436

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¶437

A similar view was taken with regard to adopting the beneficial rule of construction in respect of social welfare legislation, particularly in the context of the P.G. Act, 1972 in the case of Jeewanlal Ltd. & Ors. Vs. Appellate Authority under the Payment of Gratuity Act & Ors.²⁵ , wherein it was stated as follows:-

¶438

“11. In construing a social welfare legislation, the court should adopt a beneficent rule of construction ; and if a section is capable of two constructions, that construction should be preferred which fulfils the policy of the Act, and is more beneficial to the persons in whose interest the Act has been passed...”

¶439

Reference may also be had to the case of Bharat Singh Vs. Management Of New Delhi Tuberculosis Centre, New Delhi & Ors.²⁶ , where purposive interpretation safeguarding the rights of have-nots was preferred to a literal construction in interpreting a welfare legislation, and it was held as follows:-

¶440

“11....the court has to evolve the concept of purposive interpretation which has found acceptance whenever a progressive social beneficial legislation is under review. We share the view that where the words of a statute are plain and unambiguous effect must be given to them. Plain words have to be accepted as such but where the intention of the legislature is not clear from the words or where two constructions are possible, it is the court's duty to discern the intention in the context of the background in which a particular Section is enacted. Once such an intention is ascertained the courts have necessarily to give the statute a purposeful or a functional interpretation. Now, it is trite to say that acts aimed at social amelioration giving benefits for the have-nots should receive liberal construction. It is always the duty of the court to give such a construction to a statute as would promote the purpose or object of the Act. A construction that promotes the purpose of the legislation should be preferred to a literal construction. A construction which would defeat the rights of the have-nots and the underdog and which would lead to injustice should always be avoided...”

¶441

The aforementioned position of law has been discussed in a recent judgment of this Court in U.P.S.R.T.C. Thru Its R.M. Vikasnagar Kanpur Vs. State Of U.P. And 3 Others²⁷ .

¶442

(1984) 4 SCC 356 26. (1986) 2 SCC 614 27. (Writ - C No. - 6971 of 2017, decided on 28.08.2019)

¶443

¶444

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¶445

In the case at hand, the provisions of the P.G.Act, 1972 having been made applicable to local bodies which includes Municipal Corporations in terms of the notification dated 08.01.1982 issued by the Central Government in exercise of powers conferred under Section 1 (3) (c) the same would be applicable to the employees governed by Regulations 1990 in the absence of any exemption notification having been issued with regard to the petitioner-establishment under Section 5 and it will have an overriding effect by virtue of Section 14 over any scheme which is less favourable to the said employees.

¶446

Counsel appearing for the petitioner has not been able to dispute the aforementioned legal proposition and has not been able to point out any material error or irregularity in the orders passed by the Controlling Authority and the Appellate Authority so as to warrant interference in exercise of powers in writ jurisdiction under Article 226 of the Constitution of India.

¶447

The writ petitions lack merit and are accordingly dismissed. Order Date : - 12.9.2019 Pratima

¶448

(Dr.Y.K.Srivastava,J.)

Nagar Nigam Gorakhpur Thru Nagar Ayukt v. Suresh Pandey and 2 Others

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Nagar Nigam Gorakhpur Thru Nagar Ayukt v. Suresh Pandey and 2 Others

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