Dismissed

State of Gujarat v. Nathabhai Punjabhai Rathod

Gujarat HC27 Dec 2018SCA/23016/2017

Case brief

AI extract

What is this about?

The High Court rejected special civil appeals challenging orders denying gratuity to daily wagers. The court held that the Payment of Gratuity Act does not distinguish between daily wagers and regular employees, invalidating a government circular to the contrary.

What did the court decide?

All special civil applications rejected; winnings on merits that the Act covers daily wagers for gratuity.

State of Gujarat Vs Nathabhai Punjabhai Rathod — Pension and Retirement Benefits | Gujarat HC (2018)

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C/SCA/22817/2017 ORDER

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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R/SPECIAL CIVIL APPLICATION NO. 22817 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 22818 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 22819 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 22820 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 22821 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 22822 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 22823 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 22824 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 22825 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 23012 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 23013 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 23016 of 2017

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STATE OF GUJARAT

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Versus

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GOBARBHAI MERANBHAI SARVAIYA

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Appearance:

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MS ASMITA PATEL, AGP for the PETITIONER(s) No. 1 NOTICE SERVED(4) for the RESPONDENT(s) No. 1,2

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CORAM: HONOURABLE MR.JUSTICE C.L. SONI

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Date : 27/12/2018

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ORAL ORDER

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The petitions are filed under Article 226 of the Constitution against the orders dated 20.7.2016 passed by the Appellate Authority under the provisions of the Payment of Gratuity Act, 1972 (‘the Act’) in the individual appeals filed by the petitioner, being

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Page 1 of 6

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C/SCA/22817/2017 ORDER

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Appeal Nos.13 of 2016, 14 of 2016, 15 of 2016, 16 of 2016, 17 of 2016, 18 of 2016, 19 of 2016, 23 of 2016, 24 of 2016, 20 of 2016, 21 of 2016 and 22 of 2016 respectively.

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The above appeals were filed by the petitioner against the orders made by the Controlling Authority for payment of gratuity with interest at the rate of 10% to the respondent No.1 of each petition passed on individual applications made by them.

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The Appellate Authority has rejected all the appeals by impugned orders on the grounds that as per sub-section (7) of Section 7 of the Act, the Appellate Authority can entertain the appeal against the order of the Controlling Authority if filed within 120 days from the date of the order passed by the Controlling Authority but the petitioner has not filed the appeals within 120 days and therefore, it has no jurisdiction to hear the appeals.

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Learned Assistant Government Pleader Ms. Patel submitted by relying on the material available on record that though the appeals were in fact filed within the time limit of 120 days, as available under Section 7(7) of the Act, however the appeals were not taken on file by the Appellate Authority as the appellant had presented one cheque for total amounts awarded by the Controlling Authority on different individual applications of the respondent No.1 of each petition and thereafter, when the appellant went with different cheques, the appeals were not entertained on the ground that the appeals were presented after expiry of 120 days.

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As against the above arguments, learned advocate Mr. Rajyaguru appearing for respondent No.1 in each petition submitted that the appellant in fact had not complied with the mandatory requirement of making pre-deposit of the amount awarded by the Controlling Authority under the Act to the respondent No.1 of each

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Page 2 of 6

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C/SCA/22817/2017 ORDER

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petition while presenting the appeals before the Appellate Authority and the appellant when had gone with the cheque showing predeposit of the amounts to file the appeals, the prescribed time limit for filing the appeal had already passed and therefore, the Appellate Authority could not be said to have committed any error in not entertaining the appeals on the ground that the appeals were not filed within the time available under Section 7(7) of the Act.

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During the course of hearing of the petitions, when the Court asked learned Assistant Government Pleader Ms. Patel as to on what issues, the orders made by the Controlling Authority were sought to be challenged before the Appellate Authority, she stated before the Court that the only issue on which the orders made by the Controlling Authority were sought to be challenged was that the Controlling Authority committed error in taking into consideration the period of service rendered by respondent No.1 in each petition as daily wager (Rojamdar) for granting the benefit of gratuity under the Act to them. The Court then asked to learned Assistant Government Pleader Ms. Patel to take specific instruction from the appellant whether such is the only issue to be raised to challenge the orders made by the Controlling Authority, she then, on instructions, stated before the Court that only on the above such issue, the petitioner sought to challenge the orders made by the Controlling Authority by filing the appeals. She submitted that such issue was sought to be raised in the context of the circular dated 24.3.2016 which provides for not considering the services rendered by employee as daily wager for the purpose of grant of benefits of pension and gratuity.

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The Court would have considered the petitions to decide whether the appeals filed by the petitioner against the orders of the Controlling Authority could be treated to have been filed within the

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Page 3 of 6

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C/SCA/22817/2017 ORDER

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time limit, but the fact that the above such is the only issue on which the petitioner sought to challenge the orders made by the Controlling Authority, the matters are not required to be sent back to the Appellate Authority as this Court has already considered such issue in Special Civil Application No.15253 of 2018 and has held that there is no distinction made in the definition of ‘employee’ in Section 2(e) of the Act between daily wager and the regular employee working on the establishment for the purpose of payment of gratuity under the Act.

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While taking above view, this Court has also considered the circular dated 24.3.2016 relied on by learned AGP Ms. Patel and has held in para 6 to 9 of the order dated 14.12.2018 passed in above petition as under:-

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This Court had occasion to decide whether a person employed on contract basis could be made entitle to payment of gratuity under the Act. While deciding such question in Special Civil Application No.14498 of 2018, this Court has observed and held in paragraph No.4 of its order dated 03.12.2018 as under:

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“4. The Court, having heard learned advocate Mr. Meena, finds that the Act is beneficial legislation providing for payment of gratuity to the employees engaged in the establishment, factory, mine, oilfield, plantation, etc. The word ‘employee’ is defined in Section 2(e) of the Act, which reads as under:-

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(e) "employee" means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied a [and whether or not such person is employed in a managerial or administrative capacity, 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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As per the above definition, any person who is employed for wages, whether the terms of such employment are express or implied, in any kind of the work either manual or otherwise, in connection with the work of a factory, mine or oilfield, plantation, port or other establishments, to which the Act applies is an employee for the purpose of the Act. Therefore, definition of the employee does not make any distinction or difference between the persons employed on contract basis or

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Page 4 of 6

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C/SCA/22817/2017 ORDER

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on regular basis in the establishments. The Act confers the benefit of payment of gratuity on all those persons who are employed in the establishment for any kind of the work of the establishment or in connection with the work of the establishment, provided such persons employed satisfy the other requirements of the Act as regards length of service, etc. to become entitled to payment of gratuity. There is no dispute that the petitioner is an establishment to which the Act applies. In fact, as per Section 14 of the Act, the provisions of the Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than the Act or in any instrument or contract having effect by virtue of any enactment other than the Act. Therefore, even if a person is made to work for the establishment or in connection with the works of the establishment through the contractor either under the contract or any kind of the instrument entered between the employer and the contractor, the Act shall prevail over such arrangement and irrespective of such arrangement made under the contract or the instrument, the Act shall have effect for the purpose of payment of gratuity to the persons employed for the work of the establishment or in connection with the works of the establishment.”

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As observed in the above paragraph, the definition of the employee in Section 2(e) of the Act does not make any distinction or difference between the persons employed on the contract basis or regular basis in the establishment. Similarly, it does not make any distinction or difference between persons employed as daily-wager or on regular basis in the establishment. Therefore, even if a person is employed as a daily-wager but if he otherwise satisfies the other requirements of the Act, he cannot be denied the benefit of gratuity simply because he was employed as a daily-wager. For the purpose of payment of the gratuity, the entire service of an employee, right from the day he joined as daily-wager, is required to be considered.

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Learned advocate Ms.Mandavia, however, submitted that in view of the Government Resolution dated 24.03.2006, the service rendered by the deceased employee as daily-wager could not be considered for grant of gratuity.

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It is required to note that the claim for payment of the gratuity is made by the respondent No.1 under the provisions of the Act and, therefore, the gratuity paid to the respondent No.1, if less than what is available under the Act, he becomes entitled to get the difference of amount. The Government Resolution dated 24.03.2006 would not take away what is available under the Act. If the contention raised by Ms.Mandavia is to be accepted, the Court will be required to rewrite the definition of the employee in the context of the Resolution which is not permissible. Even otherwise, as per Section 14 of the Act, the provisions of the 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

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Page 5 of 6

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C/SCA/22817/2017 ORDER

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other than this Act. Therefore, though the Resolution provides for grant of gratuity by excluding the period of service put in as a daily-wager, such being inconsistent to the provisions made in the Act, the provisions of the Act shall have effect and the petitioner would remain entitle to get the gratuity under the Act.

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In light of the above, the Court finds that no purpose will be served in considering the matters to decide whether the appeals filed by the petitioner could be treated to have been filed within the time limit provided under Section 7(7) of the Act and these petitions are taken to have been heard on merits on the above issue.

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In light of the above and for the reasons stated above, the petitions are rejected. Notice in each petition stands discharged.

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OMKAR

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Page 6 of 6

State of Gujarat v. Nathabhai Punjabhai Rathod

Case brief

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State of Gujarat v. Nathabhai Punjabhai Rathod

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