The Superintendent of Central Excise Vs Sri G Ramachandra G P

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24^TH DAY OF SEPTEMBER, 2025 BEFORE

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THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR WRIT PETITION NO.3562 OF 2022 (L-PG)

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BETWEEN:

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THE SUPERINTENDENT OF CENTRAL EXCISE SHIVAMOGGA RANGE 6^TH CROSS, SAVALANGA ROAD SHIVAMOGGA-577 204

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…PETITIONER

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(BY SRI VENKATASATHYANARAYANA FOR SRI MADHUKAR DESHPANDE, ADVOCATES)

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AND:

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SRI RAMACHANDRA G.P. MAJOR R/AT 1^ST CROSS BOTHAPPANAKERI MILLAGHATTA SHIVAMOGGA-577 203

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Digitally signed by GAVRIBIDANUR SUBRAMANYA GUPTA SREENATH

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Location: HIGH COURT OF KARNATAKA

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SMT.CHANDRAMMA T. MAJOR SINCE DEAD amended as per Court REPRESENTED BY R-1 Order dated 24.09.2025

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APPELLATE AUTHORITY UNDER PAYMENT OF GRATUITY ACT, 1972 AND DEPUTY CHIEF LABOUR COMMISSIONER (CENTRAL), BENGALURU 'SHRAM SADAN', III CROSS, III MAIN YESHWANTHPUR INDL. SUBURB II STAGE TUMKUR ROAD BENGALURU-560 022

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CONTROLLING AUTHORITY AND ASSISTANT LABOUR COMMISSIONER (CENTRAL) OFFICE AT CTS NO.27773/4B 2^ND FLOOR, OPPOSITE HDMC PARK NEAR BHAVANINAGAR LAST BUS STOP BHAVANINAGAR HUBLI-580 029

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…RESPONDENTS

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(BY SRI GOVINDARAJ K., ADVOCATE FOR R-1; MS.ANUPAMA BORDOLOI, ADVOCATE FOR R-3 & R-4; NOTICE TO R-2 IS HELD SUFFICIENT V/O.DATED 17.02.2025)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 06.01.2020 PASSED BY RESPONDENT NO.3 IN APPEAL NO.36(133)2018/B1 VIDE ANNEXURE-E.

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING, IN 'B' GROUP THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE PRADEEP SINGH YERUR

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ORAL ORDER

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This petition is filed by the petitioner-Central Excise Department, being aggrieved by the order dated 06.01.2020 passed in Appeal No.36(133)/2018/B1 by respondent No.3-Appellate Authority under Payment of Gratuity Act, 1972 and Deputy Chief Labour Commissioner

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(Central), Bengaluru.

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It is the case of the petitioner that one

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Ms.G.P.Nagarathnamma was working as a Casual Labourer

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on temporary basis from 28.09.1992 to till the date of her unfortunate demise on 11.10.2013. It is stated that the

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deceased Nagarathnamma was not a permanent Group-D employee. Pursuant to the death of deceased Nagarathnamma, respondent Nos.1 and 2, her legal representatives namely, Sri Ramachandra G.P., the brother and Smt.Chandramma T., the mother of the deceased, filed an application before respondent No.4Controlling Authority under the Payment of Gratuity Act, 1972 (for short, 'the Act') and the Assistant Labour Commissioner (Central), Hubli claiming gratuity in respect of the deceased employee Nagarathnamma. The application so filed by the legal representatives i.e. the mother and the brother of the deceased came to be dismissed by the Controlling Authority vide order dated 01.05.2018.

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2.1 Aggrieved by the said order of dismissal, both respondent Nos.1 and 2 preferred an appeal before the Appellate Authority under the Act and the Deputy Labour Commissioner (Central), Bengaluru. Upon consideration of the appeal, the Appellate Authority partly allowed the appeal on 06.01.2020 and directed the petitioner to pay a sum of Rs.2,19,046/- along with interest @ 10% p.a. from 11.11.2013 till the actual date of payment.

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2.2 The petitioner is aggrieved by the said order of the Appellate Authority, whereby a direction was given to the petitioner to make payment of gratuity amount of Rs.2,19,046/- along with interest @ 10% p.a., has preferred this petition.

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It is the vehement contention of learned counsel Sri Venkatasathyanarayana on behalf of Sri Madhukar M.Deshpande for petitioner that the order passed by the Appellate Authority is illegal, perverse, arbitrary and contrary to the provisions of the Act and therefore, the

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same requires to be quashed. It is further contended that the petitioner would not come within the definition of the

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Act. It is further contended that the Customs and the Central Excise Department does not fall under the term 'establishment', in view of the fact that no trade, business and manufacture are being conducted therein. Therefore, he contends that the Department of Customs and Central Excise would not come within the purview of the Act and so also, the definition of the 'establishment'. This aspect has been totally ignored and not taken into consideration by the Appellate Authority while passing the impugned order.

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3.1 It is further contended by learned counsel for petitioner that Rule 2(b) of the Central Civil Services (Conduct) Rules, 1964 defines 'Government servant', which means - 'any person appointed by Government to any civil service or post in connection with the affairs of the Union and includes a civilian in a Defence Service'. Therefore, a casual labourer is not employed against any

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sanctioned post and is not paid from the allocations made against the sanctioned strength. Hence, the deceased Nagarathnamma having been employed as a casual labourer does not hold any post which are created, sanctioned or regularised in accordance with any statutory rules for the reason that a casual labourer is purely casual in nature and daily wagers are being engaged on need basis. It is also contended by learned counsel for petitioner that Central Civil Services (Pension) Rules, 1972 is also not applicable to the casual labourer. These aspects have been totally ignored and not appreciated by the Appellate Authority while passing the impugned order.

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3.2 It is further contended by learned counsel that the deceased Nagarathnamma was a casual labourer with temporary status on 23.09.1992 and she remained in the same status as casual labourer as on the date of her death. Learned counsel further contends that the Customs and Excise Department is clearly outside the purview of the Act for the reason as stated earlier that it does not fall

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within the definition of 'establishment'. Learned counsel further contends that the deceased casual labourer was not regularised under Group-D Recruitment Rules as she had not completed her educational qualification required for the same and therefore, consequently, she would not

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be entitled to the benefit of gratuity.

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3.3 It is vociferous contention of learned counsel for petitioner that the Appellate Authority has not examined these applicable legal aspects and position of law as to the deceased Nagarathnamma having remained a casual labourer would not be entitled to the gratuity amount and so also, the petitioner being the Central Excise Organisation would not come within the purview of the Act.

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3.4 Learned counsel for petitioner relies upon the judgment of Hon'ble Apex Court in the case of Nagar Nigam, Kanpur v. Mujib Ullah Khan reported in (2019)6 SCC 103 in support of his case.

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Per contra , learned counsel for respondent No.1 contends that respondent No.1 is the only legal

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representative of respondent No.2. He also contends that the deceased Nagarathnamma was working with the petitioner-Organisation as a sweeper since 1992 on a daily wage basis till her death on 11.10.2013. She has served for more than 21 years continuously without any break in service to the satisfaction of the petitioner-Organisation and she was drawing salary of Rs.18,080/- p.m. at the time of her death.

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4.1 Learned counsel for respondent No.1-legal representative of the deceased employee vehemently contends that there is no illegality or perversity in the order passed by the Appellate Authority directing the petitioner to pay gratuity benefits for the services rendered by Smt.Nagarathnamma to the legal representatives. It is further contended by learned counsel for respondent No.1-contesting party that the contention so taken by the petitioner with regard to entitlement of

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gratuity amount and eligibility of the gratuity under the Act cannot be accepted for the reason that the deceased was admittedly working with the petitioner-Organisation for 21 years without any break in service. The objection taken by the petitioner with regard to the petitioner not coming within the purview of 'establishment' and the Act is again not correct for the reason that Section 14 of the Act would squarely cover all persons who are employed with any Organisation are entitled for the benefit of gratuity.

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4.2 Learned counsel further contends that the petitioner would not be an 'establishment', which would be exempted as per Section 5 of the Act. So also, it is contended that no document has been produced by the petitioner to show that the petitioner is exempted from the term 'employer' under the Act, more so, being a Central Government Department. Learned counsel further contends that when the deceased has worked with the petitioner-Organisation for 21 years, she would be entitled

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to gratuity and whether she is a temporary or permanent

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employee would make no difference for her entitlement under the Act for the benefit of gratuity. Learned counsel further contends that before the Controlling Authority and the Appellate Authority, the mother and brother of the deceased had claimed the benefits of gratuity but the Appellate Authority did not grant relief of gratuity in favour of the brother of the deceased for want of proof of him being a family member as per the definition of 'family' under Act. However, the mother of the deceased namely, Smt.Chandramma was granted relief and benefit of gratuity of the deceased G.P.Nagarathnamma.

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4.3 It is also contended by learned counsel that the

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petitioner-Organisation did not dispute the period of employment of 21 years and the salary that was drawn by the deceased employee. Therefore, learned counsel contends that the Appellate Authority has rightfully passed the order granting the gratuity benefits to the mother of the deceased employee, which does not call for interference and the same is liable to be disbursed in

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favour of respondent Nos.1 and 2 forthwith. However, during the pendency of this petition, the mother of the deceased Smt.Chandramma also passed away leaving behind the sole legal heir i.e. her son

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Sri Ramachandra G.P., who is made as a party to the proceedings as respondent No.1. Hence, he would be entitled for the benefit of the gratuity as ordered by the Appellate Authority. Accordingly, learned counsel for respondent No.1 contends that the payment of gratuity being a special enactment by itself would override all other provisions of the Act as contemplated under Section 14 of the Act and also provided exemption under Section 5 of the Act, which the petitioner has failed to show or prove that it would fall within the said category.

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4.4 Under the circumstances, he contends that the

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theory put-forth by the petitioner cannot be accepted with regard to the petitioner not coming under the definition 'establishment' and not within the purview of the Act.

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4.5 Learned counsel for respondent relies upon the

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following judgments in support of his case:

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i) Smt.Mahadevamma vs. Assistant Executive Engineer in W.A.No.100/2013;

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ii) Sri Basavegowda vs. The State of Karnataka reported in MANU/KA/3708/2023 [in W.P.No.10872/2023; decided on

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20.12.2023];

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iii) Chief Executive Officer, Zilla Panchayat and another vs. Shri K.V.Puttaraju reported in MANU/KA/2183/2022 [in W.P.Nos. 46017/2017 and connected matters; decided on 12.05.2022];

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iv) Netram Sahu v. State of Chattisgarh reported in (2018)5 SCC 430;

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v) Municipal Corporation of Delhi v. Dharam Prakash Sharma and another reported in AIR 1999 SC 293;

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Having heard learned counsel for petitioner and

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learned counsel for respondent No.1, it would be relevant to extract the provisions of Sections 1, 2(a)(i)(a) to (d), 2(c), 2(e), 2(f), 2A(1), 4(1)(a)(b)(c) and its provisos, and 5(1)(2)(3) of the Act as under:

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"1. 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, on 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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(a) “appropriate Government” means,—

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(i) in relation to an establishment—

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(a) belonging to, or under the control of, the Central Government,

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(b) having branches in more than one State,

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(c) of a factory belonging to, or under the control of, the Central Government,

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(d) of a major port, mine, oilfield or railway company, the Central Government,

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(c) “continuous service” means continuous

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service as defined in section 2A;

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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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(f) “employer” means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company or shop—

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(i) belonging to, or under the control of, the Central Government or a State Government, a person or authority

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appointed by the appropriate Government for the supervision and control of employees, or where no person or authority has been so appointed, the head of the Ministry or the Department concerned,

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(ii) belonging to, or under the control of, any local authority, the person appointed by such authority for the supervision and control of employees or where no person has been so appointed, the chief executive officer of the local authority,

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(iii) in any other case, the person, who, or the authority which, has the ultimate control over the affairs of the establishment, factory, mine, oilfield, plantation, port, railway company or shop, and where the said affairs are entrusted to any other person, whether called a manager, managing director or by any other name, such person;

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2A. Continuous service.—For the purposes of this Act,— (1) an employee shall be said to be in continuous service for a period if he has, for that

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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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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:

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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 the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made,

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to his heirs, and where any such nominees or heirs is a minor, the share of such minor, 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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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

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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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In the present case on hand, there is no dispute to

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the fact that the deceased Nagarathnamma was working with the petitioner-Organisation as a Sweeper and she had continuous service of more than 21 years and was paid wages/salary amounting to Rs.18,080/- per month. The only dispute that is raised by the petitioner is that the deceased was not employed permanently and she was only a casual labourer.

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The argument canvassed by learned counsel for petitioner with regard to petitioner being a Central Government Organisation would not come within the purview of definition of 'establishment' and purview of the

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Act. In my opinion, it is no longer res integra as it is squarely covered by several judgments of the Hon'ble Apex Court, which are cited across the Bar by learned counsel for respondent No.1. The question for consideration before this Court is - 'whether the deceased Nagarathnamma could be considered as an employee of the petitioner-Organisation'. For this purpose, it is the definitions of 'employee' under Section 2(e), 'employer' under Section 2(f), 'continuous service' under Section 2(A), so also, the persons/employees who are entitled to the benefit of gratuity under Section 4 of the Act are extracted hereinabove.

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It is apparently seen from Section 4 of the Act, more specifically, Section 4(1)(c), the deceased and the legal representatives of the deceased would be entitled to payment of gratuity amount, if there is a continuous service for not less than five years. In the present case, the deceased Nagarathnamma had put in more than 21 years of service and her legal representatives would be

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entitled for gratuity. No doubt, Section 2(e) of the Act excludes the employees of the Central or State Government from the purview of the Act. However, this aspect has been clarified by several judgments of the Hon'ble Apex Court in the judgments rendered by it which are mentioned hereinabove and relied upon by learned counsel for respondent.

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It would also be relevant to extract Section 14 of the Act:

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"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."

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It is apparently clear from the provisions of

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Section 14 of the Act that it would be applicable to the employees including the Central Government or the State Government, unless they get higher benefits from the said

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Organisation, be it, the Central or the State or any such scheme having been developed and introduced by the

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Central or the State Government.

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It would be relevant to extract paras-14 to 21 in the case of Netram Sahu v. State of Chattisgarh reported in (2018)5 SCC 430 as under:

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"14. We do not agree with this submission of the learned counsel for the respondent State for more than one reason:

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14.1. First, the appellant has actually rendered the service for a period of 25 years;

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14.2. Second, the State actually regularised his services by passing the order dated 6-5-2008;

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14.3. Third, having regularised the services, the appellant became entitled to claim its benefit for counting the period of 22 years regardless of the post and the capacity on which he worked for 22 years;

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14.4. Fourth, no provision under the Act was brought to our notice which disentitled the appellant from claiming the gratuity and nor any provision was brought to our notice which prohibits the appellant from taking benefit of his long and continuous period of 22 years of service, which he

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rendered prior to his regularisation for calculating his continuous service of five years.

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15. In our considered opinion, the High Court committed an error in placing reliance on the decision of this Court in State of Karnataka v. Umadevi (2006) 4 SCC 1 : 2006 SCC (L&S) 753 to deny the relief of grant of gratuity to the appellant. In the case at hand, the High Court should have seen that the services of the appellant was actually regularised by the State and, therefore, the law laid down in Umadevi (2006) 4 SCC 1 : 2006 SCC (L&S) 753 could not be relied on. Indeed, even the decision of Umadevi (2006) 4 SCC 1 : 2006 SCC (L&S) 753 makes a distinction in cases and where the services stand regularised, the ratio of Umadevi (2006) 4 SCC 1 : 2006 SCC (L&S) 753] to deny the relief would not apply.

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16. In our considered opinion, once the State regularised the services of the appellant while he was in State services, the appellant became entitled to count his total period of service for claiming the gratuity amount subject to his proving continuous service of 5 years as specified under Section 2-A of the Act which, in this case, the appellant has duly proved.

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17. In the circumstances appearing in the case, it would be the travesty of justice, if the appellant is denied his legitimate claim of gratuity

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despite rendering “continuous service” for a period of 25 years which even, according to the State, were regularised. The question as to from which date such services were regularised was of no significance for calculating the total length of service for claiming gratuity amount once the services were regularised by the State.

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18. It was indeed the State who took 22 years to regularise the service of the appellant and went on taking work from the appellant on payment of a meagre salary of Rs 2776 per month for 22 long years uninterruptedly and only in the last three years, the State started paying a salary of Rs 11,107 per month to the appellant. Having regularised the services of the appellant, the State had no justifiable reason to deny the benefit of gratuity to the appellant which was his statutory right under the Act. It being a welfare legislation meant for the benefit of the employees, who serve their employer for a long time, it is the duty of the State to voluntarily pay the gratuity amount to the appellant rather than to force the employee to approach the Court to get his genuine claim.

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19. In view of the foregoing discussion, we cannot agree with the reasoning and the conclusion arrived at by the High Court which is legally unsustainable. It is really unfortunate that the genuine claim of the appellant was being denied by

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the State at every stage of the proceedings up to this Court and dragged him in fruitless litigation for all these years.

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20. Indeed, this reminds us of the apt observations made by M.C. Chagla, C.J. (as he then was) in Firm Kaluram Sitaram v. Union of India, 1953 SCC OnLine Bom 39 : AIR 1954 Bom 50. The learned Chief Justice in his distinctive style of writing while deciding the case between an individual citizen and the State made the following pertinent observations: (SCC OnLine Bom para 19)

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“19. Now, we have often had occasion to say that when the State deals with a citizen it should not ordinarily reply on technicalities, and if the State is satisfied that the case of the citizen is a just one, even though legal defences may be open to it, it must act, as has been said by eminent Judges, as an honest person.”

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21. These observations apply in full force against the State in this case because just case of the appellant was being opposed by the State on technical grounds. As a consequence, the appeal succeeds and is allowed. The impugned judgment/ order passed by the High Court (Single Judge and Division Bench) are set aside and the orders of the controlling authority and appellate authority are restored with costs of Rs 25,000 payable by the

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State to the appellant. Costs to be paid by the State along with the payment of gratuity amount."

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Though this case is referred to larger Bench of

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the Hon'ble Supreme Court, the same would be relevant at this stage.

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It is also relevant to extract paras-8, 8.1, 8.2,

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8.3, 8.4, 8.5, 9, 9.1 in the case of Supt. of Post Offices

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v. Gursewak Singh reported in (2019)15 SCC 292 as under:

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"8. Mr Bharat Sangal, learned Amicus Curiae, represented the interest of the respondents before this Court. The learned counsel inter alia submitted that:

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8.1. The Payment of Gratuity Act, 1972 applies to every place defined as an “establishment” within the meaning of any law for the time being in force in a State. To determine the applicability of the Payment of Gratuity Act, 1972 it must be seen whether the place is defined as an establishment under the law applicable to the State. Reliance was placed on the judgment of State of Punjab v. Labour Court [State of Punjab v. Labour Court, (1980) 1 SCC 4 : 1980 SCC (L&S) 123] wherein this Court held that an establishment falling within the definition of Section 2(ii)(g) of the Payment of Wages Act,

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1936 would be covered by the Payment of Gratuity Act, 1972. It was contended that the Postal Department is an establishment within the meaning of the term used in Section 2(ii)(g) of the Payment of Wages Act, 1936 and the 1972 Act, would be applicable to its employees.

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8.2. Section 1(3) of the 1972 Act, provides for payment of gratuity to employees of every factory, mine, oilfield, plantation, port, railway company, shop or establishment. Section 1(3) of the 1972 Act reads as under:

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“1. Short title, extent, application and commencement.— * * *

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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, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.”

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(emphasis supplied)

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8.3. It was further submitted that Section 14 of the 1972 Act specifically provides that the Act would apply “notwithstanding anything inconsistent therewith contained in any enactment”. Section 14 of the 1972 Act reads as under:

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“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.”

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8.4. Section 4(1)(b) of the 1972 Act provides that gratuity would be payable to an employee even on his resignation. Thus, any rule barring payment of gratuity to an employee who resigns, would be contrary to Section 14 read with Section 4(1)(b) of the 1972 Act.

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8.5. It was further submitted that the Department of Posts, Gramin Dak Sewak (Conduct and Employment) Rules, 2001 were superseded and replaced by the Department of Posts, Gramin Dak Sewak (Conduct and Engagement) Rules, 2011. Under the amended 2011 Rules the term “employment/appointment” has been replaced by “engagement”. The amended Rule 6 pertains to payment of ex gratia gratuity to Gramin Dak Sewaks.

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9. The first issue to be determined is whether a Gramin Dak Sewak is an “employee” as per Section

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2(e) of the 1972 Act, and is entitled to payment of gratuity under this Act?

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9.1. Section 1(3)(b) of the 1972 Act applies to every “establishment” within the meaning of “any law” for the time being in force. This Court in State of Punjab v. Labour Court [State of Punjab v. Labour Court, (1980) 1 SCC 4 : 1980 SCC (L&S) 123] has held that there is no reason for limiting the meaning of the expression “law” in Section 1(3)(b) of the 1972 Act. The Postal Department is as an establishment under Section 2(k) of the Indian Post Office Act, 1898 which reads as under:

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“2. Definitions.— * * *

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(k) the expression “Post Office” means the department, established for the purposes of carrying the provisions of this Act into effect and presided over by the Director General.”

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(emphasis supplied)

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The Indian Post Office Act, 1898 would fall under the expression “law” in Section 1(3)(b). Consequently, the Posts and Telegraphs Department would be an establishment under the 1972 Act."

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In the judgments hereinabove cited, the Hon'ble

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Apex Court has come to the aid of those workers and employees, who were not regularised and had worked as

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Gramin Dak Sewak in the postal Department and appointed on part time basis. Despite them having not been appointed as a regular employees, the gratuity benefits could not be denied is what is held by the Hon'ble Apex Court. Unless the better benefit under the Central Civil Services Rules of the Central or the State Government is formulated or by way of any scheme which could be higher than the Act, this aspect of the matter has been squarely covered by the judgments rendered by the Coordinate Bench of this Court in the cases of Chief Executive Officer, Zilla Panchayat and another vs. Shri K.V.Puttaraju reported in MANU/KA/2183/2022 [in W.P.Nos. 46017/2017 and connected matters; decided on 12.05.2022] and Sri Basavegowda vs. The State of Karnataka reported in MANU/KA/3708/2023 [in W.P.No.10872/2023; decided on 20.12.2023];

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It is also relevant to note that two Division Benches of this Court in the cases of Chief Executive

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Officer, Zilla Panchayat and another vs. Shri K.V.Puttaraju reported in MANU/KA/2183/2022 [in W.P.Nos. 46017/2017 and connected matters;

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decided on 12.05.2022] and Smt.Mahadevamma vs. Assistant Executive Engineer and Others in W.A.No.100/2013 (decided on 04.03.2021) have also dealt with the payment of gratuity amount to the employees. In the case Gursewak Singh mentioned supra, the Hon'ble Apex Court has clearly held that despite the employees working as daily wagers and not regularised as contemplated under Section 2(e) of the Act, the employees working under the Organisation are eligible for the payment of gratuity. Therefore, having considered the judgments of the Hon'ble Apex Court in the case of Netram Sahu mentioned supra , the deceased employee would be entitled to payment of gratuity and also Section 14 of the Act, which has overriding effect on all other Acts would come into play for the purpose of providing benefit of gratuity which is entitled to by the legal representatives

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of the deceased. I would like to add that the petitioner has

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not been able to point out any scheme or the Rules that is provided which would give higher benefits of the gratuity to the employee, be it, daily wager or regularised employee.

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In the case of Municipal Corporation of Delhi

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v. Dharam Prakash Sharma and another reported in

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AIR 1999 SC 293 , the Hon'ble Apex Court at para-2 has held as under:

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"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

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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 S. 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

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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 S. 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 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."

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Under the circumstances, there is nothing material produced by the petitioner to show that he is exempted from payment of gratuity to the deceased and no benefits scheme or rule is shown, which has been provided to the daily wagers/employees higher than the benefits in the Act. Therefore, I am not inclined to accept the submission made by learned counsel for petitioner. Consequently, the submission put-forth by learned counsel

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for respondent is accepted and I also did not find any illegality or perversity in the order passed by the Appellate Authority.

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Accordingly, I pass the following:

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ORDER

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i) This petition is dismissed;

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ii) The order dated 06.01.2020 passed in Appeal No.36(133)/2018/B1 by respondent No.3Appellate Authority is affirmed;

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iii) In view of the order passed by respondent No.3Appellate Authority is affirmed and respondent No.2 being the mother of deceased employee is also died, the amount shall be disbursed in favour of respondent No.1, who is the legal representative of respondent No.2 and the brother of the deceased Nagarathnamma;

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iv) At the time of granting of an interim order, the principal amount of Rs.2,19,046/-, which is entitled to respondent No.2, has been deposited

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before this Court. The said amount is lying in the Registry of this Court, which shall be released in favour of respondent No.1 namely, Sri Ramachandra G.P. upon furnishing relevant Bank details;

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v) However, the petitioner shall make good the interest amount @ 10% p.a. on the principal amount of Rs.2,19,046/- from 11.11.2013 till actual date of payment within a period of three months from the date of receipt of a copy of this order.

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Sd/(PRADEEP SINGH YERUR) JUDGE

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LB List No.: 1 Sl No.: 35

The Superintendent of Central Excise v. Sri G Ramachandra G P

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The Superintendent of Central Excise v. Sri G Ramachandra G P

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