C.Sadasivam, Vs The Management

Appellate Authority under the Payment of Gratuity Act, 1972/Addl. Commissioner of Labour, 43, Balasundaram Road, ATT Colony, Gopalapuram, Coimbatore – 641 018.

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Controlling Authority under the Payment of Gratuity Act, 1972 Office of the Joint Commissioner of Labour, Yercaud Main Road, Gorimedu, Salem – 636 008. ….Respondents

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W.P.No.13022 of 2020

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Prayer in W.P.

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To issue a writ, order or direction, in the nature of a Writ of Certiorarified Mandamus to call for the records from the files of Respondents 2 and 3 in P.G.No.131/2018 and AGA 53/2019 dated 06.05.2019 and 12.03.2020 respectively and quash both the orders and consequently direct the 1^st Respondent to pay gratuity amount of Rs.2,73,011/- and interest at Rs.1,73,644/- for delayed payment in all Rs.4,46,655/- within a time frame with further interest till date of actual payment and pass such other order or direction as this Hon’ble Court may deem fit and proper in the circumstances of the case.

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Prayer in WMP

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To dispense with production of original of the Impugned Order passed by the 3^rd Respondent in P.G.No.131/2018 dated 06.05.2019

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Appearance of Parties

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For Petitioner : Mr.K.M.Ramesh, Senior Counsel For V.Subramani, S.Sandhya, S.Apunu, and V.Sivaraman, Advocates For Respondent 1 : Mr.Murali Vinodh, Advocate For Respondents 2 and 3 : Mr.R.Kumaravel, Additional Government Pleader.

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JUDGMENT

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Heard.

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The Petitioner was employed as a Driver in the 1st Respondent Transport

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Corporation. He has filed the present writ petition assailing the order dated 12.03.2020 passed by the 2nd Respondent Appellate Authority in P.G. Appeal No. AGA 53 of 2019, whereby the appeal preferred by the Petitioner was dismissed on the ground that a parallel proceeding was pending before the Labour Court and, therefore, he was not inclined to permit a multiplicity of proceedings. When the matter was taken up on 22.09.2020, notice was accepted on behalf of the Respondents.

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When the matter was listed on 16.02.2024, this Court directed the parties

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to apprise the stage of the claim petition stated to be pending before the Labour Court. A similar direction was reiterated by this Court on 22.03.2024. The case of the Petitioner is that he joined the service in the 1^st Respondent Corporation as a Driver with effect from 08.11.1986 and retired from service upon attaining the age of superannuation on 30.04.2017. It is his contention that his gratuity was computed based on his last drawn wages and he was paid a sum of Rs.6,68,354/-. However, according to him, he was entitled to a sum of Rs.9,41,365/- towards gratuity, taking into account his last drawn basic pay and dearness allowance, which was approximately Rs.49,000/- and Rs.5,390/respectively.

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Pursuant to the issuance of a notice in Form-I to the 1st Respondent, the Petitioner filed an application for gratuity before the 3rd Respondent, the Controlling Authority, which was registered as P.G. Case No. 131 of 2018. Upon issuance of notice to the 1st Respondent Corporation and after considering the submissions, the Controlling Authority held that the entire gratuity amount, along with 6% interest, had already been credited to the Petitioner's bank account. It was therefore concluded that no further gratuity was payable, and the Petitioner would only be entitled to an additional 4% interest. On that basis, the application was closed.

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Aggrieved by the aforesaid order, the Petitioner preferred an appeal before the 2nd Respondent Appellate Authority under Section 7(7) of the Payment of Gratuity Act, 1972. The appeal was taken on file as AGA No. 53 of 2019. After affording an opportunity of hearing to both parties, the Appellate Authority dismissed the appeal, while granting liberty to the Petitioner to revive the same upon disposal of the claim petition pending before the Labour Court. In the operative portion of the order, the authority observed as follows:—

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”fPHik kd;wj;jpy; kDjhuu; jpU/rp/rjhrptk; FWf;F tprhuizapy; “ehd; jhf;fy; bra;Js;s gpukhz gj;jpuj;ij vdf;F fzf;fPL bra;aj; bjupahJ vd;gjhy; vdJ mwpt[iuapd; bgupy; jpU/gHdpag;gd; mtu;fis jahu; bra;a nfhupndd;/ nryk;. bjhHpyhsu; ePjpkd;wj;jpy; Review &

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Increment bjhlu;ghf tHf;F jhf;fy; bra;J mt;tHf;F ,d;Dk; epYitapy; cs;sJ vd;why; rup vd;W bjuptpj;Js;shu;/”

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,k;kd;wj;jpy; Kd; cs;s tHf;fpYk; ,nj gpur;ridjhd; jPu;khdpf;fg;gl ntz;oajhFk;/ ,nj gpur;rid Fwpj;J jPu;khdpg;gJ multiplicity of proceedings-f;F tHptFf;Fk;/ ,Wjpahd khj rk;gsk; gzpf;bfhil bjhifia jPu;khdpf;Fk; Kf;fpa fhuzpahf cs;sjhy; ,g;gpur;ridapy; finality vl;lg;gl;l gpd;du; ,g;gpur;ridia jPu;khdpf;f ntz;Lk;/ ,e;epiyapy; finality vl;lg;gl;l gpd;du; nky;KiwaPl;lhsu; - kDjhuu; kPz;Lk; nky;KiwaPL jhf;fy; bra;a[k; cupikf;F ghjfkpd;wp ,k;nky;KiwaPl;L kD dispose bra;ag;gLfpwJ/”

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The Petitioner has impugned the order on the ground that the expression "wages" is defined under Section 2(s) of the Payment of Gratuity Act, 1972 and, in the case of employees of the 1st Respondent Corporation, the terms of employment are governed by settlements entered into under Section 12(3) of the Industrial Disputes Act. Under the said settlement, the Corporation had introduced a Longevity Pay Scheme. In support of his claim, the Petitioner has relied upon Exhibits P1 and P7 to P14 to establish that his last drawn pay was Rs.54,390/-, on the basis of which gratuity ought to have been computed. The claim made by him before the Labour Court pertain to a claim for difference in wages and bear no relevance to the computation of gratuity payable to him.

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In support of his claim, the Petitioner placed reliance on the judgment of

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the Bombay High Court in The Transport Manager, Kolhapur Municipal

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Transport v. Pravin Bhabhutlal Shah , reported in 2005 (II) LLJ 104 (Bom), as well as the decision of this Court in R. Nagarajan v. The Management of State Express Transport Corporation (Tamil Nadu) Ltd. & Ors., in W.P.(MD) No. 17073 of 2018 dated 01.08.2018. In the latter case, this Court had directed that wages be computed in accordance with the terms of the settlement.

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It is pertinent to note that under Section 7(3) of the Payment of Gratuity Act, 1972, the obligation is cast upon the employer to determine the gratuity amount and disburse the same as soon as it becomes payable. In the event of any dispute, as contemplated under Section 7(4)(a), the employer is required to deposit the admitted amount with the Controlling Authority. In terms of Section 7(4)(b), the employee may then prefer an application before the Controlling Authority for determination of the gratuity payable. Section 7(4)(c) mandates the Controlling Authority to conduct an enquiry and determine the amount due to the employee. Any person aggrieved by such determination has a right of appeal before the Appellate Authority under Section 7(7) of the Act. Further, by virtue of Section 14 of the Act, any

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stipulation for lesser payment stands overridden, and more beneficial terms in favour of the employee are expressly protected.

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In the present case, the approach adopted by the 2^nd Respondent in declining to adjudicate the appeal and instead directing the Petitioner to await the outcome of the proceedings before the Labour Court is wholly unwarranted. The Payment of Gratuity Act, 1972, being a special legislation, not only confers a substantive right to gratuity but also establishes a self-contained mechanism comprising two tiers—the Controlling Authority and the Appellate Authority—

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for determination and enforcement of such right. It is also well settled that an eligible employee cannot invoke the jurisdiction of the Labour Court for determination of gratuity; the appropriate forum lies exclusively under the provisions of the Payment of Gratuity Act. This legal position has been authoritatively laid down by the Hon’ble Supreme Court in State of Punjab v. Labour Court, Jullundur & Ors. , reported in (1980) 1 SCC 4, wherein it was held as follows:—

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“It is apparent that the Payment of Gratuity Act enacts a complete code containing detailed provisions covering all the essential features of a scheme for payment of gratuity. It creates the right to payment of gratuity, indicates when the right will accrue, and lays down the principles for quantification of the gratuity. It provides further for recovery of the amount, and contains an especial

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provision that compound interest at nine per cent per annum will be payable on delayed payment. For the enforcement of its provisions, the Act provides for the appointment of a controlling authority, who is entrusted with the task of administering the Act. The fulfilment of the rights and obligations of the parties are made his responsibility, and he has been invested with an amplitude of power for the full discharge of that responsibility. Any error committed by him can be corrected in appeal by the appropriate Government or an appellate authority particularly constituted under the Act.

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Upon all these considerations, the conclusion is inescapable that Parliament intended that proceedings for payment of gratuity due under the Payment of Gratuity Act must be taken under that Act and not under any other. That being so, it must be held that the applications filed by the employee respondents under section 33C(2) of the Industrial Disputes Act did not lie, and the Labour Court had no jurisdiction to entertain and dispose of them. On that ground, this appeal must succeed.

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In the light of the foregoing discussion, the impugned order dated 12.03.2020 passed by the 2nd Respondent Appellate Authority in AGA No. 53 of 2019 is hereby set aside. The matter is remanded to the 2^nd Respondent for fresh consideration of the appeal preferred by the Petitioner, on its own merits and in accordance with law. Accordingly, the writ petition is allowed to the extent indicated above. The connected Writ Miscellaneous Petition stands dismissed as infructuous. No order as to costs.

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22.04.2025

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ay

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NCC : Yes / No Index : Yes / No Internet : Yes / No

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To

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1.The Management Tamil Nadu State Transport Corporation (Coimbatore), Erode Region, Regional Office, 45, Chennimalai Road, Erode – 638 001

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Appellate Authority under the Payment of Gratuity Act, 1972/Addl. Commissioner of Labour, 43, Balasundaram Road, ATT Colony, Gopalapuram, Coimbatore – 641 018.

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Controlling Authority under the Payment of Gratuity Act, 1972 Office of the Joint Commissioner of Labour, Yercaud Main Road, Gorimedu, Salem – 636 008.

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DR. A.D. MARIA CLETE, J

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ay

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