Tripura High Court
Sri Bhupati Debnath vs The State Of Tripura on 13 February, 2020
Equivalent citations: AIRONLINE 2020 TRI 27, 2020 LAB IC 1152
Author: Akil Kureshi
Bench: Akil Kureshi
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HIGH COURT OF TRIPURA
AGARTALA
WP(C) No.1054/2019
Sri Bhupati Debnath, S/O. Lt. Kshitish Debnath, R/O.-Shri Palli,
Badharghat, P.O.- Siddhi Ashram, P.S.-Amtali, Agartala, West
Tripura, PIN-799003.
----Petitioner(s)
Versus
1. The State of Tripura, To be represented by the Principal
Secretary, Department of Industries and Commerce, Government of
Tripura, New Secretariat Building, New Capital Complex, Kunjaban,
Agartala, West Tripura, PIN-799010.
2. Tripura Handloom and Handicrafts Development Corporation
Ltd., (A Govt. of Tripura Undertaking), To be represented by the
Managing Director, Tripura Handloom and Handicrafts Development
Corporation Ltd., M.B.B. Sarani, Dhaleswar, Agartala, West Tripura,
PIN-799007.
3. The Managing Director, Tripura Handloom and Handicrafts
Development Corporation Ltd., M.B.B. Sarani, Dhaleswar, Agartala,
West Tripura, PIN-799007.
-----Respondent(s)
For Petitioner(s) : Mr. P. Roy Barman, Advocate, Mr. Samarjit Bhattacharjee, Advocate, Mr. Kawsik Nath, Advocate.
For Respondent No.1 : Mr. Dipankar Sharma, Addl. G.A. For Respondents No.2 & 3 : Mr. Bimal Shome Bhowmik, Advocate.
HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI Date of hearing and judgment: 13th February, 2020.
Whether fit for reporting : YES.
JUDGMENT & ORDER(ORAL)
Heard learned counsel for the parties for final disposal of the petition.
2. Petitioner is a retired employee of respondent No.2, Tripura Handloom and Handicrafts Development Corporation Ltd., a Government of Tripura undertaking (hereinafter to be referred to as Page 2 of 10 the said corporation). He retired on superannuation w.e.f. 30.06.2018 as an Auditor after putting in more than 29 years of service. He has been paid gratuity of `9,80,423 on or around 04.12.2018. He has two grievances. Firstly, that the payment of gratuity is delayed for which interest should be awarded, further that such gratuity is paid by taking into consideration a pre-revised limit of `10,00,000 (rupees ten lakhs) for payment of gratuity without applying the fresh ceiling of `20,00,000 (rupees twenty lakhs) as per the Government of India notification dated, 29.03.2018. His second grievance is that his leave encashment of accumulated unused Earned Leave of 300 days is not paid though sanctioned.
3. The said corporation has taken three defences:
(i) Firstly, the computation of gratuity payable to the petitioner comes to `9,80,423 which has already been paid. The question of applying revised ceiling limit, therefore, would not arise;
(ii) Secondly, that in any case the revised limit is prescribed by the Government of India in its notification which is not adopted by the State Government. The corporation is governed by the State Government's prescription. Unless and until such revised limit is adopted by the State Government, it would not apply to the employees of the said corporation;
(iii) Lastly, that on account of severe financial constraints the leave encashment has not been paid immediately. A Page 3 of 10 sum of `1,17,200 has been paid on 27.12.2019. The remaining amount would be paid as soon as the funds are available.
4. The petitioner has not given the breakup of his computation of gratuity on the basis of which he contends that the amount of `9,80,423 does not represent the full entitlement of the petitioner. He would, therefore, file such calculation before the employer within a period of 2(two) weeks from today. The corporation shall verify the details provided by the petitioner and communicate to him whether the amount of `9,80,423 already paid represents the full gratuity entitlement of the petitioner. If there is any short payment so that the total payable gratuity (inclusive of what is already paid over to the petitioner) exceeds `10,00,000 (rupees ten lakhs), the question of applying revised limit would arise. In this context, therefore, it would be necessary to decide this issue in the present petition.
5. The statement of objects and reasons for enactment of the Payment of Gratuity Act, 1972 (the Act, for short) reads as under:
"STATEMENT OF OBJECTS AND REASONS:
There is at present no Central Act to regulate the payment of gratuity to industrial workers, except the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act. 1995. The Government of Kerala enacted legislation last year for payment of gratuity to workers employed in factories, plantations, shops and establishments. The West Bengal Governor Promulgated an Ordinance on the Page 4 of 10 3rd June, 1971 prescribing a similar scheme of gratuity. This Ordinance has since been replaced by the West Bengal Employees' Payment of Compulsory Gratuity Act, 1971, enacted by the President on 28th August, 1971. Gratuity is also being paid by some employers to their workers under Awards and Agreements.
Since the enactment of the Kerala and the West Bengal Acts, some other State Governments have also voiced their intention of enacting similar measures in their respective States. It has become necessary, therefore, to have a Central law on the subject so as to ensure a uniform pattern of payment of gratuity to the employees throughout the country. The enactment of a Central law would also avoid different treatment to the employees of establishments having branches in more than one State when, under the conditions of their service, the employees are liable to transfer from one State to another.
The proposal for Central legislation on gratuity was discussed in the Labour Ministers' Conference held at New Delhi on 24th and 25th August, 1971 and also in the Indian Labour Conference at its session held on the 22nd and 23rd October, 1971.
There was general agreement at the Labour Ministers' Conference and the Indian Labour
Conference that Central legislation on payment of gratuity might be undertaken as early as possible. It is accordingly proposed to undertake such legislation.
In enacting the President's Act for West Bengal in August, 1971, care has been taken to so design its provisions that they could serve as far as possible as norms for the Central law. The Bill has, therefore, been drafted on the lines of the West Bengal Page 5 of 10 Employees' Payment of Compulsory Gratuity Act, 1971 with some modifications which have been made in the light of the views expressed at the Indian Labour Conference relating to forfeiture of gratuity in cases of dismissal for gross misconduct.
The Bill provides for gratuity to employees drawing wages up to Rs. 270 per month in factories, plantations, shops, establishments and mines, in the event of superannuation, retirement, resignation and death or total disablement due to accident or disease. The quantum of gratuity payable will be 15 days' wages based on the rate of wages last drawn by the employees concerned for every completed year of service or part thereof in excess of six months subject to a maximum of 15 months' wages. The term "wages" will mean "basic wage plus dearness allowance".
It is proposed that the appropriate
Government for administering the Act in
relation to establishment belonging to or under the control of the Central Government or a railway company, or mine, a major port and oilfield or in relation to establishments having departments or branches in more than one State, will be the Central Government, and, in relation to other establishments, the State Government.
The Bill seeks to give effect to the above proposals."
With these objects in mind 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 the said Act was enacted.
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6. Clause (a) of Section 2 of the Act defines the term "appropriate Government" as under:
"2. (a) "appropriate Government" means,--
(i) in relation to an establishment--
(a) belonging to, or under the control of, the Central Government,
(b) having branches in more than one State,
(c) of a factory belonging to, or under the control of, the Central Government,
(d) of a major port, mine, oilfield or railway company, the Central Government,
(ii) in any other case, the State Government."
7. This distinction between the State or the Central Government being an appropriate Government in relation to different classes of establishments, manifests itself in various sections contained in the said Act. For example, under Section 3 the appropriate Government may, by notification, appoint an officer to be a Controlling Authority who shall be responsible for the administration of the Act. Different Authorities may be appointed for different areas. Under Section 4A the appropriate Government may notify date with effect from which every employer other than an establishment belonging to or under the control of the Central or the State Government would have to obtain an insurance for liability for payment of gratuity. Under sub-section (1) of Section 5 the appropriate Government may by notification exempt any establishment, factory, mine or oilfield etc. from the operation of the provisions of the Act. Under sub-section (2) of Section 5 Page 7 of 10 similarly the appropriate Government may notify exemption of any employee or class of employees from the operation of the provisions of the said Act.
8. However, when it comes to Section 4 of the said Act which pertains to payment of gratuity, this distinction of the appropriate Government being Central or the State Government, has no effect. Sub-section (1) of Section 4 provides that the gratuity shall be payable to an employee on termination of his employment after he has rendered continuous service for not less than five years, on his superannuation or retirement or resignation or death or disablement due to accident or disease. Sub-section (2) of Section 4 provides 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 15 (fifteen) days wages based on the rate of wages last drawn by the concerned employee. Sub-section (3) of Section 4 which is of importance reads as under:
"(3) The amount of gratuity payable to an employee shall not exceed such amount as may be notified by the Central Government from time to time."
9. As per this provision thus the amount of gratuity payable to an employee would not exceed such amount as may be notified by the Central Government from time to time. The group of words "such amount as may be notified by the Central Government from time to time" was substituted by Act 12 of 2018 for the group of Page 8 of 10 words "ten lakh rupees". This limit of ten lakhs of rupees was self in substitution of earlier limits of lesser amounts.
10. It can thus be seen that insofar as the payment of gratuity, its computation and the ceiling up to which such amount can be paid as referred to in Section 4 of the said Act, the term "appropriate Government" has no bearing. This distinction is also apparent from the statement of objects and reasons which provides that for the purpose of uniformity, the Central Act was envisaged. At the same time, appropriate Government is for the purpose of administering the Act. The ceiling limit for payment of gratuity is provided in sub-section (3) of Section 4. Previously, such ceilings were contained in the sub-section itself. Pursuant to amendment by virtue of Act 12 of 2018 the power to prescribe such ceiling has been vested in the Central Government to be exercised by issuing notification in this regard. It is in exercise of such delegated powers of legislation that the Central Government has issued a notification dated 29.03.2018 which reads as under:
"S.O. 1420 (E).--In exercise of the powers conferred by sub-section (3) of section 4 of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specifies that the amount of gratuity payable to an employee under the said Act shall not exceed twenty lakh rupees."
11. This revised ceiling thus would apply to all establishments irrespective of whether they are controlled or governed by the State or the Central Government as the appropriate Government. The stand of the respondents, therefore, Page 9 of 10 that unless and until such revised ceiling of payment of gratuity is adopted by the State Government, the employees of the said corporation cannot claim benefit of such revised limit cannot be accepted. Revised ceiling limit of `20,00,000 (rupees twenty lakhs) would be applicable to the petitioner.
12. The corporation cannot cite the reason of financial constraints indefinitely for paying post retiral benefits of its employees. The petitioner has put in more than 29 years of service. His service is not governed by the pension scheme. After his retirement, therefore, he would have only savings in the form of gratuity, provident fund accumulated in his account and leave encashment, if any, to fall back upon in his old age. Such amount must, therefore, be paid over to him as soon as possible.
13. Under the circumstances, petition is disposed of with following directions:
(i) As provided earlier, the petitioner shall apply to the respondent No.2 stating his calculation of payable gratuity. The respondent No.2 shall examine the petitioner's calculation and convey to him if any gratuity remains still payable;
(ii) While calculating such gratuity, revised limit of `20,00,000 (rupees twenty lakhs) shall be applicable;
(iii) If there is any shortfall in payment of gratuity, the same shall be paid within a period of 4(four) months from today with simple interest @ 7.5% per annum from one month after the date of superannuation till actual payments; Page 10 of 10
(iv) The remaining amount of leave encashment shall be released within a period of 4(four) months from today. The entire leave encashment payment shall carry simple interest @ 7.5% per annum from one month after the date of retirement till actual payments;
(v) The gratuity already paid shall also carry simple interest @ 7.5% per annum from one month after the date of retirement till actual payments.
14. Pending application(s), if any, also stands disposed of.
(AKIL KURESHI), CJ Pulak