Allahabad High Court
General Manager Kisan Sahakari Chini ... vs Appellate Authority Under Payment Of ... on 12 November, 2018
Equivalent citations: AIRONLINE 2018 ALL 4721
Author: Sunita Agarwal
Bench: Sunita Agarwal
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Reserved Case :- WRIT - C No. - 25888 of 2018 Petitioner :- General Manager Kisan Sahakari Chini Mills Ltd. Respondent :- Appellate Authority Under Payment Of Gratuity Act 1972/Deputy Labour Commissioner And 2 Others Counsel for Petitioner :- Ved Byas Mishra Counsel for Respondent :- C.S.C.,Shyam Narain Hon'ble Mrs. Sunita Agarwal,J.
Heard Sri Ved Byas Mishra learned counsel for the petitioner, Sri Gopal Narain holding brief of Sri Shyam Narain learned counsel for the respondent no. 3 and learned Standing Counsel appears for respondent nos. 1 and 2.
The present petition is directed against the orders dated 25.04.2016 and 01.06.2018 arising out of the proceedings under the Payment of Gratuity Act' 1972 (herein after referred as Act' 1972). Only submission made by the learned counsel for the petitioner to assail the orders impugned is that in view of the law laid down by the Apex Court in the case of Ghaziabad Zila Sahakari Bank Limited Vs Additional Labour Commissioner and others reported in 2007 (11) SCC 756, the Controlling Authority under the Payment of Gratuity Act had no jurisdiction to decide the dispute relating to non-payment of gratuity to the employees of the Co-operative Sugar Mills namely Kisan Sahakari Chini Mills, Ltd, Nanauta, District-Saharanpur. It is contended that for any dispute raised by the workman of the Co-operative Sugar Mills, after the enforcement of U.P. Co-operative Societies Act' 1965 (herein after referred as Act' 1965), the forum as provided therein would have to be approached. Under section 70 of the Act' 1965, any dispute relating to claim for the amount due, if made, shall be referred to the Registrar for action in accordance with the provisions of the Act and the Rules made thereunder. Reference has also been made to the Uttar Pradesh Co-operative Sugar Mills and Distilleries Employees Service Regulation' 2015 (hereinafter referred as the "Regulation' 2015") framed in exercise of the powers under sub section (2) of Section 122 of the Act' 1965 to state that the matters regarding recruitment, emoluments, terms and conditions of services including disciplinary control of the employees of U.P. Co-operative Sugar Factories and Distilleries Employees are covered by the said Regulation.
Regulation 29 of the Regulation' 2015 provides that the Payment of Gratuity to the employees shall be made according to the Gratuity (Production) Act' 1972 as amended from time to time. And where gratuity trust is established, the rules of registered gratuity trust shall apply.
Reference has also been made to the judgments of this court in Writ-C No.42285 of 1998 (The Kisan Sahkari Chini Mills, Satha Aligarh Vs. State of U.P. & others), Writ-C No.10601 of 1998 (The Kisan Cooperative Sugar Factory Ltd. Vs. Presiding Officer, Labour Court, & others) and Writ-C No.44864 of 2005 (M/s Pradhan Prabandhak, Kisan Sahkari Chini Mill Vs. State of U.P. & others) to submit that in all these matters following the law laid down by the Apex Court in the case of Ghaziabad Zila Sahakari Bank (supra), it was held that the dispute could not have been referred to the Labour Court/Industrial Tribunal for adjudication. The award of the Labour Court/Industrial Tribunal was, consequently, set aside.
In a feeble submission, on the merits of the order passed passed by the Payment of Gratuity Authority, it is contended that the workman being a daily wage employee was not entitled for gratuity.
Learned counsel for the respondents, on the other hand, summits that the issue being raised with regard to the jurisdiction of Payment of Gratuity Authority is not open for contest, in as much as, it was not raised before the said authority at the first opportunity. Even otherwise the law laid down by the Apex Court in Ghaziabad Zila Sahakari Bank (supra) would have no application.
On merits, it is submitted that the Payment of Gratuity Authority had recorded a categorical finding that the workmen had worked in the establishment from the year 1984 till 6.9.2011. Barring three years, in each year of the aforesaid period, he had worked for more than 240 days and as such, he was covered by the "definition" of "employee" under the Payment of Gratuity Act and was entitled for gratuity for 15 days in one calendar year.
There is no dispute about the computation made by the Payment of Gratuity Authority, in the present petition.
Heard learned counsel for the parties and perused the record.
The short question that arises for consideration before this Court is as to whether the employees of the Co-operative Sugar Mills would be covered by the Payment of Gratuity Act or whether the Controlling Authority under the Payment of Gratuity Act has jurisdiction to enter into the controversy.
To answer this question, the law laid down by the Apex Court in Ghaziabad Zila Sahakari Bank (supra) is required to be examined first. In the said case, the dispute was with regard to an order passed by the Assistant Labour Commissioner Ghaziabad, U.P. under Section 6H(1) of the U.P. Industrial Disputes Act' 1947. The appellant challenged the said order on the ground that the Assistant Labour Commissioner had no jurisdiction to pass such an order, in as much as, the UP Industrial Disputes Act had no application. The U.P. Co-operative Societies' Act' 1965 being a special enactment will prevail over the U.P. Industrial Disputes Act' 1947. The U.P Co-operative Societies Employees Service Regulation' 1975 framed by the U.P Co-operative Institutional Service Board, which has been approved by the Governor and published in the Official gazette under section 122 of the Act' 1965, provides a full fledged remedy and complete mechanism to the employees of the Co-operative Societies to agitate their grievances.
In view of the said remedy, the general Act namely the U.P. Industrial Disputes Act as a whole has no application.
This issue has been answered by the Apex Court in paragraph Nos. 61, 63, 64 and 65 of Ghaziabad Zila Sahakari Bank (supra) as under:-
"61. The general legal principle in interpretation of statutes is that 'the general Act should lead to the special Act'. Upon this general principle of law, the intention of the U.P legislature is clear, that the special enactment UP Co-operative Societies Act, 1965 alone should apply in the matter of employment of Co-operative Societies to the exclusion of all other Labour Laws. It is a complete code in itself as regards employment in co-operative societies and its machinery and provisions. The general Act the UPID Act, 1947 as a whole has and can have no applicability and stands excluded after the enforcement of the UPCS Act. This is also clear from necessary implication that the legislature could not have intended 'head-on-conflict and collision' between authorities under different Acts. In this regard reference can be made to decisions of this court in the case of The Co-operative Central Bank Ltd. & Ors. v. The Additional Industrial Tribunal, Andhra Pradesh & Ors, (1969) 2 SCC 43 where this court observed that:
Applying these tests, we have no doubt at all that the dispute covered by the first issue referred to the Industrial Tribunal in the present cases could not possibly be referred for decision to the Registrar under Section 61 of the Act. The dispute related to alteration of a number of conditions of service of the workmen which relief could only be granted by an Industrial Tribunal dealing with an industrial dispute. The Registrar, it is clear from the provisions of the Act, could not possibly have granted the reliefs claimed under this issue because of the limitations placed on his powers in the Act itself. It is true that Section 61 by itself does not contain any clear indication that the Registrar cannot entertain a dispute relating to alteration of conditions of service of the employees of a registered society; but the meaning given to the expression "touching the business of the society", in our opinion, makes it very doubtful whether a dispute in respect of alteration of conditions of service can be held to be covered by this expression. Since the word "business" is equated with the actual trading or commercial or other similar business activity of the society, and since it has been held that it would be difficult to subscribe to the proposition that whatever the society does or is necessarily required to do for the purpose of carrying out its objects, such as laying down the conditions of service of its employees, can be said to be a part of its business, it would appear that a dispute relating to conditions of service of the workmen employed by the society cannot be held to be a dispute touching the business of the society. Further, the position is clarified by the provisions of Sub-section (4) of Section 62 of the Act which limit the power to be exercised by the Registrar, when dealing with a dispute referred to him under Section 61, by a mandate that he shall decide the dispute in accordance with the provisions of the Act and the Rules and bye-laws. On the face of it, the provisions of the Act, the rules and the bye-laws could not possibly permit the Registrar to change conditions of service of the workmen employed by the society. For the purpose of bringing facts to our notice in the present appeals, the Rules framed by the Andhra Pradesh Government under the Act, and the bye-laws of one of the appellant Banks have been placed on the Paper-books of the appeals before us. It appears from them that the conditions of service of the employees of the Bank have all been laid down by framing special bye-laws. Most of the conditions of service, which the workmen want to be altered to their benefit, have thus been laid down by the bye-laws, so that any alteration in those conditions of service will necessarily require a change in the bye-laws. Such a change could not possibly be directed by the Registrar when, under Section 62(4) of the Act, he is specifically required to decide the dispute referred to him in accordance with the provisions of the bye-laws. It may also be noticed that a dispute referred to the Registrar under Section 61 of the Act can even be transferred for disposal to a person who may have been invested by the Government with powers in that behalf, or may be referred for disposal to an arbitrator by the Registrar. Such person or arbitrator, when deciding the dispute, will also be governed by the mandate in Section 62(4) of the Act, so that he will also be bound to reject the claim of the workmen which is nothing else than a request for alteration of conditions of service contained in the bye-laws. It is thus clear that, in respect of the dispute relating to alteration of various conditions of service, the Registrar or other person dealing with it under Section 62 of the Act is not competent to grant the relief claimed by the workmen at all. On the principle laid down by this Court in the case of the Deccan Merchants Co-operative Bank Ltd., therefore, it must be held that this dispute is not a dispute covered by the provisions of Section 61 of the Act. Such a dispute is not contemplated to be dealt with under Section 62 of the Act and must, therefore, be held to be outside the scope of Section 61."
63. Also if we refer to the general principles of Statutory Interpretation as discussed by G.P.Singh, in his treatise on 'Principles of Statutory Interpretation', we can observe that, a prior general Act may be affected by a subsequent particular or special Act if the subject-matter of the particular Act prior to its enforcement was being governed by the general provisions of the earlier Act. In such a case the operation of the particular Act may have the effect of partially repealing the general Act, or curtailing its operation, or adding conditions to its operation for the particular cases. The distinction may be important at times for determining the applicability of those provisions of the General Clauses Act, 1897, (Interpretation Act, 1889 of U.K. now Interpretation Act, 1978) which apply only in case of repeals.
64. A general Act's operation may be curtailed by a later Special Act even if the general Act will be more readily inferred when the later Special Act also contains an overriding non-obstante provision. Section 446(1) of the Companies Act 1956 (Act 1 of 1956) provides that when the winding up order is passed or the official liquidator is appointed as a provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of winding up order shall be proceeded with against the company except by leave of the Court. Under Section 446(2), the company Court, notwithstanding anything contained in any other law for the time being in force is given jurisdiction to entertain any suit, proceeding or claim by or against the company and decide any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in the course of the winding up. The Life Insurance Corporation Act, 1956 (Act 31 of 1956) constituted a Tribunal and section 15 of the Act enabled the Life Insurance Corporation to file a case before the tribunal for recovery of various amounts from the erstwhile Life Insurance Companies in certain respects. Section 41 of the LIC Act conferred exclusive jurisdiction on the tribunal in these matters. On examination of these Acts, it was held that the provisions conferring exclusive jurisdiction on the tribunal being provisions of the Special Act i.e. the LIC Act prevailed over the aforesaid provisions of the general Act, viz., the Companies Act which is an Act relating to Companies in general and, therefore, the tribunal had jurisdiction to entertain and proceed with a claim of the Life Insurance Corporation against a former insurer which had been ordered to be wound up by the Company Court. This case was followed in giving to the provisions of the Recovery of Debts due to Banks and Financial Institutions Act 1993 (RDB Act) overriding effect over the provisions of the Companies Act, 1956. The RDB Act constitutes a tribunal and by sections 17 and 18 confers upon the tribunal exclusive jurisdiction to entertain and decide applications from the banks and financial institutions for recovery of debts (defined to mean any liability which is claimed as due). The Act also lays down the procedure for recovery of the debt as per the certificate issued by the tribunal. The provisions of the RDB Act, which is a special Act, were held to prevail over sections 442, 446, 537 and other sections of the Companies Act which is a general Act, more so because Section 34 of the RDB Act gives over-riding effect to that Act by providing that the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.
65. We are therefore of the view that the Asst. Labour Commissioner (ALC)'s jurisdiction was wrongly invoked and his order dated 15.03.2003 under section 6H, U.P. Industrial Disputes Act, 1947 is without jurisdiction and hence null and void and it can be observed that, in view of the said general legal principle, it is immaterial whether or not the government has enforced section135 (UPCS Act) because, in any case the said provision (S.135) had been included in the Act only by way of clarification and abundant caution.
The legal position regarding applicability of U.P. Industrial Disputes Act has been settled by the Apex Court on the general principle of interpretation of statutes that "the General Act should lead to the special Act". It was held that the U.P Co-operative Societies Act being a complete code in itself as regards employment in cooperative societies and its machinery and provisions, the Assistant Labour Commissioner had wrongly invoked the jurisdiction under Section 6-H (1) of the UP Industrial Disputes Act. It was held that the exclusion of UP Industrial Disputes Act and the Industrial Disputes Act though has been specifically contemplated under section 135 of the Co-operative Societies Act but the fact that the said provision has not been enforced by the government would be of no implication as the said provisions (section 135) has been included in the Act' 1965 only by way of clarification and abundant caution.
The dispute in the instant case relates to the applicability of the Payment of Gratuity Act' 1972 which cannot be said to be a general enactment. A perusal of the object and reason of the said enactment indicates that it was enacted to bring a central legislation to regulate the payment of Gratuity to the industrial workers. The Act 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 or incidental thereto.
1. It extends to the whole of India.
2. It applies to every factory, mine, oilfield, plantation, port and railway company; 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.
The only provision which excludes the applicability of the Act to the employees of any establishment is in the definition of word "employee" in section 2 (e) which excludes the employees of the Central Government and State Governments who are governed by any other act or by any rules providing for Payment of Gratuity.
Section 5 of the Act' 1972 confer powers on the appropriate government to exempt an 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.
Section 14 of the Act' 1972 gives overriding effect to the Payment of Gratuity Act for any inconsistency contained in any other enactment or in any instrument or contract.
The Apex Court in the case of Municipal Corporation of Delhi Vs Dharam Prakash Sharma & another reported in 1998 (7) SCC 221 recognized the said import of the Payment of Gratuity Act to say that it is a special provision for payment of gratuity and unless there is any provision which exclude its applicability to an employee, it is not possible to hold that the said employee would not be entitled to the gratuity under the Payment of Gratuity Act.
Even in the light of the legal position as clarified by the Apex Court in Ghaziabad Sahkari Bank (supra), it is not possible for this Court to hold that the Controlling Authority under the Payment of Gratuity Act had no jurisdiction.
In other words, in the light of the principle of interpretation of statute that the Special Act would prevail over General Act, as relied therein, the Payment of Gratuity being the special enactment would prevail over the general provisions relating to Payment of Gratuity provided under clause 29 of the Regulation' 2015 framed under Section 122 (2) of the Act' 1965. The overriding effect given to the Payment of Gratuity Act would further strengthen the case of the respondent that he is entitled for gratuity as payable under the Payment of Gratuity Act' 1972.
Now the only question remains as to the merits of the claims of the respondent No.3 for gratuity being a daily wage employee. Section 4(1) of the Act' 1972 provides that the gratuity shall be payable to an employee on the termination of his employment or on his superannuation/retirement, resignation/death or disablement due to accident or disease provided, he has rendered "continuous service" for not less than five years. However, the requirement of 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. The requirement, therefore, is to render continuous service of not less than five years for putting a claim of gratuity under Section 4 of the Act' 1972. Section 2-A provides for the meaning of "continuous service" which has to be computed within the meaning of the Payment of Gratuity Act to accrue benefit to an employee. Sub-Section (2) of section 2-A provides that an employee who may not be in "continuous service" within the meaning of clause (1) of Section 2-A but had actually worked for 240 days of service during the period of 12 calendar months preceding the date with reference to which calculation is to be made, shall be deemed to be in "continuous service" under the employer.
In the instant case, the Controlling Authority under the Payment of Gratuity Act' 1972 has recorded in the order impugned that the employee had worked for 240 days or more than that in several calendar years during the period of employment from 1984 till 06.09.2011. Mere fact that he was termed as a daily wage employee or temporary employee would, therefore, be of no relevance.
The said findings returned by the Payment of Gratuity Authority is perfectly justified in view of the provisions of Section 2-A (2) read with Section 4(1) of the Payment of Gratuity Act.
The judgments of this Court as noted above relied by learned counsel for the petitioner are, therefore, distinguishable in the facts and circumstances of the present case.
For all the above discussions, no infirmity is found in the order impugned. The writ petition is, accordingly, dismissed being devoid of merits.
Order Date:-12.11.2018 Himanshu