Allahabad High Court
Distt. Basic Education Officer vs Niyantrak Pradhikari Anutoshik ... on 24 September, 2019
Equivalent citations: AIRONLINE 2019 ALL 2013, (2019) 12 ADJ 324 (ALL), (2020) 164 FACLR 692, (2020) 1 ESC 38
HIGH COURT OF JUDICATURE AT ALLAHABAD Court No. - 18 Reserved A.F.R. Case :- WRIT - C No. - 62286 of 2009 Petitioner :- District Basic Education Officer Respondent :- Niyantrak Pradhikari Anutoshik Bhugtan Adhiniyam 1972 And Anr Counsel for Petitioner :- Vimal Chandra Mishra, Nand Kishore Singh Counsel for Respondent :- C.S.C., A.K. Trivedi, Fasiha Fatma, Ambika Prasad Tewari, M.S. Khan, Mohammad Najam Siddiqui Connected with Case :- WRIT - C No. - 9831 of 2019 Petitioner :- Mohammad Ahmad Respondent :- Prescribed Authority Under The Payment Of Gratuity Act 1972 And Another Counsel for Petitioner :- Fasiha Fatma, Ambika Prasad Tewari Counsel for Respondent :- C.S.C.,Nand Kishore Singh Hon'ble J.J. Munir,J.
1. Civil Misc. Writ Petition No.62286 of 2009 has been brought by the District Education Officer, Hamirpur against an order of the Controlling Authority, Payment of Gratuity Act, 1972-cum-Assistant Labour Commissioner, U.P., Kanpur Region, Kanpur, dated 26.09.2009 passed in P.G. Case no.74 of 2007. By the said order, the Controlling Authority, Payment of Gratuity Act, 1972 (for short, the Authority) has ordered the petitioner to pay the second respondent-employee gratuity in the sum of Rs.1,48,050/- in accordance with the provisions of the Payment of Gratuity Act, 1972 (for short the Act), instead of Section 9(1) of the U.P. Basic Education Act, 1972 (for the short, the Act of 1972) and Service Rules framed thereunder, governing entitlement to post retiral benefits for the second respondent-employee, a Head Clerk employed with the office of the District Basic Education Officer, Nagar Kshetra Maudaha, District Hamirpur.
2. Connected Civil Misc. Writ Petition No.9831 of 2019 has been filed by the employee, Mohammad Ahmad, who is the second respondent in Civil Misc. Writ Petition No.62286 of 2009, praying that a writ of mandamus be issued commanding the Authority to issue a recovery certificate against the District Basic Education Officer, Hamirpur, who is the second respondent in this petition and the petitioner in Civil Misc. Writ Petition No.62286 of 2009, in compliance of the order dated 26.09.2009 passed in P.G. Case no.74 of 2007, determining the employee's entitlement to gratuity under the Act as detailed hereinabove.
3. Since both the writ petitions relate to validity of the order dated 26.09.2009 passed by the Authority under the Act, one assailing its validity and the other seeking its enforcement, the two petitions have been connected and heard together, with Writ - C No.62286 of 2009 being treated as the leading petition.
4. Heard Sri Kunal Shah holding brief of Sri Nand Kishore Singh, learned counsel for the petitioner-District Basic Education Officer, Hamirpur and Ms. Fasiha Fatma, learned counsel appearing on behalf of respondent no.2-employee in Writ - C No.62286 of 2009; and, Sri Ambika Prasad Tewari, learned counsel appearing for the petitioner-employee and Sri Kunal Shah holding brief of Sri Nand Kishore Singh, learned counsel appearing on behalf of respondent no.2-District Basic Education Officer, Hamirpur in Writ - C No.9831 of 2019.
5. Parties have exchanged affidavits in the leading case and by consent of learned counsel appearing for both sides, the two petitions have proceeded to hearing.
6. The facts giving rise to the present petition are set out bearing reference to the leading case. It is the case of the petitioner, District Basic Education Officer that the respondent-employee was initially appointed on 01.11.1965 as Jalkal Store Keeper with the Nagar Palika, Maudaha, District Hamirpur. He was promoted on 21.12.1970 as Head Clerk in the said Nagar Palika, and continued as such until 31st July, 1972. Upon constitution of the Board of Basic Education on 01.08.1972, the second respondent-employee was absorbed in the services of the Board of Basic Education and appointed as In-charge Officer, Shiksha, Nagar Kshetra, Maudaha, Hamirpur working under the immediate control of the District Basic Education Officer, Hamirpur. Admittedly, the date of birth of the second respondent-employee entered in his service book is 10.08.1940. He, therefore, attained the age of superannuation upon turning 60, and retired from service of the Board of Basic Education on 31.08.2000. According to the petitioner, on 06.09.2001, the Regional Assistant Joint Director of Education (Basic), Jhansi, described as the Competent Authority in the matter, passed an order sanctioning pension to the second respondent-employee. The said pension payment order has been passed in accordance with the applicable Government Orders and is addressed to the District Basic Education Officer, Hamirpur. It indicates the date of commencement of entitlement to pension as 01.09.2000. It is the petitioner's further case that the second respondent-employee is in receipt of regular pension since 01.09.2000. It is, however, specifically urged that upon retirement an employee of the petitioner, the Board of Basic Education, that is the second respondent, is not entitled to payment of gratuity under the Act, or Rules framed thereunder. The second respondent-employee asserted his claim to payment of gratuity and also leave encashment. According to the petitioner, earlier there was provision for encashment of earned leave, but that was nullified by a certain Government Order No.3049/15-5-91-370/82 dated May, 1992.
7. Nevertheless, the second respondent-employee filed Civil Misc. Writ Petition no.38566 of 2003 seeking to enforce his claim regarding leave encashment and gratuity. This petition was disposed of on 01.09.2003 directing a representation to be made to some Authority of the Board of Basic Education described as respondent no.3 in the order of this Court last mentioned, requiring the said Authority to decide the second respondent's representation, if made along with a certified copy of the order of this Court, within three months of its presentation, in case the Basic Shikha Adhikari had power to decide the question about the second respondent's entitlement to these post retiral benefits.
8. It is claimed by the petitioner that the order of this Court dated 01.09.2003 last mentioned was never served upon the District Basic Education Officer. Instead, the District Basic Education Officer was proceeded in contempt before this Court, and shorn of unnecessary detail about those proceedings, the District Basic Education Officer, Hamirpur, passed an order dated 21.06.2004, holding that gratuity as well as leave encashment is not payable to the second respondent-employee.
9. Disillusioned with the decision of the District Basic Education Officer, dated 21.06.2004, the second respondent-employee moved the Authority under the Act vide P.G. Case no.74 of 2007. The Authority issued notice to the petitioner on 16.07.2008 returnable on 13.08.2008 requiring the petitioner to show cause by submitting his reply by the said date, and for the determination of the application. The petitioner in compliance with the notice issued by the Authority, authorized the Finance and Accounts Officer in the office of the District Basic Education Officer, Hamirpur to file a reply and contest the matter on behalf of the petitioner. The Finance and Accounts Officer submitted a reply on 13.08.2008. In the said reply, it was asserted in substance that the second respondent-employee was not a workman. He was a regular employee in the cadre of Class-III with the Board of Basic Education. His service conditions were regulated by the Act of 1972 and departmental Service Regulations, governing post retiral benefits. It was asserted that in accordance with the Act of 1972 and the Service Regulations applicable to the second respondent, no gratuity was payable to him. Another plea about territorial jurisdiction was raised through a separate reply, where it was said that the Authority had held earlier that territorial jurisdiction relating to the District Hamirpur vested with the Authority at Jhansi, and not with the Authority at Kanpur, exercising jurisdiction under the Act.
10. It may be mentioned here that the plea as to territorial jurisdiction was not at all urged before this Court at the hearing of these writ petitions. The challenge was confined to the issue that the Act was not at all applicable to the petitioner in the matter of entitlement of their employees to receive gratuity. It was, therefore, argued that the Authority went beyond jurisdiction in holding the Act to be applicable to the petitioner's establishment, and calculating gratuity payable to the second respondent in accordance with the Act. It was urged that the second respondent's entitlement is governed by the Act of 1972, whereunder a Class-III employee of the Board of Basic Education was entitled to receive pension, but not gratuity. In substance, the contention of the petitioner is that the Act is not at all applicable to the petitioner's establishment, and would not enure to the benefit of the second respondent-employee, entitling him to gratuity as ordered by the Authority.
11. The applicability of the Act to an employer is governed by Section 1(3) thereof, which reads:
"1.Short title, extent, application and commencement. -- (1) x x x x (2) x x x x (3) It shall apply to--
(a) every factory, mine, oilfield, plantation, port and railway company;
(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;
(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.
[(3-A) x x x x (4) x x x x"
(Emphasis by Court)
12. The other important provision that governs the question, whether the Act would apply to the employer, vis-a-vis, the claimant-employee are the provisions of Section 2(e) of the Act, that define an employee. The provisions of Section 2(e) of the Act are extracted infra:
"2. Definitions.--In this Act unless the context otherwise requires,--
(a) x x x x
(b) x x x x
(c) x x x x
(d) x x x x
(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;
(f) x x x x
(g) x x x x
(h) x x x x
(i) x x x x
(j) x x x x
(k) x x x x
(l) x x x x
(m) x x x x
(n) x x x x
(o) x x x x
(p) x x x x
(q) x x x x
(r) x x x x
(s) x x x x"
(Emphasis by Court)
13. It is the submission of Mr. Kunal Shah, learned counsel appearing on behalf of the petitioner, that the Act does not apply to the petitioner, who is an officer of the Board of Basic Education, and represents that establishment, which is incorporated under the Act of 1972. He submits that the Board of Basic Education performs sovereign functions as distinguished from commercial functions. It is urged by Mr. Shah that the words of Section 3(1)(a) of the Act are express, which in no way could be held referable to an employer, like the petitioner. Again, he submits that Clause (c) of sub-Section (3) of Section 1 of the Act also make it explicit that every establishment, or class of establishments not covered by Clause (a) or (b) of sub-Section (3) of Section 1, may be brought under the regime of the Act, provided they employ ten or more employees, or in the past, have employed that number in the preceding twelve months, but this extended application of the Act, would govern only such establishments which the Central Government may specify by notification in this behalf, to borrow the phraseology of the statute. Mr. Shah has urged that Clause (b) of sub-Section (3) of Section 1, last mentioned comes closest to rendering the petitioner vulnerable, but the said Clause also does not take a sovereign establishment like the petitioner, in its fold.
14. It is further submitted by the learned counsel for the petitioner that the words, "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", are of considerable significance. It is Mr. Shah's contention that the words, "shop or establishment", carry a definitive connotation, which is not decisively determined by the word 'or', that separates them. In his submission, it is not decisive to determine the connotation of 'establishment' whether the word 'or' really means an 'and'; not whether that 'or' is conjunctive or disjunctive, but the real legislative intent is to be discerned on the basis of an altogether different principle. Mr. Shah submits that the word 'establishment' occurring after the word 'shop' bears reference to a shop like establishment, a commercial establishment as distinguished from an establishment performing a sovereign function. According to him, this inference is based on a well established cannon of statutory construction. It is the principle of noscitur a sociis. It is urged by the learned counsel that the word 'establishment' in the context where it has been placed, and the fact that it occurs after the word 'shop', which is a specific word, would confine the otherwise wide and generic import of the word 'establishment', in the sense that it would have to be understood as an establishment, that has the likeness of a shop. According to Mr. Shah, there is nothing said in the statute, that may suggest that the word 'establishment' is to be understood in the widest import of the word so as to take in its fold all the myriad kinds of establishments, whatever be the essential nature of their activity. He elaborates on that contention to submit that in the absence of a definitive indicator to be found in Clause (b) of sub-Section (3) of Section 1 of the Act, from which the meaning of the word 'establishment' there, may be inferred to be its use in the most generic sense of it, one has to fall back upon the rule of noscitur a sociis. It is his submission that the principle only means that a word in a statute is to be understood by the company it keeps. The submission further proceeds that the word 'establishment' if not understood by application of the principle last mentioned, would take within its fold, the most sovereign of establishments, including the Government. This, in the submission of Mr. Shah, cannot be the legislative intent. He, therefore, moots a restricted meaning to be placed on the word 'establishment', that is conditioned by its immediate predecessor, separated by just a conjunction, that is the word 'shop'. Learned counsel for the petitioner in support of his contention, that the word 'establishment' must be read conditioned by the word 'shop', by applying the principle of noscitur a sociis, has relied upon the decision of the Supreme Court in Rohit Pulp and Paper Mills Ltd. vs. CCE1. In the said decision, explaining the principle of noscitur a sociis, it was said by their Lordships thus:
"12. The principle of statutory interpretation by which a generic word receives a limited interpretation by reason of its context is well established. In the context with which we are concerned, we can legitimately draw upon the "noscitur a sociis" principle. This expression simply means that "the meaning of a word is to be judged by the company it keeps." Gajendragadkar, J. explained the scope of the rule in State of Bombay v. Hosptial Mazdoor Sabha [(1960) 2 SCR 866 : AIR 1960 SC 610 : (1960) 1 LLJ 251] in the following words: (SCR pp. 873-74) "This rule, according to Maxwell, means that, when two or more words which are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense. They take as it were their colour from each other, that is, the more general is restricted to a sense analogous to a less general. The same rule is thus interpreted in "Words and Phrases" (Vol. XIV, p. 207): "Associated words take their meaning from one another under the doctrine of noscitur a sociis, the philosophy of which is that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it; such doctrine is broader than the maxim ejusdem generis". In fact the latter maxim "is only an illustration or specific application of the broader maxim noscitur a sociis". The argument is that certain essential features of attributes are invariably associated with the words "business and trade" as understood in the popular and conventional sense, and it is the colour of these attributes which is taken by the other words used in the definition though their normal import may be much wider. We are not impressed by this argument. It must be borne in mind that noscitur a sociis is merely a rule of construction and it cannot prevail in cases where it is clear that the wider words have been deliberately used in order to make the scope of the defined word correspondingly wider. It is only where the intention of the legislature in associating wider words with words of narrower significance is doubtful, or otherwise not clear that the present rule of construction can be usefully applied. It can also be applied where the meaning of the words of wider import is doubtful; but, where the object of the legislature in using wider words is clear and free of ambiguity, the rule of construction in question cannot be pressed into service."
This principle has been applied in a number of contexts in judicial decisions where the court is clear in its mind that the larger meaning of the word in question could not have been intended in the context in which it has been used. The cases are too numerous to need discussion here. It should be sufficient to refer to one of them by way of illustration. In Rainbow Steels Ltd. v. CST [(1981) 2 SCC 141 : 1981 SCC (Tax) 90] this Court had to understand the meaning of the word ''old' in the context of an entry in a taxing traffic which read thus:
"Old, discarded, unserviceable or obsolete machinery, stores or vehicles including waste products......"
Though the tariff item started with the use of the wide word ''old', the court came to the conclusion that "in order to fall within the expression ''old machinery' occurring in the entry, the machinery must be old machinery in the sense that it has become non-functional or non-usable". In other words, not the mere age of the machinery, which would be relevant in the wider sense, but the condition of the machinery analogous to that indicated by the words following it, was considered relevant for the purposes of the statute.
13. The maxim of noscitur a sociis has been described by Diplock, C.J. as a "treacherous one unless one knows the societas to which the socii belong" (vide Letang v. Cooper [(1965) 1 QB 232 : (1964) 2 All ER 929] ). The learned Solicitor General also warns that one should not be carried away by labels and Latin maxims when the words to be interpreted is clear and has a wide meaning. We entirely agree that these maxims and precedents are not to be mechanically applied; they are of assistance only insofar as they furnish guidance by compendiously summing up principles based on rules of common sense and logic. As explained in CCE v. Parle Exports (P) Ltd. [(1989) 1 SCC 345, 357 : 1989 SCC (Tax) 84] and Tata Oil Mills Co. Ltd. v. CCE [(1989) 4 SCC 541, 545-46 : 1990 SCC (Tax) 22] in interpreting the scope of any notification, the court has first to keep in mind the object and purpose of the notification. All parts of it should be read harmoniously in aid of, and not in derogation of, that purpose. In this case, the aim and object of the notification is to grant a concession to small scale factories which manufacture paper with unconventional raw materials. The question naturally arises: Could there have been any particular object intended to be achieved by introducing the exceptions set out in the proviso? Instead of proceeding on the premise that it is not necessary to look for any reason in a taxing statute, it is necessary to have a closer look at the wording of the proviso. If the proviso had referred only to ''coated paper', no special object or purpose would have been discernible and perhaps there would have been no justification to look beyond it and enter into a speculation as to why the notification should have thought of exempting only ''coated paper' manufactured by these factories from the purview of the exemption. But the notification excepts not one but a group of items. If the items mentioned in the group were totally dissimilar and it were impossible to see any common thread running through them, again, it may be permissible to give the exceptions their widest latitude. But when four of them -- undoubtedly, at least three of them -- can be brought under an intelligible classification and it is also conceivable that the government might well have thought that these small scale factories should not be eligible for the concession contemplated by the notification where they manufacture paper catering to industrial purposes, there is a purpose in the limitation prescribed and there is no reason why the rationally logical restriction should not be placed on the proviso based on this classification. In our view, the only reasonable way of interpreting the proviso is by understanding the words ''coated paper' in a narrower sense consistent with the other expressions used therein."
15. Learned counsel for the petitioner has further submitted that the Board of Basic Education, which is a statutory body established under the Act of 1972, falls generally within the class of an establishment that would be considered by the law to be a statutory body. He has drawn the attention of the Court to the fact that the petitioner's are not an establishment, or part of a class of establishments employing ten or more employees, which the Central Government has, by its notification specified in this regard under Section 1 (3) (c) of the Act. Mr. Kunal Shah, has drawn the attention of the Court to some eight notifications issued by the Central Government in exercise of their powers under Clause (c) of sub-section(3) of Section 1 of the Act, that refer to various establishments, specifically by name or by reference to there class, to which the application of the Act has been extended. None of those notifications bear reference, in the submission of learned counsel for the petitioner, to a statutory body as a class, or specifically in some manner, indicating that the application of the Act is extended to the petitioner.
16. This submission of learned counsel for the petitioner about the petitioner being covered under Clause (c) of sub-section (3) of Section1, can be straightaway disposed of without much to be examined about the issue, inasmuch as none of the notifications issued under the Act, even remotely apply to a statutory body, like the Board of Basic Education.
17. Ms. Fasiha Fatma, and Mr. Ambika Prasad Tiwari, learned counsel appearing for respondent No.2-employee have also not brought to the notice of this Court any notification under Section 1(3)(c) of the Act, extending its application to the petitioner specifically or by reference to a class, which may include the petitioner. Both learned counsel representing the employee do not dispute this submission of learned counsel for the petitioner. This Court is, therefore, of opinion that the Act has not been extended in its application to the Board of Basic Education, by a notification of the Central Government issued under Section 1(3)(c) of the Act. This clearly confines the question about applicability of the Act to the petitioner-Board, to be determined with reference to Clause (b) of sub-section (3) of Section 1 of the Act, alone.
18. In this regard, learned counsel for the petitioner has placed reliance upon the decision of a Division Bench of this Court in High Court Bar Association, Allahabad Vs. Deputy Labour Commissioner, Allahabad and others2, where speaking for the Division Bench, it was held by M.Katju, J. (as His Lordship then was of the High Court):
"6. As regard clause (b) of Section 1(3) this too will not apply because this relates to a shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in the State. In U.P., this law is the U.P. Dookan Aur Vanijya Adhishthan Adhiniyam, 1962. The High Court Bar Association, Allahabad is not a shop or establishment which comes within the purview of the aforesaid U.P. Act, 1962."
19. Learned counsel for the petitioner has depended upon this view of their Lordships of the Division Bench with much emphasis to submit that the earlier part of his contention, applying the principle of noscitur a sociis, accords with the aforesaid view of their Lordships where they have interpreted the word establishment in the same genre as the word "shop", though without referring to the principle last mentioned. Learned counsel for the petitioner has also placed reliance upon a Division Bench decision of this Court in Ms. Usha Hamilton and another Vs. State of U.P.3, where it was held thus:
"8. On behalf of the petitioner no.1 reliance is placed upon certain provisions of the Payment of Gratuity Act to show that in the event of an employee having no "Family" within the meaning of the said Act gratuity payable to a particular employee shall be paid to his or her nominee. To get over Rule 4 of the Rules, section 14 of the Payment of Gratuity, which gives an overriding effect to the provisions of the said Act and over other enactment, has been pressed into service. There may be some force in the contention of the learned counsel if the Payment of Gratuity Act was applicable to the case of Miss Elias. Our reading of the said Act shows that it has no application to her. The preamble of the Payment of Gratuity Act, 1972, sets out that it has been enacted to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shop or other establishments. Sub-section (3) of Section 1 makes it clear that the Act shall apply to (a) factory, mines, etc. (b) other shop or establishment and (c) such other establishments or class of establishments in which 10 or more persons are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf. If at all, the provisions of sub-section 1(3)(c) of the Act alone may have some relevance. However, we are clear that even that sub-section had no application to the College wherein Miss. Elias was surviving as a teacher. The preamble coupled with the provisions of section 1(3) of the Act makes it crystal clear that the Payment of Gratuity Act, 1972 is applicable only to commercial and industrial establishment."
(Emphasis by Court)
20. Learned counsel for the petitioner has drawn the attention of the Court to the concluding lines in paragraph-8 of the report to submit that their Lordships of the Division Bench in the said case again, read Section 1(3)(b) of the Act in a manner where without specifically referring to the principle of noscitur a sociis, they read the word establishment conditioned by the specific word "shop" to hold that it connotes a commercial and industrial establishment.
21. Learned counsel appearing for the employees, on the other hand, have disputed the aforesaid submission advanced on behalf of the petitioner. It is their contention that the word establishment employed under clause (b) of sub-section (3) of Section 1 of the Act, is in no way conditioned by the word "shop" which carries a disjunctive "or" between the two. In their submission, read as a whole, Section 1(3)(b) would show that the word "or" is to be read as "and". It is not conjunctive but disjunctive. The word establishment has been used in its widest generic sense, completely independent of the word "shop". It is the submission of learned counsel for respondent No.2-employee that the 'establishment' envisaged under Section 1(3)(b) would be any kind of establishment, not necessarily commercial or industrial. Confining the scope of the word establishment by reading it ejusdem generis with the word "shop", or by applying the more settled principles of noscitur a sociis would lead to bogging down the statute and result in curtailing its application to subjects, to which the legislature intended it to apply. It is their submission that there is absolutely nothing to suggest upon a reading of the provisions of Section 1(3)(b) of the Act, that may lend itself to the kind of a restricted meaning being given to the word 'establishment' in terms urged by learned counsel for the petitioner.
22. This Court has carefully considered the rival submissions advanced.
23. The question whether the word establishment has been used in a restricted sense, conditioned by the word "shop", to mean that establishments commercial alone fall within the mischief of Section 1(3)(b) of the Act, or the word establishment followed by the words, "within the meaning of any law for the time being in force in relation to shops and establishment in a State", are to be read considering "establishment" free from the shadows of it being a commercial one and in its widest sense, was considered by their Lordships of the Supreme Court in State of Punjab Vs. Labour Court, Jullunder and Others4. In State of Punjab Vs. Labour Court, Jullunder (supra), their Lordships were confronted with this question in the context of facts where employees of a certain "Hydle Upper Bari, Doab Construction Project", undertaken by the Hydle Department of the Government of Punjab, moved the Labour Court for payment of gratuity upon retrenchment, when the project came to an end. The claim was considered by the Labour Court, under Section 33-C(2) of the Industrial Disputes Act, 1947. The claim was granted, holding the employees entitled to gratuity. It was contended that the employers were an industrial establishment within the meaning of Section 2(ii)(g) of the Payment of Wages Act, as held by the Labour Court, and that, according to the parties in that case, the question was required to be examined with reference to Section 1(3)(b) of the Act alone. In the aforesaid context, it was held in the State of Punjab Vs. Labour Court, Jullunder (supra) thus:
"3. ............According to the parties, it is clause (b) alone which needs to be considered for deciding whether the Act applies to the Project. The Labour Court has held that the Project is an establishment within the meaning of the Payment of Wages Act, Section 2(ii)(g) of which defines an "industrial establishment" to mean any "establishment in which any work relating to the construction development or maintenance of buildings, roads, bridges or canals, relating to operations connected with navigation, irrigation or the supply of water, or relating to the generation, transmission and distribution of electricity or any other form of power is being carried on". It is urged for the appellant that the Payment of Wages Act is not an enactment contemplated by Section 1(3)(b) of the Payment of Gratuity Act. The Payment of Wages Act, it is pointed out, is a Central enactment and Section 1(3)(b), it is said, refers to a law enacted by the State Legislature. We are unable to accept the contention. Section 1(3)(b) speaks of "any law for the time being in force in relation to shops and establishments in a State". There can be no dispute that the Payment of Wages Act is in force in the State of Punjab. Then, it is submitted, the Payment of Wages Act is not a law in relation to "shops and establishments". As to that, the Payment of Wages Act is a statute which, while it may not relate to shops, relates to a class of establishments, that is to say, industrial establishments. But, it is contended, the law referred to under Section 1(3)(b) must be a law which relates to both shops and establishments, such as the Punjab Shops and Commercial Establishments Act, 1958. It is difficult to accept that contention because there is no warrant for so limiting the meaning of the expression "law" in Section 1(3)(b). The expression is comprehensive in its scope, and can mean a law in relation to shops as well as, separately, a law in relation to establishments, or a law in relation to shops and commercial establishments and a law in relation to non-commercial establishments. Had Section 1(3)(b) intended to refer to a single enactment, surely the appellant would have been able to point to such a statute, that is to say, a statute relating to shops and establishments, both commercial and non-commercial. The Punjab Shops and Commercial Establishments Act does not relate to all kinds of establishments. Besides shops, it relates to commercial establishments alone. Had the intention of Parliament been, when enacting Section 1(3)(b), to refer to a law relating to commercial establishments, it would not have left the expression "establishments" unqualified. We have carefully examined the various provisions of the Payment of Gratuity Act, and we are unable to discern any reason for giving the limited meaning to Section 1(3)(b) urged before us on behalf of the appellant. Section 1(3)(b) applies to every establishment within the meaning of any law for the time being in force in relation to establishments in a State. Such an establishment would include an industrial establishment within the meaning of Section 2(ii)(g) of the Payment of Wages Act. Accordingly, we are of opinion that the Payment of Gratuity Act applies to an establishment in which any work relating to the construction, development or maintenance of buildings, roads, bridges or canals, or relating to operations connected with navigation, irrigation or the supply of water, or relating to the generation, transmission and distribution of electricity or any other form of power is being carried on. The Hydel Upper Bari Doab Construction Project is such an establishment, and the Payment of Gratuity Act applies to it."
(Emphasis by Court)
24. A reading of the part of their Lordships decision in State of Punjab Vs. Labour Court, Jullunder (supra), extracted above, shows an authoratative and explicit exposition of law, that the word establishment is to be given its widest meaning, without restricting its scope to commercial establishments. No further illustration is required on the reasoning about it, in view of what their Lordships have held in the said decision. It must, however, be remarked that the fact that in State of Punjab Vs. Labour Court, Jullunder (supra), the word establishment was construed to include industrial establishments, is in no way indicative of an intent to confine the word 'establishment' to mean commercial and industrial establishments. It is only that in that case the question was about the applicability of the Act to an industrial establishment, under Section 1(3)(b), that led to a mention of industrial establishments alone, in the decision of their Lordships. However, the principle enunciated there is clear which, in no way, can be confined to industrial establishments alone. It may be mentioned that the decision of the Supreme Court in State of Punjab Vs. Labour Court, Jullunder (supra), was not brought to the notice of their Lordships of the Division Bench in Ms. Usha Hamilton (supra), or the Division Bench of this Court in High Court Bar Association, Allahabad (supra).
25. About the said issue, a judgment of the Karnataka High Court in Regional Provident Fund Commissioner, Bangalore Vs. Regional Labour Commissioner (Central) and others5, may be referred to with profit. In the said decision, the question arose whether the respondent-employee, who was a Upper Division Clerk in the establishment of the Regional Provident Fund Commissioner, Bangalore, and had resigned after rendering nine years and nine months of service, was entitled to gratuity calculated in accordance with the provisions of the Act. The employee moved the Authority under the Act, who allowed his claim and the employer's appeal was dismissed. In the context of the said facts, it was held thus:
"5. In order to appreciate the contention, it is necessary to extract the relevant part of Section 1(3). It reads:
"1.(3) It shall apply to-
* * *
(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."
As can be seen from the above provision, the Act applies to every establishment within the meaning of any law for the time being in force in relation to such establishments in a State in which ten or more persons are employed. There is no dispute that more than ten persons are employed on the establishment of the Provident Fund. The only question for consideration is whether it is or it is not an establishment within the meaning of any law for the time being in force in this State in relation to shops and establishments. In this State,inter alia, the three relevant laws which are in force are
(i) Karnataka Shops and Establishment Act,
(ii) Payment of Wages Act, and
(iii) Contract Labour Act.
If the establishment of the Petitioner fails under the definition of establishment under any one of these Acts, the provisions of the Act gets attracted. The term 'establishment' is defined in the Contract Labour (Regulation and Abolition) Act, 1970. It reads:
"(i) Any office or department of the Government or a local authority, or;
(ii) Any place where any industry, trade, business, manufacture or occupation is carried on."
According to the above definition all types of establishments including an office fall under the definition of the expression 'establishment'. Therefore, it is difficult to agree with the contention of the Petitioner that the office of the Petitioner does not fall within the meaning of the word 'establishment'."
6. Therefore, if the provisions of the Act are attracted, even though there are regulations regulating the payment of gratuity which are applicable to the petitioner-establishment, the provisions of the Act do not get excluded, for, Section 14 of the Act gives overriding effect to the provisions of the Act. See State of Punjab v. Labour Court, Jullundur, [1980-I L.L.N. 39]. Therefore, even if under the regulations governing the petitioner-establishment, a person who has tendered resignation is not entitled to gratuity, if under the Act he is entitled to it, the same cannot be denied. It may be seen that under Section 4 of the Act, the criteria for entitlement for gratuity is five years or more of service and the fact that the termination has been brought about by resignation, does not matter."
(Emphasis by Court)
26. It may be noticed in connection with the aforesaid decision of the Karnataka High Court that in order to construe the true import of the word 'establishment', and extending it to include any office or department of Government, the Court relied upon the definition of the word in the Contract Labour (Regulations and Abolition) Act, 1970. The decision does notice the law laid down by the Supreme Court in State of Punjab vs. Labour Court, Jullunder (supra), but does seem to apply the reasoning there, in order to give the word establishment, a wider meaning as indicated on the principles laid down by their Lordships in State of Punjab vs. Labour Court, Jullunder (supra). This question has received the most elaborate consideration by a Division Bench of this Court in Uttar Pradesh Co-operative Union and others Vs. Prabhu Dayal Srivastava and others6, where the issue arose whether an employee of the petitioner-Co-operative Union, would be governed by the provisions of the Act, on basis that the Co-operative Union would be an establishment under Section 1(3)(b) of the Act. It was held in Uttar Pradesh Co-operative Union (supra) thus:
"5. We are conscious that the Act is a progressive, social and beneficial legislation and it has to be interpreted as to promote the purpose or object of the Act. In such matters the construction that promotes the purpose of legislation should be preferred rather than just a literal construction. Under S. 1(3)(c) the relevant clause is "such other establishment" in a State in which ten or more persons are employed or were employed on any day of the preceding twelve months. The preceding Cl. 1(3)(b) was "every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishment in a State." The word "and" even though appears to be conjunction, but keeping in view the legislative intent and applying elementary principles of textual and contextual interpretation it appears to have the meaning of "or" and has been accordingly, used in a disjunctive sense. This preceding clause under S. 1(3)(b) to the effect "every shop or establishment within the meaning of any law for the time being in force in relation to shops" has got a complete meaning with the establishment pertaining to shops. There was no sense in using the word "and," a conjunction, and to add subsequent clause "establishment in a State" in which ten or more persons are employed. This obviously indicates that subsequent expression "establishment in a State" has been used in an independent and different sense than the preceding clause and has nothing to do with the establishment in relation to shops. In our opinion the word "and" has been used disjuntively to mean "or." We are conscious that the word "or" is antithesis of word "and" and the meaning of word "and" has to be sparingly interpreted as "or." The context of expression has been used under Sub-cl. (b) or Sub-cl. (c) of S. 1(3) of the Act. Keeping in view of the intention and purpose of legislation to provide gratuity to employees drawing wages up to Rs. 270 per month or otherwise. The object of the Act can also be in brief looked into, which is to the following effect:
"The Bill provides for payment of gratuity to employees drawing wages up to Rs. 750 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 means basic wages plus dearness allowance."
6. In the aforesaid object of the Act it has been clearly specified that the employees of factories, plantations, shops, establishments and mines have been separately provided. It means that the object of legislation was to provide benefit of gratuity to establishments independently of shops.
7. Much emphasis was laid by the learned counsel for petitioner on the word "establishment" used in second clause after the word "and." the word "establishment" is, however, not a defined term either under the Act or under the General Clauses Act. It is now well-settled principle that dictionary meaning of a word cannot be looked into in case the word has been defined statutorily or has been judicially defined. But where there is no such definition or interpretation, the Court can take the aid of dictionaries to ascertain the meaning in common parlance. In doing so the Court must bear in mind that the words are used in different sense according to its context and the dictionary gives all the meaning of a word and the Court would, therefore, have to select from the meaning which would be relevant to the contest in which it has to interpret the words. See State of Orissa v. Titaghar Paper Mills Company, Ltd. [1985 Supp SCC 280 : A.I.R. 1985 S.C. 1296].
8. It is better to have some dictionary meanings of the word "establishment." According to Black's Law Dictionary the word "establishment" connotes an institute, a place where conducted, to settle or fix firmly, place of a permanent footing. According to Words and Phrases (Permanent Edn.), Vol. 15, the word "establishment" means a place where one is permanently fixed for residence or business, such as an office or place of business with its fixtures. Further it means an establishment in which employee is or was employed. "Establishment" means merely something established. In Webster's International Dictionary the word "establishment" means an institute or place of business with its fixtures and organized staff. Oxford Dictionary defines the term "establishment" as organized body of men maintained for a purpose. According to Bouvier, Law Dictionary the word "establishment" connotes that which is instituted or established for public or private use.
9. The word "establish" has also been used in Art. 30(1) of the Constitution where the provision is that the minority whether based on religion or language shall have right to establish and administer educational institutions of their choice. The word "establishment" under Art. 30(1) of the Constitution means to bring into existence. See I.S. Aziz Pasha v. Union of India [A.I.R. 1968 S.C. 662].
10. In V. Transport [Private), Ltd. v. Regional Provident Fund Commissioner, Madras[A.I.R. 1965 Mad. 466], it means been held that the word "establishment" has been interpreted to mean an organization which employs persons, where relationship of employee and employer comes into existence.
11. We are accordingly of the opinion that the word "establishment" as used under S. 1(3)(b) or S. 1(3)(c) of the Act connotes an organized body of men and women employed where the relationship of employer and employee comes into existence. There could be no manner of doubt that petitioner 1 has employed a number of employees for a purpose, namely, to carry out the duties assigned to them for the object for which Uttar Pradesh Co-operative Union has been established. There is no doubt that the provisions of Gratuity Act would apply to the employees of petitioner 1."
27. This question again fell for consideration before a Division Bench of the Orissa High Court in Administrator, Shree Jagannath Temple, Puri, Vs. Jagannath Padhi & Others7. In the said decision, the question arose whether the term establishment that has not been defined under the Act, would apply as defined in any law operating in the State to include within its ambit a "temple". In Administrator, Shree Jagannath Temple, Puri (supra), Hon'ble A. Pasayat, J. (as His Lordship then was, of the High Court) speaking for the Bench held:
"4. ...........The term "establishment" has not been defined in the statute. Section 1(3)(b) of the Act makes it clear that it applies to every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishment in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months. As observed by the Supreme Court in (1980) 1 SCC 4 : A.I.R. 1979 S.C. 1981 :State of Punjab v. The Labour Court, Jullundur; Vol. 32 (1990) O.J.D. 42 (S. & L)Executive Officer, Cuttack Municipality, Cuttack v. Appellate Authority under Payment of Gratuity Act-cum-Labour Commissioner, Orissa (to which one of us, Pasayat, J. was a party) and O.J.C. Nos. 1129 to 1131 of 1985. The Executive Officer, Puri Municipality v. Rama Naik etc., disposed of on 30-11-1990 (to which my Lord the Chief Justice was a party), the Act is not restricted to only commercial establishments, but to establishments within the meaning of any law for the time being in force in relation to establishments in a State. The question that falls for determination, therefore, is whether the term "establishment" as defined in any law operating in the State includes within its ambit a "Temple". The authorities under the Act have observed that the Industrial Disputes Act and the statute relating to shops and commercial establishments include "Temple Trust" and therefore, the Temple is included therein. It would be relevant at this stage to refer to a decision of this Court reported in 49 (1980) C.L.T. 252'. Gopi Chand Agarwala v. State of Orissa, wherein the question whether deity is an establishment or an undertaking under the Orissa Prevention of Land Encroachment Act came up for consideration and it was held that deity is neither an establishment nor an undertaking within the meaning of that Act. It was observed that the word "establishment" was not defined in the concerned statute and therefore to be assigned the common sense meaning; it is difficult to conceive that a religious institution like a Hindu temple can constitute an establishment in the sense the words have been used in section 2(e) of the Orissa Prevention of Land Encroachment Act, 1972.
5. According to The Compact Edition of the Oxford Engligh Dictionary, Volume I, page 897 (Reprinted 1972), "establishment" means a public institution; a school; a factory; a house of business etc. In 1851, D. Wilson in Preh Ann, (1863) 11 iv. i. 192 referred to "the religious establishment founded at Iona". "Establishment" also has been defined to be the ecclesiastical system established by law. As observed by the Allahabad High Court in 1986 (53) F.I.R. 227;Municipal Board v. Appellate Authority and Addl L.C. to which reference was made by this Court in executive Officer, Puri Municipality's case (supra), the definition of establishment is very wide, and keeping in view the objective of the Act, it was held that the same is applicable to the retired persons of municipalities. Keeping in view the laudatory objects of the Act, and the same being a part of the social justice, this Court observed that the legislation was to be applied Liberally and a wider meaning was to be given.
6. "Gratuity", as observed by the Supreme Court in its etymological sense, means a gift, especially for services rendered or return for favours received. See A.I.R. 1970 S.C. 919; Delhi Cloth & General Mills Co. Ltd. v. Its Workmen. The general Principle underlying the gratuity schems is that by their length of service, workmen are entitled to claim a certain amount as a retiral benefit. See A.I.R. 1960 S.C. 251; Indian Home Pipe Co. Ltd. v. Its Workman Gratuity has to be considered to be an amount paid unconnected with any consideration and not resting upon it, and has to be considered something given freely or without recompense. It does not have foundation on any legal liability, but upon a bounty stemming from appreciation and graciousness. Long service carries with it expectation of an appreciation from the employer and a gracious financial assistance to tide over post retiral difficulties. Judged in that background, we feel that it would be unconscionable to keep temple out of the purview of the Act, more particularly when opposite party No. 1, a low paid employees has served the temple for a very long span of time."
(Emphasis by Court)
28. The question was considered by the Bombay High Court in Poona Cantonment Board, Vs. S.K. Das and others8, in the context of an employee of the Cantonment Board of Poona, who was held entitled to gratuity under the Act, treating the Cantonment Board to be an establishment within the meaning of Section 1(3)(b) of the Act. The Board had contended that they were not an establishment within the meaning of Section 1(3)(b) of the Act, and that, Section 1(3)(c) of the Act did not apply as the notification extending the provisions of the Act to local bodies came to be issued in the month of January 1982, that is to say, before the cause of action arose. This issue was examined with reference to the provisions of Section 1(3)(b), alone.
29. In Poona Cantonment Board (supra), it was held:
"7. It is difficult to accept the contention urged on behalf of the petitioner for mere than one reason. In (State of Punjab v. The Labour Court, Jullundur,)1, (1980) 1 SCC 4 : A.I.R. 1979 Supreme Court 1981, the Supreme Court had an occasion to consider a somewhat similar contention. The question arose therein as to whether the Hydel Department of the Government of Punjab, which bad undertaken a construction project, in which the concerned workmen were employed as work-charged employees, answered the test in section 1(3)(b) of the Payment of Gratuity Act, so as to enable the employees to claim gratuity. The State of Punjab contended that section 1(3)(b) required that the establishment within its contemplation most be one "within the meaning of any law for the time being in force in relation to establishments in a State", which meant that it should be an establishment within the meaning of a law applicable to shops and establishments enacted by the State Legislature. This contention was emphatically rejected by the Supreme Court by pointing out:
"It is difficult to accept that contention because there is no warrant for so limiting the meaning of the expression 'law' in section 1(3)(b). The expression is comprehensive in its scope, and can mean a law in relation to shops as well as, separately, a law in relation to establishments or a law in relation to shops and commercial establishments and a law in relation to non-commercial establishments. Had section 1(3)(b) intended to refer to a single enactment, surely its appellant would have been able to point to such a statute, that is to say, a statute relating to shops and establishments, both commercial and non-commercial. The Punjab Shops & Commercial Establishments Act does not relate to all hinds of establishments. Besides shops, it relates to commercial establishments clone. Had the intention of Parliament been, when enacting section 1(3)(b), to refer to a law relating to commercial establishments, it would not have left the expression 'establishments' unqualified. We have carefully examined the various provisions of the Payment of Gratuity Act, and we are unable to discern any reason for giving the limited meaning to section 1(3)(b) urged before us on behalf of the appellant. Section 1(3)(b) applies to every establishment within the meaning of any law for the time being in force in relation to establishments in a State. Such an establishment would include an industrial establishment within the meaning of section 2(ii)(g) of the Payment of Wages Act."
8. The Supreme Court, therefore, held that the Hydel Project run by the State of Punjab was an establishment falling within section 1(3)(b) of the Payment of Gratuity Act, and, therefore, the workmen were entitled to claim gratuity.
9. In my view, the reasoning adopted by the Supreme Court in the judgment in State of Punjab (supra) would equally apply to the case of the petitioner. The Appellate Authority has taken the view that the petitioner's offices/establishments would be 'establishments' within the meaning of the Contract Labour (Regulation and Abolition) Act, 1970, as defined in section 2(1)(e). Interestingly, section 2(1)(e) of the said Act defines the expression 'establishment' as under:
"2(i) In this Act unless the context otherwise requires,--
.....
(e) "Establishment" means--
(i) any office or department of the Government or a local authority, or
(ii) any piece where any industry, trade, business, manufacture or occupation is carried on;"
10. Even a cursory look at section 2(1)(e)(ii) is sufficient to lead to the conclusion that the establishment contemplated thereunder could be an establishment of a local authority. It is not disputed that the Pune Cantonment Board is a local authority, and, therefore, I would have thought that there would be no difficulty in holding that the establishment of the Puns Cantonment Board would be an establishment within the meaning of section 2(1)(e) of the Contract Labour (Regulation end Abolition) Act, 1970.
11. Mr. Presswala, learned Counsel appearing for the petitioner, contended that the petitioner-Board does not employ any contract labour, and, therefore, tits Contract Labour (Regulation and Abolition) Act, 1970, would not apply to any concerned establishment of the Board, as it does not qualify under section 1(4)(a). In other words, the contention seems to be that, in order to made section 1(3)(b) of the Payment of Gratuity Act apply, not only must the establishment be an 'establishment' within the meaning of any law for the time being in force in relation to stops end establishments in the Stats, but that such law must also apply to the establishment in question. I am afraid, it is not possible to accept this contention. The only test of applicability prescribed in section 1(3)(b) is that the establishment must be an 'establishment' within the meaning of a specified type of law in the State. The section does not prescribe the former qualification canvassed by the learned Counsel for the petitioner. It is irrelevant, therefore, in cay view, whether the Contract Labour (Regulation and Abolition) Act, 1970, applies to any of the petitioner-Board concerned establishment or not What may not apply today may apply tomorrow, if the Board decides to engage 20 or more contract labour. While it in true that the application of the Contract Labour (Regulation and Abolition) Act, 1970, may be determined by a voluntary act of the Board in engaging the requisite number of contract laborr, section 1(3)(b) of the Payment of Gratuity Act does not contemplate applicability depending upon the volition of the employer. All that is necessary under section 1(3)(b) is that the establishment in question must answer the description or definition of an "establishment" within the meaning of any tow relating to shops end establishments which is in force in the Stele", nothing mare and nothing less. Although the Appellate Authority has also relied upon the definition of the expression 'establishment' as contained in the Bombay Shops & Establishments Act, 1948, I am not taking the said Act into consideration, since, as rightly contended by the learned Counsel for the petitioner-Board, the question whether the petitioner's establishments would answer the description of the said expression defined in that Act, is not free from doubt. For the purpose of disposing of the present petitions, it is sufficient that we concentrate our attention on the Contract Labour (Regulation and Abolition) Act, 1970, which is capable of applying to all establishments of local authorities like the petitioner-Board.
12. Thus, in my view, the establishments of the petitioner-Board are 'establishments' within the meaning of section 2(1)(e)(i) of the Contract Labour (Regulation and Abolition) Act, 1970, which is a law in force in the State of Maharashtra in relation to shops and establishments in this State. Thus, the qualifying test in section 1(3)(b) being satisfied, the Payment of Gratuity Act, 1972, was applicable, even at the relevant time, to the establishments of the petitioner-Board, wherein the concerned workmen were working."
30. The question whether the Gujarat Labour Welfare Board is an establishment within the meaning of Section 1(3)(b) of the Act, fell for consideration of the Gujarat High Court in (Smt.) Jayaben Suryakant Modi Vs. Welfare Commissioner & Others9.
31. In (Smt.) Jayaben Suryakant Modi (supra), it was held:
"12. The basic facts in both the matters are not in dispute. The only question which requires consideration is as to whether the Gujarat Labour Welfare Board is an establishment within the meaning of Section 1(3)(b) of the Payment of Gratuity Act, 1972. Whereas it is clear from definition of the 'employee' given in Section 2(e) of the Payment of Gratuity Act, 1972 and the conditions mentioned in Section 4 of the Payment of Gratuity Act, 1972 are admittedly satisfied factually in case of the employees in both these matters, in case it is found that the Gujarat Labour Welfare Board is an 'establishment' within the meaning of Section 1(3)(b), there cannot be any difficulty in upholding the claim to the entitlement of the gratuity with regard to the employees of the Gujarat Labour Welfare Board.
13. There is no dispute that the Gujarat Labour Welfare Board has been constituted under the Bombay Labour Welfare Fund Act, 1953 and according to the provisions of Section 7 this Board holds the welfare fund and the same is held by the Board as Trustees, the fund also vests in the Board. In this view of the matter, the Gujarat Labour Welfare Board may be a Trust as mentioned in sub-section (2) of Section 2 of the Bombay Shops and Establishments Act, 1948 dealing with the definition of 'commercial establishment'. The Gujarat Labour Welfare Board as a Trustee of the fund under the Bombay Labour Welfare Fund Act, 1953, whether registered or not, carries on work in connection with or incidental or ancillary thereto whether for purposes of gain or not and as such it appears that the Gujarat Labour Welfare Board is covered under the definition of 'commercial establishment' as mentioned under Section 2(4) of the Bombay Shops and Establishments Act, 1948. In the alternative, even if it is assumed that the Gujarat Labour Welfare Board is not covered by the definition of 'commercial establishment' as given in Section 2(4) of the Bombay Shops and Establishments Act, 1948, it is still an establishment within the meaning of Section 1(3)(b) of the Payment of Gratuity Act because it is an establishment within the meaning of the law which is in force in relation to 'establishment' in the State of Gujarat. It is not in dispute that various Central Acts, which have been enumerated in para 8 in the earlier part of the Judgment as pointed out by Mr. Bhaya, viz. Contract Labour (Regulation & Abolition) Act, 1948, Employment Exchange (Compulsory Notification of Vacancies) Act, Industrial Disputes Act, 1947 and Apprenticeship Act are in force in the State of Gujarat and that being so, it is an 'establishment' within the meaning of the law for the time being in force in the State of Gujarat and it is not in dispute that' more than ten persons are employed in this Board. The use of the word 'and' between the words 'shops' and 'establishments' is clearly disjunctive and it cannot be read to be conjunctive and, therefore, it is not necessary that such establishment must be in relation to shops as well as establishments. It can be 'shops' and distinctly it can be an 'establishment-and yet it would be covered under Section 1(3)(b) of the Payment of Gratuity Act, 1972. In State of Punjab v. Labour Court, Jullundur (supra) the Supreme Court was dealing with a case with reference to the Punjab Shops and Establishments Act and it has been observed that besides shops it relates to commercial establishments also. While referring to the provisions of Section 1(3)(b) of the Payment of Gratuity Act, the Supreme Court has observed that had the intention of the Parliament been while enacting Section 1(3)(b) to refer to a law is relating to commercial establishments, it would not have left the expression 'establishments' unqualified. It also observed that it was difficult to accept the contention that the law referred to under Section 1(3)(b) must be a law relating to both the shops and establishments such as the Punjab Shops and Commercial Establishments Act because the Supreme Court found that there is no warrant to limit the meaning of the expression 'law' in Section 1(3)(b) and further that the expression is comprehensive in its scope and it can mean a law in relation to shops as well as separately, a law in relation to establishments, or a law in relation to shops and commercial establishments and a law in relation to non-commercial establishments. In view of such a categorical pronouncement by the Apex 35 Court, it is not discernible by any reasoning to give a limited meaning to Section 1(3)(b) as has been argued by Mr. Pandya and I have no hesitation in holding that Section 1(3)(b) of the Payment of Gratuity Act applies to every establishment within the meaning of any law for the time being in force in relation to establishment in a State and such an establishment would also include an establishment like Gujarat Labour Welfare Board for the purpose of payment of the gratuity and the Payment of Gratuity Act applies to the Gujarat Labour Welfare Board with full force and the payment of the gratuity could not be denied to the employees of the Gujarat Labour Welfare Board on the ground that Gujarat Labour Welfare Board is not an establishment within the meaning of Section 1(3)(b) of the Payment of Gratuity Act....."
32. In V. Venkateswara Rao, Vs. The Chairman/Governing Body, S.M.V.M. Polytechnic, Tanuku & Ors.10, the polytechnic, who were employers imparting education in the technical field, were held to be an establishment within the meaning of Section 1(3)(b) of the Act.
33. The same view has been taken by a Division Bench of the Andhra Pradesh High Court in Smt. D. Lakshmi Vs. Andhra Pradesh Agricultural University and Anr.11
34. This view of the law was echoed yet again by a learned Judge of the Madras High Court in Habibaa Girls Primary School (represented by its Manager), Ambur Vs. Smt. Noorinisha and Others12, to hold that an educational institution like a private unaided school, would be covered under the definition of establishment, envisaged under Section 1(3) of the Act. It must be said here that in all decisions relating to educational institutions, the Act would apply also by virtue of Section 1(3)(c) of the Act, after 3rd April, 1997, in view of a notification issued by the Central Government, including Educational Institution in the category of establishments to which the provisions of the Act would apply, under Section 1(3)(c) of the Act.
35. The question has recently received the attention of their Lordships of the Supreme Court in Senior Superintendent of Post Offices, Vs. Gursewak Singh and Others13, where, while examining the question whether a Gramin Dak Sewak is an employee within the meaning of Section 2(e) of the Act, the issue whether the Department of Post and Telegraph is an establishment within the meaning of Section 1(3)(b) of the Act, was considered and answered thus:
"9. The first issue to be determined is whether a Gramin Dak Sewak is an 'employee' as per Section 2(e) of the 1972 Act, and is entitled to payment of Gratuity under this Act?
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 Jalandhar (1980) 1 SCC 4, 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:
"2. Definitions.-
(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.
(emphasis supplied) The Indian Post Act, 1898 would fall under the expression 'law' in Section 1(3)(b). Consequently, the Post & Telegraphs Department would be an establishment under the 1972 Act."
36. The question, therefore, that the word 'establishment' occurring in Section 1(3)(b) of the Act is not confined in its scope to commercial establishments alone, or commercial and industrial establishments in contradistinction to sovereign establishments is no longer res integra. Wherever there is an establishment within the meaning of any law for the time being in force relating to establishment in a State, where ten or more persons are employed, the Act would apply. The establishment here, is the Board of Basic Education constituted under the Act of 1972. The petitioner, District Basic Education Officer, is an officer of that establishment at the District Headquarters. The Second respondent-employee is an employee of the Board of Basic Education, working under the administrative control of the District Basic Education Officer. It has nowhere been urged, or can be urged that an establishment, as large as that of the Board of Basic Education, would employ less than ten persons, even under the petitioner, District Basic Education Officer, Hamirpur. The question whether the Board of Basic Education is an establishment within the meaning of any law for the time being in force in relation to establishments in a State, to employ the phraseology of Section 1(3)(b) of the Act, one has to look to the Act of the 1972. The Act of 1972 is definitely law in force in the State of Uttar Pradesh, being enacted by the State legislature. The Act of 1972 defines the 'Board' under Section 2(c) as follows:
"Section 2 - Definitions In this Act, unless the context otherwise requires--
(a) x x x x
(b) x x x x
(c) "Board' means the Uttar Pradesh Board of Basic Education constituted under section 3 ;
(d) x x x x
(e) x x x x"
37. Section 3 of the said Act speaks about the constitution of the Board, where sub-Section (1) clearly spells it out to be an establishment to be brought into existence by the State Government by notification in the Gazette. Section 3(1) reads:
"Section 3 - Constitution of the Board (1) With effect from such date as the State Government may, by notification in the Gazette, appoint, there shall be established a Board to be known as the Uttar Pradesh Board of Basic Education.
(2) x x x x (3) x x x x"
38. It is, thus, evident that the Board of Basic Education is an establishment within the meaning of the Act of 1972, which is law for the time being in force in the State of Uttar Pradesh. The Board being an establishment under a law for the time being in force, it clearly falls within the mischief of Section 1(3)(b) of the Act. The provisions of the Act, would, clearly be applicable to the Board and to its officers, including the petitioner, District Basic Education Officer, an officer of the Board.
39. At the same time, in order to make the Act govern the rights of an employee, it is just not enough that it is applicable to the employer. It is also necessary that the employee should qualify for an employee under Section 2(e) of the Act. A perusal of Section 2(e) shows that the Act would apply to any person, other than an apprentice, who is paid wages and engaged in any kind of work, manual or otherwise in an establishment to which the Act applies. Section 2(e) further requires that once an employee falls into the inclusive part of the aforesaid provision, he/ she should not fall under the excluding part of the provision. This is so because the provisions of Section 2(e) of the Act exclude from the definition of an employee, a person otherwise well within its fold, in case such person is the holder of a post under the Central Government or a State Government, and is governed by any other Act or by Rules providing for payment of gratuity. Thus, notwithstanding the applicability of the Act to an establishment by virtue of what Section 1(3)(b) envisages, an employee of the Central Government or a State Government, would not be entitled to its benefits at all, subject to the condition that the post that he holds, is governed by any other Act or by Rules, that provide for payment of gratuity. Clearly, employees of the Central Government or a State Government, who are in receipt of gratuity under law applicable to them relating to gratuity, would not be entitled to benefit of the Act. The provisions of Section 2(e) of the Act have a clarificatory feature about them. These make it explicit that but for the Central Government or a State Government vis-a-vis their employees, who are in receipt of gratuity under law or rules applicable to them for the purpose, every establishment, even if it be an establishment of the State created by statute and entrusted with very sovereign functions, would still be subject to the Act. The principle about a body corporate entirely owned and controlled by the Central Government, that is, just another face of the State, or an alterego, that is recognized as State to render such establishment amenable to the writ jurisdiction of this Court, or to other obligations of the State as an instrumentality of it, has no application here.
40. There is yet another feature of the Act, that would positively displace Section 9 of the Act of 1972, or any other Rule framed thereunder governing the liability to pay gratuity to an employee of the petitioner or the Board; that is the overriding effect given to the Act, over all other laws governing gratuity provided under Section 14. Section 14 of the Act reads:
"Section 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."
41. There is, thus, no scope for the provisions of the Act of 1972 to work to the exclusion of the Act, as canvassed by Mr. Kunal Shah. The submission of the learned counsel for the petitioner about the inapplicability of the Act to the petitioner, in the matter of entitlement to gratuity for the second respondent, cannot be accepted. The only avenue, that is still available to an employer to be relieved of his liability under the Act to its employees, despite the Act being applicable, is Section 5. Section 5 of the Act speaks about the power to exempt from the operation of the Act. Section 5 of the Act reads thus:
"Section 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.
(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 are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.
(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."
42. Under Section 5(1) of the Act, the appropriate Government is empowered by notification and subject to such conditions as may be mentioned in the notification, to exempt an establishment from the provisions of the Act, in case such Government are of opinion that the employees of the establishment are in receipt of gratuity or pensionary benefits, not less favourable than what they would be entitled to under the Act. It is not that, that the mere provisions of post retiral benefits as to pension and gratuity that offer better terms to an employee, would ipso facto work to exempt an establishment from the provisions of the Act. The exemption has to be expressly granted by the appropriate Government, after it forms an opinion that pensionary benefits and gratuity under the law or rules applicable to an establishment, are not less favourable to the employee than what he would be entitled to under the Act. This decision, the appropriate Government, has to express through a notification issued for the purpose under the provisions of Section 5. Appropriate Government is defined under Section 2(a) of the Act as follows:
"2. Definitions.--In this Act unless the context otherwise requires,--
(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;
(b) x x x x
(c) x x x x
(d) x x x x
(e) x x x x
(f) x x x x
(g) x x x x
(h) x x x x
(i) x x x x
(j) x x x x
(k) x x x x
(l) x x x x
(m) x x x x
(n) x x x x
(o) x x x x
(p) x x x x
(q) x x x x
(r) x x x x
(s) x x x x"
43. A perusal of the definition of appropriate Government clearly shows that the Central Government is the appropriate Government in relation to specified categories of establishments under Section 2(a)(i) of the Act, that fall into any of its four sub-clauses (a), (b), (c), and (d). If the establishment does not fall into any of the above mentioned sub-clauses of Section 2(a)(i), in relation to all other establishments, the State Government is the appropriate Government as a matter of residual application.
44. Admittedly, in this case, the petitioner has not come up with a plea that they have been granted exemption by the State Government. Once that is not the case, it goes without saying that the petitioner has not offered any evidence to substantiate such a case. The conclusion is, therefore, inescapable that the petitioner is an establishment/ part of an establishment, to which the Act applies. The Act is in no way excluded by operation of Section 9, or any other provisions of the Act of 1972. Also, the petitioner is not an establishment/ part of establishment, that has been exempted under Section 5 of the Act.
45. In view of these findings, the order impugned cannot be held to be vitiated for want of jurisdiction in the Authority. The order, otherwise also, is in no way manifestly illegal or unjust. It, thus, calls for no interference under Article 226 of the Constitution.
46. In the result, the petition fails and is dismissed with costs.
47. Interim order dated 01.12.2009 is hereby vacated.
Order on WRIT - C No. - 9831 of 2019
48. In view of the orders passed in Writ - C No.62286 of 2009 (District Basic Education Officer vs. Niyantrak Pradhikari Anutoshik Bhugtan Adhiniyam, 1972 And Another), no orders are required to be passed in this writ petition, which stand consigned to the Record subject, of course, to liberty to the petitioner of this writ petition, to come up again, should that necessity arise.
49. There shall be no order as to costs.
50. Let this order be communicated by the office forthwith to the Controlling Authority, Payment of Gratuity Act, 1972-cum-Assistant Labour Commissioner, U.P., Kanpur Region, Kanpur.
Order Date :- 24.9.2019 Anoop/ NSC