Charotar Gas Sahakari Mandli Ltd. ... vs Punjalal Parshottamdas Patel on 27 January, 2021

[Cites 12, Cited by 0]

Gujarat High Court

Charotar Gas Sahakari Mandli Ltd. ... vs Punjalal Parshottamdas Patel on 27 January, 2021

Bench: Nirzar S. Desai

         C/SCA/16929/2020                                     ORDER




          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

           R/SPECIAL CIVIL APPLICATION NO. 16929 of 2020

==========================================================
      CHAROTAR GAS SAHAKARI MANDLI LTD. THROUGH HASMUKH
                      MANGALDAS PATEL
                            Versus
               PUNJALAL PARSHOTTAMDAS PATEL
==========================================================
Appearance:
MR YOGEN N PANDYA(5766) for the Petitioner(s) No. 1
for the Respondent(s) No. 1,2,3
==========================================================

 CORAM: HONOURABLE MR. JUSTICE NIRZAR S. DESAI

                            Date : 27/01/2021

                             ORAL ORDER

1. By way of this petition under Articles 226 and 227 of the Constitution of India, the petitioner has challenged the order dated 05.11.2020 passed by the Respondent No.3 - Appellate Authority under the Payment of Gratuity Act, 1972 at Vadodara in Appeal Case No.6 of 2020 and has further challenged the order dated 29.10.2018 passed by the Respondent No.2 the Controlling Authority under the Payment of Gratuity Act, 1972 at Anand in Gratuity Case No.60 of 2017 on the ground that both the aforesaid orders are illegal, bad in law as well as on facts, without appreciating the facts and circumstances and are contrary to the settled legal proposition of law.

2. The brief facts of the case are summarized as under:

2.1 The petitioner is a Cooperative Society registered under the Cooperative Societies Act, 1961 somewhere in the year 1998 and Page 1 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER its nature of work is of gas distribution. The respondent No.1 joined the service of the petitioner after he voluntarily retired from his erstwhile employer at Kheda i.e. Amul Dairy, as "Retainer".

2.2 The respondent No.1 served as Retainer under present petitioner for a period from 01.06.2006 to 01.01.2017 i.e. for more than ten years. Once the respondent No.1 retired on account of his reaching at the age of superannuation, he filled in FormN for getting gratuity amount of Rs.3, 42,705/ [Rupees Three Lakhs Forty Two Thousand Seven Hundred and Five Only] based on his calculation. The said calculation was based upon the fact that his last remuneration was Rs.54,000/ and he was also getting other benefits like leave, bonus, medical allowance, petrol allowance etc. It was the case of the respondent No.1 that since he has served for more than five years under the petitioner and there was relationship of employer - employee, he is entitled to get aforesaid amount of gratuity.

2.3 Since the respondent no.1 filled in Form No.N for the purpose of getting his gratuity, the Controlling Authority under the Payment of Gratuity Act, 1972 issued notice to the petitioner society and after hearing both the sides, considering the reply filed by respondent No.1 and after adducing the evidence, the learned Controlling Authority, under the Payment of Gratuity Act, vide its order dated 29.10.2018 passed an order directing the petitioner to pay an amount of Rs.3,42,692/ to the respondent no.1 with effect from 01.01.2017 till the actual date of payment of gratuity with 10% simple interest.

Page 2 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER

2.4 It was the case of the respondent no.1 before the Controlling Authority that he was performing duty under the petitioner for more than five years and has performed his duty for more than 240 days in each year after his superannuation from Amul Dairy, he was appointed by the petitioner and to mark his attendance the muster roll was also maintained. He was paid salary regularly every month and, therefore, there was relationship of employer employee between the petitioner and the respondent no.1.

2.5 On the basis of the aforesaid submissions, he prayed for passing an order of directing the petitioner to pay gratuity to the respondent no.1.

3. It was the case of the petitioner before the controlling authority that the respondent no.1 was appointed in the petitioner organisation only as a Retainer and considering his nature of appointment, he cannot be termed as 'employee' as per the definition of employee under Section 2(E) of the Payment of Gratuity Act, 1972. Since the respondent no.1 has already received an amount towards gratuity on his superannuation from his erstwhile employer i.e. 'Amul Dairy' on attaining the age of 58 years, he is not entitled to claim gratuity from the petitioner. It was submitted by the petitioner before the Controlling Authority that the Respondent No.1 is not entitled for gratuity under Sections 4(1)(b) and 4(1)(c) as the respondent does not fall within the scope of 4(1) of Payment of Gratuity Act.

3.1 The Controlling Authority considered material on record and Page 3 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER also the evidence which was on record and came to the conclusion that the Respondent No.1 was appointed by the petitioner in its organisation vide appointment letter dated 01.06.2006 and was subsequently promoted to the post of Manager vide order dated 14.08.2012. Thereafter, vide order dated 01.01.2016 he was further promoted to the post of Senior General Manager and was given increments also. The above referred orders clearly establish the fact that there was relationship of 'employeremployee' between the petitioner and the respondent No.1. The Controlling Authority also considered the fact that as per the terms of the appointment order issued by the present petitioner in favour of respondent no.1, the respondent no.1 was on probation for initial six months and thereafter his pay fixation was to take place on the basis of his performance. The Controlling Authority also considered that as per the condition of service, there is provision of two months' notice period prescribed for resignation. The Controlling Authority while referring the order of promotion on 01.01.2016 referred one of the conditions i.e. "we clearly understood and agreed that your employment will come to an end automatic end on expiry of your retainership period as stipulated above, no notice will be necessary, no compensation shall be paid..." and held that the aforesaid condition clearly stipulates that respondent No.1 was under "employment of the petitioner" merely because using the word "retainer", a person cannot be excluded from the definition of 'employee'. The Controlling Authority further observed that though the petitioner undertook to produce the photocopy of muster roll for the years 2014, 2015 and 2016, the petitioner never produced the same. The Page 4 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER Controlling Authority further observed that at no point of time, the petitioner ever contended before it that the respondent No.1 has not worked either as 'Retainer' or as an 'employee' under the organisation between the year 2014 to 2016. The Controlling Authority also took a note of the fact that Respondent No.1 was earlier serving under Amul Dairy tendered voluntarily resignation before his attaining the age of superannuation at his erstwhile organisation i.e. Amul Dairy and joined the petitioner organisation. Considering all the aspects, i.e. the respondent No.1 joined the service under the petitioner with effect from 01.06.2006 and his last drawn salary was Rs.54,000/, the Controlling Authority has passed an order directing the petitioner to pay Rs.3,42,692/ to the respondent No.1 with effect from 01.01.2017 till the date of actual payment with 10% simple interest.

3.2 Against the aforesaid order, the petitioner herein preferred Review Application before the Controlling Authority under Rule 11(5) of the Payment of Gratuity (Gujarat) Rules, 1973. The Review Application was rejected by the Controlling Authority vide order dated 03.07.2019.

4. It is against the order dated 29.10.2018 passed by the Controlling Authority in Payment of Gratuity Case No.60 of 2017 as well as against the order dated 03.07.2019 passed in Review Application that the present petitioner preferred an appeal before the Appellate Authority under the Payment of Gratuity Act, 1972, Vadodara by filing an Appeal No.6 of 2020. The Appellate Authority initially took a view that since the appeal was filed after Page 5 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER the prescribed period of limitation under the Act and hence vide order dated 31.12.2019 the respondent No.3 Appellate Authority held that since the appeal is time barred the same was rejected. However, the present petitioner preferred an application dated 18.01.2020 and requested to reopen the appeal on the ground that as the Review Application was pending before the Controlling Authority and the same was decided on 03.07.2019 which was received by the petitioner on 05.07.2019, limitation would start from 05.07.2019 and, therefore, considering the fact that the appeal was preferred on 29.08.2019, it is preferred after 54 days after receipt of the order and hence it was well within limitation.

5. The aforesaid application for reopening the appeal was positively considered by the Appellate Authority and accordingly notice was issued to Respondent No.1 and thereafter both the sides were heard. The Appellate Authority also considered various documentary evidence produced by the parties and also considered the fact that even before the Income Tax Authority while filling in the Form16, the petitioner has shown respondent no.1 as its employee. Not only that, the Appellate Authority also concurred with the findings of Controlling Authority.

6. As against the petitioner's contention that in view of official gazette published by Union of India dated 23.06.2017, the order passed by the Controlling Authority is without any jurisdiction. The Appellate Authority considered the aforesaid submission and negatived the same on the ground that the aforesaid Notification which was referred to by the petitioner before it was not produced Page 6 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER before the Controlling Authority and though the same was referred to even before the Controlling Authority, the same was never produced before the Controlling Authority.

6.1 The Appellate Authority apart from the above observations also observed that the contentions in respect of jurisdiction of Controlling Authority as well as Appropriate Government were raised for the first time before the Appellate Authority. The Controlling Authority had given full opportunity to the petitioner to put forward his case. The Appellate Authority further held that as per the provisions of Gratuity Rules, 1972, State Government being the 'Appropriate Government', the order passed by the Controlling Authority dated 03.07.2019 is just and proper and accordingly, the Appellate Authority dismissed the Appeal No.6 of 2020 preferred by the petitioner vide order dtd.05.11.2020.

6.2 These two orders dated 29.10.2018 passed in Gratuity Case No.60 of 2017 by the Controlling Authority and the order dated 05.11.2020 passed in Appeal No.6 of 2020 by the Appellate Authority are under challenge by way of present petition before this Court.

7. Learned advocate Mr.Yogen Pandya for the petitioner submitted that both the authorities under the Payment of Gratuity Act have committed error of law by not appreciating the fact that the respondent No.1 was a 'Retainer' of the petitioner company and he was never an employee of the petitioner company. He further contended that the respondent no.1 joined the petitioner organisation as 'Retainer' after attaining the age of superannuation.

Page 7 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER

The amount of gratuity was already paid by erstwhile employer i.e. Amul Dairy. Mr.Pandya further contended that considering the fact that the petitioner appointed respondent No.1 as 'Retainer', he cannot be termed as an 'employee' and accordingly considering the fact that the respondent No.1 is an employee, both the authorities below have committed an error while exercising jurisdiction under the Payment of Gratuity Act, 1972, and, therefore, both the orders impugned are bad in law and deserve to be quashed and set aside. Mr.Pandya further submitted that the Controlling Authority has limited powers only to determine the amount of gratuity and it does not have power to adjudicate whether there is relationship of employeremployee exist between the parties or not. By concluding that there is relationship of employeremployee between the petitioner and the respondent no.1, the Controlling Authority has exceeded its jurisdiction and as such the Appellate Authority committed error by confirming the order passed by the Controlling Authority.

8. Apart from these contentions, no other submissions were made by learned advocate Mr.Pandya.

9. I have heard learned advocate Mr.Yogen Pandya for the petitioner company and also considered the material on record. According to Mr.Pandya both the authorities have committed grave error by not taking into consideration in its true perspective various orders passed by the petitioner initially in respect of appointment of Respondent No.1 and thereafter relating to his promotion and increments. According to Mr.Pandya all those orders which are on Page 8 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER record, the respondent No.1 is termed as 'Retainer'. According to him, when the appointment order as well as subsequent order in no uncertain terms state the nature of work of the respondent no.1 and state his status as 'Retainer', both the authorities ought not to have come to the conclusion that the respondent No.1 can be said to be an employee of the petitioner company. In view of these submissions, it is necessary to look into the various orders of appointment, promotion and increments passed by the petitioner in respect of respondent No.1. As per the order passed by the petitioner dated 01.06.2006 appointing the respondent, he is designated as Chief Engineer (Retainer) and various conditions as noted and observed by the Controlling Authority like notice period, fixing the remuneration, probation period, leave, performance based salary etc. are mentioned. Thereafter, vide order dated 14.08.2010, Respondent No.1 was designated as 'Manager' and as per that order dated 14.08.2010, he was held responsible for smooth functioning of organisation. Again the Respondent No.1 was promoted vide order dated 06.04.2012 to the post of 'General Manager' and vide order dated 11.07.2014, the Respondent No.1 was given increment in the grade of General Manager and was placed in the grade of Rs.40,000200050,0003000650005000 90000 and his total revised salary was determined as Rs.48,000/ by giving breakup of the salary. Again vide order dated 01.01.2016, the petitioner issued letter of Promotioncum Increment (Retainer ship) in favour of Respondent No.1 and in that letter his remuneration as on 01.06.2016 shown as Rs.54,000/. A perusal of the aforesaid letter/ orders would clearly indicate that Respondent No.1 had served under the petitioner organisation for a Page 9 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER period from 01.06.2006 till his date of superannuation and his last drawn salary was Rs.54,000/ A perusal of the above referred orders also indicates the fact that though respondent No.1 was named as Retainer in all the letters and orders issued by the petitioner, actually, the respondent No.1 was in full time employment of the petitioner as none of the orders referred to above speak anything about parttime nature of work or respondent No.1 being a consultant or advisor as canvassed by the advocate of the petitioner before this Court as well as before the authority. Further, whether a person can be said to be an 'employee' or not and whether the remuneration paid by the employer can be said to be 'wages' as defined under the Act are the questions which are required to be determined in order to determine the contention of the petitioner that the respondent no.1 being a 'Retainer' and not being 'employee' is outside the purview of Payment of Gratuity Act.

9.1 A similar question though not identical arose before this Court in Special Civil Application No.8586 of 2015 decided on 28.08.2018 in the case of Gujarat Rural Labour Welfare Board vs. Manjulaben Natwarlal Jani and this Court while interpreting the term 'employee' observed as under:

"14. In this view of the matter it is appropriate to take into account the provision under Section 2(e) of the Payment of Gratuity Act, which defines the term "employee". The said term reads thus:

2(e):"employee" means any person (other than an apprentice) employed on 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 Page 10 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER 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.]"

14.1 The said definition is in two parts. First or principal part of the definition provides and explain and who would stand covered within the purview of the term "employee" whereas the second part of the definition explains the categories of persons who would stand excluded from the purview of said term.

14.2 On this count it is relevant to note that the Board has taken very clear and specific stand that the respondent did not hold "civil post" or any post with the State Government and she was not "Government employee".

The Board also maintained that the claimant is not governed by and she is eligible / entitled for gratuity under GCSR or under any other Rules or under any Scheme or Rules framed by and in operation in, the Board.

14.3 In light of such clear and specific stand and reply by the Board the claimant does not come within the purview of exclusion Clause of Section 2(e). Therefore, in light of its (above mentioned) stand and reply the Petitioner Board cannot expect and cannot claim that the claimant should be excluded from the purview of Section 2(e) and that she should not be considered " employee".

14.4 It is pertinent to note that the said Section 2(e) excludes, from its purview, only those employees who hold a post under Central Government or State Government and is governed by any such Act or by said Rules provided by the Payment of Gratuity Act.", whereas even according to the petitioner Board claimant does not hold civil or any other post with State of Central government and she is not eligible for Gratuity under any Rules. According to the case setup by the petitioner and Page 11 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER its own reply or explanation with reference to the claimant, she does not fall within the exclusion clause.

15. In light of foregoing discussion, now the question as to whether the respondent falls within the purview of principal main part of the said definitionclause or not, can be considered.

15.1 It is relevant to note of Section 2(e) of P.G.Act. According to Section 2(e) a person engaged for "any kind of work" manual or otherwise of establishment will come within the purview of said provision. Therefore the "Kendra Sanchalak" or "Jilla Sanchalak" engaged to "carry out" the "work" of the board, which include manual work and / or clerical work, would fall within purview of the expression" employed ... in any kind of work, manual or otherwise" in connection with the work of establishment.

15.2 The respondent worked for the Board and she was, undoubtedly, engaged for "work" ( manual or clerical or otherwise) related to and/ or in connection with the work (objects and activities of the board) of the Board. She, undisputedly performed manual and/ or clerical work. Therefore she cannot be excluded from the purview of Section 2(e) of P.G. Act. Her employment with the Board would, therefore come within the scope of the expression "employed ....in any kind of work ...in connection with the work of.....establishment" and the said fact [i.e. the fact that the claimant is engaged in/ for manual/ Clerical work of petitioner establishment (i.e. work of the Board)] is not in dispute.

16. It is pertinent that before the authorities and also before this Court the petitioner failed to prove that the claimant was not engaged for manual work and/ or clerical work and/ or that she did not "work" for the petitioner establishment and/ or that the work/ duty which she performed was not in connection with the work of the Board. There is no material on record and no justification which could lead the Court to the conclusion Page 12 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER that the claimant cannot be termed "employee" u/s. 2(e) of P.G.Act. The respondent fulfills the criteria prescribed by Section 2(e) and she falls within the purview of the term "employee" under Section 2(e) of the said Act. Moreover, even according to the Board's case, the claimant does not fall in the exclusion clause u/s. 2(e) of P.G.Act inasmuch as even according to the Board the claimant did not "hold" a "civil post" or any other "post" under State or Central government and she was not "government employee/ servant". Thus, there is no ground to exclude her from Section 2(e) of P.G.Act."

9.2 In the instant case, it is not in dispute as observed by the Controlling Authority that the Respondent No.1 has worked from 01.06.2006 till 01.01.2017 under the petitioner no.1. He was paid salary also regularly by the petitioner for performing work for the petitioner and the petitioner herein also does not fall within the exclusion as per the definition of 'employee' under Section 2(e) of the Act and, therefore, the Controlling Authority was right in holding that there is relationship of 'employeremployee' between the petitioner and the respondent no.1 and the Appellate Authority has rightly confirmed the aforesaid finding.

10. As regard the second contention raised by Mr.Pandya that Controlling Authority exceeded its jurisdiction by going into the question to adjudicate as to whether there is relationship of 'employer-employee' between the petitioner and Respondent No.1 as according to Mr.Pandya the Controlling Authority was empowered only to determin the amount of gratuity. In this regard, this Court is of the opinion that when a dispute was raised by the petitioner itself that the Respondent No.1 was not an employee of the petitioner and he was only Retainer, when such dispute was Page 13 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER raised by the petitioner itself, just to get rid off from its liabilities to pay the amount of gratuity to Respondent No.1, the Controlling Authority had rightly gone into the question whether Respondent No.1 can be said to be employee of the petitioner and whether there is relationship of employeremployee between the petitioner and the respondent No.1 and, therefore, this Court is of the view that Controlling Authority has not committed any error by adjudicating whether there is any relationship of employer employee between the petitioner and the respondent no.1.

11. As regards the contention raised by Mr.Pandya that since the respondent no.1 was not employee of the petitioner and, therefore, he was paid some amount towards 'Retainership', which cannot be said to be 'salary' though in all the orders it is stated as 'salary' is concerned, this Court has observed in para:22 of the Gujarat Welfare Board (supra) as under:

"22. Likewise, the petitioner's contention that the respondent was paid honorarium and therefore the amount paid to the respondent cannot be termed "wages" and consequently the Board would not be liable to pay gratuity, is also not sustainable.

22.1 The term "wages" is defined under Section 2(s). The said provision explains this position and leads the Court to dismiss the said contention. The said provision reads thus:

"Section 2(r):"wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance."(emphasis Page 14 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER supplied) 22.2 The P.G.Act employs the expression "all emoluments". The said term is very wide and it includes any payment to an "employee" while on duty except those allowances which are expressly excluded.

23. At this stage it would be appropriate to take into account the meaning and scope of the expressionterm "emoluments" and to also study the said term in light of the terms which are, ordinarily, used interchangeably viz. "remuneration" and "salary" in juxtaposition with the term "honorarium". In Oxford dictionary the said terms are defined thus:

"Emolument salary, fee, or profit from employment or office (Middle English from Old French emolument or Latin emolumentum, originally probably 'payment for corngrinding'.

In Webster the said terms are defined as:

"Emoluments gain, profit, advance, from emolire, to accomplish, effect; out, and molire, to exert oneself.

"Emolument" the profit arising from office or employment; that which is received as a compensation for services; payment received for work; wages; salary; fees.

2. advantage; gain in general.

As per Lexicon, the said term is defined as:

"Emoluments - means pay, leave salary or subsistence grant if admissible and any remuneration of the nature of pay received in respect of deputation.

Any advantage, profit, or gain received as a result of one's holding of office.

Whereas the term "Remuneration" is defined thus in oxford dictionary:

"Remunerate - reward; pay for services rendered.

Page 15 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER

2. serve as or provide recompense for (toil etc) or to (a person).

In Webster's dictionary, the said term is defined thus: "Remuneration" 1. a remunerating; the act of paying an equivalent for services, loss, or sacrifices.

2. the equivalent given for services, loss, or sufferings;

that which remunerates; reward; pay;

recompense; compensation.

Law Lexicon explains the term "Remuneration" thus: "Remuneration" is only a mere formal version of payment, Bala Subrahmanya Rajaram v. B.C.Patil, AIR 1958 SC 518: (1958) SCR 1504.

Payment; compensation, Black's Law Dictionary, 7th Edn., p.1298.

Whereas the term "salary" is defined thus in Oxford dictionary: "Salary fixed regular payment, usu. Monthly or quarterly, made by an employer to an employee, esp. a professional or white collar worker, pay a salary to.

In Webster said term is defined thus: "Salary [originally salt money, money given to buy salt, as part of the pay of Roman soldiers, hence, stipend, pay from sal, salt] a fixed payment at regular intervals for services, usually other than manual or mechanical: distinguished from wages.

Syn.recompense, compensation, pay, remuneration, stipend.

Lexicon explains the term "Salary" thus: "Salary , a recompense or consideration generally periodically made to a person for his service in another person's for his service in another person's business; also wages, stipend, or annual allowance.

"Salary", An agreed compensation for services esp.

Page 16 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER

professional or some professional services usu. Paid at regular intervals on yearly basis, as distinguished from an hourly basis, Black's Law Dictionary, 7th Exn., p.1337.

"Salary" means payment received by any person on regular basis for each month. Salary does not include arrears of salary.

23.1 A comparative study shows that usually said terms are used interchangeably and take in the fold any and all payment for work done/ service rendered.

23.2 There is slight or inconsequential distinction between the term "wages" and the term "Salary", more particularly in their usage rather than the meaning, however practically the said terms are used interchangeably. Actually the scope and purview of the term "emolument" are slightly wide and it take in its fold more modes and types of payments including "profit from employment". The definition and meaning of the said terms gives out that fixed payments at regular intervals for service rendered fall within purview of "salary" or "wages" or "remuneration" and even "emolument".

Therefore, when it is shown and established that payments were/are made at fixed/ agreed rate and at regular intervals and that such payments were/ are made for service rendered, then such payment would fall within purview of the term "emolument". It would, therefore, be appropriate at this stage, to consider the features and characteristics of the payments to the claimant and service rendered by her.

23.3 So far as the claimant is concerned, she received the payment for the service which respondent rendered to the Board

(a) regularly

(b) in accordance with the terms, conditions and instruction and directions of the Board.

(d) under the supervision and control of the Board.

(e) she was subject to the Rules of discipline fixed framed by the Board.

Page 17 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER

(f) she did not render service at her will and according to her convenience.

(g) for her service she was paid (she was entitled for) fixed/agreed amount periodically and at regular interval i.e. every month. The payment to the claimant fulfill the characteristics and criteria of "emoluments" or "salary" (or "remuneration" or 'wages" ).

23.4 Now so far as Honorarium is concerned, the said expression is defined - explained in Oxford dictionary, thus: "Honorarium a fee, esp. a voluntary payment for professional services rendered without the normal fee.

In Webster's Dictionary the said term is explained thus: "Honorarium a payment to a professional man for services on which no fee is set or legally obtainable.

"Honorarium a recompense for service rendered; a voluntary fee to one exercising a liberal profession e.g. a barrister's fee.

Lexicon explains the said term thus:

A payment of money or anything of value made to a person for services rendered for which fee cannot legally be or are not traditionally paid, Black's Law Dictionary, 7th Edn.

23.5 The service rendered by the respondent was not and cannot be termed "honorary service" and the payment to the respondent does not have the characteristics of "honorarium".

23.6 From the said definitions it comes out that distinguishing feature or special characteristic of "honorarium" is that it is paid for service which is, usually rendered voluntarily and for which any fee or remuneration or consideration is not legally or traditionally paid or required to be paid. In present case both features are absent. It is not the claim of the respondent that she rendered honorary and voluntary service. Above mentioned features of her service Page 18 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER make it clear that she was "employed" by and she rendered service to the petitioner in Board as an employee.

23.7 When the remuneration paid to the respondent is taken into account and above mentioned characteristic and features attached to the service rendered by the claimant and the characteristic attached to the payment made to the claimant are accordingly examined, then it becomes clear that the amount paid to the claimant is, undisputedly, in the nature of and it has character of wages or salary i.e. "emolument" and it is not honorarium in its pure and/ or legal form and nature.

23.8 It is necessary to note that when the petitioner board appoints Kendra Sanchalaks/ Jilla Sanchalaks, it calls for the names from Employment Exchange and it also verifies the educational qualification. Experience of the candidates are scrutinized and the selection procedure as per Rules and practice of the Board is followed. The Kendra Sanchalaks/ Jilla Sanchalaks are paid emoluments at fixed rate and at fixed duration (every month). It, therefore, follows that the amounts paid to the persons employed by the Board i.e. Kendra and Jilla Sanchalaks would fall within purview of the term "Wages" under Section 2(s) of P.G.Act and the Board is not justified in wishing away the claim on the premise that what is paid to the Kendra Sanchalaks/ Jilla Sanchalaks is an Honorarium.

When all factors and relevant features and characteristics are conjointly considered it becomes clear that the claimant is "employee" within the meaning of the term defined u/s. 2(e) and the amount which the Board paid/ claimant received would fall within the purview of the term "wages" defined u/s. 2(s) of P.G.Act.

24. Merely because the emolument paid to the petitioner was styled as "honorarium" it does not take away the basic, inherrent and natural and realactual characteristic and nature and form of the payments made to the claimant. It reamined "wages" or "salary". Therefore it is not possible to hold that the monthly payments to the respondents are not Page 19 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER "emolument" or "salary" or "wages". Therefore the said contention should also fail."

12. The above observations made by this Court make it more than clear that under whatever name or head the amount is paid but it remains as 'wages' or 'salary' and, therefore, since the petitioner used to pay wages to respondent no.1 on that count also the employeremployee relationship between the petitioner and the respondent no.1 can be established easily.

13. As regard the contention of Mr.Pandya that respondent no.1 joined the petitioner organisation after attaining the age of superannuation from his erstwhile employer i.e. Amul Dairy and he has already received amount of gratuity from its erstwhile employer and, therefore, present petitioner is not liable to pay any amount towards gratuity is concerned, Section 4(1) and Section 4(5) of the Payment of Gratuity Act requires to be considered, which read thus:

"4. Payment of gratuity. (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years,

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease:

Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:

[Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other Page 20 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER financial institution, as may be prescribed, until such minor attains majority.] Explanation. For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement. ...... ... xxx 4(5) Nothing in this section shall affect the right of an employee receive better terms of gratuity under any award or agreement or contract with the employer."

14. As per section 4(1), an employee who has served for continuous service for not less than five years becomes entitled to gratuity on account of superannuation, retirement, resignation or in case of his / her death or disablement or accident or disease. In Section 4(5) no upper age limit has been prescribed that an employee cannot claim amount of gratuity on attaining particular age be considered the age of superannuation. If Section 4(1) is read with Section 4(5) which prescribes that nothing in this Section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer, meaning thereby, if an employee gets any better terms of gratuity under any award or agreement or contract, the same is not barred or prohibited by the provisions of the Act and, therefore, the contention of Mr.Pandya that since the respondent No.1 has already received an amount of gratuity from its erstwhile employer, his present employer is not liable to pay an amount of gratuity. For almost 11 years of service, respondent no.1 has rendered for petitioner organisation cannot be accepted.

15. In view of aforesaid discussion, it is crystal clear that both the Page 21 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022 C/SCA/16929/2020 ORDER Controlling Authority as well as Appellate Authority under Payment of Gratuity Act, 1972 have not committed any error and this Court is under complete agreement with the findings recorded by both the authorities and, therefore, no interference is warranted in orders passed by both the authorities. Accordingly, this petition deserves to be dismissed and it is dismissed with no order as to costs.

(NIRZAR S. DESAI,J) MISHRA AMIT V. Page 22 of 22 Downloaded on : Wed Jan 12 04:53:29 IST 2022

Unlock Advanced Research with PRISMAI

Gujarat High Court