Bombay High Court
Digamber Yeshwantrao Watane vs Agricultural Produce Market Committee ... on 5 July, 2004
Equivalent citations: 2004(6)BOMCR678, 2005(1)CTLJ152(BOM), [2004(102)FLR988], (2004)IIILLJ895BOM, 2004(3)MHLJ603
Author: B.R. Gavai
Bench: B.R. Gavai
JUDGMENT B.R. Gavai, J.
1. The present petition challenges the order passed by the Divisional Joint Registrar, Co-operative Societies, Amravati dated 15-7-1989 in Revision No. 6 of 1987, thereby rejecting the revision of the present petitioner.
2. Factual background giving rise to filing of the present is as under:--
That, the petitioner was working as a Secretary in APMC, Achalpur, the respondent No. 1 herein, since its inception i.e. 1963. On account of certain grievance, the petitioner submitted an offer for voluntary retirement vide his letter dated 28th October, 1986. In the letter, offering for voluntary retirement, the petitioner had put certain conditions. The relevant condition for adjudication of the present petition in the said letter is Condition No. 2, which reads thus, "that an amount of gratuity should be paid in accordance with the Payment of Gratuity Act, 1972 and Rule 34(C) of Service Conditions of APMC as per the pay payable to the petitioner on the date of retirement."
3. The said letter of the petitioner offering for voluntary retirement was placed before the Committee of the respondent No. 1, APMC in its meeting held on 29th October, 1986. The Committee considered the offer of the petitioner and accepted to give voluntary retirement to the petitioner on certain conditions. The relevant condition for the purposes of the present petition is, "an amount of Rs. 52,440/- should be paid on account of gratuity being twenty months' salary. It was also decided in the said meeting that in case in future the pension scheme is applicable to the respondent No. 1, APMC, then in that event the petitioner would be entitled to receive the pension. It is further clarified that if pension scheme is applicable then the petitioner will have to refund certain amount in accordance with the Rules and only on refund of such amount, the pension scheme would be made applicable to the petitioner. The said offer was communicated to the petitioner by letter dated 15-11-1986 by the Chairman of the respondent No. 1, Committee. Along with the said letter, a true copy of the resolution No. 11/3 of the meeting held on 29th October, 1986 was also annexed. The petitioner addressed a letter of the same date i.e. 15-11-1986 to the Chairman of respondent No. 1 stating therein that the decision taken by the respondent No. 1 vide Resolution No. 11/3 in the meeting dated 29th October, 1986 regarding voluntary retirement of the petitioner is acceptable to him and that he will have no future grievance.
4. The District Deputy Registrar, Co-operative Societies took an objection to the decision of APMC of paying Rs. 52,440/- towards payment of gratuity being twenty months' salary. The objection raised was that the said payment was made in excess of the provisions of the said Act. Accordingly, the petitioner was sent a communication dated 15-11-1987 by the respondent No. 1 APMC communicating therein that since the service of the petitioner was only 23 years, three months and 15 days, he was entitled only for the salary for 11 months and 20 days towards payment of gratuity. The said amount was quantified at Rs. 30,590/-. It was thus stated in the letter that after adjusting all the payments made to the petitioner, only an amount of Rs. 2, 808 was payable to the petitioner. Vide the said letter, the petitioner was requested to receive the said amount from the office of respondent APMC. Being aggrieved by the objection raised by the DDR and the consequential letter addressed by the APMC, the petitioner filed a revision under Section 43 of the said Act before the Divisional Joint Registrar of Co-operative Societies, Amravati. The Divisional Joint Registrar, Co-operative Societies, respondent No. 2 herein, dismissed the revision application filed by the petitioner vide order dated 15-7-1989. Being aggrieved by the said order, the petitioner has approached this Court.
5. Heard Shri Mihir Kanade, the learned Counsel appearing on behalf of the petitioner, Shri M.N. Ingle, the learned Counsel appearing on behalf of the respondent No. 1 and Smt. N.S. Jog, the learned Assistant Government Pleader appearing on behalf of the respondent No. 2.
6. Shri Kanade, the learned Counsel for the petitioner submitted that the petitioner had given an offer for voluntary retirement with certain conditions. The respondent-APMC in response thereof, has accepted the proposal of the petitioner for voluntary retirement on certain conditions imposed by it and that the petitioner had accepted the revised proposal of the APMC. He, therefore, submits that there was a concluded contract between the employer and employee and as such the petitioner was entitled to receive the better payment towards the payment of gratuity than the one provided under Sub-section (2) of Section 4 of the said Act. He submits that to invoke the provisions of Sub-section (5) of Section 4 of the said Act, it is not necessary that the contract has to be the one which was executed between the parties at the time of commencement of service. He submits that even by subsequent contract, better terms could be given to an employee, taking recourse to Sub-section (5) of Section 4 of the said Act. He relies on the judgment of the Apex Court in the case of Workmen of Metro Theater, Bombay v. Metro Theater Ltd. Bombay .
7. Smt. N.S. Jog, learned AGP vehemently supported the order of Divisional Joint Registrar. She submitted that the Divisional Joint Registrar has rightly come to a conclusion that there was no contract between the petitioner and the respondent No. 1, APMC and as such rightly held that the petitioner was not entitled to higher amount than the one which is provided under Sub-section (2) of Section 4 of the said Act. She submitted that the contract which is referred to in Sub-section (5) has to be a contract of service entered into between the employer and employee at the stage of commencement of the service. Relying on the judgment of the Apex Court in the case of Uptron India Ltd. v. Shammi Bhan and Anr. , she submits that the relationship between the employer and employee is partly contractual and partly non contractual. She submits that insofar as the obligation of the employer to pay wages and the corresponding obligation of the workman to render services is concerned, the same forms part of contractual relationship, whereas the terms, conditions and obligations prescribed by the Payment of Wages Act, 1936, Industrial Employment (Standing Orders) Act, 1946, Minimum Wages Act, 1948, Payment of Bonus Act, 1965 and Payment of Gratuity Act, 1972 forms a part of non contractual relationship. She 'submits that since Sub-section (2) of Section 4 clearly provides that what shall be the terms and conditions of payment of gratuity, depending upon service rendered. It is statutory obligation and the same cannot be modified by a contract of the present nature. She submits that firstly the offer by the petitioner, the counter offer by the respondent-APMC and the acceptance by the petitioner cannot be termed to be a contract. She submits that assuming without admitting that the same can be termed to be a contract but it cannot be termed to be a contract so as to invite the provisions of Sub-section (5) of Section 4. She also relies on the judgment of the Apex Court in the case of D. T. C. Retired Employees' Association and Ors. v. Delhi Transport Corporation etc. in support of her submissions.
8. Shri M. N. Ingle, the learned Counsel for the respondent No. 1, APMC also supports the impugned order. He submits that from the facts, it can be seen that there was no contract between the petitioner and the respondent APMC. He submits that if this Court holds that the resolution vide which the higher payment was decided to be made to the petitioner then in that event the other employees may also demand for such a higher payment.
9. The question that will have to be decided in the present petition is as to whether an offer made by the petitioner, the counter offer made by the respondent-APMC and its acceptance by the petitioner could be said to be a contract so as to bring it within the ambit of Sub-section (5) of Section 4 of the said Act. Sub-section (5) of Section 4 of the Act reads thus :--
"(5) 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."
It can thus be seen that the Sub-section (2) of section provides that for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned. Sub-section (3) of said section provides that the amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand rupees. At the relevant time, when the petitioner opted for voluntary retirement, the said amount was Rs. 50,000/-. Sub-section (5) provides 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. Thus, it can be seen that the term used by the legislature is not given any restrictive meaning. Even otherwise, it is a settled law that when the provisions of beneficial legislation are interpreted, they have to be given the liberal meaning.
10. In the present case, we can see that initially the petitioner vide his letter dated 28th October, 1986 had given an offer for voluntary retirement on certain conditions. The respondent-APMC vide its resolution dated 29th October, 1986 had considered the proposal and resolved to give voluntary retirement to the petitioner on certain conditions incorporated in the resolution. The offer for voluntary retirement on the modified terms was made to the petitioner by the Chairman of the APMC vide letter dated 15-11-1986 and that the petitioner vide letter of the same date accepted the proposal for voluntary retirement on the conditions laid down by the APMC. It can thus be seen that the ingredients of contracts i.e. "offer" and "acceptance" are complete in the facts of the present case and, therefore, it cannot be disputed that there was a contract between the petitioner and the APMC.
11. The only question that now requires to be determined is as to whether in pursuance of such a contract, whether the petitioner was entitled to receive better terms than the one which is provided under Sub-section (2). The Apex Court in the case of Workmen of Metro Theater, Bombay v. Metro Theater Ltd., Bombay (cited supra), in para 8 has observed thus :--
"The question for consideration is whether the expression 'award' occurring in the above provision means an existing award or would include any award whatsoever to be made by an adjudicator under the Industrial Disputes Act. In the first place there is nothing in the provision which limits the expression 'award'. Secondly, it cannot be and was not that under the above provision a gratuity scheme obtaining under an existing agreement or contract could be improved upon by a fresh agreement or fresh contract between the employer and the employee and if that be so there is no reason why the expression 'award' should be construed as referring to an 'existing award' and not to include a fresh award that may be made by an adjudicator or an industrial court improving in favour of the employees the scheme obtaining under the Act or the existing award. Thirdly, the very fact that under the above provision better terms of gratuity could be obtained by an employee by an agreement or contract with the employer notwithstanding the scheme of gratuity obtaining under the Act clearly suggests that no standardisation of the gratuity scheme contemplated by the Act was intended by the Legislature."
12. Thus the Apex Court itself has observed that there cannot be any standardisation of gratuity scheme contemplated by the Act. It can be seen that the intention of the Act was that an employer will have to pay a minimum gratuity as contemplated under Sub-section (2) of Section 4. The legislation intended that it was always permissible to an employer and or employee to arrive at a settlement thereby providing for a better terms towards gratuity. The Apex Court in the case of D.T.C. Retired Employees' Association and Ors. v. Delhi Transport Corporation etc. (cited supra), while considering the provisions of Sub-section (5) of Section 4 has observed thus :--
"Sub-clause (5) of Section 4 is an exception to the main section under which gratuity is payable to the employee. In all welfare legislations, the amount payable to the employees or labourers is fixed at the minimum rate and there will not be any prohibition for the employer to give better perquisites or amounts than what is fixed under law. The employer, who is more concerned with industrial peace and better employer-employee relations, can always give benefit to the employees irrespective of any statutory minimum prescribed under law in respect of such reliefs. Therefore, the provision contained in Sub-clause (5) of the Section 4 is of no assistance to the appellants."
13. The Apex Court has clearly held that the amount payable to the employees or labourers is fixed at the minimum rate and there will not be any prohibition for the employer to give better perquisites or amounts. It is needless to state that the voluntary retirement is generally in the nature of golden hand shake. Normally, an offer for voluntary retirement is given with the better benefits than the one which are available at the age of retirement on superannuation.
14. The reliance placed by Smt. N.S. Jog, the learned AGP on the judgment in the case of Uptron India Ltd. v. Shammi Bhan and Anr. (cited supra), in my respectful view is also not of much help. It is no doubt that there is substance in what has been contended by the learned AGP that the relationship between the employer and employer is partly contractual and partly non contractual. No doubt, the Apex Court in the aforesaid case has held that insofar as obligation on an employer to abide by the provisions of Labour Enactments is concerned, the same is not contractual and is obligatory upon an employer. However, if the same labour enactment itself provides for a better deal in favour of an employee, the same cannot be prohibited as already held in the case of D.T.C. Retired Employees' Association and Ors. v. Delhi Transport Corporation etc. (cited supra).
15. Plain reading of Sub-section (5) of Section 4 would reveal that it has an overriding effect. Since in the present case, the petitioner had opted for voluntary retirement and that the respondent-APMC had decided to give him voluntary retirement on certain conditions, the contention of Shri Ingle, learned Counsel for APMC that the other employees will also demand the same gratuity is without substance. Rights and obligations while granting voluntary retirement depend upon the facts of each case and they will never govern the rights and obligations while an employee retires on superannuation. In the latter case, the service conditions would apply. The fear expressed by Shri Ingle, in my opinion, is without substance. I am, therefore, of the considered view that there was a concluded contract of voluntary retirement between the petitioner and the respondent-APMC and that contract was of such a nature so as it brings to within ambit of Sub-section (5) of Section 4 of the said Act.
16. The order of the learned Divisional Joint Registrar dated 15-7-1989 thereby dismissing the revision of the petitioner and the communication addressed by the respondent-APMC dated 15-11-1987 and the objection raised by the District Deputy Registrar are, therefore, not sustainable in law. The petition is, therefore, allowed. The order passed by the Divisional Joint Registrar, Co-operative Societies, Amravati dated 15-7-1989 and the communication addressed by the respondent No. 1 dated 15-11-1987 are quashed and set aside. The respondent-APMC is directed to pay the retiral benefits to the petitioner as per its Resolution No. 11/3 dated 29th October, 1986. The balance of the unpaid amount shall be paid to the petitioner within a period of four weeks from today with the interest at the rate of rupees six per cent per annum from the date on which the amount was due.