Allahabad High Court
Mahak Singh vs Appellate Authority/Deputy Labour ... on 24 July, 2019
Equivalent citations: AIRONLINE 2019 ALL 2045, (2019) 11 ADJ 56 (ALL)
HIGH COURT OF JUDICATURE AT ALLAHABAD Reserved AFR Court No. - 18 Case :- WRIT - C No. - 11140 of 2019 Petitioner :- Mahak Singh Respondent :- Appellate Authority/Deputy Labour Commissioner Payment Of Gratuity Counsel for Petitioner :- Dinesh Rai Counsel for Respondent :- C.S.C.,Chandan Sharma Hon'ble J.J. Munir,J.
1. This writ petition under Article 226 of the Constitution has been brought by Mahak Singh, an employee of Cooperative Cane Development Limited, Railway Road, Deoband, Saharanpur through its Secretary, who are a Cane Cooperative Society registered under the U.P. Co-operative Societies Act, 1965. Admittedly, the petitioner was appointed as a seasonal clerk with respondent no. 3, last mentioned (for short the 'society') on 09.12.1975 and retired from service, as such, on 31.08.2014, upon attaining the age of superannuation. The petitioner rendered 39 years of service. At the time of retirement, the last salary drawn by the petitioner was Rs. 16,690/- per mensem. Upon retirement, the petitioner was paid a sum of Rs. 3,62,754/- in gratuity, calculating it at the rate of seven days wages for each season, multiplying it with the total number of seasons that were reckoned to be 37 by the Society. Thus calculated, the petitioner was paid gratuity in the sum of Rs. 3,62,754/-, in accordance with the provisions of the second proviso to sub-section (2) of Section 4 of the Payment of Gratuity Act, 1972 (for short the 'Act').
2. The petitioner claims that though employed as a seasonal clerk by the Society, he has admittedly worked for more than 240 days regularly, thus being employed throughout the year, and, upon that fact even if the Society are held to be a seasonable establishment, the petitioner is entitled to be paid gratuity @ 15 days wages based on the rate of wages last drawn for every completed year of service or part thereof in excess of six months in accordance with sub section (2) of Section 4 of the Act. Reckoned thus, the petitioner would be entitled to gratuity in the sum of Rs. 7,77,330/-, which after deducting the sum already paid to him on that account, short of his entitlement, the Society still owes to the petitioner a sum of Rs. 4,14,576/-.
3. It is also contended by the petitioner that apart from designating him a seasonable clerk, the Society are not entitled to rely on the second proviso to sub section (2) of Section 4 of the Act, inasmuch as, they are not at all a seasonal establishment. It is urged in the supplementary affidavit filed by the petitioner, in particular, that the Society are not a seasonal establishment within the meaning of the second proviso to Section 4(2) of the Act. He has relied on a specific certification tendered in answer to information about the status of the society sought by one Suresh Pal Singh s/o Amar Singh from the District Cane Officer, Saharanpur, where it has been certified vide Memo No. 1297, amongst other things, that Cooperative Cane Societies are not seasonal establishments, but Cooperative Societies.
4. This petition has arisen from proceedings taken by the petitioner under the Act before the Controlling Authority and the Appellate Authority. The course of those proceedings and disposition of the petitioner's claim by those Authorities, is described hereinafter.
5. The petitioner approached the Controlling Authority under the Act seeking to enforce recovery of the balance of his gratuity from the Society. The Controlling Authority appointed under the Act for the District of Saharanpur vide an order dated 15.05.2017, rejected the petitioner's claim on application of a simple principle that the petitioner being a seasonal employee, he was entitled to gratuity calculated in accordance with the second proviso to sub section (2) of Section 4 of the Act. The said order was challenged in appeal to the Appellate Authority under Section 7(7) of the Act. The appeal aforesaid, registered as PGA Appeal No. 13 of 2017, was dismissed by the Appellate Authority vide order dated 30.07.2018, affirming the order of the Controlling Authority, dated 15.05.2017, refusing the petitioner's prayer as above detailed. The orders dated 15.05.2017 passed in PGA Appeal No. 13 of 2017 by the Controlling Authority and the Order dated 30.07.2018 passed by the Appellate Authority affirming the said order, wherever referred together are hereinafter referred are called the 'impugned orders'.
6. Aggrieved by the impugned orders rejecting the petitioner's claim, the present writ petition has been filed.
7. It may be mentioned here that this petition was filed on 22.03.2019. It came up before Court on 01.04.2019 when it was adjourned to 01.04.2019, in order to enable the learned counsel for the petitioner to serve a copy of the writ petition upon learned counsel appearing for the Society. On 02.04.2019, the matter was heard at the admission stage and learned counsel for the Society was required to seek instructions regarding the copy of a document enclosed as Annexure 1 to the writ petition, particularly, about the number of working days shown there by the petitioner from 1979 to 2014, for the specific purpose of verifying whether that was a correct statement of account about his working days. Since learned counsel for the Society also sought to raise some objections that the Payment of Gratuity Act would not apply to the Society, he was also required to disclose his stand on the issue. The matter was adjourned to 08.04.2019. On 08.04.2019, a supplementary affidavit, some of the contents whereof have been referred to hereinbefore, was filed by the petitioner after service upon learned counsel for the respondent no. 3. The matter was adjourned to 16.04.2019. The writ petition was taken up thereafter on 16.04.2019 and learned counsel for both parties desired that the matter be heard finally at the stage of admission with learned counsel for respondent no. 3 consenting to that course, without any affidavit being filed on behalf of the Society. The matter was, accordingly, heard on 16.04.2019. It was further heard on 22.04.2019, and finally on 25.04.2019, when judgment was reserved.
8. Heard Sri Dinesh Rai, learned counsel for the petitioner, Sri Chandan Sharma, learned counsel appearing on behalf of the Society (respondent no. 3) and Sri R.M. Vishwakarma, learned Standing Counsel appearing on behalf of the State.
9. The following questions arise for consideration in this petition:-
(a). Whether seasonal employees of Cane Cooperative Societies in Uttar Pradesh are governed in the matter of payment of gratuity by the Act or by the provisions of the U.P. Cooperative Act, 1965 read with U.P. Cane Cooperative Service Regulations, 1975?
(b). Whether a seasonal clerk employed by a Cane Cooperative Society who works for more than 240 days in a year is entitled to gratuity at the rate 15 days wages, worked out on the wages last drawn under Section 4(2) of the Act, or is entitled to seven days wages for each season under the second proviso to Section 4(2)?
10. The submission of Sri Chandan Sharma is that the Act does not apply proprio vigore to seasonal employees of Cane Cooperative Societies in U.P. He submits that the Act has been made applicable to such seasonal employees only to the extent of calculation and payment of gratuity in terms of a circular issued by the Cane Commissioner, Uttar Pradesh, in exercise of powers under Regulation 200 of the U.P. Cane Cooperative Service Regulations, 1975 (for short the 'Service Regulations of 1975'). Prior to the issue of the aforesaid circular dated 25.02.1997, employees of Cane Cooperative Societies like the petitioner were governed by the Service Regulations of 1975, even in the matter of calculation and payment of gratuity which was in accordance with the earlier order of the Cane Commissioner/Registrar, Cooperative Cane Societies, U.P., Lucknow, dated 05.01.1987. A clear formula for working out gratuity of an employee like the petitioner was detailed in the Cane Commissioner's Statutory order of 05.01.1987, issued under Rule 200 of the Service Regulations of 1975, which left no scope for calculation of gratuity to be made in accordance with the provisions of the Act.
11. Sri Chandan Sharma submits that the Cane Commissioner's order of 25.02.1997, has amended the earlier order of 05.01.1987, as already said to the extent of calculation of gratuity, by making the Act applicable to a seasonal employee like the petitioner. It is not that the Act has become applicable on its own force, and, as a whole. He submits that Authorities under the Act, have no jurisdiction to determine disputes relating to calculation or payment of gratuity to employees of a Cane Cooperative Society in U.P. All that has to be done by the Authorities under the Service Regulations of 1975 or the U.P. Cooperative Societies Act, 1965 (for short the 'Act of 1965').
12. Stressing his submission as to inapplicability of the Act, except to the limited extent of calculation and payment of gratuity, Sri Chandan Sharma has submitted that the Act is a General Law regulating payment of gratuity to all classes of employees, as indicated by Section 1 thereof, whereas the Act of 1965 and the Service Regulations of 1975 are a Special Act and Regulations framed under the Special Act, that make provision for gratuity and the manner of redressal of grievances of an employee. The jurisdiction of the Authorities under the Act is, therefore, completely excluded. Shri Chandan Sharma has further emphasized that Chapter 16 of the Service Regulations of 1975, in particular, Regulations 141 to 149, provide for everything about gratuity to an employee of Cane Cooperative Societies like the petitioner. He submits that the Service Regulations of 1975 came into force on 18.10.1975, whereas the Act was brought into force on 31.08.1972. The Service Regulations of 1975 being a subsequent statutory regulation carrying specific provisions in relation to gratuity of employees of a Cane Cooperative Society, will prevail over a general statute like the Act in matters of payment of gratuity, except to the extent that the Act is made applicable. In accordance with the last part of his submission that the Act governs to the extent that it is made applicable by the Authorities acting under the Service Regulations of 1975 or the Act of 1965, it is pointed out by Sri Sharma that the Cane Commissioner's Order dated 25.02.1997 annexed to the supplementary affidavit filed by the petitioner shows, that the Act has been made applicable for the limited purpose of reckoning/calculation and payment of gratuity under it, and according to its provisions, from time to time in force. But the said Order makes it clear that except for the amendment, the earlier Statutory Order made by the Cane Commissioner dated 05.01.1987 will remain in force.
13. Sri Chandan Sharma has also urged that the Act of 1965 is a self contained statute and it excludes applicability of all other labour laws, like the U.P. Industrial Disputes Act, 1947 and the Payment of Gratuity Act, 1972. Sri Sharma has placed reliance in this context upon a decision of the Supreme Court in Ghaziabad Zila Sahkari Bank Ltd. vs. Additional Labour Commissioner and others, 2007 (11) SCC 756. In the said decision of their Lordships it has been held that on principle of statutory interpretation which provides that a General Act should yield to a Special Act, the Act of 1965 excludes the provisions of U.P. Industrial Disputes Act, in matters governing service conditions of employees of a cooperative society like the Ghaziabad Zila Sahkari Bank Limited (supra). It was held that the Authorities under the Act of 1965 and the Service Regulations framed thereunder, alone would have jurisdiction to decide entitlement to ex gratia payment that was made the subject matter of dispute and taken to the Assistant Labour Commissioner under Section 6H(1) of the U.P. Industrial Disputes Act by the workman. He has, in particular, placed reliance on paragraphs 37,39, and 41 of the report in Ghaziabad Zila Sahkari Bank Limited (Supra) where it is held:-
37. It was then submitted that the U.P. Industrial Disputes Act is a special statute dealing with industrial disputes and therefore will exclude the application of the U.P. Cooperative Societies Act which is a general statute.
39. In the above Act, Section 70 provides for disputes which can be referred to arbitration of the Registrar. Sub-section (1) thereof provides that Section 70 applies to "any dispute relating to the constitution, management or the business of a cooperative society" (emphasis supplied). Sub-section (2) thereof provides for including in the above disputes any "claims for amounts due" but this is also for the purposes of sub-section (1) and therefore would have to be read along with sub-section (1). This Court has specifically held that disputes arising out of terms and conditions of employment of the Society's employees do not fall within the phrase "any dispute relating to the constitution, management or the business of a cooperative society". Thus Registrar cannot decide such disputes regarding terms and conditions of employment. A number of decisions of this Court were cited on this point by the learned Senior Counsel, Deccan Merchants Coop. Bank Ltd. v. Dalichand Jugraj Jain [AIR 1969 SC 1320 : (1969) 1 SCR 887] , Coop. Central Bank Ltd. v.Addl. Industrial Tribunal[(1969) 2 SCC 43] , Allahabad District Coop. Ltd. v. Hanuman Dutt Tiwari [(1981) 4 SCC 431 : 1981 SCC (L&S) 649] and Morinda Coop. Sugar Mills Ltd. v. Workers' Union [(2006) 6 SCC 80 : JT (2006) 6 SC 374] .
41.This is further strengthened by Rule 130(2) which provides that if the resolution is not covered by Section 128 then it becomes operative immediately.
14. Sri Chandan Sharma has further relied upon a decision of this Court in Brahmawarta Commercial Co-Operative Bank Ltd., Kanpur vs. Presiding Officer, Industrial Tribunal III, U.P. Kanpur, 2012 (10) ADJ 8, where an employee of the Cooperative Bank concerned whose services were dispensed with, raised an industrial dispute under Section 4K of the U.P. Industrial Disputes Act. The petition was brought at an interlocutory stage to quash proceedings of the adjudication case on ground that the Tribunal does not have jurisdiction, in relation to service disputes of employees of a Cooperative Society. In the said case, and some of the connected matters disposed of by the same judgment, the issue was about some employees of Cooperative Banks who had received gratuity determined in accordance with the provisions of the Act, where the entitlement was higher than the provisions of the Act of 1965. About the issue of applicability of the Act vis-a-vis an employee of a Cooperative Society, governed by the Act of 1965, it was held by this Court, after considering the decision of their Lordships of the Supreme Court in R.C. Tewari v. M.P. State Co-operative Marketing Federation Ltd. (1997) 5 SCC 125 and Ghaziabad Zila Sahkari Bank Limited (Supra) that the provisions of the Act of 1965 would exclude the applicability of all Labour Laws, including the Act. In this connection, learned counsel for the society has placed particular reliance upon paragraphs 10,11,12,15,16,17,18,19,20,24 of the report in Brahmawarta (supra), where it has been held:
10. Learned counsel for the respondent has submitted that in the case of Writ Petition Nos. 5860 of 2002; 5874 of 2002 and 5876 of 2002 the respondents/employees have already been paid their gratuity in terms of the relief sought by them in writ petition, as such in their cases no recovery in respect of the difference of sum under Payment of Gratuity Act, 1972 and under the provisions of 1965 Act and Regulations framed there under may not be recovered. However, learned counsel for the respondents have failed to dispute the principle of law which emerged from the judgments mentioned in forthcoming paragraphs of this order. He has not placed reliance on any judgment contrary to the law laid down in the judgments of the Supreme Court and of this Court mentioned in this judgment.
11. I have considered the rival submissions made by the learned counsels for the respective parties. Indisputably the respondents in all the writ petitions are employees of the various Co-operative Banks who are the petitioner in the present writ petition and in the connected writ petitions. In all these matters the employees have either invoked the provisions of the U.P. Industrial Dispute Act, 1947 or under the Payment of Gratuity Act, 1972.
12. The Supreme Court in the case of R.C. Tewari (supra) has held that Co-operative Societies Act of M.P. Deals with the dispute relates to the term of employment, working conditions, disciplinary action taken by the society under Section 64 of the said Act. Registrar is empowered to decide the dispute and his decision shall be binding on the society and its employees.
15. Coming to the second set of case where the issue of gratuity is involved. Civil Misc. Writ Petition No. 5860 of 2002 has been filed through its Secretary/General Manager aggrieved by the order of the Additional Labour Commissioner/Controlling Authority under the Payment of Gratuity Act, 1972 dated 2.1.2002 and order passed by the Appellate Authority under the Payment of Gratuity Act, 1972 dated 22.5.2001.
16. In the said case the respondent No. 3 therein Surya Nath Pathak was the employee of the petitioner Bank, who was initially appointed on 23.7.1962 and attained the age of superannuation on 30.11.1998. The Bank paid him the amount of gratuity to the tune of Rs. 2,76,412.10 p. in terms of the Regulations 95 of the U.P. Employees Service Regulations, 1975. The said Regulation was framed under the provisions of the U.P. Cooperative Societies Act, 1965 and the Rules framed thereunder. The employees of the Co-operative Bank are governed by the said Regulations (for short 1975 Regulations). The 1975 Regulations were framed by the Institutional Board under Section 122 of the U.P. Co-operative Societies Act, 1965. The Regulations 95 deals with the gratuity, it provides that an employee is entitled to gratuity equivalent not more than 15 days salary for every completed year of service, if he has attained the age of superannuation. The Bank stand is that it has paid the gratuity to its above mentioned employee in terms of the said Regulations. However, after receiving the said amount the employee moved all application under the provisions of the Payment of Gratuity Act, 1972 and he claimed a higher amount of the gratuity. The Controlling Authority had his application registered as APGA case No. 9 of 1999. The Bank filed a detailed written statement refuting the claim of its employee inter alia on the ground that the Regulation 95 will override the provisions of any agreement arrived at between the parties.
17. The stand of the employees before the Controlling Authority was that there was an agreement between the U.P. Bank Employees Union and the management under the proviso 6-B(1) and the said settlement provides that the gratuity was payable at the rate of one months salary of each completed year of service. The Controlling Authority relying on the said settlement allowed the application of the employee and directed the Bank to pay gratuity amount to the tune of Rs. 4,97,880/- and also imposed 12% interest over the balance amount. Aggrieved by the order of the Controlling Authority the Bank filed an appeal under the provisions of the Gratuity Act, 1972. The appeal was also dismissed by the Appellate Authority respondent No. 1 herein, by order dated 22.5.2001 and 2.2.2001. The Bank aggrieved by the said orders dated 22.5.2001 and 2.1.2002 has filed the present writ petition.
18. Sri H.R. Mishra, learned counsel for the petitioner in this case has raised the same legal plea and has urged that common settlement which arrived at in the year 1966 which was registered under Section 6B(1) of the U.P. Industrial Dispute Act, 1947 was ineffective as its life was only one year in terms of the said sections. Further elaborating his argument he has submitted that the Bank vide its resolution No. 10 dated 11.1.1991 terminated the said settlement. The Regulations 95 which specifically deals with the gratuity has override effect over the provisions of the U.P. Industrial Dispute Act, 1947 as well as Gratuity Act, 1972. The said Regulations have been framed by the Institutional Board which has been constituted under Section 122 of the Act, 1965.
19. Sri Mishra has placed reliance on the judgment of this Court in case of Deo Raj Singh v. Fatehpur District Co-operative Bank Ltd. (supra).
20. In the matter of Deo Raj Singh (supra) the dispute arose under the provisions of the Payment of Gratuity Act, 1972. The issue raised before this Court was whether the payment of gratuity shall be made on the basis of the calculation as provided under the Service Regulations of 1995 or under the provisions of the award/agreement, 1966. In the said case the employees had invoked the provisions of the Payment of Gratuity Act, 1972,- as under the said Act the gratuity was payable to the employee @ one month wages per year service or it was payable @ 15 days wages as per year of services as provided in the Payment of Gratuity Act, 1972. The employee in the said case raised the dispute under Section 4K of the Industrial Dispute Act and the matter was referred for adjudication to the Industrial Tribunal at Allahabad.
24. Having regards to the facts and circumstances of the case, I am of the view that from the aforesaid judgments what emerges is that the U.P. Co-operative Societies Act, 1965 is a self contained Act and it excludes the jurisdiction of all other labour law such as Industrial Dispute Act and the Gratuity Act etc.
15. Sri Chandan Sharma has also pressed into service a Division Bench decision of this Court in Shobhai Ram vs. State of U.P., 2014 (142) FLR 457, where in the context of applicability of the Act to an employee of a Cooperative Society, it has been held thus in paragraphs 2,3,4 and 5 of the report:-
2. The contention of the learned counsel for the petitioner is that the Payment of Gratuity Act being an Industrial Law is not applicable to the employees of the Cooperative Societies in view of the U.P. Cooperative Society Act as also the pronouncement of the Supreme Court in the case of Ghaziabad Zila Sahkari Bank Ltd. v. Additional Labour Commissioner and others, MANU/SC/7040/2007 : (2007) 11 SCC 756 and the judgment rendered in the case of Brahmawarta Commercial Co-Operative Bank Ltd., Kanpur v. Presiding Officer, Industrial Tribunal-III, U.P., Kanpur, MANU/UP/1821/2012 : 2012 (134) FLR 574.
3. Learned counsel for the petitioner further contends that in fact the gratuity is payable under Regulation 95 of the U.P. Cooperative Societies Employees Service Regulations 1975.
4. Sri K.N. Mishra appearing for the respondent bank very fairly submits that in fact the Gratuity Act is not applicable to the cooperative society and that it being an independent body the relevant Government orders issued by the State Government in pursuance of the recommendations of the 6th Pay Commission are also not applicable unless and until the respondent bank takes a decision adopting the same.
5. Be as it may, the fact remains that the impugned order has been passed only on the ground of applicability of the Gratuity Act 1972 which is clearly not applicable in view of the provisions of the U.P. Cooperative Societies as also the aforesaid judgments mentioned.
16. Sri Dinesh Rai rebutting the contention of Sri Chandan Sharma submits that the payment of gratuity Act is not a general law vis-a-vis the Act of 1965. It is a dedicated legislation that has for its object ensuring regulation of payment, including determination and realization of gratuity, to all classes of employees to which the Act applies. He submits that in matters of payment of gratuity, the Act of 1965 and the Service Regulations of 1975 cannot be said to be special statutes that would exclude the applicability of the Act. He submits that the decision of their Lordships in Ghaziabad Zila Sahkari Bank Limited (supra) excludes the operation of labour laws in general, like the Industrial Disputes Act to Cooperative Societies, governed by the Act of 1965. The principle there does not exclude the applicability of the Act, which is a special Act so far as payment of gratuity to an employee of any establishment is concerned. It is not even limited in its applicability to industrial workers or the employees of a commercial establishment. It applies to various classes of employees of different establishments, except employees of the Central or State Government who hold posts under such Government and are governed by any other Act or by any Rules, providing for the payment of gratuity. The Act applies to various kinds of establishments in the submission of Sri Rai, as envisaged under Section 1(3) of the Act, except those that are exempted under Section 5. In short, according to Sri Rai, the Act is not a general law vis-a-vis the Act of 1965 or the Service Regulations of the 1975 framed thereunder, in the sense that the concept of a general law is postulated for the Industrial Disputes Act in the decision of their Lordships in Ghaziabad Zila Sahkari Bank Limited (supra).
17. Sri Dinesh Rai has placed particular reliance upon a recent decision of this Court in General Manager Kisan Sahakari Chini Mills Ltd. vs. Appellate Authority Under Payment of Gratuity Act, 1972 and Ors., 2019 (160) FLR 691, where this Court considered the question of applicability of the Act vis-a-vis Cooperative Sugar Mills governed by the Act of 1965 and the Service Regulations of 1975. It fell for consideration of this Court in the decision last mentioned as to whether the Act would apply to a Cooperative Sugar Mill and the Controlling Authority under the Act would have jurisdiction, given the provisions of the Act of 1965 and the Service Regulations of 1975. The question was examined on a consideration of the impact of their Lordships decision in Ghaziabad Zila Sahkari Bank Limited (supra), threadbare by this Court. The issue aforesaid was posed and answered in General Manager Kisan Sahakari Chini Mills Ltd. (supra) by this Court thus:-
10. The short question that arises for consideration before this Court is as to whether the employees of the Co-operative Sugar Mills would be covered by the Payment of Gratuity Act or whether the Controlling Authority under the Payment of Gratuity Act has jurisdiction to enter into the controversy.
11. To answer this question, the law laid down by the Apex Court in Ghaziabad Zila Sahakari Bank (supra) is required to be examined first. In the said case, the dispute was with regard to an order passed by the Assistant Labour Commissioner Ghaziabad, U.P. under Section 6H(1) of the U.P. Industrial Disputes Act' 1947. The appellant challenged the said order on the ground that the Assistant Labour Commissioner had no jurisdiction to pass such an order, in as much as, the UP Industrial Disputes Act had no application. The U.P. Co-operative Societies' Act' 1965 being a special enactment will prevail over the U.P. Industrial Disputes Act' 1947. The U.P. Co-operative Societies Employees Service Regulation' 1975 framed by the U.P. Cooperative Institutional Service Board, which has been approved by the Governor and published in the Official gazette under section 122 of the Act' 1965, provides a full fledged remedy and complete mechanism to the employees of the Co-operative Societies to agitate their grievances.
12. In view of the said remedy, the general Act namely the U.P. Industrial Disputes Act as a whole has no application.
14. The legal position regarding applicability of U.P. Industrial Disputes Act has been settled by the Apex Court on the general principle of interpretation of statutes that "the General Act should lead to the special Act". It was held that the U.P. Co-operative Societies Act being a complete code in itself as regards employment in cooperative societies and its machinery and provisions, the Assistant Labour Commissioner had wrongly invoked the jurisdiction under Section 6-H (1) of the UP Industrial Disputes Act. It was held that the exclusion of UP Industrial Disputes Act and the Industrial Disputes Act though has been specifically contemplated under section 135 of the Co-operative Societies Act but the fact that the said provision has not been enforced by the government would be of no implication as the said provisions (section 135) has been included in the Act' 1965 only by way of clarification and abundant caution.
15. The dispute in the instant case relates to the applicability of the Payment of Gratuity Act' 1972 which cannot be said to be a general enactment. A perusal of the object and reason of the said enactment indicates that it was enacted to bring a central legislation to regulate the payment of Gratuity to the industrial workers. The Act provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected or incidental thereto.
1. It extends to the whole of India.
2. It applies to every factory, mine, oilfield, plantation, port and railway company; time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months.
16. The only provision which excludes the applicability of the Act to the employees of any establishment is in the definition of word "employee" in section 2 (e) which excludes the employees of the Central Government and State Governments who are governed by any other act or by any rules providing for Payment of Gratuity.
17. Section 5 of the Act' 1972 confer powers on the appropriate government to exempt an establishment from the operation of the provisions of the Act, if in its opinion, the employees of such establishment are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.
18. Section 14 of the Act' 1972 gives overriding effect to the Payment of Gratuity Act for any inconsistency contained in any other enactment or in any instrument or contract.
19. The Apex Court in the case of Municipal Corporation of Delhi vs. Dharam Prakash Sharma & another reported in MANU/SC/1136/1998 : 1998 (7) SCC 221 recognized the said import of the Payment of Gratuity Act to say that it is a special provision for payment of gratuity and unless there is any provision which exclude its applicability to an employee, it is not possible to hold that the said employee would not be entitled to the gratuity under the Payment of Gratuity Act.
20. Even in the light of the legal position as clarified by the Apex Court in Ghaziabad Sahkari Bank (supra), it is not possible for this Court to hold that the Controlling Authority under the Payment of Gratuity Act had no jurisdiction.
21. In other words, in the light of the principle of interpretation of statute that the Special Act would prevail over General Act, as relied therein, the Payment of Gratuity being the special enactment would prevail over the general provisions relating to Payment of Gratuity provided under clause 29 of the Regulation' 2015 framed under Section 122 (2) of the Act' 1965. The overriding effect given to the Payment of Gratuity Act would further strengthen the case of the respondent that he is entitled for gratuity as payable under the Payment of Gratuity Act' 1972.
18. Sri Rai submits, therefore, that there is absolutely no question of exclusion of a special statute like the Act in the matter of payment of gratuity by the Society, banking on the principle that the Act of 1965 and the Service Regulations of 1975 are a special law, that would exclude the applicability of the Act. This Court has carefully considered this rather settled question, in the light of the decision of their Lordships in Ghaziabad Zila Sahkari Bank Limited (supra).
19. It must be acknowledged at once that the decision of their Lordships in Ghaziabad Zila Sahkari Bank Limited (supra) expounds the principle that the provisions of the Act of 1965, together with the Service Regulations of 1975, would exclude the provisions of all other Labour Laws in matters of employment under the Cooperative Societies. The principle to the understanding of this Court does not go further. What is, therefore, to be seen in context of the question about an exclusion of the Act in the matters of payment of gratuity by the Act of 1965 is whether the Act would fall in the category of "all other labour laws" vis-a-vis the Act of 1965, as postulated by their Lordship's decision in Ghaziabad Zila Sahkari Bank Limited (supra). The object and purpose of the Act apparently is very different from other labour laws. It is not designed to safeguard industrial relations or to promote industrial peace, amongst workman. It is a dedicated central legislation brought by Parliament to regulate "payment of gratuity to employees engaged in factories, mines, oil fields, plantations, ports, railway companies, shops or other establishments, and for matters connected therewith or incidental thereto", to borrow the precise words of the object of the Act, as delineated in its preamble. The object of the Act, therefore, is clearly to secure payment of gratuity to employees of myriad establishments; not just industrial workers or workman. The way it applies by virtue of Section 1(3), it can and does take into its fold employees, even of statutory bodies, such as local bodies, educational establishments, subject only to the employer falling in one of the clauses of sub section (3) of Section 1 of the Act. The Act, therefore, is a special statute designed to secure payment of gratuity to employees transcending the character of the establishment or employers, except those to whom the Act does not apply or the employer/establishment that are exempted by notification under the Act. By no means, therefore, can the Act be said to be part of the corpus juris of labour laws in general or, for that matter, a General Act vis-a-vis the Act of 1965 to which it must yield. The special and overriding character of the Act in matters relating to payment of gratuity to employees, particularly, flows from the terms of Section 14 of the Act that read thus:-
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.
(Emphasis by court)
20. The acknowledgment about the character of the Act being a special legislation that works to exclude other statutes governing regulation, reckoning, payment and enforcement of a claim to gratuity is to be found in the guidance of their Lordships in Municipal Corporation of Delhi vs. Dharam Prakash Sharma and another, (1998) 7 SCC 221, where in relation to the right of employees of the Municipal Corporation of Delhi to proceed under the Act in the matter of payment of their gratuity, in preference to the Gratuity Rules, enforced by the Corporation it was held:-
2. The short question that arises for consideration is whether an employee of the MCD would be entitled to payment of gratuity under the Payment of Gratuity Act when the MCD itself has adopted the provisions of the CCS (Pension) Rules, 1972 (hereinafter referred to as "the Pension Rules"), whereunder there is a provision both for payment of pension as well as of gratuity. The contention of the learned counsel appearing for the appellant in this Court is that the payment of pension and gratuity under the Pension Rules is a package by itself and once that package is made applicable to the employees of the MCD, the provisions of payment of gratuity under the Payment of Gratuity Act cannot be held applicable. We have examined carefully the provisions of the Pension Rules as well as the provisions of the Payment of Gratuity Act. The Payment of Gratuity Act being a special provision for payment of gratuity, unless there is any provision therein which excludes its applicability to an employee who is otherwise governed by the provisions of the Pension Rules, it is not possible for us to hold that the respondent is not entitled to the gratuity under the Payment of Gratuity Act. The only provision which was pointed out is the definition of "employee" in Section 2(e) which excludes the employees of the Central Government and State Governments receiving pension and gratuity under the Pension Rules but not an employee of the MCD. The MCD employee, therefore, would be entitled to the payment of gratuity under the Payment of Gratuity Act. The mere fact that the gratuity is provided for under the Pension Rules will not disentitle him to get the payment of gratuity under the Payment of Gratuity Act. In view of the overriding provisions contained in Section 14 of the Payment of Gratuity Act, the provision for gratuity under the Pension Rules will have no effect. Possibly for this reason, Section 5 of the Payment of Gratuity Act has conferred authority on the appropriate Government to exempt any establishment from the operation of the provisions of the Act, if in its opinion the employees of such establishment are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act. Admittedly MCD has not taken any steps to invoke the power of the Central Government under Section 5 of the Payment of Gratuity Act. In the aforesaid premises, we are of the considered opinion that the employees of the MCD would be entitled to the payment of gratuity under the Payment of Gratuity Act notwithstanding the fact that the provisions of the Pension Rules have been made applicable to them for the purpose of determining the pension. Needless to mention that the employees cannot claim gratuity available under the Pension Rules.
21. Likewise, in the case of Nagar Ayukt Nagar Nigam, Kanpur vs. Mujib Ullah Khan and another, (2019) 6 SCC 103, in the context of the right of employees of the Nagar Nigam, Kanpur to reckon their entitlement and recover gratuity under the Act, it was held that the Act would work to the exclusion of what their entitlement to gratuity was under the U.P. Municipal Corporation Act, 1959 read with Retirement Benefit and General Provident Fund Regulation, 1962 framed under the Act, last mentioned. It was held thus:
11. We find that the Notification dated 8-1-1982 was not referred to before the High Court. Such notification makes it abundantly clear that the Act is applicable to the local bodies i.e. the Municipalities. Section 14 of the Act has given an overriding effect over any other inconsistent provision in any other enactment. The said provision reads as under:
"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."
12. In view of Section 14 of the Act, the provision in the State Act contemplating payment of gratuity will be inapplicable in respect of the employees of the local bodies.
(Emphasis by Court)
22. The question would nevertheless arise whether a Cane Cooperative Society is an establishment within the meaning of Sub Section (3) of Section 1 of the Act to which the Act would apply. Though, no issue has been raised about this matter by the third respondent, but the applicability of the Act being a jurisdictional fact has nevertheless to be determined by this Court. The provisions of Section 1(3) of the Act reads thus:
1 - Short title, extent, application and commencement.
(1) x x (2) 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.
1[(3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.] (4) x x
23. The question would be under which of the clauses (a), (b) or (c) of sub section (3) of Section 1 of the Act a Cooperative Society fall? Rightaway, clause (a) is not attracted. So far as clause (c) is concerned, it requires a notification to be issued by the Central Government, regarding any establishment or class of establishments, to be brought within the purview of the Act, employing 10 or more persons. There is no case of either party that any such notification relating to the Society or Cooperative Societies in general in Uttar Pradesh or Cane Cooperative Societies, in particular, as a class has been issued by the Central Government, notifying any of these to be establishments, to which the Act would apply. This spares clause (b) of sub Section (3) last mentioned, that may be explored to find out whether the Society would fall within the definition of an establishment under any law for the time being in force, in relation to establishments in the State, where 10 or more persons are employed. Again, though the precise numbers of persons employed has not been given out, it is not disputed by the Society, either before this Court or elsewhere, that the number of persons employed would far exceed ten. The question is whether a Cooperative Society which is not a shop, would still fall under the residual clause of establishment, within the meaning of any law for the time being in force, in relation to it in the State. Certainly, the law in relation to the Society, to make it qualify for an establishment as aforesaid is the Act of 1965, under which the Society is registered, regulated and functions. The Society performs basically commercial functions. Therefore, there would be no difficulty in considering it to be an establishment, within the meaning of Section 1(3)(b) of the Act.
24. The question as to what an establishment would mean within the contemplation of Section 1(3)(b) of the Act, fell for consideration of their Lordships of the Supreme Court in State of Punjab vs. Labour Court, Jalandhar (1980) 1 SCC 4. In the aforesaid decision of their Lordships, the true scope of the establishment occurring in clause (b) of sub section (3) of Section 1 was delineated 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)
25. The decision aforesaid makes it clear that the expression 'establishment' is not just confined to shops and commercial establishments or industrial establishments. It is wide enough to take within its fold any other establishment also, provided it is an establishment within the meaning of any law for the time being in force in the State. The Act of 1965 is certainly such a law and the Society is in the opinion of the Court, definitely an 'establishment', to which the Act would apply.
26. It also has to be seen if the petitioner is an employee within the meaning of Section 2(e) of the Act. Section 2(e) of the Act reads thus:-
2. Definitions.- (a) x x
(b) x x
(c) x x
(d) 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;.] (Emphasis by Court)
27. The petitioner is not a person who holds a post under the Central or State Government and is governed by any other Act or by any rules providing for payment of gratuity. He may be governed by an Act and rules providing for payment of gratuity but is not a person who holds a post under the Central Government or a State Government. He is an employee of a Cooperative Society that cannot be even remotely construed to fall within the exclusionary category, as regards persons holding a post under the Central Government or a State Government. Thus, also the Act would be attracted in the petitioner's case.
28. In this context, reference may be made to the decision of the Supreme Court in Sr. Superintendent of Post Offices vs. Gursewak Singh and others, 2019 SCC OnLine SC 399, where the event went against the employee invoking the provisions of the Act on a different point, but the Act was held applicable to the Postal Department of the Government that was considered to an establishment, falling within that meaning, under Section 1(3)(b) of the Act. In this connection, paragraph 9.1 of the report may profitably be quoted:-
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 Jalandhar4 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 Office 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.
29. The answer to question (a), therefore, is that seasonal employees of a Cane Cooperative Societies in U.P. would be governed by the provisions of the Act, to the exclusion of the Act of 1965 read with the Service Regulations of 1975.
30. The second question may now be considered. It is whether a seasonal clerk employed by a Cane Cooperative Society, who works for 240 days in a year, is entitled to gratuity @ of 15 days wages or to 7 days wages for each season, under the second proviso to section 4(2) of the Act. Section 4(2) of the Act that would be wholesomely relevant to the context, is quoted in extenso:-
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 super annuating, 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:
1 [Provided further that in the case of death of the employee, gratuity payable to hi m 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 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.
(2) 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:
Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by hi m for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account:
Provided further that in the case of an employee who is employed in a seasonal establishment and who is not so employed throughout the year, the employer shall pay the gratuity at the rate of seven days' wages for each season.
(Emphasis by Court)
31. A reading of the second proviso to Section 4 (2) of the Act shows that an employee is not to be scaled down in his entitlement to receive gratuity, merely because his designation is seasonal, or he is retained as a seasonal employee. The rule engrafted in sub section (2) of Section 4 is reckoning of gratuity @ 15 days wages, based on the rate of wages last drawn by the employee, for every completed year of service, or part thereof in excess of six months. That is almost the precise language of the statute. This is the general rule by which the entitlement to gratuity of every employee, governed by the Act is to be calculated. The two provisos to sub section (2) carve out exceptions to this rule; one in case of peace rated employees, and the other, in case of an employee retained in a seasonal establishment. A proviso is always an exception to the rule, and it is a principle well known to law that one who pleads an exception in the determination of a right or liability, bears the burden to prove it. Thus, in the case of an employer who claims that his employee is engaged in a seasonal establishment, has to prove that fact. In addition, he has to prove that despite being employed in a seasonal establishment, he is not so employed throughout the year. In case, the employer successively proves both these facts, the superannuating or resigning employee would have his gratuity determined @ of 7 days wages for each season that he has worked.
32. The submission of Sri Chandan Sharma in this regard is to the effect that gratuity in the case of an employee who is employed in the seasonal establishment, and who is not so employed throughout the year, has to be worked out @ of 7 days wages for each season. He has urged that in paragraph 3 of the writ petition the petitioner has admitted that he has been a seasonal employee throughout, and, as such, gratuity payable to him is to be calculated as per the second proviso to Section 4(2) of the Act. Dwelling upon the meaning of the word 'season' that occurs in the context of the second proviso to Section 4(2), Shri Chandan Sharma submits that 'season' pre-supposes that the employee has not been employed in annual or regularly durated work, throughout the year, and, that the establishment was not functional throughout the course of the year. He submits that if it were so, the employment would not be seasonal. In order to define what seasonal employment would mean, Shri Chandan Sharma has placed reliance on the decision of the Supreme Court in Aspinwall & Co., Kulshekar, Mangalore vs. Lalitha Padugady and Ors., (1995) 5 SCC 642. He has drawn the attention of the Court to paragraph 7 of the report, where his submissions on the point above recorded, almost seems to paraphrase the principles laid down by their Lordships regarding what 'season' would mean in the context of the second proviso to sub section (2) of Section 4, and how seasons have to be reckoned, during each completed year of service. In Aspinwall & Co., Kulshekar, Mangalore (supra) it has been held thus:-
8. Explanation II to Section 2(c) plainly provides that an employee of a seasonal establishment shall be deemed to be in continuous service, if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during the year. Now what is that year. It obviously is the completed year of service of an employee, meaning thereby continuous service for one year. The provisions of Section 4 clearly reveal that before an employee can claim gratuity, he must have rendered continuous service for not less than five years. Further, for every completed year of service or part thereof in excess of six months, the employer is required to pay him gratuity at the rate of fifteen days' wages based on the rate of last drawn wages by the employee concerned. The first proviso relates to the right conferred under sub-section (2) to employees other than those employed in a seasonal establishment. The second proviso being so related prominently says that in case of an employee employed in a seasonal establishment, the employer shall pay gratuity at the rate of seven days' wages for each season. Now the word ''season' herein presupposes that the employee has not been employed in annual or regularly durated work during the days in which the establishment was in operation during the year. Were it to be so, then the employment would not be seasonal. Here the unit of reckoning is by means of the afore-understood continuous service of one year containing a season or seasons. And being seasonal, the span of the period of such season can by the very nature of things be short or large for various reasons but referable yet to continuous service within the meaning of Section 2(c). Tying all these ends together, the conclusion is thus inescapable that when gratuity at the rate of seven days' wages for each season requires to be worked out, then one has to see the number of seasons in each completed year of service of the workman i.e. his continuous year of service not regulated by the calendar year. The second proviso would have to be read in a purposive way i.e. in the nature of an explanation tied and woven in Section 4. In working for each season thus the employee becomes entitled to gratuity at the rate of seven days' wages per season. Instantly no dispute had individually been raised in such manner with regard to identification of seasons on the basis of the count of the number of working days in each completed year of service pertaining to each workman.
33. Sri Chandan Sharma has further placed reliance on a decision of this Court in Maliana Co-operative Cane Development Union Ltd. vs. Tej Ram Sharma and Ors. 2009 (123) FLR 393, where the main issue appears to be whether the provisions of the Act apply to a Cooperative Cane Development Union. However, with regard to seasonal employees in the said decision, it has been held thus:-
5. Under the definition of employee given under Section 2(e) of the Act even workers of seasonal establishments are employees. Same is the position under Section 20A defining continuous service. The only difference is that by virtue of Section 4(2) second proviso, such employees are entitled to get gratuity at the rate of 7 days wages for each season (as against 15 days wages per year for other employees) and this is what has been done by the authorities below. The said proviso is quoted below:
provided further that in the case of an employee who is employed in a seasonal establishment and is not so employed throughout the year the employer shall pay the gratuity at the rate of 7 days wages for each season.
In this regard reference may be made to Mangalore v. Lalitha Padugady MANU/SC/2011/1995 : AIR 1996 SC 580.
34. Sri Dinesh Rai, learned counsel for the respondent, however submits that by virtue of Section 2-A(2)(a)(ii) of the Act, 240 days of continuous work in a year would mean working throughout the year, within the meaning of the second proviso to Section 4(2). He submits that even if it is a seasonal establishment, an employee who works for 240 days in each year, would be entitled to wages not according to the second proviso to Section 4(2) but according to the main provision. He would thus be entitled to 15 days wages for each completed year of service calculated @ wages last drawn for all those years that he has worked throughout the year. He has drawn the attention of the Court to Annexure 1 to the writ petition that carries with it a chart of the total number of working days, in each year, put in by the petitioner from 1975, until his retirement in the year 2014.
35. Sri Chandan Sharma, on instructions received has stated that the duty chart annexed by the petitioner as Annexure 1 to the petition is accurate and correctly depicts the number of days of service, in each year, that he has put in with the Society. Those instructions received in writing by Sri Sharma from the Secretary of the Society are on record. A look at the chart to which Sri Dinesh Rai has drawn pointed attention of the Court, shows that except for the years 1975, 1976, 1987, 2000, 2002, 2005, 2009 and 2014, in all other years, the petitioner has put in 240 days of service; in many a year he has put in more than 300 days of service. But, decidedly, except for the years indicated, in every other year he has put in 240 days. In all the years that the petitioner has completed 240 days of service, it is Sri Rai's contention that he would be entitled to gratuity @15 days, under the provisions of Section 4(2) of the Act, which embodies the rule regarding entitlement to gratuity of a workman, and not under the exception carved out in the second proviso .
36. This Court has considered the matter. It is true that the second proviso engrafts a second exception to the Rule in Section 4(2) of the Act, about the rate at which gratuity is to be paid to an employee. Every employee is to be compensated in gratuity @ 15 days wages for every completed year of service or six months in excess of it. It is only in a case where an employee is employed in a seasonal establishment, and is not employed throughout the year, that the reduced rate of seven days wages of gratuity for each season would come into play. Here the petitioner has been designated as a seasonal employee, but it is not shown by any evidence by the Society that they are a seasonal establishment, or that though not a seasonal establishment, the petitioner is employed in a part of their establishment, that is seasonal. The burden to prove these facts so as to invoke the provisions of the second proviso to section 4(2) would certainly lie upon the Society and not the petitioner. The approach of the Society, as well as Authority below, appears to be that once the petitioner's designation is that of a seasonal clerk, the provisions of the second proviso to Section 4(2) of the Act would automatically operate to reduce the petitioner's entitlement to gratuity, to seven days wages for each season. This does not appear to be the purport of the second proviso to Section 4(2) of the Act.
37. This Court is also of opinion that even if an employee is actually employed in a seasonal establishment but works throughout the year, he would be entitled to receive gratuity worked out under Section 4(2) of the Act, and not under the second proviso, at a reduced number of days season-wise. Since the phrase "being employed throughout the year" occurs in the second proviso to Section 4(2), it certainly has decisive importance in a case where an employee is claimed or proved to be in a seasonal establishment. It would be gainful to look to the definition of what a year would mean in the context of the Act. Section 2A(2)(a)(ii) which reads thus:-
Section 2A - Continuous service. - For the purposes of this Act,--
(1) an employee sh1all be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order2[***] treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;
(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer--
(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is' to be made, has actually worked under the employer for not less than--
(i) one hundred and ninety days, in the case of any employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) two hundred and forty days, in any other case;
(Emphasis by Court)
38. A reading of Section 2A(1) read with sub section 2A(2)(ii) together would show that even where an employee does not put in continuous service for the entire year within the meaning of sub section (1), but completes 240 days, working besides the excepted case under Section 2A(2)(ii), it would be recorded as a period of one year of continuous service. This definition read together with the terms of the second proviso to Section 4(2), would lead to the inevitable conclusion that if the Society were assumed to be a seasonal establishment, which they do not appear to be, for reasons to be shortly indicated, the number of working days put in by the petitioner is far more than 240 days, in 31 years of his service out of the total of 39 rendered. This clearly entitles the petitioner to be paid gratuity @ 15 days of wages last drawn, calculated by multiplying the same with the number of years that he has worked for more than 240 days. The said figure 31 years during which he completed more than 240 days of service, is admitted to the Society, in terms of the calculation chart appended as Annexure 1 to the petition. It may also be mentioned that the fact that the petitioners are not a seasonal establishment, has been raised before this Court through a document secured under the Right to Information Act, filed along with the supplementary affidavit, where the Cane Commissioner through his memo dated 23.05.2015 has certified generally that Cooperative Cane Societies are not seasonal establishments. The said fact brought through the supplementary affidavit, has not been disputed by the respondents by means of a counter affidavit, bringing on record any material to the contrary. But, since the said issue was not raised before the Authorities below, this Court does not wish to go into the same on account of the fact that under the law applicable, the Society have not discharged their burden that the petitioner was employed in a seasonal establishment, and admitting that he has worked, he has not worked throughout the year, so as to bring his case within the exception, envisaged under the second proviso to Section 4(2).
39. The question whether in a seasonal establishment where an employee works for more than 240 days a year he would be entitled to calculation of his gratuity @ 15 days in a year under the provisions of Section 4(2) of the Act was considered in General Manager The Kisan Sahkari Chini Mills Ltd. vs. Appellate Authority/Deputy Labour Commissioner Payment of Gratuity and 2 others in Writ C No. 4031 of 2019. In the aforesaid decision, this Court held thus:-
The fact that the respondent no. 3 had worked for 240 days in a year during the period from 01.03.1984 to 02.09.1996 has not been disputed by the petitioner establishment. Section 2-A(2)(ii) of the Act contemplates a year to mean 240 days.
Section 2-A(2)(ii) of the Act reads as under :
"2-A(2)(ii) - two hundred and forty days, in any other case;"
Therefore, in my opinion, the import of second proviso of sub-section (2) of Section 4 of the Act would be that if the employee has worked in an establishment, even if it is a seasonal establishment, for a year meaning thereby 240 days the proviso would not apply and the employee would be entitled to gratuity calculating the wages of 15 days in a year as per the provisions of sub-section (2) of Section 4 of the Act.
(Emphasis by Court)
40. A deeper analysis of the rights of a seasonal employee to be paid @ 15 days wages for every completed year of service was undertaken by the Kerala High Court in M.P. Thressiamma vs. Appellate Authority under the Payment of Gratuity Act, ILR2007(1)Kerala658, where it was held thus:-
7. The learned Counsel for the third respondent would submit that it is for the petitioners to prove that they have been working through out the year and therefore, they are entitled to full gratuity at the rate of 15 days' wages for every completed year of service. He would submit that they have not stated in their claim statement that they have been working so. I am not inclined to accept this contention. Under the Payment of Gratuity Act, pleadings have not much importance, in so far as the Payment of Gratuity (Central) Rules, 1972 prescribed a form of application for gratuity as Form N. All what the petitioners have to do is to fill up that form and there arises no occasion for them to add anything to the same. Even otherwise, when the third respondent has all the evidence relating to the service particulars of the petitioners as the employer, they are is in a better position to prove the attendance particular of the petitioners than the petitioners. Therefore, when it the 3rd respondent who has set up a case that theirs is a seasonal factory and the petitioners did not work through out the year, the burden of proof is on the third respondent to prove that theirs is a seasonal establishment/factory and the petitioners have actually worked only as non-seasonal workers as laid down in Uthaman's case (supra). The third respondent has not even made any attempt to produce any proof in that regard, except to file a certificate to the effect that theirs is a seasonal factory. Going by the parts of evidence extracted in Ext.P1 order, the 1st petitioner had stated before the Controlling Authority that there would be 12 month's work in the company and that the company had never been closed for want of raw materials that the work in the factory is that of processing mango and pineapple fruits which are seasonal fruits and that during those seasons all of them would work and after the season it would become difficult to give work to all of them. At that time, work would be given to some of them. It is further stated that in respect of semi finished products for processing, the workers would be employed on rotation basis. As such, the evidence would indicate that the factory works throughout the year, but all the workers would not have work through out the year. Simply because some of the workers would be given work on rotation basis, that would not make the factory seasonal in character. The certificate produced by the 3rd respondent being of the year 1950, that cannot be relied on to decide the present day character of the factory in view of the sea change that has happened in all walks of life after 1950 over a period of 50 years. Even if it is assumed that it is a seasonal factory, it was for the third respondent to prove that the petitioners herein had in fact worked only during the season and not beyond the season, which would have been very easy for the third respondent because they possess all the records to prove the number of days the petitioners worked. Since the third respondent has not chosen to do so, I must draw an adverse inference against the third respondent especially since there, is nothing on record on conclusively to show that the petitioners had worked only during the season.
(Emphasis by Court)
41. The Society have not brought on record anything to show, either before this Court or before the Authorities below, that the petitioner has not worked throughout the year for 240 days in the specified years, claimed in accordance with the appended chart, which in any case they acknowledge to be true. If the petitioner has worked for more than 240 days during the specified number of years, assuming that the petitioner is employed in a seasonal establishment he is entitled to receive in gratuity for the relative years that he has put in more than 240 days, gratuity calculated in accordance with the Section 4(2) of the Act @ 15 days on the wages last drawn based on the last year where he has rendered continuous service of 240 days, multiplied with the total number of years that he has worked for 240 days. The Society have not brought anything on record by way of evidence to show that they are indeed a seasonal establishment. To the contrary, the petitioner has brought on record a document dated 23rd May, 2015 issued by the District Cane Officer certifying that Cooperative Cane Societies are not seasonal establishments. The Controlling Authority would be free to go into that question, affording opportunity to the parties to lead evidence to establish whether the Societies are a seasonal establishment, or if not, they have a seasonal establishment wherein the petitioner is employed. This burden would primarily lie on the Society to be rebutted by the petitioner by relevant evidence. This inquiry regarding the Society being a seasonal establishment or the petitioner being employed in the seasonal establishment of the Society, not otherwise seasonal, would be limited for the purpose of determining the right to calculation of gratuity for those years during which the petitioner has not worked for 240 days continuously. Where he has worked for 240 days, the nature of the establishment being seasonal or otherwise would be of no consequence, and gratuity would be straightway calculated on the basis of 15 days for each such year.
42. Question (b) is, therefore answered in the manner that a seasonal clerk employed by a Cane Cooperative Society who works for more than 240 days in a year is entitled to gratuity @ 15 days wages, worked out on the wages last drawn during the last year that he has worked for 240 days, in accordance with Section 4(2) of the Act; and for all such years that a seasonal clerk has worked for more than 240 days in a year, even in a seasonal establishment, his gratuity cannot be worked out under the second proviso to Section 4(2) of the Act @ 7 days wages for each season.
43. Though, the petitioner has been held clearly entitled to receive in gratuity wages calculated @ 15 days wages last drawn during the years that he last worked for 240 days, multiplied by the total number of such years where he had worked for 240 days or more, and the figure of such years is admittedly 31 years, in accordance with the yearswise work chart enclosed with the petition which has been admitted to be true and correct by the Society before this Court, this Court does not find it fit to precisely liquidate the sum of money, to which the petitioner would be entitled in gratuity. This is so as there is an issue still to be determined by the Controlling Authority, about the petitioner's entitlement to gratuity, for the years that he has not worked continuously for 240 days.
45. In the result, the petition succeeds and is allowed. The impugned orders dated 30.07.2018 passed by the Appellate Authority, Payment of Wages Act, U.P., Saharanpur and the impugned order dated 15.05.2017 passed by the Controlling Authority, Payment of Wages Act, Saharanpur are hereby quashed. The Controlling Authority is directed to re-determine gratuity payable to the petitioner in accordance with the directions carried in this judgment and ensure recovery from the Society the difference between the sum of gratuity already paid to the petitioner, and that found due on a redetermination, in excess of it, in accordance with law; all to be done within a period of two months from the date of production of a certified copy of this order.
Order Date :- 24.07.2019 BKM/-