Calcutta High Court (Appellete Side)
Hooghly Mills Company Limited & Anr vs The State Of West Bengal & Ors on 25 November, 2022
Author: Harish Tandon
Bench: Harish Tandon
1
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
Present:
THE HON'BLE JUSTICE HARISH TANDON
&
THE HON'BLE SHAMPA DUTT (PAUL)
M.A.T. 192 OF 2021
With
IA No. CAN 1 OF 2021
Hooghly Mills Company Limited & Anr.
Vs.
The State of West Bengal & Ors.
Appearance:
For the Appellants : Mr. Partha Sarathi Sengupta, Sr. Adv.
Mr. Shyamal Sarkar, Sr. Adv.
Mr. Bhaskar Mukherjee, Adv.
Mr. Nafisa Yasmin, Adv.
For the State : Mr. Narayan Chandra Bhattacharyya, Adv.
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Ms. Sujata Ghoh, Adv.
For the Respondent no. 6 : Mr. Abhrajit Mitra, Sr. Adv.
Mr. Soumya Majumder, Adv.
Mr. Phiroze Edulji, Adv.
Ms. Amrita Pandey, Adv.
Ms. Anamika Pandey, Adv.
Mr. Ghanshyam Pandey, Adv.
Ms. Sneha Singh, Adv.
Ms. Sabnam Farooqui, Adv.
Ms. Sikha Kumari Kashyap, Adv.
For the Respondent no. 7: Mr. Bikash Shaw, Adv.
Judgment On : 25.11.2022
Harish Tandon, J.
The instant appeal arises from an interlocutory order dated 29th January, 2021 passed by the Single Bench directing the appellants to pay the amount of gratuity accrued to the Respondent no. 7 on superannuation together with an interest within a specified time. Simultaneously, the liberty was also granted to the appellant to raise all points against the Respondent 3 no. 6 towards the realisation of the said amount to be paid to the Respondent no. 7.
Though the order appears to be innocuous bearing in mind that the employee who superannuated has a legal right to receive the gratuity which is neither considered to be a bounty nor a bonanza but the statutory right which cannot be denied, but the interesting points have been raised by the appellants on the basis of the contract having entered into between the appellants and the Respondent no. 6 foistering upon the responsibility to pay the gratuity to the employees on superannuation whether in past, present or future. We thus invited the Counsels to canvas those points for better appreciation of the legal and/or contractual rights of the respective parties in relation to the payment of the gratuity under the Payment of Gratuity Act, 1972 (said Act).
The litigation has travelled in several forums at the behest of the rival parties relating to the payment of the gratuity admissible to the Respondent no. 7. It is undisputed that the Appellate no. 1 being a company owned a jute mill by the name of Gondalpara Jute Mill and the Respondent no. 7 was the employee who superannuated in the year 2005. Subsequently, the appellant was facing a financial crunch and decided to sell the said jute mill and an offer was received from the Respondent no. 6 to purchase the said situated jute mill and in furtherance therewith an agreement was entered upon on May 7, 2009. Pursuant to the said agreement, the possession of the said jute mill was handed over to the Respondent no. 6 on May 7, 2009 with several reciprocal obligations to which we are mainly concerned with, Clause 4 11 concerning the gratuity amount to be paid to the employee. The said clause postulates that the Respondent no. 6 would agree to bear all liabilities past, present and future on account of gratuity payable to the workman of the said jute mill to the extent of 14 crores with further stipulation that in the event the said amount exceeds the said figure, the appellant would reimburse the excess amount to the Respondent no. 6. The Sub-clause 11.2 further indicates that the Respondent no. 6 shall keep the appellant duly indemnified against the claim on account of gratuity to the extent of Rs. 14 crores. The dispute arose between the appellant and the Respondent no. 6 on the purported receipts handed over to the said respondent by the appellants, evincing the payment of the gratuity to the workman who attained superannuation prior to the said agreement. However, proceeding was initiated under Section 7(4) of the said Act at the behest of the Respondent no. 7 against the Respondent no. 6 that despite the attainment of superannuation the gratuity has not been paid and the controlling authority passed an Order on 8.5.2014 directing the Respondent no. 6 to pay the gratuity to the Respondent no. 7 with categorical finding that questions were raised on the genuinity of the documents produced before the said authority concerning the payment of the said gratuity. Despite the said order being passed by the said Controlling Authority under Section 7(4) of the Act, the payment was not made and ultimately the certificate was issued by the Controlling Authority on an application taken out by the Respondent no. 7 to the collector to recover the said amount together with a compound interest at such rate as the Central Government made specify from the date of the expiry of the prescribed time as arrears of 5 land revenue. Pursuant to the said certificate issued under Section 8 of the said Act, the Certificate Officer under Bengal Public Demand Recovery Act, 1913 directed the Respondent no. 6 to make the payments to the Respondent no. 7 on a categorical finding that since no appeal has been filed by the Respondent no. 6 against an order dated 8.5.2014 under Section 7(7) of the said Act nor to produce any document in support thereof. Subsequently, the matter was referred to National Lok Adalat but the parties could not resolve such dispute. A writ petition being WP no. 14267 (W of 2015) was filed by the Respondent no. 7 before the High Court, seeking enforcement of the order of the Certificate Officer. A plea was taken that the purported copy of the receipts handed over by the appellant to the Respondent no. 6 would indicate that the gratuity amount has been paid to the Respondent no. 7 which was seriously denied and disputed by the said respondent and taking into account the aforesaid facts, the liberty was granted to the Respondent no. 6 to take steps against the order dated 23rd February, 2015 in the event there is no order interdicting the payment of the gratuity to the Respondent no. 7. The same should be paid within a specified time. Pursuant to the said liberty the appeal was filed by the Respondent no. 6 under the 1913 Act before the competent authority. Amidst the pendency of the said appeal, a writ petition was filed by the Respondent no. 6 being WP no. 20583 (W) of 2015 before the Court challenging the parent order of the Controlling Authority passed under Section 7(4) of the said Act and also the order of the Certificate Officer dated 23rd February, 2015. The appeal under Section 51 of the 1913 Act filed before the competent authority was dismissed during the pendency of the 6 said writ petition but at the time of disposal of the said writ petition the High Court set aside the order of the competent authority passed under Section 51 of the 1913 Act and directed the collector to dispose of the appeal within a stipulated time thereof. The collector dismissed the said appeal and directed the Respondent no. 6 to pay the gratuity within 15 days from the date of the order. A review petition was filed by the Respondent no. 6 and the collector being the Appellate Authority under 1913 Act modified the order of the dismissal and directed the Certificate Officer under the said Act to check and verify the evidences submitted by the parties and to ascertain when the payment of gratuity has been made. The Certificate Officer subsequently directed the Controlling Authority to certify whether the payment of gratuity has been made and it was informed that the Respondent no. 7 has not received the gratuity from the Respondent no. 6. The review application was thereafter filed and the same was rejected. Curiously enough, the collector under the 1913 Act again directed the Controlling Authority to submit a report whether the Respondent no. 7 has received the payment of gratuity after affording an opportunity of hearing to the parties. In terms of the said direction the Controlling Authority submitted a report indicating that the payment of gratuity has been made by the Respondent No.6 which was later on accepted by the Collector. Interestingly, the Respondent no.7 filed an appeal under Section 7(7) of the said Act against the report/opinion dated April 18, 2018 which was subsequently dismissed. The said order was further challenged by way of a writ petition being WP 21949 (W) of 2018 which was disposed of by setting aside the said order and directing the appellate authority to hear out the 7 appeal afresh. Curiously enough, the said appeal was disposed of remanding the matter to the Controlling Authority with a categorical finding that the appellant should be held responsible to pay gratuity to the Respondent no.7 and to dispose of the proceeding after affording an opportunity of hearing to the respective parties. The said order is challenged by the appellant by filing a writ petition wherein the impugned order has been passed.
Such being the facts discerned from the pleading the point is raised in the instant appeal whether the interim order in such nature can be passed, on the backdrop of the facts appeared from the record ignoring the contractual obligations of the appellants and the Respondent no.6 all the orders passed by the Controlling Authority under the said Act.
Mr. Partha Sarathi Sengupta, the learned Senior Advocate appearing for the appellant vehemently submits that the appellate authority under 1913 Act is denuded of powers to interfere with the power of the Controlling Authority under the said Act upon usurpation of the powers not vested under 1913 Act. Mr. Sengupta is very much critical on the assumption of the powers by the Appellate Authority under 1913 Act, which is merely a recovery provision and cannot activate as an Appellate Authority under the said Act. He vehemently submits that the Respondent no.6 has not filed an appeal under Section 7 (7) of the said Act against an order dated 8.5.2014 passed by the Controlling Authority and, therefore, such order attained finality which cannot be overridden and/or interfered by the Appellate Authority under 1913 Act and, therefore, as a prima facie reading of the 8 provision, ought to have been passed directing the Respondent no. 6 to make the payments. It is further argued that the proviso to Section 7(7) of the said Act restricted by putting an outer cap the powers of the Appellate Authority under the said Act to condone the delay in preferring the appeal within the ordinary period of limitation provided therefore. It is, thus, submitted that the moment the Respondent no.6 has not challenged the parent order of the Controlling authority passed on 8.5.2014, it cannot be maintain the appeal as of date as the power to condone the delay beyond the out cap has not been provided in the aforesaid provision of law. To buttress the aforesaid submission, several judgments have been referred by Mr. Sengupta, the Senior Advocate in the matter of City College, Calcutta vs. State of West Bengal & Ors. reported in (1986) 1 CHN 186, Ali Hossain vs. Budge Budge Co. Ltd. & Ors reported in (2018) 3 CLR 475 and Murlidhar Ratanlal Exports Ltd. vs. State of West Bengal & Ors. reported in (2014) 141 FLR 583. Mr. Sengupta further argues that unless the order is passed by an authority lacking inherent jurisdiction the executing Court cannot interfere with such order as held by the Supreme Court in Chiranjilal Shrilal Goenka vs. Jasjit Singh & Ors. reported in (1993) 2 SCC 507. Mr. Sengupta arduously submits that the Controlling Authority is trimmled with the jurisdiction to decide the disputes under the Payment of Gratuity Act, 1972 and the moment the certificate is issued by the said Controlling Authority, the Certificate Officer cannot usurp jurisdiction to question the legality, validity and correctness of the certificate and relied upon a Single Bench decision rendered in case of Santosh Pathak vs. State of West Bengal & Ors. reported in (2022) 172 FLR 9
478. It is vehemently submitted by Mr. Sengupta that the moment the power and jurisdiction is conferred upon an authority under the statute, the High Court by issuing a writ of certiorari cannot confer a jurisdiction upon the said authority and placed reliance upon a judgment of the Apex Court in case of Zuari Cement Ltd. vs. Regional Director, Employees' State Insurance Corporation, Hyderabad & Ors. reported in (2015) 7 SCC 690 and the Division Bench Judgment of this Court in case of B. Chiranjivi Rao & Ors. vs. Union of India & Ors. reported in 2001 LAB IC 1870. Lastly, it is submitted that the order of the High Court in a writ jurisdiction granting liberty to prefer an appeal which is otherwise time barred is apparently without jurisdiction and, therefore, no right can either be accrued or claimed by the Respondent no.6. To conclude, Mr. Sengupta, the learned Senior Advocate submits that the moment the order passed by the Controlling Authority has attained finality, the ultimate order of the Appellate Authority under 1913 Act is palpably without jurisdiction and, therefore, the Single Bench ought not to have been passed an order directing the payment of the gratuity to the Respondent no.7 by the appellant.
Per contra, Mr. Mitra, the learned Senior Advocate appearing for the Respondent no.6 submits that the right to claim gratuity accrues on co- terminus with the satisfactory service of the employee and, therefore, such liability which accrued at a relevant point of time when the said respondent had no right, title and interest in respect of the said jute mill cannot be imposed upon the said respondent and placed reliance upon a full Bench decision of the Patna High Court in case of Agent Muridhar Colliery of 10 Bharat Coking Coal Ltd. vs. Sital Chandra Pathak & Ors. reported in 1986 PLJR 1168. Mr. Mitra further argues that the liability of the post- take over management period and the pre-take over management period as in later case, it remained the liability of the previous management and placed reliance upon a Supreme Court Judgment in case of Rashtriya Mill Mazdoor Sangh vs. National Textile Corporation (South Maharashtra) Ltd. & Ors. reported in (1996) 1 SCC 313. Mr. Mitra, the learned Senior Advocate vociferously submits that the jurisdiction conferred upon the High Court under Articles 226 and 227 of the Constitution cannot be abridged to the extent that it cannot interfere with the order of the Tribunal or the authority in the event of an appeal having provided in the statute. Such powers to issue writ of certiorari and other reliefs are well within the domain of the aforesaid constitutional provisions and placed reliance upon a constitutional Bench decision of the Supreme Court in case of Hari Vishnu Kamath vs. Syed Ahmad Ishaque & Ors. reported in AIR 1955 SC 233. It is further submitted that the power of the Certificate Officer under 1913 Act is not only to execute the order but the moment the objection is raised denying the liability, it is imperative to decide the said objection before any further steps are taken in the said proceedings and placed reliance upon a Division Bench judgment of this Court in case of Abanindra Kumar Maity vs. A.K. Biswas, Certificate Officer of Midnapore reported in 58 CWN
573. Mr. Mitra, the learned Senior Advocate further submits that an appeal under Clause 15 of the letter patent is not maintainable against the discretionary order passed by the Single Bench as held in a judgment of the Supreme Court in case of Union of India vs. Simplex Infrastructures Ltd. 11 reported in (2017) 14 SCC 225. Mr. Mitra thus, submits that there is no fetter on the part of the Certificate Officer of the Appellate Authority under 1913 Act to enter upon the objection raised by the said respondent and pass an appropriate order for further investigation.
The learned Advocate appearing for the Respondent no.7 submits that the said respondent has not been paid the amount of gratuity and the receipt which has been relied upon has no bearing on the issue more particularly, when the Controlling Authority under the said Act has categorically held that the payment has not been made. It is further submitted that the gratuity is to be paid at the time of attaining superannuation and the litigation between the appellant and the Respondent no.6 has created an embargo in getting the statutory dues. Showing the concern on the payment of gratuity, the Counsel appearing for the said respondent submits that his client is deprived of his legitimate claim and it is immaterial whether such amount is to be paid by the appellant or the Respondent no.7.
On the conspectus of the aforesaid submissions, as indicated earlier, the instant appeal has been filed by the appellant against an interlocutory order directing the payment of gratuity along with an interest by the appellant to the Respondent no. 7 within the time frame. It is beyond cavil of doubt that the interim or interlocutory orders are based upon satisfaction of the existence of a prima facie case, balance of convenience and inconvenience and irreparable loss and injury to be caused to the appellant. Apart from the same, the interlocutory orders are passed in exercise of 12 inherent jurisdiction to secure the ends of justice. There is no hesitation in our mind since the advent of the instant appeal that the gratuity is neither a bounty nor a bonanza but a deferred payment of the salary. By promulgation of the Payment of Gratuity Act, 1972 it assumes a character of statutory right legally enforceable against the employer. We are also not unmindful of the proposition of law that the Appellate Court should seldom interfere with the discretion exercised by the Trial Court unless the exercise of such discretion is manifestly unreasonable and irrational. The sequel of events leads no ambiguity in our mind that the Respondent no. 7 exhausted the remedy provided under the statute in approaching the controlling Authority under the said Act raising a grievance of non payment of gratuity by his employer. It is a specific stand of the appellant that the custom and the usages prevalent in the said industry would reveal that on the date of superannuation the receipts are signed by the employee quantifying the amount of gratuity and subsequently, after ascertaining the veracity of the said amount, the gratuity is paid to the employee. The subsequent acts of the parties would further reveal that the appellant was facing a financial crunch and decided to sell the said jute mill to the Respondent no. 6 and an agreement was entered into in this regard on May 7, 2009. The possession was also handed over simultaneously with the execution of the said agreement to the Respondent no. 6 by the appellant. Clause 11 of the said agreement is relevant for the said purpose and quoted as under:
"11. Gratuity:13
11.1 The purchaser has agreed to assume and bear all liabilities past, present and future, on account of Gratuity payable to the workmen of the said Jute Mill, save and except that in the event, the amount payable to workmen retired as on Completion Date exceeds Rs. 14, 00,00,000/-(Rupees fourteen crores only), the Vendor shall reimburse the excess amount to the Purchaser however, in the event of the amount payable to the workmen retired on the Completion date is less than the Rs.
14,00,00,000/- (Rupees fourteen crores only) then in that event, the Vendor shall not be entitled to make any claim for further payment and/or enhancement in the contract price.
11.2 The purchaser shall keep the vendor saved, harmless and indemnified against any claim on account of Gratuity in respect of the said Jute Mill to the extent as stated above."
What can be gathered from the meaningful reading of the said clause is that the Respondent no. 6 has agreed to assume and bear all the liabilities past, present and future on account of gratuity payable to the workman of the said jute mill to the extent of Rs. 14 crores. It is further manifest from this aforesaid clause that any amount exceeding the said Rs. 14 crores paid to the workman on account of gratuity shall be reimbursed by the appellant to the Respondent no. 6. It is, therefore, apparent from the aforesaid Clause that the Respondent no. 6 agreed to bear the responsibility of the payment of gratuity of the workman accrued in past, present or will accrue in future upto the extent of Rs. 14 crores. The question is not 14 begging for an answer on the right of the workman to get the gratuity on superannuation. Such right is crystallised and even in the impugned order challenged in the writ petition such right has not been disturbed nor abridged in any form. The only question begging an answer is the liability and the responsibility to pay the gratuity to the workman either by the appellant or the Respondent no. 6. The Controlling Authority in its order dated 8.5.2014 passed under Section 7(4) of the said Act imposed such liability on the Respondent no. 6 with a positive finding that the said respondent never questioned the genuinity and/or the authenticity of the claim based on the said document. The said order has not been challenged and it appears that subsequent to the liberty granted by the High Court in the writ jurisdiction, the same is a subject matter of challenge. The arguments are advanced by the respective parties on the powers and jurisdiction of the High Court to pass such an order conferring the jurisdiction which inherently lacks in the statutory authorities. Since large number of judgments have been cited on such score we feel that any observation thereupon would impinge upon the decision to be taken in the writ petition which is pending before the Single Bench and, therefore, we refrained from making any observations thereupon. It would not, therefore, be proper on our part to deal with the authorities cited by the respective councils on such score. So far as the power of the certificate officers and the appellate authority under 1913 Act is concerned, the same is within the domain of the writ petition and, therefore, any observation made thereupon might, impacted the decision to be taken therein. The Writ Court will decide whether the Certificate Officer or the Appellate Authority under the 1913 Act 15 was patent to interfere with the certificate officer issued under Section 8 of the said Act. Both 1972 Act and 1913 Acts are self contained code and the powers are well defined thereunder to be exercised by the authorities under the relevant acts and the transgression and/or overreach is to be guarded against. The undisputed facts remained that the gratuity has not been paid to the Respondent no. 7 and all the authorities have held that the same is required to be paid by the employer. The word "employer" assumes significance and it can be reasonably construed the employer as on the date of superannuation. However, if the contract or the agreement postulates the responsibilities and/or liabilities, such contract cannot be overlooked. Mr. Mitra may be right in his contention that on the date of the superannuation his client cannot be brought within the purview of the employer as the employment ceases by terminus of the employment. However, this Court cannot overlook the fact that Clause 11 of the said agreement clearly stipulates the liability of the Respondent no. 6 in the past, present and future to the extent of Rs. 14 crores. It can be reasonably inferred that the Respondent no. 6 has taken a burden of payment of gratuity accrued to the post provided; the same has not been paid by the appellant to the extent of Rs. 14 crores. Any other interpretation to the said clause more particularly, "past, present and future" would frustrate the contractual wisdom of the parties and the Court cannot overlook the conscious decision of the parties who have the freedom of contract. There is no document forthcoming before us from the side of the Respondent no. 6 that he has paid the gratuity amount to the workman superannuated in past, present and future exceeding Rs. 14 crores. The moment the parties in their contractual 16 wisdom have agreed to bear the responsibilities to the extent of Rs. 14 crores, the contracting party cannot wriggle out of the said contractual obligation. The workman cannot be deprived of his statutory right because of the fight between the two corporate giants. The claim towards gratuity is crystallised and none of the orders passed by the statutory authorities have held that such right does not exist. All the authorities uniformly held that the gratuity is required to be paid to the Respondent no. 7but there has been a decent opinion on the liability to be borne by the appellant and the Respondent no. 6. Since the larger questions raised in the instant appeal is yet to be decided by the Writ Court and we have decided to refrain ourselves from making any observations except to the extent of modifying the interim order imposing the liability to pay the gratuity amount to the Respondent no. 7. Since the Respondent no. 6 have agreed to bear the liability of gratuity to the workman accrued in past, present and future to the extent of Rs. 14 crores and in absence of any document forthcoming that the said amount has been exhausted, the Respondent no. 6 cannot escape the contractual responsibility to pay the gratuity to the Respondent no. 7 in absence of any documentary evidence evincing the payment of gratuity to the workman upto the extent of Rs. 14 crores. The order impugned is modified to the extent that in respect of the appellant, the Respondent no. 6 is directed to pay the gratuity amount along with the statutory interest to the Respondent no. 7 within two weeks from the date of the order without prejudice to their rights and contentions raised or to be raised in the writ petition. In the event it was found in the writ petition that the appellant is liable to pay the said amount of gratuity, the appellant shall reimburse the 17 said amount to the Respondent no. 6 immediately. The appeal is thus dismissed.
No order as to costs.
Urgent photostat certified copies of this judgment, if applied for, be made available to the parties subject to compliance with requisite formalities.
I agree. (Harish Tandon, J.) (Shampa Dutt (Paul), J.)