Madhya Pradesh High Court
The Manager vs Aminuddin on 13 April, 2017
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Writ Petition No.19988/2011
(The Manager vs Aminuddin)
13.4.2017.
Shri P. Dubey, learned counsel for the petitioner.
Shri Deepak Raghuwanshi, learned counsel for respondent.
With consent of learned counsel for the parties, the matter is
heard finally.
Petition is directed against the order dated 25.5.2010 and
19.10.2011 respectively passed by the Controlling Authority and the
Appellate Authority under Payment of Gratuity Act, 1972 (hereinafter
to be referred to as 'Act of 1972').
Facts giving rise for a dispute before the Authorities
concerned briefly are that the respondent was holding the post of Khalasi at the time of retirement. He was initially appointed on 11.11.1974 and has retired on attaining the age of superannuation w.e.f. 30.6.2009. On being deprived of the amount of gratuity, the respondent approached the Controlling Authority under the Act of 1972 and vide order-dated 25.5.2010, the Authority issued the direction to the petitioner to pay an amount of Rs.508348.80/- towards gratuity amount.
Feeling aggrieved, the petitioner filed an appeal before the Appellate Authority under Section 7(7) of the Act of 1972. However, the appeal was dismissed on 19.10.2011 in the following terms -
"The issue of non payment of gratuity till non- vacation of company's quarters I hereby rely upon the following case laws- (i) An employer cannot withhold or adjust the gratuity of an employee for unauthorized occupation of company accommodation. Nov.2003 LLR Guj. HC Page 1069 (ii) Regarding the issue of non payment of gratuity till non-vacation of company's quarters as per Texmaco Ltd, v. Ram Dhan 1992 (65) FLR 742 DELHI HC - There is no provision in the Act for withholding of gratuity for non-vacation of company's quarters. Remedy lies in Civil Court for vacation of quarters. On this ground the workmen cannot be :: 2 ::Writ Petition No.19988/2011
(The Manager vs Aminuddin) deprived of payment of gratuity. As per 2010 LLR 506 Madras High Court in W.P. No.18970/2000 dated 17.12.2009. Nayveli Lignite Corporation Vs/ Raju and others. It was held that gratuity of employee for not vacating the residential accommodation as provided to him cannot be withheld. Since it amounts to attachment which is not permissible under Payment of Gratuity Act, hence the employer will be liable to pay gratuity alongwith interest 10%. Hence, the action of the management in withholding the gratuity amount for non-vacation of quarters is not justified.
In the light of the above, the Controlling Authority's order-dated 25.5.2010 issuing Form 'R' for payment of gratuity to Aminuddin and subsequently, issuing show cause notice is in order and need no interference.
The Controlling Authority and ALC, Chhindwara has elaborately discussed the issue. The Controlling Authority has held management of WCL is not responsible for delay in payment of gratuity does not hold good in view of the judgment narrated above.
After going through the order of Controlling Authority, Appeal filed, reply furnished and file of Controlling Authority, it is clear as follow :
1. Order of Controlling Authority dated 25.5.2010 and subsequent show cause notice dated 20.10.2010 issued for paying gratuity to Shri Aminuddin is justified.
2. The decision given by Controlling Authority is modified to the extent that Appellant-management will pay the principle amount of gratuity i.e. Rs.508348.80 to Shri Aminuddin along with interest @ 10% i.e. Rs.72016 for the delay in making payment of gratuity by management as per Section 7(3-A) of P.G. Act, 1972 to Shri Aminuddin within a period of 15 days from the date of receipt of this order. "
The order has been challenged by the management on the very same ground, as was raised before the Authorities below that in absence of no objection certificate and the vacating of quarter, they :: 3 ::Writ Petition No.19988/2011
(The Manager vs Aminuddin) cannot be compelled to disburse gratuity.
Question is whether management are justified in their stand. Trite it is that gratuity is earned by an employee for long and meritorious service rendered by him.
In Garment Cleaning Works vs. The Workmen: AIR 1962 SC 673 it was held:
"5........Gratuity is not paid to the employee gratuitously or merely as a matter of boon. It is paid to him for the service rendered by him to the employer, and when it is once earned it is difficult to understand why it should necessarily be denied to him whatever may be the nature of misconduct for his dismissal. ........"
Similarly, in Calcutta Insurance Company Limited V. The Workmen: AIR 1967 SC 1286 it was observed:
"13........Gratuity cannot be put on the same level as wages. We are inclined to think that it is paid to a workman to ensure good conduct through-out the period he serves the employer. "Long and meritorious service"
must mean long and unbroken period of service meritorious to the end. As the period of service must be unbroken, so must the continuity of meritorious service be a condition for entitling the workman to gratuity......" In State of Kerala V. M. Padmanabhan Nair: (1985) 1 SCC 429 it was held:
"Pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment."
In R. Kapur V.Director of Inspection (Painting and Publication) Income Tax: (1994) 6 SCC 589, it was observed:
"8. In this appeal before us the appellant urges that he would be entitled to 18% interest at least in view of judgment of this Court in State of Kerala v. M. Padmanabhan Nair. Relying on this ruling, it is submitted :: 4 ::Writ Petition No.19988/2011
(The Manager vs Aminuddin) that there is unjustified culpable delay in issuing the No Demand Certificate. The Tribunal having held that DCRG cannot be withheld because of the pendency of the claim for damages should have awarded interest at the rate of 18% per annum.
9. The respondent has not entered appearance.
10. This Court in M. Padmanabhan Nair case I has held as under: "Pension and gratuity are no longer any bounty to be distributed by the Government to its employees on their retirement but have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment."
11. The Tribunal having come to the conclusion that DCRG cannot be withheld merely because the claim for damages for unauthorised occupation is pending, should in our considered opinion, have granted interest at the rate of 18% since right to gratuity is not dependent upon the appellant vacating the official accommodation. Having regard to these circumstances, we feel that it is a fit case in which the award of 18% is warranted and it is so ordered. The DCRG due to the appellant will carry interest at the rate of 18% per annum from 1-6-1986 till the date of payment. Of course this shall be without prejudice to the right of the respondent to recover damages under Fundamental Rule 48-A. Thus, the civil appeal is allowed.
However, there shall be no order as to costs." Thus it is no more res integra that the gratuity which an employee earns cannot be withheld subject to the conditions as laid down in the statute whereunder it is payable.
In the case at hand, provisions contained in the Act of 1972 nowhere stipulates withholding of gratuity for non-vacating of quarter or for non-issuance of no objection certificates by the department concerned. Section 4 of the Act of 1972 provides for:
"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,--
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(The Manager vs Aminuddin)
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:
Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other 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 him 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.
Explanation.--In the case of a monthly rated employee, the fifteen days wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen. (3) The amount of gratuity payable to an employee shall not exceed three Lakhs and fifty thousand rupees (4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his :: 6 ::Writ Petition No.19988/2011
(The Manager vs Aminuddin) disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.
(5) Nothing in this section shall affect the right of an employee receive better terms of gratuity under any award or agreement or contract with the employer. (6) Notwithstanding anything contained in sub- section(1),--
(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused;
(b) the gratuity payable to an employee may be wholly or partially forfeited--
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment."
The case of the petitioner is that in absence of no objection and of non-vacating the quarter the entire gratuity is not payable. The stand, in the considered opinion of this Court, has no foundation of law, therefore, cannot be approved.
Having thus considered, this Court does not perceive any illegality in the impugned order as would warrant an interference.
In the result, petition fails and is dismissed. No costs.
(SANJAY YADAV)
vinod JUDGE