Kerala High Court
Kathayee Cotton Mills vs Gopala Pillai on 11 July, 1979
JUDGMENT
Bhaskaran J.
1. This writ petition raises a question of interpretation with regard to Sub-section (2) of Section 4 of the Payment of Gratuity Act, 1972 (Act 39 of 1972), hereinafter referred to as the Act. That sub-section lays down as follows:
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. (Provisos omitted)
2. The bone of contention is whether in the case of monthly rated employees, like the 1st respondent in the writ petition. 15 days' wages has to be reckoned on the basis of a month having 30 days as contended for by the writ petitioner (Management) or on the basis of it having only 26 working days as contended for by the 1st respondent.
3. On the retirement on 17-10-1974 of the 1st respondent who was employed as a piecer in the Spinning Department of the petitioner's factory at Alwaye, he was paid gratuity in the sum of Rs. 4,485.60 calculated at the rate of a month's salary for every year of his completed service, he having had 21 years of service and his aggregate monthly wage reckonable for the purpose having been Rs. 427.24. The 1st respondent not having been satisfied with the amount received filed an application before the Controlling Authority under the Act, the 3rd respondent in the writ petition, alleging that gratuity was calculated by the petitioner on the basis of the daily wages arrived at by dividing the monthly salary by 30 and multiplying into 15 for determining the gratuity payable for every year of service. According to him, the monthly wages should have been divided by 26 for finding out the daily wages and 15 days' wages should be calculated by multiplying the daily wages thus arrived at into 15. The contention of the petitioner before the Authority, consistent with its stand, was that the daily wages should be calculated by dividing the monthly wages by 30, inasmuch as the 1st respondent was a monthly rated employee and his salary was given for the whole month; as monthly wages were given for the whole month, 15 days' wages meant half a month's wages, and what was paid by the petitioner to the 1st respondent under Section 4(2) of the Act was at that rate. After the enquiry and after hearing the parties the 3rd respondent passed an order dismissing the application, accepting the contention of the petitioner. Exhibits P 1 is the copy of the order dated 14-7-1975. Aggrieved by Ext, P1 order the 1st respondent filed an appeal before the Deputy Labour Commissioner and the Appellate Authority, the 2nd respondent in the writ petition. A copy of the appeal filed under Section 7(7) and 13 of the Act dated 25-8-1975 is Ext. P2. After hearing the parties the 2nd respondent passed orders dated 19-2-1976, a copy of which is Ext. P 3, allowing the appeal, and directing the petitioner to pay to the 1st respondent an amount of Rs. 689,75 being the difference in the amount of gratuity payable to him over what was already paid, having held that the daily wages had to be calculated by dividing the monthly wages by 26, not by 30. In this writ petition the petitioner challenges the correctness of Ext. P3 order passed by the second respondent.
4. The counsel for the petitioner submitted that in the absence of a definition or any provision in the Act giving an indication expressly or by necessary implication to the contrary, the expression 'month' has to be taken to mean a period of 30 days as understood in the ordinary parlance. In Section 4(2) of the Act it has not been stated that for the purpose of reckoning daily wages the total monthly emoluments have to be divided by 26 and wages at that rate for 15 days should be paid by way of gratuity for every completed year of service to the employee. He argued that in the present case there is no denial that the salary of the 1st respondent was fixed on a monthly basis and that used to be paid and received as monthly salary. According to him, whatever be the criterion adopted for arriving at the daily wages of a daily rated worker for any practical purpose that cannot be ipso facto applied in the case of a monthly rated employee like the 1st respondent for arriving at it for the purpose of determining the gratuity payable to him under Section 4(2) of the Act.
5. The counsel for the 1st respondent on the other hand contended that it is common knowledge that there being at least one holiday in a week even in the case of monthly rated employees, the emoluments paid to such employees represent the wages payable to him for not more than 25 days, and therefore for all practical purposes, including for the purpose of assessing daily wages for calculating gratuity, a month of an employee, whether daily rated or monthly rated, should be treated as one having only 26 day?'. In other words, ho reiterates the contention taken by the 1st respondent before the Controlling Authority and the Appellate Authority that his monthly wages ought to have been divided by 26 and multiplied by 15 to arrive at the quantum of gratuity payable for every completed year of service. The counsel also submitted that for the purpose of overtime and leave with wages allowances even in the case of monthly rated employees like the 1st respondent, the daily wages used to be arrived at by dividing the monthly wages by 26 and there is no reason why a departure should be made in the context of assessing daily wages for the purpose of payment of gratuity under Section 4(2) of the Act. He placed reliance on the decision of the Supreme Court in B. Shah v. Labour Court, Coimbatore 1978-I L.L.J. 29, wherein the Supreme Court held that bearing in mind the dictionary or popular meaning of the word 'week', in the context of Sub-sections (1) and (3) of Section 5 of the Maternity Benefits Act, 1961, it has to be taken to signify a cycle of seven days including Sundays.
6. In interpreting a statutory provision we have to look into the plain meaning of the language used therein, and if it does not give room for any ambiguity that meaning has to be given to it in the absence of any contrary or different intention indicated expressly or at least by implication. In this case the term "month" has not been defined in the definition section, namely, Section 2 of the Act. In common parlance a month is understood to mean a period of 30 days. Under Section 3(35) of the General Clauses Act, 1837, the number of days in a month has to be reckoned according to the British calendar under which some months have 31 days while others have either 30 days, and one month having 28 or 29 day?. In the absence of a definition giving a different meaning there is no justification for departing from the meaning given to the term in common parlance. We are, therefore, of the opinion that for the purpose of Section 4(2) of the Act, for arriving at the daily wages of the employee in the case of monthly rated employees, the total monthly wages reckonable for the purpose should be divided by 30 and that there is no legal basis for the contrary view taken by the 2nd respondent in Ext. P3 order. The decision of the Supreme Court which was referred to by the counsel for the 1st respondent, in our opinion, does not advance the 1st respondent's cause; and, if at all it only supports the case of the petitioner, inasmuch as it has been declared therein that a week is understood to connote a cycle of seven days, on the analogy of which it could be argued that the term "month" should be deemed to connote a period of 30 days in the absence of a definition of the term in the Act or a contrary intention indicated expressly or by necessary implication in the relevant provisions of the Act.
7. We have been referred to the Division Bench ruling of the Bombay High Court in Lakshmi Vishnu Textile Mills v. P.S. Mavlankar 1979-I L.L.J. 443, by the counsel for the petitioner. In that decision, no doubt, the provisions of Section 4(2) of the Act and the question of 15 days' wages also came up for hearing. The contention in that case advanced by the management however, represents the extreme stand that for every completed year of service the gratuity payable should be deemed to be only wages for 13 days, treating the number of days in a month as 26 and wages for half the number of these days as payable under the law. Repelling this contention the Division Bench held that in the face of the express and unambiguous mandate, the number of days for which payment under the Gratuity Act has to be made is 15, not 13, for every completed year of service inasmuch as a month has to be understood to represent a period of 30 days. To this extent this decision also supports the stand taken by the counsel for the petitioner. We arc in agreement with the above view expressed by the Division Bench of the Bombay High Court.
8. For the foregoing reasons the writ petition' is allowed, the impugned order Ext. P3 passed by the 2nd respondent is quashed. There will be no order as to costs.