Madras High Court
Management Of Christian Medical ... vs Deputy Commissioner Of Labour ... on 22 September, 1999
Equivalent citations: (2001)ILLJ1674MAD
JUDGMENT E. Padmanabhan, J.
1. In this writ petition, the petitioner-management, Christian Medical College and Hospital, pray for the issue of certiorarified mandamus to call for the records connected with P.G. No. 196 of 1998 on the file of the Controlling Authority and quash the order No. N. Dis. L2/44282 of 1999, dated July 2, 1999, made by the first respondent, Deputy Commissioner of Labour (Appeals) (Appellate Authority, under the Payment of Gratuity Act, 1972) and further directs that the appeal of the petitioner be taken on file without insisting on any deposit to be made and render justice.
Heard Mr. S. Sanjay Mohan for S. Ramasubramaniam Associates appearing for the writ petitioner. In this writ petition, the only point raised and argued could be formulated as hereunder:
"Whether in terms of the second proviso to Section 7(7) of the Payment of Gratuity Act, 1972, a pre-deposit of the amount, determined by the original authority is a must or not?"
2. The second respondent herein approached the first respondent under Section 7(1) of the Payment of Gratuity Act and prayed for a direction directing the writ petitioner-management to pay gratuity for 20 years of service rendered by him. After affording opportunity and hearing the second respondent as well as the writ petitioner-management herein, the Assistant Commissioner of Labour, Madras-6, by proceedings dated March 4, 1999, directed the writ petitioner-management to pay Rs. 22,134 being gratuity payable by the writ petitioner-management to the second respondent herein.
3. Being aggrieved by the said proceedings, the writ petitioner preferred appeal before the first respondent, the appellate authority constituted under the Payment of Gratuity Act. The said Appellate Authority by its endorsement dated June 3, 1999, returned the appeal. The endorsement reads thus:
"N. Dis. L2/37067/99 - Office of the Commissioner of Labour, Chennai-6, dated June 3, 1999, returned.
2. As per the second proviso to Section 7(7) of the Payment of Gratuity Act, an employer at the time of preferring the appeal should deposit the amount of gratuity ordered by the controlling authority, with the controlling authority and produce the certificate issued by him to the effect that the appellant has deposited the gratuity amount ordered by him. Whereas no such certificate has been produced by the appellant along with the appeal petition. Hence, the appeal petition cannot be entertained.
Deputy Commissioner of Labour (Appeals)."
4. Once again, the petitioner-management represented the appeal submitting that mere is no legal requirement for the writ petitioner-management to deposit the amount as ordered by the authority and requested the first respondent to take up the appeal or afford an opportunity of hearing. The first respondent by further order dated July 2, 1999, while referring to the earlier endorsement of return dated June 3, 1999, intimated the writ petitioner that unless and until the amount adjudicated or ordered to be paid is deposited, the appeal will not be entertained. Being aggrieved, the present writ petition has been filed.
Heard Mr. Sanjay Mohan learned counsel appearing for the writ petitioner.
5. Learned counsel took the Court through the statutory provisions of the Payment of Gratuity Act and contended that what is required to be deposited under the second proviso to Section 7(7) of the Act is the admitted liability, and not the disputed amount. According to counsel for the writ petitioner, the writ petitioner disputes the entire liability and no amount is payable towards gratuity. Learned counsel referred to Sub-section (7) of Section 7 and contended that what is required to be deposited under Sub-section (4) of Section 7 alone is required to be deposited and it is not as if the entire amount is directed to be deposited by the authority.
6. This Court is unable to sustain the contention raised by Mr. Sanjay Mohan.
Section 4 of the Act provides for payment of gratuity to an employee who satisfies the conditions prescribed therein.
Section 5 provides for exemption. Section 7 provides for determination of the amount of gratuity. Sub-section (1) of Section 7 provides that an employee, who is eligible for payment of the gratuity under the Act has to submit a written application to the employer seeking for payment of gratuity. Sub-section (2) provides that as soon as gratuity becomes payable, the employer shall, whether an application referred to in Sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the employee to whom the gratuity is payable and also to the controlling authority, specifying the amount of gratuity so determined.
Sub-section (3) provides that an employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable. Sub-section (3-A) of Section 7 provides for payment of interest. Sub-section (4)(a) provides that if there is any dispute as to the amount of gratuity payable to an employee under the Act, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity.
Section 7(4)(b) provides that when there is a dispute with regard to any matter or matters specified in clause (a) of Sub-section (4) of Section 7, the employer or employee may make an application to the controlling authority for deciding the dispute. Clause (c) of Sub-section (4) provides that the controlling authority shall after due inquiry and after giving the parties to the dispute a reasonable opportunity to determine the matter or dispute, and if any amount is found to be payable to the employee, the controlling authority shall direct the employer to pay such amount already deposited by the employer. Clause (d) of Sub-section (4) of Section 7 provides that the controlling authority shall pay the amount deposited by the employer to the person entitled thereto.
Sub-section (5) of Section 7 provides for the procedure to be followed by the controlling authority and the powers of the said authority. Sub-section (6) of Section 7 provides that the proceedings under Section 7 by the controlling authority is a judicial proceedings.
Sub-section 7(7) provides that any person aggrieved by an order under Sub-section (4) may prefer an appeal to the appellate authority within sixty days from the date of receipt of the order or within the extended period of further sixty days, The second proviso to Sub-section (7) of Section 7, which is relevant for the purpose of this writ petition, reads thus:
"Provided further that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under Sub-section (4) or deposits with the appellate authority such amount."
7. While elaborating the above second proviso to Section 7(7), Mr. Sanjay Mohan learned counsel for the writ petitioner, contends that the second proviso refers to Sub-section (4), which means the admitted amount alone is required to be deposited under Sub-section (4)(a) of Section 7 and not the disputed liability. Hence, according to learned counsel, no deposit need be made and the return made by the first respondent appellate authority suffers with an error apparent on the face of the record and liable to be quashed.
8. This contention of learned counsel for the petitioner cannot be sustained. The contention would have deserved acceptance provided the second proviso to Sub-section (7) of Section 7 had confined itself to Clause (a) of Sub-section (4), but the entire Sub-section (4) of Section 7 is included in the proviso. In other words, the admitted amount or the amount adjudicated or whatever the amount as may be directed to be deposited or ordered to be paid by the controlling authority is required to be deposited or ordered to be paid by the controlling authority is required to be deposited by the employer in terms of the second proviso to Sub-section (7) of Section 7. There is no justification or warrant to restrict the meaning of the second proviso to the admitted liability alone. Learned counsel for the petitioner refers to the provisions of the Payment of Gratuity Act and the Provident Fund Act and sought to contend that the said provisions are slightly different vis-a-vis to the second proviso to Sub-section (7) of Section 7.
9. The object of the proviso to Sub-section (7) of Section 7 makes it abundantly clear that before filing an appeal, the employer is bound to deposit the amount of gratuity required to be deposited under Sub-section (4) of Section 7. In other words, the expression "amount of gratuity required to be decided under Subsection (4)" cannot be restricted to clause (a) of Sub-section (4), as Sub-section (4) provides for various other contingencies including the contingency where there is total denial and the conclusion of the controlling authority holding that the employer is liable to pay gratuity. When once the controlling authority adjudicates the claim of the employer and holds that the employer is liable to pay gratuity, which adjudication also falls under Sub-section (4), and as such, the amount adjudicated by the controlling authority is required to be deposited before filing an appeal.
10. The interpretation sought to be placed on the second proviso to Section 7(7) if it is to be sustained as contended by counsel for the writ petitioner, the same will defeat the very object of the statutory provision. Identical provisions had been repeatedly upheld and in this case there is no challenge to the constitutional validity of the proviso. There is no basis or justification or reason to restrict the meaning of the expression "amount of gratuity required to be deposited under Sub-section (4)" of Section 7 to Sub-section (4)(a) alone. Such a construction will defeat the very object of the enactment, a social legislation.
11. If the Legislature intended to restrict the pre-deposit to clause (a) of Sub-section (4) of Section 7, then it would have been provided that the required amount to be deposited under Clause (a) of Sub-section (4). This is not the statutory provision. Further, if such a contention is to be accepted, the object of legislation, which has provided for a mandatory provision to deposit the amount, as determined by the controlling authority before filing an appeal, would be defeated. The intention and object of the legislation is also very clear and the second proviso has been introduced with the object of making pre-deposit of the amount determined by the controlling authority as pre-requisite under Sub-section (7) of Section 7. Further, in terms of Clause (a) of Sub-section (4) of Section 7 the deposit is a voluntary deposit by the employer at the threshold, where the employer comes forward with a deposit. Such is not the contingency provided for in respect of other clauses in sub- section (4) of Section 7 of the Act.
12. In the circumstances, this Court holds that there is no illegality in the order impugned nor there is any error apparent on the face of the order nor the contention raised by Mr. Sanjay Mohan deserves acceptance.
13. The writ petition fails and it is dismissed. Consequently, the connected W.M.P. is also dismissed.
14. However, to afford an opportunity, this Court extends the time to deposit the amount of gratuity determined by the controlling authority by four weeks from today, by way of bank draft and as and when the amount is deposited, the first respondent appellate authority shall take up the appeal on file and dispose of the same on merits and according to law.
15. Mr. Sanjay Mohan also expressed a view that if the amount is deposited, the controlling authority may disburse the amount. This anxiety expressed by learned counsel for the petitioner cannot be appreciated as it is well open to the writ petitioner to move the appellate authority and seek for a direction or stay, as the case may be, which the appellate authority may consider and pass orders.