Andhra HC (Pre-Telangana)
K. Gangadhar And Ors. vs The Appellate Authority Under Payment ... on 30 April, 1992
Equivalent citations: 1992(2)ALT580, (1993)ILLJ342AP
ORDER B. Subhashan reddy, J.
1. These two writ petitions arise out of a common order passed by the respondent in P.G. Application No. 2 of 1986. The matter arises under Payment of Gratuity Act, 1972. The said central legislation is a beneficial one providing a scheme for the payment of gratuity to employees engaged in factories, mines, oil fields, plantations, ports, railway companies, shops or other establishments and the matters connected therewith or incidental thereto. The dispute in the instant cases, relates to the payment of gratuity to the petitioners in W.P. No. 10233/88 payable by the petitioner in W.P. No. 14936/90. To avoid confusion and duplication, I shall refer the petitioners in W.P. No. 10233/88 as the workers and the petitioner in W.P. No. 14936/90 as the management. The workers are Beedi Rollers entrusted with the said work by the management. The Management has set up a beedi manufacturing unit at Bardipur within the precincts on Nizamabad. The workers are not only the persons employed for that purpose, but several persons numbering more than 10 have been employed for such purpose. For establishing a Beedi manufacturing unit, the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 which is also a Central beneficial legislation, obligates the management to obtain a licence as contemplated under Section 4 thereof. It is not in dispute that the management in the instant case is an industrial premises, coming under the purview of the Act mentioned supra obligating to obtain a licence therefor and when the management has obtained a licence to that effect, it is needless to mention that all the incidents arising under the said statute, statutory rules framed thereunder as also the conditions of licence have got to be scrupulously followed. More so, in a case of this nature which is a beneficial scheme with an avowed object of protecting, safeguarding and benefitting the workers like the instant one. The words 'employer, 'establishment', 'industrial premises', and 'manufacturing process' are defined under definition clause contained under Section 2(g),(h),(i),(j),(k) of the aforesaid Act. Section 38 says that Chapter IV and Section 85 of the Factories Act, 1948 shall apply to Industrial premises and the rest of the provisions in that Act shall not apply to any industrial premises and further says that nothing contained in any law relating to regulation of conditions of work of workers in shops or commercial establishments shall apply to any shop to which this act applies. By virtue of Section 39, the provisions of the Industrial Disputes Act, 1947 are made applicable in respect of other industrial premises. The Payment of Gratuity Act, 1972 is made applicable to every factory, mine, oil-field, plantation, ports and railway company under Section 1(3)(a) and under Section 1(3)(b) to every shop or establishment within the meaning of any law for the time being in force in relation to shops an establishments in a State in which 10 or more persons are employed or were employed on any day of the preceding 12 months and under Section 1(3)(c) to such other establishment or class of establishments in which 10 or more employees are employed, or were employed, on any day of the preceding 12 months as the Central Government may, by notification, specify in this behalf.
2. The contentions advanced on behalf on the management are as follows :
(a) that their's is not a factory;
(b) that their's is not an establishment within the meaning of A.P. Shops and Establishments Act; and
(c) though they come under "other establishments", but there is no notification in that regard as contemplated under Section 1(3)(c) of Payment of Gratuity Act, 1972 and that Beedi and Cigar Workers are governed by Beedi and Cigar Workers Act, 1966 and not by Factories Act, 1948 or by A.P. Shops and Establishments Act, 1966 and that the same is clear from Section 38 of Gratuity Act, 1972.
It is the further contention of the management that the matter falls under Section 2(a)(i)(b) and not under Section 2(a)(ii) of Payment of Gratuity Act, 1972. Mainly speaking, the contentions are only two-fold; namely (1) that the workmen who are the Beedi rollers and who are governed by Beedi and Cigar Workers Act, 1966 are not entitled for payment of gratuity and (2) the controlling authority mentioned under Section 3 of Payment of Gratuity Act, 1972 is not the officer appointed by the State Government, but, it is the officer appointed by the Central Government.
3. On the other hand, the contention of the workers and supported by the Government are that the payment of Gratuity Act is applicable to the workers even though they are governed by Beedi and Cigar Workers Act, 1966 and the place where the management carries on manufacturing of beedis, as also the places ancillary thereto, come within the definition of Establishment and as such, the workers are entitled for gratuity under the Payment of Gratuity Act, 1972 and that even if the management had got several units like the one at Nizamabad and also elsewhere in other States, the same cannot be termed as branches and each unit is an independent unit and the unit at Nizamabad is an independent unit and is an independent industrial premises and as such, the licence was obtained by the management from the State Government for the said independent unit and that the controlling authority under Section 3 of Payment of Gratuity Act, 1972 is the Assistant Commissioner of Labour as notified and gazetted in the A.P. Official Gazette No. 1-B, dated January 3, 1985. The said gazette is produced before me and it is clear from the said gazette that at item No. 22 concerning the notification, the Assistant Commissioner of Labour, Nizamabad is the controlling authority for the District of Nizamabad and Medak.
4. Dealing with the first contention that the provisions of the Gratuity Act, 1972 are not applicable on the ground that the management is neither a factory nor an establishment, I repel the contention of the management. The word 'factory' is defined under Section 2(m) of Factories Act, 1948 and the contention of the management is that there is no premises for carrying on manufacturing process by the management and as such, it cannot be construed as a factory, is not acceptable for the reason that, it is the manufacturing process which is the criterion and not the premises or place in question. It cannot be disputed that the making of beedis is a manufacturing process and the words 'manufacturing process' under definition clause contained under Section 2(k) of Beedi and Cigar Workers (Conditions of Employment) Act, 1966 clearly take in the process of making beedis as a manufacturing process, wherever the manufacturing process is carried. May be, a particular place, a premises or the same are scattered over, nevertheless, the object being the manufacturing process, a definite place or premises loses its significance and instances are galore, where in judicial precedents, it was held that any place, even that of a sea shore, where prawns are processed, can be construed as a factory within the meaning of Factories Act, 1948. As such, I have got no hesitation to hold that the management is a factory.
5. But, for the reason mentioned infra, the Payment of Gratuity Act, 1972 is applicable even if the management is not a factory within the meaning of Factories Act, 1948.
6. I shall now proceed to deal with another aspect as to whether the management is an establishment as contemplated under Section 1(3)(b) of Payment of Gratuity Act, 1972.
7. The counsel for management seeks to interpret the word 'establishment' as contained under the above provision under Section 1(3)(b) of Payment of Gratuity Act, 1972 to mean that it is referable to A.P. Shops and Establishments Act and that since Section 38(2) of Beedi and Cigar Workers (Conditions of Employment) Act, 1966 specifically excludes the application of the conditions of work of workers in shops or Commercial establishments to any of the shops to which the Central Act, 1966 applies, the Payment of Gratuity Act cannot be made applicable and the management comes under the residuary provision of S. 1(3)(c) of Payment of Gratuity Act and that since there is no notification issued by the Central Government with regard to management the Payment of Gratuity Act, 1972 cannot be invoked for the benefit of the workers.
8. The above Act of 1966 dealing with Beedi and Cigar Workers defines the Word 'employee' under Section 2(f) as meaning, a person employed directly or through any agency, whether for wages or not, in any establishment to any work, skilled, unskilled, manual or clerical and includes any labour who is given raw material by an employer or a contractor for being made into beedi or cigar or both at home. Section 2(h) of the said Act defines establishment as meaning any place or premises including the precincts thereof in which or in any part of which any manufacturing process connected with the making of beedi or cigar or both, is being or is ordinarily carried on and includes industrial premises.
9. As stated above, the making of beedis being manufacturing process and the employee being a worker, whether working in industrial premises or in establishment, the latter taking in even the home worker, in any event of the matter, the management is an establishment and such an establishment need not be Central or State and need not be one covered by A.P. Shops and Establishments Act, as the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 is an independent Act by itself and for conferring the benefits under the said Act, there is no need to have resort even to the Factories Act or to the A.P. Shops and Establishments Act. The said Act of 1966 dealing with workmen engaged in the manufacturing process of Beedis and Cigars, is for welfare of labour. The true nature and character of the legislation shows that it is for enforcing better conditions of labour amongst those who are engaged in the manufacturing of beedis and cigars. It is intended to achieve welfare benefits and amenities for the labour.
10 The Supreme Court while construing the scope of section 1(3)(b) of Payment of Gratuity Act, 1972 has held in State of Punjab v. Labour Court, Jullundur 1981 - I - LLJ - 354 that it is difficult to accept the contention that law referred to under Section 1(3)(b) of Payment of Gratuity Act, 1972 must be a law which relates to both shops and establishments such as the Punjab Shops and Commercial Establishments Act, 1958 and that there is no warrant for So limiting the meaning of the expression "law" under Section 1(3)(b). Held, the Supreme Court further, that 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 establishment, or a law in relation to shops and commercial establishments and a law in relation to non-commercial establishments and further held that Section 1(3)(b) of Payment of Gratuity Act, 1972 applies to every shop within the meaning of any law for the time being in force in relation to shops in a State. Relying upon the said judgment, a Division Bench of Bombay High Court has held in B. N. Sarada Pvt. Ltd. v. Kisan K. Borada 1981 - I - LLJ - 190 that the word 'establishment' employed under Section 1(3)(b) of Payment of Gratuity Act, 1972 is comprehensive in nature and rules emphatically that the provisions of Beedi and Cigar Workers (Conditions of Employment) Act, 1996 will show that it is positively a legislation in relation to a particular kind of establishment where the workers are engaged in the manufacturing of beedis and cigars and it is clearly a law in relation to an establishment as contemplated by the provisions of Section 1(3)(b) of Payment of Gratuity Act, 1972. It held that for the applicability of Payment of Gratuity Act, 1972, it may be a shop or establishment within the meaning of any law, whether it is a State Law or Central Law and that the provision of the Payment of Gratuity Act, 1972 will be applicable in the case of the employees in that establishment if the employees fall within the definition under Section 2(e) of the said Act. Similar contentions were also raised before the said Court with regard to non-applicability of Payment of Gratuity Act, 1972. Repelling the said contention, the said court held that the Beedi and Cigar Workers (Conditions of Employment) Act, 1966, is a law enacted by the Parliament and deals with the establishment where the manufacturing of beedis is carried on and that the said establishment comes within the ambit of Section 1(3)(b) of Payment of Gratuity Act and consequently, the said beneficial legislation i.e., Payment of Gratuity Act, 1972 is applicable to beedi and cigar workers.
11. Having regard to the interpretation placed on the scope of Section 1(3)(b) of Payment of Gratuity Act, 1972 vis-a-vis the provisions of Beedi and Cigar Workers (Conditions of Employment) Act, 1966, I hold that the management, in the instant case, is an establishment within the meaning of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 and the said Act is a law relating to establishments operative in the State of Andhra Pradesh and as such, come within the purview of Section 1(3)(b) of Payment of Gratuity Act, 1972 and consequently, the workers are entitled for the payment of gratuity under the provisions of Payment of Gratuity Act, 1972 and the management is liable to pay the same as specified under the said statute and the rules made thereunder.
12. Coming to the second aspect of the jurisdiction as to whether, it is the Central Government or State Government, which is the controlling authority, I have no hesitation to hold that the management is a separate independent unit set up within the jurisdiction of Nizamabad District and is not a branch as contended by the management and that the State Government i.e., the officer appointed by it, is the controlling authority and not the Central Government under Section 3 of Payment of Gratuity Act, 1972.
13. In the result, Writ Petition No. 10233/88 is allowed and W.P. No. 14936/90 is dismissed. The parties shall bear their own costs. Advocate's fee Rs. 250/- in each of the writ petitions.