Gujarat High Court
Shri Shah Khimchand Laxmichand Deaf And ... vs State Of Gujarat on 1 April, 2025
NEUTRAL CITATION
C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 21672 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 1931 of 2024
With
R/SPECIAL CIVIL APPLICATION NO. 1998 of 2024
With
R/SPECIAL CIVIL APPLICATION NO. 21695 of 2023
With
R/SPECIAL CIVIL APPLICATION NO. 21737 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
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Approved for Reporting Yes No
✔
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SHRI SHAH KHIMCHAND LAXMICHAND DEAF AND DUMB SCHOOL-
TRUST
Versus
STATE OF GUJARAT & ORS.
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Appearance:
MS MESHWA H. BHATT WITH MR DG SHUKLA (1998) for the Petitioner(s)
No. 1
MR YUVRAJ BRAHMBHATT AGP for the Respondent(s) No. 1,2,3
PARTH J ADHYARU(9359) for the Respondent(s) No. 4
SIDDHI V VADODARIYA(9533) for the Respondent(s) No. 4
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CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 01/04/2025
COMMON ORAL JUDGMENT
1. Rule returnable forthwith. Learned advocates for the respondents waive service of rule on behalf of the respective Page 1 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined respondents.
2. Since issue is raised in all partitions are similar, they are being decided by a common judgment. However, facts of Special Civil Application No.21672 of 2023 taken into consideration.
3. The petitioner filed the petition under Article 226 of the Constitution of India with following reliefs:
"(A) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other writ or direction directing the Respondent No.1 herein to release the grant for the balance Gratuity amount of Rs.1,20,046/- as well as 10% simple interest amount on Gratuity w.e.f. 01.11.2006 till the date of payment, payable to Ms. Jayshriben J. Bhatt - Respondent Employee pursuant to the Demand Notice date 31.03.2023/17.04.2023 issued by City Mamlatdar, Bhavnagar Respondent No.3 herein in the interest of justice; Annexure - A, (B) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to grant the interim relief staying the implementation, execution and operation of Demand Notice dated 31.03.2023/17.04.2023 issued by City Mamlatdar, Bhavnagar Respondent No.3 herein at Annexure- A to the present petition in the interest of justice; (C) An ex-parte ad interim relief in terms of paragraphs 11 (B) above may kindly be granted;
(D) Any other and further reliefs as this Hon'ble Court may deem fit and proper in the circumstances of the case."Page 2 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025
NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined
4. It is the case of the present petitioner that the petitioner - Trust is mainly engaging in imparting education and training to the deaf and dumb students and for that purpose, is running several educational institutes. The petitioner - Trust is getting 100% grant from the Social Defence Department, Government of Gujarat. It is further case of the petitioner that the employee concerned was retired from the service on attaining the age of superannuation and on retirement, the Form No. I - application filed for claiming gratuity under the Payment of Gratuity Act, 1972. Thereafter, the Form No.N was filed along with an application for condonation of delay before the learned Controlling Authority, Bhavnagar, learned Controlling Authority has issued the notice of hearing to both the parties, the petitioner - Trust has written a letter to Director, Social Defence Department, State of Gujarat, who is respondent No.1 herein, about the application for claiming gratuity submitted by the respondent - employee and requested to pass necessary order for payment of gratuity. The petitioner - Trust is getting 100% grant from Social Defence Department, Gujarat State, Gandhinagar and is a grant-in-aid institute and therefore, application was moved to join the Social Defence Department, Page 3 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined Gujarat State, Gandhinagar as a necessary party before the learned Controlling Authority. Learned Controlling Authority issued the notice on the said application, wherein the respondents - employees made an endorsement that they have no objection to the said application. Learned Controlling Authority, after hearing the submissions of the respective party, rejected the application submitted by the petitioner to join the Director, Social Defence Department, Gujarat State, Gandhinagar as a necessary party on 03.03.2018. The said order challenged before this Court by way of filling the petitions being Special Civil Application No.9349, 9315 to 9353 of 2018 and this Court, vide common oral order dated at 08.04.2019, disposed of the said petitions by setting aside the impugned order dated 03.03.2018 on recording that the State has no objections, if aforesaid department is made a party to the proceedings before the Competent Authority and accordingly, the petitions were allowed. Thereafter, the Director, Social Defence Department, State of Gujarat was joined as a party in proceedings before the learned Controlling Authority. Learned Controlling Authority, after hearing the party, allowed the application filed by the employee directing the petitioner - Trust and the respondent Page 4 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined No.1 of Special Civil Application No.21672 of 2023, Special Civil Application No.21737 of 2023 and Special Civil Application No.21695 of 2023. However, in the Special Civil Application No.1998 of 2024 and Special Civil Application No.1931 of 2024 the directions were issued against the present petitioner only. It is further observed that the payment of the gratuity for a period of 1976 to 1997 be taken after taking into consideration the decision of the Hon'ble Apex Court in the pending matters along with the amount of 10% interest with effect from date of retirement till the payment of the gratuity, amount which should not be exceeding the gratuity amount. It is further case of the petitioner that even before order passed by the learned Controlling Authority, the communications were sent to the respondent No.1 to give necessary directions for the amount of gratuity as well as the interest thereon. After the order is passed by the learned Controlling Authority, again communications were sent informing about the order passed by the learned Controlling Authority as well as submitting the bill along with interest thereon. However, neither any reply was given by the respondent No.1 nor made entire payment along with interest to the employee, respondent, thereafter, made the payment of the Page 5 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined amount of gratuity in the account of the employee and informed the Trust to send the receipt, which was sent by the petitioner - Trust. Thereafter, the request was made by the Trust on 14.10.2020 to the learned Controlling Authority for waiving of the interest on the gratuity payable to the employee. Thereafter, the respondent has also passed an office order for making the payment of the additional amount of gratuity, as the arrears of gratuity on higher pay scale benefits, the said amount was also credited in the account of the employee by respondent No.1. Thereafter, the petitioner has received demand notice issued by the City Mamlatdar, Bhavnagar on 31.03.2023 / 17.04.2023 informing that balance amount of the gratuity along with 10% simple interest has not been paid by the Trust and if the said amount is not deposited within a period of 10 days, the proceeding under the Land Revenue Code will be initiated. The said notice is issued to the petitioner - Trust only and in turn, the present petitioner has informed the respondent No.3 i.e. - City Mamlatdar that as the amount of the gratuity was paid by the respondent No.1, therefore, the liability for the payment of interest is also on respondent No.1. It is further case of the petitioner that pattern of assistance made available to the Page 6 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined voluntary organizations like the petitioner - Trust is provided under the grant-in-aid Rules and as the petitioner - Trust is entitled for the reimbursement in respect of the expenses incurred towards the pay and allowance of the employee. It is the obligatory function of the State Government to pay the gratuity due under the Act, 1972. It is further case of the petitioner that as the respondent Nos.1 and 2 have partly made the payment of the gratuity but have not paid full gratuity amount and the interest thereon and as there has been substantial delay on the part of the respondent Nos.1 and 2 in making the payment of gratuity, the compliance of the order passed by the learned Controlling Authority should be made and for that, the grant shall be released in favour of the petitioner by the respondent Nos.1 and 2.
5. Heard learned advocate Mr. Shukla for the petitioner, learned AGP Mr. Yuvraj Brahmbhatt for the State and learned advocate Ms. Vadodaria for the respondent - employee.
6. Learned advocate Mr. Shukla submits that the petitioner - Trust has undertaken voluntary task of running the educational institute for deaf and dump students as well as center for Page 7 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined rehabilitation in the society with object of providing social service. It is the obligatory function of the State Government within Constitutional framework to provide the educational institutions for deaf and dumb students, which is undertaken by the present petitioner, as the grant-in-aid regulations due contemplate payment of pay and allowance of the staff. The State Government is bound to provide for grant for gratuity payable to the concerned employee along with interest if there is the delay in payment by the State Government. Refusal by the State Government to do so is in breach of provisions of the above grant-in-aid regulations and therefore, also the directions be issued to the State Government to release the grant in favour of the petitioner - Trust. It is further submitted by the learned advocate Mr. Shukla that when the respondent Nos.1 and 2 have undertaken 100% availability of grant in respect of the running of institutions as well as payment of gratuity, respondent No.1 and 2 herein are also bound to provide for any payment i.e. due and payable to the employees under the provisions of Labour Law as an employer, which is the undertaking of the work from its employee through an agent of the State Government. Learned advocate Mr. Shukla further submits that set up of the staff is Page 8 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined approved by the Social Defence Department and interview process for the appointment was also attended by the representative of the said department. As the 100% grant for the payment of salary and wages was given by the State Government, the payment towards the gratuity is also required to be made, which was partly made by the State Government by crediting the amount directly in the account of the employee concerned. In that background, learned advocate Mr. Shukla has prayed to allow this petition and for the issuance of directions for the release of the grant at the end of respondent Nos.1 and 2.
7. Par contra, learned AGP Mr. Yuvraj Brahmbhatt has submitted that there is no provision in the grant-in-aid with regard to the payment of gratuity. Learned AGP Mr. Yuvraj Brahmbhatt submitted that under the GCSR Rule employee would not be entitled for the gratuity as well as the interest and therefore, State Government is justifying in denying to release the grant in favour of the petitioner for payment of interest. Learned AGP Mr. Yuvraj Brahmbhatt further stated that in Special Civil Application No. 1931 of 2024, wherein directions for payment of the interest and the gratuity were issued against the Page 9 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined petitioner - Trust only and in the petition filed by the employee for implementation of the recovery certificate, the payment is made by the petitioner - Trust, which is recorded by this Court in order passed dated 13.12.2022 in Special Civil Application No.2474 of 2022. Learned AGP Mr. Yuvraj Brahmbhatt, in that background, stated that when the payment is made in one of the cases then petitioner is only responsible and liable for payment of gratuity in all cases. By submitting the same, learned AGP Mr. Yuvraj Brahmbhatt has requested to dismiss the petition.
8. Having considered the arguments advanced by the learned advocates for the respective parties, it emerges that the petitioner is getting 100% grant from the respondent Nos.1 and 2 to run the education institute for the deaf and dumb students. It is also not in dispute that the respondent No.1 has been joined as a party respondent after the directions issued by this Court in the writ petitions. It is also not in dispute that all the employees are not eligible for the pension, as they had opted for the CPF. The contention, which was raised by the learned AGP Mr. Yuvraj Brahmbhatt submit that there is no provision in the grant-in-aid for payment of gratuity. It is required to be observed herein that Page 10 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined grant-in-aid was enacted in the year 1964. However, the payment of the gratuity was enacted in the year 1972, which is subsequent to the enactment grant-in-aid. It emerges from the record that on filing the application by the employees for gratuity under the Act, 1972, the communications were addressed by the present petitioner to the respondent - State informing the proceedings initiated and requesting for issuance of the directions for payment of the gratuity, even after the order passed by the learned Controlling Authority, it was informed by the petitioner - Trust to the respondent that the payment is required to be made within the time prescribed, otherwise, the interest would be levied. Thereafter, the payment is made by the present respondent, part payment is made towards the gratuity directly in the account of the respondent - employee. Subsequently, for the difference amount of higher pay grade, further amount is paid that also directly the account of the concerned employee on 18.11.2021. It appears that thereafter, the representation is made by the respondent Nos.1 and 2 to learned Controlling Authority requesting to waive the interest on the gratuity amount. It is undisputed fact that neither the petitioner nor the respondent No.1 has challenged the impugned order, though Page 11 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined directions were issued in the order annexed with Special Civil Application No.1998 of 2024 and Special Civil Application No.1931 of 2024, in which both the petitioner and respondent No.1 were held liable for making the payment. The order of the learned Controlling Authority attains the finality. It is true that in one of the petitions being Special Civil Application No.1931 of 2024 for the payment of the gratuity is made by the petitioner in view of the directions issued by this Court in Special Civil Application No. 2474 of 2022. However, this Court has made an observation in the order dated 13.12.2022 that if the respondent is aggrieved by any action of the State Authority, it will be open for them to challenge the same before the appropriate forum. 8.1 This Court has referred the decision rendered by the Hon'ble Apex Court in the case of Nutan Bharti Gram Vidyapith V/s. Government of Gujarat reported in 2024 (12) SCR 366, wherein identical situation the following observations are made by the Hon'ble Apex Court in Para Nos.13 to16.
"13. It is not a matter of dispute that the appellant is an institution entitled to Grant-in-Aid and the employees thereof are entitled to pensionary benefits in terms of the aforesaid Scheme. The only argument raised by the learned counsel for the State is regarding conduct of the Page 12 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined appellant in fighting litigation after the State had directed reinstatement of the respondent no.2 and finally settling the matter before the High Court. In our opinion, the same cannot be fatal for the appellant and burden it with the retiral benefits of respondent no.2 whereas the Scheme provides for otherwise. There is no exception provided in the Scheme to enable the State to deny payment of retiral benefits to an employee of the Grant-in-Aid Institution under certain circumstances and shift the burden on the institution.
14. The judgment relied upon by the State may not have application in the facts of the case, wherein it was found that the action of the Education Institution was without jurisdiction, transgressing its power to terminate its employee. If the facts of the present case are concerned, no such finding has been recorded by the appellate authority. There were serious charges against the respondent no.2 which included inter alia instigation of students to go on strike, improper behaviour with the co-employees, attempt to pollute the atmosphere in the institution, violation of rules and regulations of the institution and involvement in the activities which may cause damage to the institution. Out of 30 charges, 10 were proved. After inquiry, with a view to maintain discipline in the institution, it was found appropriate that the respondent no.2 be dismissed from service. However, the appellate authority found the charges established to be trivial in nature and opined that those should have been sorted out. The appellate authority Page 13 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined found that the punishment of dismissal is too harsh and the issues could have been resolved by way of discussion.
15. The appellant, keeping in view the discipline in the institution, thought it appropriate to challenge the same. In such circumstances, it cannot be opined that it's conduct was such that it should be burdened with the retiral benefits of delinquent employee. It is not the opinion of the appellate authority or any Court that the action taken by the appellant against the respondent no.2 was without jurisdiction as was the case in Educational Society, Tumsar and Others (supra).
16. For the reasons mentioned above, the appeals are allowed. The impugned order dated 21.04.2023 passed by the High Court, allowing the Review Application filed by the State and dismissing the Review Application filed by the appellant, is set aside. The Review Application filed by the appellant is allowed. As a consequence, the order dated 26.07.2022 is modified. The consequence thereof is that the State, respondent no.1 shall be liable to pay retiral dues to respondent no.2."
8.2 This Court has also referred the decision rendered by the Division Bench of this Court in LPA No.1315 of 2006 dated 05.12.2012, wherein also the dispute with regard to the liability of the Government to make the payment of gratuity to the employee of the Trust, who are getting the 100% grant, was Page 14 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined raised, wherein the following orders were passed Para No.14(a).
"(a) It is held that the employees working in the Homes run by the NGOs (original petitioners in the respective petitions) would be entitled to all allowances as are available to the employees working in the Homes run by the Government in capacity as the Government service. The State or its concerned authorities would be required to reimburse the grant for such purpose for the concerned employees of the respective Institutions. So far as the availability of the gratuity is concerned, we find that the position will remain the same at par with the employees working in the Homes run by the Government, inasmuch as if such gratuity is available to such employees working in the Homes run by the Government the same would equally be available to the employees working in the Homes run by the NGOs like the original petitioners. However, it is clarified that all benefits of the allowances at par with the employees working in the Homes run by the Government would be available on fulfilling the conditions that such posts were sanctioned by the competent authority concerned and the recruitment process for employment of such person is duly followed in accordance with law by the concerned original petitioner Institutions."
8.3 This Court has also referred the decision rendered by this Court in LPA No. 822 of 1997 and LPA No. 96 of 2012, wherein also the directions were issued to the State Government to Page 15 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined reimburse the payment of the gratuity in identically situated employees.
8.4 In view of above facts, this Court is of the view that when 100% grant for making payment of pay and allowances of the approved employees is granted by the State Government and there is no dispute with regard to the recruitment in accordance with law as well as the fact that the part payment is made by the State Government directly in the accounts of the employees and the State Government has addressed the communication to the learned Controlling Authority for waiving of interest amount and in absence of a challenge to the order passed by the learned Controlling Authority, this Court does not feel any hesitation in holding that the payment of balance amount of gratuity and the interest thereof is liability of State and the grant is also required to be released in favour of the petitioner for the said payment.
9. In that background, the petitions are hereby allowed. The respondent No.1 shall release the grant for the balance gratuity amount as well as the 10% simple interest as directed by the learned Controlling Authority within a period of 8 weeks from today. Petitioners shall in turn disburse the amount in favour of Page 16 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025 NEUTRAL CITATION C/SCA/21672/2023 JUDGMENT DATED: 01/04/2025 undefined the employees as directed by the learned Controlling Authority.
10. All the petitions are disposed of accordingly. Rule is made absolute.
(M. K. THAKKER,J) Vikramsinh Amarsinh Page 17 of 17 Uploaded by Vikramsinh Amarsinh(HCW0055) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 21:31:25 IST 2025