Bombay High Court
Gangubai Bhagwan Salawade, Ms. Rupali ... vs Smt. Chimanabai Suryabhan Salawade, ... on 29 June, 2004
Equivalent citations: 2005(2)BOMCR423, (2005)ILLJ107BOM, 2004(4)MHLJ204
Author: Nishita Mhatre
Bench: Nishita Mhatre
JUDGMENT Nishita Mhatre, J.
1. This Petition challenges the order of the Industrial Court, Solapur acting as the appellate authority under the Payment of Gratuity Act (for short, 'the Act'). The Petitioner is the widow of the deceased Bhagwan Salawade, who was employed as an Helper with Maharashtra State Electricity Board (for short, 'MSEB'). The Petitioner No. 1 is the wife and Petitioner Nos. 2, 3 and 4 are the children of the deceased. After death of Bhagwan Salawade on 1.5.1996, while in service, the Petitioners submitted an application on 30.5.1996 to the employer of the deceased claiming the gratuity amount payable to him. Since the nomination was made in favour of Respondent No. 1 who is the mother of the deceased, the employer deposited an amount of Rs. 65,615/- before the Controlling Authority under the Payment of Gratuity Act.
2. An application bearing No. 396 of 1996 was filed by the MSEB stating that there was a dispute regarding the person who should receive the gratuity the amount was being deposited by them before the Controlling Authority. The Petitioners as well as Respondent No. 1 filed their respective say in the matter. The Petitioners claimed that since they were the legal heirs of the deceased, the amount should be paid over to them. According to Respondent No. 1, since she was the mother and the nominee, she was entitled to the gratuity and the amount should not be paid to the Petitioners. On 29.9.1998, the Controlling Authority under the Payment of Gratuity Act held that the amount deposited should be equitably distributed between the Petitioners and Respondent No. 1. The Controlling Authority was of the view that the heirs of the deceased and respondent No. 1 were entitled to a share and the Controlling Authority therefore, apportioned the amount. Respondent No. 1 preferred an appeal under the Payment of Gratuity Act claiming that she was entitled to the entire amount of gratuity to the exclusion of others since she was the nominee. According to Respondent No. 1 despite the marriage of the deceased with Petitioner No. 1 in 1983, he had nominated Respondent No. 1 on 10.5.1986 thereby indicating that the entire amount should be paid over to the mother. The appellate authority had considered the judgment of the Apex Court in the case of Sarbati Devi v. Usha Dev, and held that since there is a nomination in the name of the mother, she was entitled to the entire amount of gratuity and the petitioners were not to be paid any amounts. It is this order which is challenged in the present petition.
3. Mr. Godbole, learned Advocate for the Petitioners, has submitted that the nomination cannot override the provisions of the Hindu law which is the personal law governing the Petitioners and Respondent No. 1. According to him, the nominee merely holds the amount in trust and the nominee does not have an exclusive right over the amount. He places reliance on the case of Sarbati Devi (supra) where it has been held that the nomination only indicates the hand which is authorised to receive the amount from the insurer. He further places reliance on the judgment of this Court in the case of Gopal Vishnu Ghatnekar v. Madhukar Vishnu Ghatnekar, 1982 Mh.L.J. 65 where it has been held under the Maharashtra Cooperative Societies Act that a nomination made by a person in favour of another does not create a title in the property. It is only meant to provide for the interregnum between the death and the full administration of the estate and does not confer any permanent right to the property forming part of estate of the deceased. He further submits that the Act being a self contained code, as held in the State of Punjab v. Labour Court, Jullunder and Ors., (1980) SCC 4, the Controlling Authority has powers to decide the dispute between the nominee and the heirs of the deceased. He submits that under Section 7 of the Act, the Controlling Authority can determine the person who is entitled to the gratuity. The Petitioners ought not to be driven to file a suit against Respondent No. 1 to claim their right in the estate of the deceased. he further submits that the Controlling Authority had rightly apportioned the amount between the heirs; Respondent NO. 1 was also given a share in the gratuity amount. He submits that just as under the Motor Vehicles Act, the Tribunal is empowered to award just compensation and the tribunal is empowered to specify the person or persons to whom the compensation shall be paid, thereby permitting apportionment of the compensation awarded, the Controlling Authority is also similarly powered. He relies on the judgment in the case of V. Sivalingam v. Dakshinamurthy and Ors., .
4. This matter was heard on 14.6.2004, 21.6.2004 and was fixed for orders on 28.6.2004. On none of these dates, did Respondent No. 1 remain present nor was her advocate present. However, since the advocate appearing for Respondent No. 1 made a request to the Court that he be heard before pronouncement of judgment, I have given him the opportunity in order that no injustice be done.
5. It is no doubt true that once there is a nomination, the amounts must be paid over to the nominee under the Payment of Gratuity Act. A nominee can be any person who belongs to the family of the deceased. Section 6 of the Act makes it clear that if the employee has a family at the time of making nomination, the nomination must be made in favour of one of the members of his family. Any nomination made by the employee in favour of a person who is not a member of his family is void. If the employee at the time of making a nomination has no family but subsequently acquires a family, the nomination made earlier becomes invalid and a fresh nomination must be made by the employee in favour of the members of his family. "Family" has been defined under Section 2(h) of the Act. In relation to a male employee the word includes his wife, his children whether married or unmarried, his dependent parents and the dependent parents of his wife and the widow and children of his predeceased son. Therefore, the nomination made in favour of the dependent parent is a valid nomination. The Appellate Authority under the Act has not considered whether the nomination is valid but has held that the amount must be paid to the nominee because Respondent No. 1 is the mother of the deceased. However, he has not considered whether she was a dependent parent. Only a dependent parent is considered a member of the family of the employee. Although an affidavit has been filed by the Respondent in this Court, there is not a whisper as to whether she was dependent on the deceased in order to qualify a member of the 'family' of the deceased. Nor is any such statement found in the say of Respondent No. 1 filed before the Controlling Authority. However, in the appeal memo, there is a ground taken that Respondent No. 1 and her husband were being looked after by the deceased employee.
6. The Appellate Authority has not adverted to this fact at all as to whether Respondent No. 1 was a member of the family of the deceased. The Appellate Authority only considered the fact that Respondent No. 1 was the mother of the deceased and, therefore, could be a nominee. There is no discussion at all as to whether she was dependent on the deceased and, therefore, was qualified to be considered as a member of the family of the deceased. It appears there is no dispute that Respondent No. 1 was dependent on the deceased since no averment to the contrary is found in the Petition. The contention raised in the Petition is that the nomination does not confer an exclusive right and that the order of the Controlling Authority was correct.
7. Although the Industrial Court has found that the gratuity amount should be paid to Respondent No. 1, this would not mean that Respondent No. 1 has exclusive right over that amount. She has a right only as a nominee to receive the amount as a trustee, on behalf of the heirs of the deceased. The judgment in the case of Sarbati Devi (supra) applies on all fours to the present case. The Supreme court was considering whether Section 39 of the Insurance Act deprives the heirs of the amounts under life insurance policy and held that a mere nomination would not have effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. The nomination only indicates the hand which is authorised to receive the amount on the payment of which the insurer gets a valid discharge of its liability under the policy. The amount however, can be claimed by the heirs of the deceased in accordance with the law of succession applicable to them. Therefore, the finding of the Industrial Court that Respondent No. 1 is entitled to the entire amount merely because she is a nominee is not correct. There is no doubt that Respondent No. 1 is entitled to receive the amount from the employer. She will therefore have a right to withdraw the amount, deposited in Court. However, this does not mean that she has exclusive right on that amount or that the other heirs of the deceased cannot claim the amount in accordance with the law of succession governing them.
8. The submission of Mr. Godbole that the Controlling Authority under the Payment of Gratuity Act itself can decide the issue as to who are the rightful heirs of the deceased and what would be their respective shares in respect of the amount of gratuity, cannot be accepted. The Controlling Authority is not a Civil Court which is empowered to decide the disputes between the heirs or the disputes pertaining to the law of succession. it would be disastrous in my opinion, to accept this submission as the Controlling Authority is not always a legally trained person. Therefore, such a person would not be able to decide the questions regarding succession and entitlement to the amount or apportionment of shares The Reliance placed on the judgment under the Motor Vehicles Act in V. Sivalingam (supra) is misplaced. The Tribunal under the Motor Vehicles Act is a legally trained person. Besides a claim before the Tribunal may be preferred by all or any of the legal heirs of the deceased and not a nominee. The Motor Vehicles Act makes it clear that where all the legal representatives have not joined in filing the claim, they are to be impleaded as respondents to the claim application. Therefore, an order of apportionment of the shares can be made. Moreover, the Tribunal has been empowered to do so under the Motor Vehicles Act and the Rules framed thereunder. The Controlling Authority under the Payment of Gratuity Act can be any officer who is appointed by Government, not necessarily with any legal background, who is responsible for the administration of the Payment of Gratuity Act. Therefore, in my view, the submission of Mr. Godbole that the Controlling Authority itself is empowered under the Act to decide the inter se claims of the heirs of the deceased cannot be accepted.
9. In my opinion, the Appellate Authority has rightly held that Respondent No. 1 is entitled to receive the amount but the observation that she has exclusive right over the same is set aside. Writ Petition is disposed of accordingly.
10. In order to put an end to the entire litigation, I had suggested to the advocates that the parties should agree to the distribution of the amount between themselves so that there is no need for any further litigation in the matter in order to establish the claims of the various heirs. However, although the advocate for the petitioners was inclined to do so, the advocate for the respondent staunchly refused as according to him the respondent had no source of income whatsoever.
11. Rule discharged. No order as to costs.