Karnataka High Court
M/S Beml Limited vs Appellate Authority Under Payment Of ... on 29 June, 2022
Author: Jyoti Mulimani
Bench: Jyoti Mulimani
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 29TH DAY OF JUNE, 2022
BEFORE
THE HON'BLE MS. JUSTICE JYOTI MULIMANI
WRIT PETITION NO.11678 OF 2018 (L-PG)
BETWEEN:
M/S. BEML LIMITED
MYSORE COMPLEX. BELAWADI POST
MYSORE-570 018
REPRESENTED BY ITS
ASST. GENERAL MANAGER
SHRI R.NAGARAJA ... PETITIONER
(BY SRI.NATARAJA BALLAL, ADVOCATE)
AND:
1. APPELLATE AUTHORITY UNDER PAYMENT OF
GRATUITY ACT-CUM-DEPUTY CHIEF
LABOUR COMMISSIONER (CENTRAL)
"SHRAM SADAN" III CROSS,
III MAIN, II PHASE, TUMKUR ROAD,
YESHWANTHPURA
BENGALURU - 560 022.
2. THE CONTROLLING AUTHORITY UNDER
THE PAYMENT OF GRATUITY ACT 1972 CUM
ASSISTANT LABOUR COMMISSIONER (CENTRAL)
"SHRAM SADAN" III CROSS,
III MAIN, II PHASE, TUMKUR ROAD,
YESHWANTHPURA
BENGALURU - 560 022.
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3. SHRI DEOBROTO CHOUBEY
MAJOR
C/O MANAGER (FINANCE)
HINDUSTAN AERONAUTICS LTD.,
OVERHAUL DIVISION
VIMANAPURA POST
BENGALURU - 560 017. ...RESPONDENTS
(BY SRI ABHISHEK MARLA.M.J., ADVOCATE FOR R3;
CGC FOR R1 & R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES
226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING
CERTAIN RELIEFS.
THIS WRIT PETITION COMING ON FOR PRELIMINARY
HEARING 'B' GROUP, THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
Sri.Nataraja Ballal, learned counsel for petitioner has appeared in person.
2. We can refer to the facts quite briefly:
It is stated that the petitioner is a Central Public Sector Undertaking under the administrative control of Ministry of Defence, Government of India, engaged inter- alia in the manufacture and supply of Equipment and Components required for core sectors of India viz., Rail, 3 Metro, Mining, Construction, Defence, Aerospace, Dredging. etc. The Petitioner is having four manufacturing units located at Bengaluru, Kolar Gold Fields, Mysuru and Palakkad. It has Regional and District Offices and also Depot Offices all over India and has its presence in about 67 (Sixty Seven) Countries.
The third respondent joined the services of the petitioner on 31.01.2008 as Asst. Manager (Finance). The respondent No.3 submitted his resignation on 04.07.2012 with a request to relieve him from the services of the petitioner - Company with effect from 27.09.2012 to join with M/s.Hindustan Aeronautics Ltd (HAL). Thus the third respondent was relieved on 27.09.2012 after putting in service of 4 years, 07 months and 27 days or in other words 4 years 240 day in all.
Thereafter, HAL had sent a letter dated:07.11.2012 to the Petitioner informing that the third respondent had joined their services with effect from 28.09.2012 and enclosed the request of the third respondent vide his letter 4 dated:16.10.2012 to HAL to seek for transfer of gratuity from the petitioner to HAL. The Petitioner replied to the said request vide letter dated 24.07.2013 informing HAL that since the third respondent had not put in minimum service of 5 years as required under the provisions of Payment of Gratuity Act, he was not eligible to claim gratuity and thus it is unable to accede to the request. The third respondent had also submitted a letter dated:26.06.2013 to the petitioner claiming gratuity by quoting the Apex Court Judgment in the case of SURENDRA KUMAR VERMA VS. CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL. This was followed by yet another letter dated:16.08.2013 wherein the third respondent was reiterating his claim for gratuity. The petitioner replied vide letter dated:30.08.2013, communicating to HAL that request on behalf of the third respondent for transferring the gratuity cannot be acceded to since the third respondent is not eligible to claim gratuity since he has not served the minimum eligibility period of five years.
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It is stated that, despite this reply, the third respondent filed Form-N under the Payment of Gratuity Act 1972 (hereinafter 'the Gratuity Act' for brevity) on 05.11.2013 before the Controlling Authority - second respondent claiming gratuity along with interest, which was numbered as Application No.48 (195) 2013-B3. It is relevant to submit that the third respondent filed Form-N claiming gratuity which was beyond the prescribed period of 90 days without an application to condone the delay and therefore the application claiming gratuity was liable to be dismissed on the ground of delay since the same was barred under Rule 10 of the Payment of Gratuity (Central) Rules 1972. The petitioner filed its objections to the claim for Gratuity of the third respondent.
During the pendency of the application before the Controlling Authority, the third respondent had also filed a Grievance Petition through CPGRAMS Portal and the petitioner filed its reply to the same and thus the said petition was disposed of vide letter dated:29.01.2015. 6
The Controlling Authority second respondent allowed the claim of the third respondent vide order dated:04.08.2016, wherein the petitioner was directed to calculate the service gratuity based on the last drawn wage as Rs.38,536/- (Rupees Thirty Eight Thousand Five Hundred and Thirty Six only) and to pay the same along with interest for the delayed period within 30 days from the date of the receipt of the order. The petitioner being aggrieved by the said order of the second respondent preferred the statutory appeal before the Appellate Authority - first respondent under Section 7(7) of the Payment of Gratuity Act and raised several grounds in support of the appeal. It is said that the Appellate Authority - first respondent without considering the legal contentions passed order on 25.10.2017, affirming the order of the Controlling Authority.
It is this order which is challenged in this present Writ Petition on several grounds as setout in the Memorandum of Writ Petition.
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3. Learned counsel for petitioner has urged several contentions.
4. Heard the contentions urged on behalf of petitioner and perused the Writ papers with care.
5. The sole question is whether the third respondent is entitled for gratuity?
6. The facts have been sufficiently stated. The issue involved in the Writ Petition falls on a very narrow compass. The issue relates to continuous service under the provision of Payment of Gratuity Act, 1972. Hence, reference is invited to Section 2 and 2A of the Payment of Gratuity Act, 1972.
Payment of Gratuity Act, 1972
2. Definitions.- In this Act unless the context otherwise requires,-
(c) "continuous service" means continuous service as defined in Section 2-A. 8 2-A. Continuous service.- For the purpose of this Act,- (1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order [***] treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act;
(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year of six months, he shall be deemed to be in continuous service under the employer-
(a) for the said period of one year, if he employee during the period of twelve calendar months preceding the date with reference to which 9 calculation is to be made, has actually worked under the employer for not less than -
(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) two hundred and forty days, in any other case;
(b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than
(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week;
and
(ii) one hundred and twenty days, in any other case;
Reverting to the facts of the case, the third respondent contended that he has worked for more that 10 240 in the fifth year; rendered continuous service of five years and hence sought for payment gratuity.
While addressing argument, Sri.Nataraja Ballal., counsel submitted that the third respondent resigned on 04.07.2012. Learned counsel has drawn the attention of the Court to Section 2-A (1) and (2) of the Act and urged that the third respondent cannot claim benefit of Section 2A(2) of the Act, since the eligibility criteria is not fulfilled.
I have considered the contention urged on behalf of the petitioner with care and also perused the relevant provision of the Act with care.
The question/point, however, is, though plain enough, a little more difficult and requires to be treated at greater length.
It is true that the third respondent joined the served on 31.01.2008 and he resigned on 04.07.2012 and relieved on 27.09.2012. Thereafter he claimed gratuity. 11
Suffice it to note that Section 4 of Payment of Gratuity Act, 1972 postulates the payment of gratuity on the termination of employment due to the reasons stated therein provided the requirement of period of service is satisfied. It is needless to say that Section 4 of the Act provides that gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years.
Under Section 2-A (1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order [***] treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock- out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted 12 service was rendered before or after the commencement of this Act. Section 2-A(2) reveals that where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six month, shall be deemed to be in continuous service under the employer .....
Under Section 2A (1), uninterrupted service includes interrupted service which may be interrupted on account of sickness, accident, leave, absence from duty without leave. To claim benefit of deemed service, the interruption should be on account of sickness, accident, leave, absence from duty without leave. But in the present case, the third respondent has resigned. The interruption is not on account of reasons as enumerated under Section 2A (1) of the Act so as to claim that he is deem to be in continuous service and claim the benefit of Section 2A (2) of the Act. Hence, the third respondent cannot claim that he has rendered service continuously for five years. 13
The Authorities placed reliance on the decision of the Madras High Court reported in - METTUR BEARDSELL LTD Vs. REGIONAL LABOUR COMMISSIONER - LAWS (MAD) 1996 (6) 84. I have perused the decision with care. It would be relevant to notice that in the said judgment, the distinction between 2A (1) and 2A (2) of the Act and the eligibility criteria fixed in Section 4 of the Act has not been gone into.
The Authorities have failed to have regard to relevant considerations and disregarded relevant matters. In my considered opinion, the orders passed by the authorities are unsustainable in law.
Resultantly, Writ of Certiorari is ordered. The Order dated:25.10.2017 passed by Appellate Authority under Payment Of Gratuity Act-Cum-Deputy Chief Labour Commissioner (Central) - first respondent in Appeal No.36(111)/2016-B1 vide Annexure-A and order dated:04.08.2016 passed by The Controlling Authority 14 under the Payment of Gratuity Act 1972 -Cum- Assistant Labour Commissioner (Central) in Application No.48(195) 2013-B3 vide Annexure-B are quashed.
This Writ Petition is allowed.
Sd/-
JUDGE GVP