Indian Kanoon - Search engine for Indian Law

5. Mr. A. S. Pandya has vehemently contested the claim of the petitioner in Special Civil Application No. 342 of 1995 and that of the respondent No. 1 in Special Civil Application No. 10106 of 1995. His argument is that the Gujarat Labour Welfare Board is not an establishment within the meaning of Section 1(3)(b) of the Payment of Gratuity Act, 1972. Mr. Pandya has submitted that Gujarat Labour Welfare Board is statutory body under the Bombay Welfare Fund Act, 1953, which is adopted by the State of Gujarat and it has been so constituted under Section 4 of the Bombay Labour Welfare Fund Act, 1953. He has taken me through the preamble of the Bombay Labour Welfare Fund Act. 1953 as also Section 3, Section 7 and Section 19 of the said Act and has submitted that this Act was enacted to promote the welfare of the labour in the State of Gujarat and for conducting such activities and the Gujarat Labour Welfare Board constituted under Section 4 of the Act deals with the fund called 'Labour Welfare Fund'. Under Section 3, the fund vests in and is held and applied by the Board as Trustees subject to the provisions of and for the purpose of this Act. The funds are to be utilized by the Board to defray expenditures on community and social education centres, including reading rooms and libraries, community necessities, games and sports, excursions, tours and holiday homes, entertainment and other forms of recreation, home industries and subsidiary occupations for women and unemployed persons, corporate activities of social nature, cost of administering the Act including the salaries and allowances of the staff appointed for the purpose of this Act and such other objects as would in the opinion of the State Government improve the standard of living and ameliorate the social conditions of labour. Rule 19-B of the Labour Welfare Fund (Gujarat) Rules, 1962 framed by the State Government in exercise of the powers under Section 19 of the Bombay Labour Welfare Fund Act, 1953 provides for the conditions of service of the Welfare Commissioner and other. staff and accordingly the provisions of Bombay Civil Services Rules (Except Chapter XI thereof), as amended from time to time by the Government of Gujarat, are applicable to the Welfare Commissioner and other staff appointed under the Act. Mr. Pandya appearing for the Gujarat Labour Welfare Board has also invited my attention to the three letters dated October 8, 1990, March 10, 1992 and June 20, 1993 sent by the Labour and Employment Department of the Government of Gujarat to the Welfare Commissioner of the Gujarat Labour Welfare Board and it has been argued that the Government is of the view that the Payment of Gratuity Act is not applicable to the employees of the Gujarat Labour Welfare Board and that if at all the benefit of the gratuity is to be availed, appropriate proposals be made after making amendment in the Gratuity Rules applicable to the Board. Mr. Pandya has developed his argument that the Board is not an establishment on the basis of the provisions as aforesaid and he has contended that the Board is not covered by the words 'commercial establishment' or 'establishment' within the meaning of Section 2(4) and Section 2(8) of the Bombay Shops and Establishments Act, 1948. According to him no organisation can be held to be an "establishment" under Section 1(3)(b) of the Payment of Gratuity Act, 1972 unless it is an establishment under the Bombay Shops and Establishments Act, 1948, which is in force in the State and it has also been submitted by him that the use of the word "and" in Section 1(3)(b) between "shops" and "establishments" is conjunctive and not disjunctive and, therefore, such establishment must be an establishment with in the meaning of any law for the time being in force in relation to Shops as well as Establishments and the words "shops" and "establishments" cannot be read disjunctively. Once it is found that the Gujarat Labour Welfare Board is not an establishment within the meaning of the law for the time being in force in relation to shops and establishments in the State of Gujarat. There is no question of applying the provisions of the Payment of Gratuity Act, 1972 and the employees of the Gujarat Labour Welfare Board can claim gratuity only in accordance with the Gratuity Rules, which are applicable to the Board and if there is no entitlement to the gratuity under such Rules, the claim of the employees for gratuity under the Payment of Gratuity Act, 1972 cannot be sustained.

1. (1981-I-LLJ-354) (State of Punjab v. Labour Court, Jullundur) a decision of the Supreme Court.

2. (1985-II-LLJ-63) (Regional Provident Fund Commissioner v. Regional Labour Commissioner) a decision of Karnataka High Court.

3. (1986-I-LLJ-323) (Municipal Corporation of Delhi v. V. T. Naresh and Another) a decision of Delhi High Court.

4. (1987-II-LLJ-291) (Ahmedabad Pan-jarapole v. Mazdoor Sabha) a Division Bench decision of Gujarat High Court.

5. (1993-II-LLJ-487) (Poona Cantonment Board v. S. K. Das and others) Mr. Bhaya on behalf of the employees has also referred to the Section 14 of the Payment of Gratuity Act, 1972 and has submitted that the provisions of the Payment of Gratuity Act, 1972 have an overriding effect over any enactment and, therefore, the argument advanced on behalf of the Board that the claim of the Gratuity can be sustained only with reference to Gratuity Rules, as are applicable to the Board, is not tenable.

10. The other arguments raised by Mr. Pandya are that the employees of the Gujarat Labour Welfare Board are governed by the Labour Welfare Fund (Gujarat) Rules, 1962, and conditions of the service of the staff of the Board are governed by the provisions of the Bombay Civil Services Rules. With reference to the three letters dated October 8, 1990, March 10, 1992 and June 20, 1993 sent by the Labour and Employment Department of the Government of Gujarat to the Welfare Commissioner of the Gujarat Labour Welfare Board, he has argued that the Government is of the view that at the Payment of Gratuity Act is not applicable to the employees of the Gujarat Labour Welfare Board unless appropriate amendments are made in the Gratuity Rules applicable to the employees of the Board. Suffice it would be to mention that Section 14 of the Payment of Gratuity Act has an overriding effect over all other existing laws and the absence of provisions relating to the payment of gratuity in the Rules, which are locally made' applicable, cannot create any impediment against the right of receiving gratuity under the Payment of Gratuity Act, 1972. High Court of Karnataka has also taken the same view with reference to the provisions of Section 14 in the case of Regional Provident Fund Commissioner v. Regional Labour Commissioner (supra) and has held that the provisions of Gratuity Act have an overriding effect over the Service Regulations providing for non-payment of gratuity. Even otherwise, the provisions of Section 14, which have been enumerated in the earlier part of this order, make it clear that the provisions of the Payment of Gratuity Act or any Rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act. In this view of the matter, the absence of the provisions relating to the Payment of Gratuity in the Rules, which are locally made applicable, cannot come in the way of the right to receive gratuity and the suggestion that appropriate proposals be made after making amendment in the Gratuity Rules applicable to the Board is irrelevant and wholly misplaced.