ST. Joseph''s College vs State of U.P.

Sunita Agarwal, J.—Heard Sri Subhas Ghosh, learned Counsel for the petitioners and Sri V.R. Agrawal, learned Senior Advocate assisted by Sri Vivek Ratan, learned Counsel for respondent No. 3 as well as learned Standing Counsel. The present writ petition has been filed challenging the notice dated (sic).3.201(sic) and the interim order dated 13.9.2013 passed in P.G. Case No. 01 of 2013, by the Controlling Authority under the Payment of Gratuity Act, 1972 (hereinafter referred to as the ''Act 1972'').

The petitioner No. 1 is an Intermediate College being administered and controlled by "Gyandeep Vidya Society", a society registered under the Society Registration Act. The respondent No. 3 was appointed as a teacher vide agreement dated 1.7.1976. She continued in the service and had retired on 31.3.2003.

The case of the petitioners is that for the welfare of the teachers and staff of the institution, the society had unanimously passed a resolution in its meeting held on 22.9.2001 to pay gratuity from its maintenance fund. The resolution was displayed on the Staff notice board on 24.9.2001 which is as under:--

"The College management is pleased to inform all the teachers and employees of the college for launching the Gratuity Benefits Scheme proposed by the governing body of the society dated 22nd September, 2001 as follows:

"For every completed year of service or part thereof in excess of six months gratuity payable will be calculated @ half month''s i.e. 15 days last month''s salary i.e. (Basic +DA), which includes only the working days i.e. 26 days. The calculation method should be 15/26x(Basic + DA) x No. of years (maximum 10 years). The amount of gratuity to an employee shall not exceed to Rs. 3.5 lakhs subject to deduction of all institutional dues if any, from the employee concerned."

Pursuant to the Gratuity Scheme floated by the society for the college, a cheque No. 182099 dated 10.6.2003 for an amount of Rs. 1,35,000/- was given to the respondent No. 3 towards full and final settlement of the gratuity and post retiral benefits. The respondent No. 3 had accepted and encashed the cheque.

The respondent No. 3 moved an application before the Controlling Authority i.e. respondent No. 2 on 4.9.2012 and has claimed gratuity under the Payment of Gratuity Act as amended by the Amendment Act No. 47 of 2009. It was stated therein that the respondent No. 3 submitted an application to the petitioners under Rule 7 of the Uttar Pradesh Payment of Gratuity Rules, 1975 on 14.5.2012, but they had refused to entertain the same. As such she was constrained to approach the Controlling Authority under the Payment of Gratuity Act, 1972

The claim was registered as case No. 1 of 2013. The petitioners submitted a reply dated 18.4.2013 alongwith an affidavit. The stand taken was that the respondent No. 3 did not fall in the category of "employees" as defined in section 2(e) of the Act, 1972 and further that she had already availed the benefit of gratuity as envisaged in the scheme floated by the society in the college. She received an amount of Rs. 1,35,000/- on 10.6.2003 after her retirement towards full and final settlement of gratuity. The said fact has been concealed and the application moved by her is not maintainable.

Learned Counsel for the petitioner challenging the notice issued by the Controlling Authority, vehemently argued that the application moved by the respondent No. 3 under the Payment of Gratuity Act is not maintainable, as she has already received the payment prior to the enforcement of the Amendment Act, 2009. The retrospective effect of the scheme is not applicable in this case. The Controlling Authority had erred in entertaining the application ignoring the fact that an amount of Rs. 1,35,000/- was received by the respondent No. 3 towards full and final settlement under the Gratuity scheme floated in the college. He submits that this fact is not disputed and hence further claim under the Payment of Gratuity Act is not maintainable. In case, if any amount is due, according to respondent No. 3, she can file a civil suit for the purpose. As the application itself was not maintainable and hence the notice issued by respondent No. 2 dated 11.3.2013 and the interim order dated 13.9.2013 passed by it are totally without jurisdiction and hence are liable to be set aside. The entire proceedings initiated by the Controlling Authority against the petitioner No. 1 is beyond jurisdiction vested in it.

While elaborating his arguments, much emphasis has been laid by the learned Counsel for the petitioners on the fact that the amount of Rs. 1,35,000/-was paid to the respondent No. 3. He submits that as envisaged u/s 4(5) of the Payment of Gratuity Act, the petitioners employers have provided better scheme of gratuity to the respondent No. 3 and for its existing staff. As such the Amendment Act 47 of 2009 will not have overriding effect on the gratuity scheme floated in the institution in 2001.

Learned Counsel for the petitioners placed reliance upon the judgment in case of Workmen of Metro Theatre, Bombay Vs. Metro Theatre Ltd., Bombay, and Gauri Chakraborty Vs. Tata Iron and Steel Co. Ltd. and Others,

Learned Senior Counsel appearing for the respondent No. 3 submits that the present writ petition has been filed challenging the notice issued by the Controlling Authority under the Act, 1972 and further against an interim order dated 13.9.2013 whereby the respondent No. 3 was allowed to adduce additional evidence on payment of cost of Rs. 100/-. The cost has already been paid.

Submission is that the additional evidence of respondent No. 3 was recorded on 23.9.2013 and 4.10.2013 was the date fixed for evidence of the witnesses of the petitioner. Two witnesses were produced by the petitioners on 4.10.2013 and thereafter, 26.11.2013 was fixed for final argument. Before the final argument could proceed, the present writ petition was filed on 19.11.2013. When the petition was heard on 21.11.2013, the petitioners gave a wrong impression to the Court that the recovery proceedings had been initiated against them and hence by the interim order, the proceedings of recovery of Gratuity have been stayed by this Court. Though further proceedings in the claim case before the Controlling Authority have not been stayed yet in view of the interim order dated 21.11.2013 the matter has not been proceeded with by the Authority. The writ petition filed against the notice and interim order is not maintainable at all and is clear abuse of process of the Court and liable to be dismissed on this ground.

Learned Counsel of the respondent No. 3 further drew attention of the Court to section 14 of the Payment of Gratuity Act which reads as under:--

"Section 14 of the Act to override other enactments, etc. The provisions of this 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."

Placing reliance upon the provisions of section 14 of the Act, he submits that section 14 contains a "Non-Obstante Clause" that every eligible employee is, notwithstanding anything inconsistent contained in any other enactment or instrument or contract, entitled to gratuity. Therefore, even if some scheme is floated by the establishment, the respondent No. 3 can claim gratuity under the Act.

In support of the said argument, he placed reliance upon the judgment of the Apex Court in Allahabad Bank Vs. A.C. Aggarwal,

He further submits that in view of the amended definition of "employees" u/s 2(e) by Act No. 47 of 2009, which has been retrospective effect from 3.4.1997, now the teachers are also covered under the Payment of Gratuity Act.

Initially, the Payment of Gratuity Act was not applicable to the teachers of educational institution as it was held in a catena of decision of this Court and Apex Court that the teachers were not covered under the definition of "employee" under Clause 2(e) of the Act, 1972. By means of Payment of Gratuity (Amendment Act), 2009 (Act No. 47 of 2009) published in the Gazette of India on 31.12.2009, the amendment was made for the benefit of "employees" u/s 2(e) of the Act. The amendment was made effective from 3.4.1997. Section 13A was inserted under the Principal Act which reads as under:--

"13-A. Validation of payment of gratuity.-Notwithstanding anything contained in any judgment, decree or order of any Court, for the period commencing on and from the 3rd day of April, 1997 and ending on the day on which the Payment of Gratuity(Amendment) Act, 2009, receives the assent of the President, the gratuity shall be payable to an employee in pursuance of the notification of the Government of India in the Ministry of Labour and Employment vide number S.O. 1080, dated the 3rd day of April, 1997 and the said notification shall be valid and shall be deemed always to have been valid as if the Payment of Gratuity (Amendment) Act 2009 had been in force at all material times and the gratuity shall be payable accordingly;

Provided that nothing contained in this section shall extend, or be construed to extend, to affect any person with any punishment or penalty whatsoever by reason of the non-payment by him of the gratuity during the period specified in this section which shall become due in pursuance of the said notification."

He placed reliance upon the judgments of different High Courts in Jain Citizens Education Society, Surendranagar and Another Vs. Union of India and Others, in Mrs. Ananta Vishwanathan Vs. Shri Narayana Guru High School and others, Sri Shamaraja Udupa Vs. The Assistant Labour Commissioner Mangalore Controlling Authority, The Deputy Labour Commissioner Hassan Division and Always Education Foundation, Mangalore and others; Independent Schools'' Federation of India (REGD) v. Union of India and another in Special Leave to Appeal (Civil) No. 10724 of 2012 arising out from the judgment and order dated 2.12.2011 in WP (C) No. 6168 of 2010 (Delhi High Court), to substantiate that the teachers are now "employees" and covered under the Payment of Gratuity Act.

He fairly submits that challenging the Division Bench Judgment of Delhi High Court in Independent Schools'' Federation (supra), SLP (Civil) No. 10724 of 2012 has been filed and by order dated 9.11.2012, leave was granted but no interim order was passed.

Learned Counsel for the petitioners though invited attention of the Court to the Judgment of the Apex Court in Ahmedabad Pvt. Primary Teachers'' Association Vs. Administrative Officer and Others, in order to submit that the teachers are not covered under the definition of "employees" under 2(e) of the Act, 1972 and hence the application moved by respondent No. 3 could not have been entertained by the Controlling Authority-respondent No. 2. However, during the course of arguments he has given up the said submission and hence the said issue is not being addressed by this Court for adjudication.

So far as the submission of learned Counsel for the petitioners that the respondent No. 3 had already received payment towards gratuity as per the Gratuity scheme floated by the petitioner society in the year 2001 is concerned, it is noteworthy that respondent No. 3 has denied that the said payment has been received by her, towards gratuity. Hence the question as to whether the payment of Rs. 1,35,000/- was towards gratuity or not is a question of fact which can only be decided by the Controlling Authority after appreciating all the evidence produced by both the parties before it. This Court cannot look into the said disputed question of fact.

The second submission of learned Counsel for the petitioner is that the scheme floated by the college in the year 2001 is covered u/s 4(5) of the Payment of Gratuity Act, 1972 and will have an overriding effect. The application moved by the respondent No. 3 u/s 7 of the Payment of Gratuity Act, was, therefore illegally entertained. In support of this submission, learned Counsel for the petitioners has relied upon the judgment of the Division Bench in Gauri Chakraborty (supra) wherein the appellant had vacated the official quarter retained by her and the entire amount of gratuity was paid to her after adjustment of the dues on vacating the company''s quarter as per the Company''s Rules. The question as to whether the provisions of Gratuity Act, 1972 have overriding effect over the Company''s Gratuity Rules was only considered by passing observations. The Court has not entered into merits of the said contention of learned Counsel for the appellant as it has become academic for the said case. It was found that the appellant was not competent to espouse the cause of other employees. Thus, the said judgment is of no benefit to the petitioners.

In Workmen of Metro Theatre, Bombay Vs. Metro Theatre Ltd., Bombay, it was held that the view taken by the Tribunal that it could not go beyond the scheme of gratuity contemplated by the Act is clearly erroneous. The Act enacts a complete code containing detailed provisions covering all essential features of the scheme for payment of gratuity. But the scheme envisaged by the enactment secures the minimum for the employees in that behalf and express provisions are found in the Act under which, better terms of gratuity, if already existing, should be conferred on the employees. It was held that the scheme of gratuity under the Act clearly suggests that no standardisation of the gratuity scheme contemplated by the Act was intended by the legislature. The provisions of section 4(5) of the Act confer power upon the appropriate Government to exempt any establishment to which the Act applies from the provisions of the Act, if in its opinion, the employees of such establishment are in receipt of gratuity benefits not less favourable than the benefits conferred under the Act.

There cannot be any quarrel with regard to the interpretation of section 4(5) of the Act, 1972.

So far as the scheme of section 4(5) of the Act, it may be noted that the said provision is to be construed in favour of the employees as it provides that, in case, better terms of gratuity could be obtained by an employee under an agreement or contract with the employer, he is entitled to the said benefit.

In the instant case, much emphasis have been placed on the gratuity scheme floated by the college, however, it is disputed that the gratuity has been paid to the respondent No. 3. Further, it is also to be decided as to whether the gratuity scheme framed by the employer is more beneficial to the respondent No. 3 than what she could have obtained under the Act, 1972. The said questions can only be decided by the Controlling Authority.

Moreover, the Court is not convinced with the arguments of learned Counsel for the petitioner that the Gratuity Scheme framed by the employer will have an overriding effect on the provisions of Act, 1972 in view of the provisions of section 4(5) of the Act, 1972. The question as to whether the gratuity scheme floated by the college is more beneficial to respondent No. 3, is to be decided by the Controlling Authority taking into consideration of the scheme of the Act, 1972.

In the result, this Court does not find any good ground to interfere in the notice issued by the Controlling Authority as also the interim order passed by it. The writ petition is devoid of merits and hence dismissed.