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Judgment
K. Chandru, J.—The writ petition is filed by the Chairman and Managing Director, M/s. Hindustan Photo Films, the wholly owned company
by the Central Government. The challenge made in this writ petition is to the common order passed by the first Respondent in Appeal Nos. 280 to
326-A/2007 dated 22.07.2007. The writ petition was admitted on 31.10.2007. Pending writ petition, this Court granted an interim stay. For
contesting Respondents, Mr. K. Elango, learned Counsel appears.
Respondents 3 to 50 were employees of the Petitioner company and they moved the second Respondent - Controlling Authority under the
Payment of Gratuity Act, 1972 with Gratuity Appeals Nos. 299 to 326-A/2007 claiming a difference in gratuity payable to them. Their claim was
based upon the interim relief granted to them. Therefore, they moved the applications before the second Respondent claiming the computation of
the interim relief as part of the wage and for non-payment, they claimed 10; simple interest. The second Respondent - Controlling Authority by
order dated 04.10.2006 dismissed the claim petitions on the ground that similar issue relating to the same is pending on the file of this Court in
W.A. No. 498 and 499 of 2006 and closed the individual claim petitions. Against the order dated 04.10.2006, the Respondents 3 to 50 preferred
Appeal before the first Respondent - Appellate Authority in P.G. Appeal Nos. 280 to 326-A of 2007.
The Appellate Authority by his order dated 27.07.2007 allowed the appeals and set aside the order passed by the second Respondent dated
04.10.2006. The appellate authority held that the term wage found in Section 2(s) of the Payment of Gratuity Act, 1972 includes all payments
which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or
are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages
and any other allowance. Therefore, on the basis of the all inclusive definition, the appellate authority held that the interim relief paid was part of the
emoluments which were earned by the employees and it should be automatically treated as wages for calculating gratuity.
Challenging this order, the Petitioner company had filed this writ petition. It was contended that the Petitioner company was having a gratuity
scheme and if any dispute regarding the payment, only by an arbitration it can be settled. It was also contended that since the Petitioner company
had become sick and it was referred to BIFR for framing a scheme and due to the intervention of Central Government''s decision to ban wage
revision in terms of sick industries, the company had entered into a settlement u/s 18(1) of the Industrial Disputes Act for the payment of interim
relief at the rate of 5% of pay. Subsequently, despite a revival package, the company could not be revived. Therefore, the employees were given
voluntary retirement in terms of Voluntary Retirement Scheme (VRS) introduced during 1999. At that time, the dues of the employees were paid
including gratuity. Therefore, there cannot be any further claim in respect of the payment of gratuity.
Since the claim of gratuity was based upon the provisions of the Payment of Gratuity Act, 1972 being a special enactment any claim for payment
has to be raised before the authorities under the Act and not before any other forum. This position of law has been clarified by the Supreme Court
in State of Punjab Vs. Labour Court Jullunder and Others, . In paragraph No. 7, the Supreme Court had observed that the Payment of Gratuity
Act being a complete code containing detailed provisions covering all the essential features of a scheme for payment of gratuity ; it creates the right
of payment of gratuity, indicates when the right will accrue, and lays down the principles for quantification of the gratuity. It provides further for
recovery of the amount, and contains an especial provision that compound interest at nine per cent per annum will be payable on the delayed
payment. For the enforcement of its provisions, the Act provides for the appointment of a controlling authority, who is entrusted with the task of
administering the Act. The fulfilment of the rights and obligations of the parties are made his responsibility, and he has been invested with an
amplitude of power for the full discharge of that responsibility. Any error committed by the Controlling Authority can also be corrected in appeal
by the appropriate government or an appellate authority particularly constituted under the Act. Therefore, it was held that the inescapable
conclusion was that the preliminary independent proceedings due under the Act must be taken only under the Act and not in any other forum.
Therefore, the first objection, that the workmen must go before an Arbitrator fails.
The second objection of the Petitioner company was that the employees were sent out on Voluntary Retirement Scheme and that gratuity due to
them was paid and therefore, no further claim can be made. It must be noted that u/s 14, the provisions of the Gratuity Act or any rule will override
anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any 8
enactment other than this Act. Therefore, inasmuch as full gratuity due was not paid to the employees, they are eligible to get the dues of gratuity.
The last objection that the interim relief paid pursuant to the settlement u/s 18(1) cannot be termed as wage as it is an interim relief. It cannot be
accepted that the employees working in a sick industry having been prevented by the Government of India, no further wage negotiation can be
made and the management in order to have better industrial relations have provided certain amounts labelling it as interim relief. Pending
consideration of any final payment must also be taken as wage as the term wage has been defined u/s 2(s) of the payment of Gratuity Act. Such a
definition will have to receive liberal interpretation. The term wage includes not only what was paid but also what was payable. The term ""last
drawn wages"" found in Section 4(2) came to be considered by a Division Bench of this Court headed by Shri. A.P. Shah, C.J., (as he then was)
vide judgment in P. Selvaraj Vs. The Management of Shardlow India Limited, The Joint Commissioner of Labour and The Assistant
Commissioner of Labour, . In that judgment, the Division Bench after referring to several other 9 decisions of the Supreme Court, in paragraph 35
of its judgment, held that the Gratuity Act is a beneficial piece of legislation and it should receive an interpreted consistent with the principles of
equity and fair play. Therefore, the term ""last drawn wage"" found in Section 4(2) of the Gratuity Act should receive its full meaning and cannot be
given any fractured interpretation. It was also pointed out that the Management cannot adopt an artificial interpretation with reference to the term
wages"" defined under the Gratuity Act and it must include not only what is paid but also what is payable to a workman.
It is seen in the light of the above principles, the term ''wage'' will include the interim relief granted to the workmen and it does not come within
the exclusions found in the definition. It must be noted that a similar view was taken by this Court in W.P. No. 873/2005 dated 01.02.2011 filed
by the same Petitioner.
Under the above said circumstances, the writ petition is misconceived and bereft of legal reasons. Accordingly, the writ petition stands
dismissed. No costs. Consequently, connected MP is closed.