The Management, Thiru Arooran Sugars Limited vs The Appellate Authority under the Payment of Gratuity Act and Others

Padmanabhan, J.—The question that falls for decision in this writ petition is whether an employee, who is permanently employed throughout the year in a seasonal establishment will be entitled to payment of gratuity at the rate of 15 days wages for every completed year of service as provided in Section 4(2) of the Payment of Gratuity Act, 1972 (hereinafter referred to as the Act) or at the rate of seven days wages for each season as provided for in the second proviso to Section 4(2) of the Act.

The background of the cases may be stated thus? The Petitioner, Thiru Arooran Sugars Limited, Vadapathimangalam, Thanjavur owns a sugar factory. Admittedly, the sugar factory is a seasonal establishment. The third Respondent, Lingam Pillai, was working as a compounder from 22nd October, 1955 in the Petitioner's sugar factory. He was superannuated from service on 17th March, 1975. The Petitioner paid him gratuity at the rate of seven days wages for every completed year of service as per the second proviso to Section 4(2) of the Act. The third Respondent claimed gratuity at the rate of 15 days wages in terms of Section 4(2) of the Act. The Petitioner having refused to admit the claim of the third Respondent, the third Respondent moved the Controlling Authority under the Act under Rule 10(1) of the Tamil Nadu Payment of Gratuity Rules, 1973. The Controlling Authority found that the third Respondent would be entitled to gratuity at the rate of 15 days wages for every completed year of service. Against the order of the Controlling Authority the Petitioner preferred Appeal No. 3 of 1976. The Appellate-Authority by its order, dated 22nd October, 1977 dismissed the appeal. In these circumstances the Petitioner has filed this writ petition for the issue of a writ of certiorari to quash the order of the controlling authority as confirmed by the order of the appellate authority.

The contention of Mr. M.R. Narayanaswami the learned Counsel for the Petitioner, is that the second proviso, to Section 4(2) of the Act provides that in the case of an employee employed, in a seasonal establishment, the employer need pay the gratuity at the rate of seven days wages for each season. Since, admittedly, the Petitioner's factory is a seasonal establishment, the third Respondent will be entitled to gratuity only at the rate of seven days wages for every completed year of service.

Gratuity is a lump sum payment made to an employee at the time of his superannuation. This is usually paid as a sort of re-compense on the superannuation of an employee. Prior to 1972 there was no statutory provision obliging an employer to pay gratuity to an employee. Payment of gratuity was being made on the basis of a scheme of gratuity framed by the employers themselves or framed by the Industrial Tribunal at the instance of the employees. The Supreme Court has explained the concept of gratuity as follows in Burhanpur Tapti Mills Ltd. Vs. Burhanpur Tapti Mills Mazdoor Sangh, -

We may here add that it is wrong to think of such a scheme as a mere burden and as of no benefit to the employer. It may be admitted that such appears at first sight to be so. But this concept of gratuity is not accurate. A scheme of gratuity and a scheme of pensions have much in common.

Gratuity is a lump sum payment while pension is a periodic payment of a stated sum. They are both ''efficiency devices'' and are considered necessary for an orderly and humane elimination from industry of superannuated or disabled employees, who, but for such retiring benefits would continue in employment even though they function inefficiently. The voluntary retirement of an inefficient or old or worn out employee on the assurance that he is to get a retrial benefit leads to the avoidance of industrial disputes, promotes contentment among those, who, look for promotions, draws better kind of employees and improves the tone and morale of the industry. It is beneficial all round. It compensates the employee who, as he grows old knows that some compensation for the gradual destruction of his wage earning capacity is being built up. By inducing voluntary retirement of old and worn out workmen it confers on the employer a benefit akin to the replacing on old and worn out machinery. An indirect saving also results when workmen at the top of the wage scales retire and their place taken by more energetic workmen at lower scales. In this connection we cannot compare compensation for retrenchment and provident fund on the one hand with gratuity or pension on the other. Compensation for retrenchment is solattim for premature termination of employment. Contribution to the provident fund is designed to induce thrift so that the employee may lay by from his present earnings a portion for a rainy day or for his old age. As the workman cannot be expected to spare very much, regard being had to the gap between what he earns and what he must spend, the employer is expected to make a contribution. Gratuity is a retrial benefit of a very different kind, because it is earned by giving service. The existence of any one of the three schemes, therefore, does not obviously overlap any of the other two. They can all exist together, provided the financial position justifies such a course.

It is equally well-settled that a precondition to the framing of a gratuity scheme was to take into consideration the financial position of the employer.

In 1972 the Parliament enacted the Payment of Gratuity Act. As the long title to the Act shows it is an Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oil-fields, plantations, ports, railway companies, shops or other establishment and for matters connected therewith or incidental thereto. The Act provides for the payment of gratuity to employees drawing wages upto rupees one thousand, employed in factories, plantations, shops, establishments and mines, in the event of superannuation, retirement, resignation and death or total disablement due to accident or disease. The Act is said to apply to every factory mine, oil-field, plantation, port and railway company every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months; and such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months as the Central Government may, be notification, specify in this behalf. 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 lees than five years on his superannuation or on his retirement or resignation, or on his death or disablement due to accident or disease. The condition regarding completion of continuous service for a period of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement. In the case of death of an employee the gratuity shall be payable to his nominee or to his heirs in the event of there being no nomination. Section 4(2) of the Act reads as follows:

4(2) For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned,-

Provided that in the cases of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be taken into account,-

Provided further that in the case of an employee employed in a seasonal establishment, the employer shall pay the gratuity at the rate of seven days, wages for each season.

Section 2(b) of the Act defines completed year of service thus: Completed year of service means continuous service for one year Section 2(c)

defines continuous service thus.

Continuous service means uninterrupted service and includes service which is interrupted by sickness, accident leave, lay-off, strike or a lock-out or cessation of work not due to any fault of the employee concerned, whether such uninterrupted or interrupted service was rendered before or after the commencements of this Act. Explanation I to Section 2(c) provides that in the case of an employee who is not in uninterrupted service for one year, he shall be deemed to be in continuous, service if he has been actually employed by an employer during the twelve months immediately preceding the year for not less than-(i) 190 days of employed below the ground in a mine, or (ii) 240 days, in any other case, except when he is employed in a seasonal establishment. Explanation II to Section 2(c) provides that an employee of a seasonal establishment shall be deemed to be in continuous service, if he has actually worked for not less then seventy-five per cent of the number of days on which the establishment was in operation during the year. Section 2(e) of the Act defines an employee thus: "Employee" means any person (other than an apprentice) employed on wages, not exceeding one thousand rupees per menses, in any establishment, factory, mine, oil-field plantation, railway company or shop, to do any skilled, semiskilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, but does not include any such person, who is employed in a managerial or administrative capacity, or who holds a civil post under the Central Government or a State Government, or who is subject to the Air Force Act, 1950 the Army Act, 1950, or the Navy Act, 1957.

The contention of Mr. M.R. Narayanaswami, is that every employee of seasonal establishment whether employed permanently of for the season will be governed by the second proviso to Section 4(2) of the Act and that he will be entitled to gratuity calculated at the rate of seven days wages only for each season.

On the other hand, the contention of Mr. K.V. Sankaran is that in the case of employees in establishments other than seasonal establishments, gratuity is payable at the rate of 15 days wages u/s 4(2) of the Act. Therefore, in the case of employees, who are permanently employed throughout the year in a seasonal establishment, gratuity shall be payable at the rate of 15 days wages per year and not at the rate of seven days wages per year. In the submission of Mr. K.V. Sankaran, the second proviso to Section 4(2) of the Act should be confined only to such of those employees in a seasonal establishment who are employed for season and not to those who are employed permanently throughout the year. In support of this argument Mr. K.V. Sankaran laid proviso emphasis on the words for each season occurring in the second to Section 4(2) and Explanation II to Section 2(c) of the Act. The learned Counsel further argued that any other construction would result in undue hardship and injustice to a number of workers who are permanently employed in various seasonal establishment like sugar factories and it would not have been the intention of the legislative that the permanent employees of such seasonal establishments, who work throughout the year should be deprived of gratuity at the rate of 15 days wages per year, while employees in establishments other than seasonal establishments would be entitled to gratuity at the rate of 15 days wages per year.

The question for consideration is which of these contentions should prevail. It is an admitted fact that the Petitioner establishment employs a number of employees permanently on the permanent establishment of the factory. It should naturally be so for a large establishment like the sugar factory should have staff to look after the administration and financial side of the factory as well as the technical side such as looking after the maintenance and repair to the machinery of the factory. It is also admitted that there are other employees, who are employed only during the season when the crushing of sugarcane and the process of sugar manufacture are carried on. Seasonal establishment is not defined under the Act.

Explanation I to Section 2(c) as already extracted shows that an employee, who is not in uninterrupted service for one year shall be deemed to be in continuous service, if he has been actually employed for not less than 190 days, if employed below the ground in a mine and 240 days, in any other case. Under Explanation II to Section 2(c) of the Act an employee of a seasonal establishment shall, be deemed to be in continuous service if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during the year. A comparison of Explanations I and II, leaves an impression in the mind that it is assumed for the purposes of Explanation II that a seasonal establishment will be in operation only for part of the year or in other words for the season.

Since a seasonal establishment will operate only during the season and not throughout the year, an employee in seasonal establishment will also be employed only during the season or the period during which the establishment is in operation. That is reason, why in the case of an employee employed in a seasonal establishment it is provided by Explanation II that he shall he deemed to be in continuous service if he has been actually employed for not less than 75 per cent of the number of days on which the establishment was in operation during the year. When we read the second proviso to Section 4(2) of the Act in this background it will be clear that the second proviso will apply only to such of those employees, who are employed in the seasonal establishment during the period of the operation of the establishment. This conclusion is supported by the words for each season, found in the second proviso to Section 4(2). The words shall pay the gratuity at the rate of seven days'' wages for each season postulate that the employees contemplated by that proviso are only employees employed for each season and not permanently. Viewed in this light, the proviso to Section 4(2) will not take in employees, who are permanently employed in seasonal establishments like the Petitioner's sugar factory. If the construction, that is sought to be placed upon the second proviso to Section 4(2) of the Act by Mr. M.R. Narayamaswami, that in the case of employees employed in a seasonal establishment, whether permanently or not, gratuity shall be payable only at the rate of seven days wages per year, is accepted it will result in great injustice and hardship to those employees, who are employed permanently throughout the year. It is well-known that there are many seasonal factories throughout the country such as factories which are engaged in the manufacturing process of cotton, jute, coffee, rubber, sugar, etc. Certainly, there will be innumerable number of persons, who are employed permanently in various sections of these seasonal establishments and they will be deprived of a sizable amount of gratuity. This will naturally result not only in great hardship and injustice to the employees but in a an anomalous situation where a number of employees in other establishments will be paid gratuity at the rate of 15 days wages per year while these employees will be entitled to gratuity only at the rate of seven days wages per year.

Mr. M.R. Narayanaswami, vehemently argued that the second proviso to Section 4(2) of the Act was clear and unambiguous and did not call for any interpretation or construction. Where the language of the statute is clear, argued the learned Counsel, it is not the business of the Court to construe the section in any other way, on grounds of alleged hardship or justice. To interpret the second proviso to Section 4(2) of the Act on the lines suggested by Mr. K.V. Sankaran would amount to legislation and re-writing the second proviso itself.

No doubt, the normal rule is that the meaning and intention of a statute must be collected from the plain and unambiguous expressions used therein irrespective of what the consequences may be. However, it is equally settled that, if the languages used is capable of bearing more than one construction, in selecting the true meaning regard must be had to the consequences resulting from adopting the alternative construction. A construction that results in hardship, serious inconvenience, injustice, absurdity or anomaly or which leads to inconsistency or uncertainty and friction in the system which the statute purports to regulate has to be rejected and preference should be given to that contribution which avoids such results. If the grammatical construction leads to some absurdity or some repugnance or inconsistency with the rest of the instrument, it may be departed from so as to avoid that absurdity and inconsistency. In Owen Thomas Maguin v. I.R.C. [1971] 2 W.L.R. 39 it has been observed as follows:

The object of the constructions of a statute being to ascertain the will of the legislature, it may be presumed that neither injustice nor absurdity was intended. If, therefore, literal interpretation would produce such a result, and the language admits of an interpretation which would avoid it, then such an interpretation may be adopted.

In Tirath Singh Vs. Bachittar Singh and Others, Venkatarama Ayyar J. stated the rule as follows:

Where the language of a statute, in its, ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence.

In Jalpu Ram and Others Vs. Deputy Commissioner, Kalu and Others, Dua J., (as he then was) spoke thus:

The Courts can look behind the letter of law to determine the true purpose and effect of an enactment when the language of a statute, in its ordinary meaning and grammatical construction leads to a manifest contradiction of the apparent, purpose of the enactment or some inconvenience or absurdity, hardship or injustice, presumably not intended. A construction modifying the meaning of the words, and even the structure of the sentence is permissible in such a case. In order to avoid absurdity or incongruity, even grammatical and ordinary sense of the words can in certain circumstances be avoided.

In State of Madhya Pradesh Vs. Azad Bharat Finance Co. and Another, it has been ruled:

It is well-recognized that, if a statute leads to absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words and even the structure of the sentence.

In Shiveshwar Prasad Narain Singh v. Ghurahu (1979) 3 S.C. 23 It has been laid down that it is a well-settled canon of construction that where two constructions are possible, one which advances the object of the legislation must be preferred to one which may retard or frustrate the object of the legislation.

In Avtar Singh and Others Vs. Jagjit Singh and Another, Krishna Iyer J., observed as follows:

Even assuming that literality in construction has tenability in given circumstances, the doctrinal development in the nature of judicial interpretation takes us to other methods like the theological, the textual, the contextual and the functional. The strictly literal may not often be logical if the context indicates a contrary legislative intent. Courts are not victims of verbalism, but are agents of the functional success of legislation, given flexibility of meaning, if the law will thereby hit the target intended by the law-maker. Here the emphasis lies on the function, utility, aim and purpose which the provision has to fulfill. A policy-oriented understanding of a legal provision which does not do violence to the text so the context gains preference as against a narrow reading of the words used. Indeed, this approach is a version of the plain meaning rule and has judicial sanction. In Hutton v. Phillips (1945) 45 Del 156 the Supreme Court of Delaware said:

Interpretation involves far more than picking out dictionary definitions of words or expressions used. Consideration of the context and the setting is indispensable property to ascertain a meaning. In saying that a verbal expression is plain or unambiguous, we mean little more than that we are convinced that virtually anyone competent to understand it, and desiring fairly and impartially to ascertain its signification, would attribute to the expression in its context a meaning such as the one we derive, rather than any other; and would consider any different meaning, by comparison, strained, or far-fetched, or unusual, or unlikely.

In Commissioner of Income Tax (Central) Vs. B.N. Bhattacharjee and Another, it has been observed as follows:

We are mindful that a strictly grammatical construction is departed from in this process and a mildly legislative flavor is imparted by this interpretation. The Judicial process does not stand helpless with folded hands but engineers its way to discern meaning when a new construction with a view to rationalisation is needed. Lord Denning, in his recent book. The Discipline of Law made a seminal observation on ''ironing out the creases'' by quoting a passage from Seaford Court Estates Ltd. v. Asher [1949] 2 K.B. 481;

Whenever a statute comes up for consideration it must be remembered that it is not within human powers to foresee the manifold sets of facts which may arise, and, even if were, it is not possible to provide for them in terms free from all ambiguity. The English language is not an instrument of mathematical precision. Our literature would be much the poorer if it were. This is where the draftsmen of Acts of Parliament have often been unfairly criticised. A judge believing himself to be fettered by the supposed rule that he must look to the language and nothing else, laments that the draftsmen have not provided for this or that, or have been guilty of some or other ambiguity. It would certainly save the judges trouble if Acts of Parliament were drafted with divine prescience and perfect clarity. In the absence of it, when a defect appears a judge cannot simply fold his hands and blame the draftsmen. He must set to work on the constructive task of finding the intention of Parliament, and he must do this not only from the language of the statute, but also from a consideration of the social conditions, which give rise to it, and of the mischief which it was passed to remedy, and then he must supplement the written word so as to give "force and life" to the intention of the legislature. That was clearly laid down by the resolution of the judges in Heydon case, and it is the safest guide today. Good practical advice on the subject was given about the same time by Plowden.... Put into homely metaphor it is this: A judge should ask himself the question: If the makers of the Act had themselves come across this ruck in the texture of it, how would they have straightened it out? He must then do as they would have done. A judge must not alter the material of which it is woven, but he can and should iron put the creases.

In Organo Chemical Industries and Another Vs. Union of India (UOI) and Others, Krishna Iyer J., has remarked as follows:

A policy-Oriented interpretation, when a welfare legislation falls for determination, especially in the context of a developing country, is sanctioned by principle and precedent and is implicitly in Article 37 of the Constitution since the judicial branch is, in a sense, part of the State. So it is reasonable to assign to damages a larger, fulfilling meaning.

In Commissioner of Income Tax, Central, Calcutta Vs. National Taj Traders, Tulzaparkar J., ruled thus:

In other words, under the first principle a cases omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself, but at the same time a cases omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the legislature.

"An intention to produce an unreasonable result" said Bankckwartsl, J., in Artemiou v. Procoiou [1966] 1 Q.B. 878 is not to be imputed to a statute if there is some other construction available''. Where to apply words literally would "defeat the obvious intention of the legislation and produce a wholly unreasonable result" we must ''do some violence to the words'' and so achieve that obvious intention and produce a rational construction.

Tested in the light of the above principles, the Principle of literal or strict construction cannot be applied in this case. Firstly, the proviso to Section 4(2) of the Act is not that unambiguous as to justify the interpretation that all employees of a seasonal establishment whether employed permanently throughout the year or only seasonally for the season will be entitled to the payment of gratuity only at the rate of seven days wages per year. The ambiguity arises, because of the use of the words for each season in the said proviso. If the intention of the Legislature had been that even permanent employees in a seasonal establishment will be entitled only to payment of gratuity at the rate of seven days wages, they would not have used the words for each season for the words at the rate of seven days wages for each season will not be applicable to permanent employees of such establishment who will be entitled to wages for all the twelve months of the year. On the other hand, the use of the words for each season gives the impression that the legislature was having in mind only the case of those employees who are employed for a season and not permanently throughout the year. I am, therefore, of the view that the proviso is capable of two interpretations. One interpretation is a narrow interpretation in the sense that employees of seasonal establishment whether permanently or seasonally employed, will be paid gratuity at the rate of seven days

wages. The other possible interpretation is only such of those employees, who are employed for the season will be covered by the proviso and only they will be paid gratuity at the rate of seven days wages for each season. The latter interpretation is very consistent with the advancement of the object of the Act. Further, such an interpretation will be in harmony with the other provisions of the Act which provide that in all cases of continuous service in the case of an establishment other than a seasonal establishment payment of gratuity will be at the rate of 15 days wages for every completed year of service. Any other interpretation, as I have already stated, would defeat the very purpose of the Act and would cause great injustice which the legislature would not have intended to create. In the circumstances, the second proviso to Section 4(2) of the Act has to be confined only to seasonal employees employed in the seasonal establishment. It will not cover the permanent employees, who are on the permanent establishment.

The above view is supported by a Bench decision of the Gujarat High Court in Akbar Hussein v. Payment of Gratuity Authority, Ahmedabad

(1979) Lab. I.C. 366. The Gujarat High Court was concerned with the identical question, viz., whether permanent employees of a sugar factory which is a seasonal establishment as in this case would be entitled to gratuity at the rate of 15 days wages for every year of completed service or only at the rate of seven days wages as provided for is the second proviso to Section 4(2) of the Act. The head note B reads as follows:

It is clear that in every seasonal factory to which the Act applies, like a sugar factory, a distinction has to be drawn between permanent employees, that is, those, who are on the regular permanent establishment of the factory, and other seasonal employees, who are on the seasonal establishment of the factory. It is to meet these cases of two types of workers in a factory or in an organisation which is a seasonal establishment of the factory, and other seasonal employees, who are on the seasonal establishment of the factory. It is to meet these cases of two types of workers in a factory or in an organisation which is a seasonal establishment that special provision has been made by the Payment of Gratuity Act for employing of seasonal establishment. Explanation II to Section 2(c) speaks about an employee of a seasonal establishment, whereas in Section 4(2) second proviso, the words used are ''an employee employed in a seasonal establishment. In order not to do injustice to either of these two types of employees, namely, permanent and seasonal that this beneficent piece of legislation, namely, the Payment of Gratuity Act is to be interpreted in such a manner, that the maximum advantage is given to both the types of workers. In order to avoid injustice to either permanent or seasonal employees, the seasonal employees are to be paid gratuity on the particular footing provided for in the second proviso to Section 4(2) and those, who are on the permanent establishment have to be paid gratuity as provided in the main clause of Section 4(2). Thus a permanent employee in a sugar factory is entitled to gratuity at the rate of 15 days wages for each completed year of service. So far as the Payment of Gratuity Act is concerned, it applies to all employees irrespective of the fact whether they are operative on the industrial side or on the clerical side whatever, because the definition of the word employee in Section 2(e) covers all skilled un-skilled, semi-skilled, manual, Supervisory, technical or clerical workers, so long as the other requirements of the definition of the word employee are fulfilled.

In Consolidated Coffee Limited v. Uthaman (1980) I L.L.J 3, the question was how to calculate gratuity for a full-time employee engaged in a seasonal establishment. In this context, Kochu Thom Men J., observed thus:

It would, therefore, appear that the rate has to be determined for the purpose of gratuity with reference to the period of employment of an employee in a particular establishment. An establishment may be seasonal in so far as its seasonal employees are concerned, but vis-a-vis persons working throughout the year it is not a seasonal establishment. It has been found by the authorities that 36 employees work throughout the year in the factory whereas 160 employees work only during seasons. The factory is a seasonal establishment in respect of these persons, who are employed seasonally, and it is a non-seasonal establishment in respect of the others who are engaged throughout the year. I am of the view that, having found that the first Respondent works throughout the year in the factory, the authorities were well-justified in treating him as a non-seasonal employee, and the factory vis-a-vis him as a non-seasonal establishment, for the purpose of allowing him gratuity at the higher rate of fifteen days wages.

Mr. M.R. Narayanaswami, the learned Counsel contended that the Legislature had made a deliberate departure in the case of seasonal establishment and provided for the payment of gratuity to the employees only at the rate of seven days wages for the season because in the case of seasonal establishments they do not operate throughout the whole year. The income in the case of seasonal establishments was derived only from the seasonal operations. In the circumstances, the legislature would have taken into account the financial capacity of the seasonal establishments in providing for the payment of gratuity only at the rate of seven days wages. I am not impressed with this contention. No doubt, seasonal establishments like the sugar factory operate only during the crushing season when sugarcane is crushed and sugar is manufactured. However, it is a fact of which judicial notice can be taken that seasonal establishments like sugar factories make as much profit as any other establishment and consequently fixed a lower rate of gratuity to these employees. Further, as I have already stated, the proviso to Section 4(2) is not so clear as to be capable of only one construction, viz., that employees, who are employed either permanently or seasonally in the seasonal establishment will be entitled to be paid gratuity only at the rate of seven days wages. When it is found that the proviso is capable of two constructions, one construction which is a narrow construction and the other construction which advances the object of the Act particularly in the context of its being a social security legislation, the latter construction has to be preferred.

Mr. M.R. Narayanaswami, then argued with reference to the decision in The Management of Thiru Arooran Sugars Limited Vs. The Industrial Tribunal and Another, that the Petitioner establishment is one integrated whole and it is wrong to assume as was assumed by the Kerala High Court in Consolidated Coffee Limited v. Uthaman (1980) I L.L.J. 3 that it consists of two establishments viz., a permanent establishment and a seasonal establishment. Therefore, it must necessarily follow that in the case of all the employees of the Petitioners's establishment gratuity will be payable only at the rate of seven days wages. I do not agree. It is not disputed that there are a number of employees who are on the permanent establishment of the Petitioner factory. Certainly, it would be hard and unjust to deny them the benefit of gratuity at the rate of 15 days wages per year as in the case of permanent employees of other establishments, who work throughout the year.

In the result, I hold that all permanent employees, who work throughout the year in a seasonal establishment will he entitled to payment of gratuity at the rate of 15 days for every completed year of service and that the second proviso to Section 4(2) of the Act shall be confined only to seasonal employees, who are employee for the season in the seasonal establishment. Viewed in this light the impugned orders are correct. There are no merits in the writ petition. The writ petition fails and is dismissed without costs.