# District Basic Education Officer v. Niyantrak Pradhikari Anutoshik Bhugtan Adhiniyam 1972 & Anr

- **Citation:** (2019) 2 ILRA 1546
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-09-24
- **Case number:** Writ- C No. 62286 of 2009
- **Bench:** J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/district-basic-education-officer-v-niyantrak-pradhikari-anutoshik-bhugtan-44605
- **Pages:** 26

## Headnote

A. Payment of Gratuity Act, 1972 -
Section 2 (e) - Gratuity - Applicability of
Act to employees of District Basic
Education Office - Act not necessarily to
be applicable to the employer, but it is
necessary that employee should qualify
for an employee under section 2 (e) of
the Act. (Para 39)

B. Payment of Gratuity Act, 1972 -
Section
1
(3)
(b)
-
Meaning
of
Establishment - It is not confined to
commercial
establishments
or
commercial or industrial establishment -
2 All. District Basic Education Officer Vs Niyantrak Pradhikari Anutoshik Bhugtan Adhiniyam 1972 & Anr. 1547
Held, Board of Basic Education is an
establishment. (Para 36 & 38)
Writ Petition dismissed (E-1)
Cases relied on :-

## Text

_Characters 0–39,876 of 86,778. This is a partial read: ask again with offset=39876 for what follows._

1546 INDIAN LAW REPORTS ALLAHABAD SERIES

40. In the case at hand, the
respondent-workman
having
been
directed to be reinstated on the post of
conductor with the petitioner-Corporation
w.e.f. 02.06.1992 in terms of the award
dated 27.05.1995 passed by the Labour
Court in Adjudication Case No.34 of
1993 and the said award having been
confirmed
vide
judgment
dated
07.02.2013 passed by this Court in Writ-C
No.34125
of
1995
with
the
only
modification that back wages were
reduced to half of what had been granted,
and the workman subsequently having
attained the age of superannuation, the
order passed by the Controlling Authority
allowing the claim for payment of gratuity
after recording a finding that for the
purposes of payment of gratuity under the
provisions of the P.G. Act, 1972 what was
mainly required to be seen was the
existence
of
the
employer-employee
relationship, the total length of service
and the last drawn wages, and the issue as
to whether the employee had worked on
daily wages or as a regular employee was
of no consequence, cannot be faulted
with. The length of service having been
held to be admitted between the parties
the computation of gratuity was made by
the Controlling Authority on the basis of
the claim made by the employee with
regard to the last drawn wages. The
Appellate Authority having affirmed the
order passed by the Controlling Authority
for the self-same reasons the said order
also requires no interference.

41. Counsel for the petitioner has
not been able to point out any material
error or irregularity in the orders passed
by the Controlling Authority and the
Appellate Authority so as to warrant
interference in exercise of powers under
Article 226 of the Constitution of India.

42. No other point was argued by
the counsel for the petitioner.

43. The writ petition lacks merit and
is accordingly dismissed.
----------

(2019)10ILR A 1546

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 24.09.2019

BEFORE

THE HON'BLE J.J. MUNIR, J.

Writ- C No. 62286 of 2009
connected with
Writ- C No. 9831 of 2019

District Basic Education Officer
 ...Petitioner
Versus
Niyantrak Pradhikari Anutoshik Bhugtan
Adhiniyam 1972 & Anr. ...Respondents

Counsel for the Petitioner:
Sri Vimal Chandra Mishra, Sri Nand
Kishore Singh.

Counsel for the Respondents:
C.S.C., Sri A.K. Trivedi, Fasiha Fatma, Sri
Ambika Prasad Tewari, Sri M.S. Khan, Sri
Mohammad Najam Siddiqui.

A. Payment of Gratuity Act, 1972 -
Section 2 (e) - Gratuity - Applicability of
Act to employees of District Basic
Education Office - Act not necessarily to
be applicable to the employer, but it is
necessary that employee should qualify
for an employee under section 2 (e) of
the Act. (Para 39)

B. Payment of Gratuity Act, 1972 -
Section
1
(3)
(b)
-
Meaning
of
Establishment - It is not confined to
commercial
establishments
or
commercial or industrial establishment -
2 All. District Basic Education Officer Vs Niyantrak Pradhikari Anutoshik Bhugtan Adhiniyam 1972 & Anr. 1547
Held, Board of Basic Education is an
establishment. (Para 36 & 38)
Writ Petition dismissed (E-1)
Cases relied on :-

1. St. of Punjab Vs Labour Court Jullunder &
ors. (1980) 1 SCC 4
2. Regional Provident Fund Commissioner,
Bangalore Vs Regional Labour Commissioner
(Central) & ors. (1985) 1 LLN 675.
3. U.P. Co-operative Union & ors. Vs Prabhu
Dayal Srivastava & ors. (1998) 2 LLN 625.
4. Administrator, Shree Jagannath Temple Puri
Vs Jagannath Padhi & ors. (1992) 65 FLR 946.
5. Poona Cantonment Board Vs S.K. Das & ors.
1993 (II) CLR 731.
6. Smt. Jayaben Suryakant Modi Vs Welfare
Commissioner & ors. 1997 Lab IC 2581:
(1997) ILLJ 139 Guj.
7.
V.
Venkateswara
Rao
Vs
The
Chairman/Governing Body S.M.V.M. Polytechnic,
Tanuku & ors. (1998) ILLJ 181 AP.
8. Smt. D. Lakshmi Vs A.P. Agricultural
University & ors. (2002) 2 LLN 54.
9. Habibaa Girls Primary School (represented
by its Manager) Ambur Vs Smt. Noorinisha &
ors. (2004) 1 LLN 592.
10. Senior Superintendent of Post Offices Vs
Gursewak Singh & ors. 2019 SCC Online SC
399.

Cases referred :-
1. Rohit Pulp & Paper Mills Ltd. Vs C.C.E.
(1990) 3 SCC 447.
2. H.C. Bar Association Allahabad Vs Deputy
Labour Commissioner Allahabad & ors. 2004
(4) AWC 3755.
3. Ms. Usha Hamilton & ors. Vs St. of U.P.
(Civil Misc. Writ No. 20829, decided on
31/10/1988).
(Delivered by Hon'ble J.J. Munir, J.)

1. Civil Misc. Writ Petition
No.62286 of 2009 has been brought by
the District Education Officer, Hamirpur
against an order of the Controlling
Authority, Payment of Gratuity Act,
1972-cum-Assistant
Labour
Commissioner, U.P., Kanpur Region,
Kanpur, dated 26.09.2009 passed in P.G.
Case no.74 of 2007. By the said order, the
Controlling
Authority,
Payment
of
Gratuity Act, 1972 (for short, the
Authority) has ordered the petitioner to
pay the second respondent-employee
gratuity in the sum of Rs.1,48,050/- in
accordance with the provisions of the
Payment of Gratuity Act, 1972 (for short
the Act), instead of Section 9(1) of the
U.P. Basic Education Act, 1972 (for the
short, the Act of 1972) and Service Rules
framed thereunder, governing entitlement
to post retiral benefits for the second
respondent-employee,
a
Head
Clerk
employed with the office of the District
Basic Education Officer, Nagar Kshetra
Maudaha, District Hamirpur.

2. Connected Civil Misc. Writ
Petition No.9831 of 2019 has been filed
by the employee, Mohammad Ahmad,
who is the second respondent in Civil
Misc. Writ Petition No.62286 of 2009,
praying that a writ of mandamus be issued
commanding the Authority to issue a
recovery certificate against the District
Basic Education Officer, Hamirpur, who
is the second respondent in this petition
and the petitioner in Civil Misc. Writ
Petition No.62286 of 2009, in compliance
of the order dated 26.09.2009 passed in
P.G. Case no.74 of 2007, determining the
employee's entitlement to gratuity under
the Act as detailed hereinabove.

3. Since both the writ petitions relate
to validity of the order dated 26.09.2009
1548 INDIAN LAW REPORTS ALLAHABAD SERIES
passed by the Authority under the Act,
one assailing its validity and the other
seeking its enforcement, the two petitions
have been connected and heard together,
with Writ - C No.62286 of 2009 being
treated as the leading petition.

4. Heard Sri Kunal Shah holding
brief of Sri Nand Kishore Singh, learned
counsel for the petitioner-District Basic
Education Officer, Hamirpur and Ms.
Fasiha Fatma, learned counsel appearing
on behalf of respondent no.2-employee in
Writ - C No.62286 of 2009; and, Sri
Ambika Prasad Tewari, learned counsel
appearing for the petitioner-employee and
Sri Kunal Shah holding brief of Sri Nand
Kishore Singh, learned counsel appearing
on behalf of respondent no.2-District
Basic Education Officer, Hamirpur in
Writ - C No.9831 of 2019.

5. Parties have exchanged affidavits
in the leading case and by consent of
learned counsel appearing for both sides,
the two petitions have proceeded to
hearing.

6. The facts giving rise to the
present petition are set out bearing
reference to the leading case. It is the case
of the petitioner, District Basic Education
Officer that the respondent-employee was
initially appointed on 01.11.1965 as Jalkal
Store Keeper with the Nagar Palika,
Maudaha, District Hamirpur. He was
promoted on 21.12.1970 as Head Clerk in
the said Nagar Palika, and continued as
such
until
31st
July,
1972.
Upon
constitution of the Board of Basic
Education on 01.08.1972, the second
respondent-employee was absorbed in the
services of the Board of Basic Education
and appointed as In-charge Officer,
Shiksha,
Nagar
Kshetra,
Maudaha,
Hamirpur working under the immediate
control of the District Basic Education
Officer, Hamirpur. Admittedly, the date
of birth of the second respondentemployee entered in his service book is
10.08.1940. He, therefore, attained the
age of superannuation upon turning 60,
and retired from service of the Board of
Basic
Education
on
31.08.2000.
According
to
the
petitioner,
on
06.09.2001, the Regional Assistant Joint
Director of Education (Basic), Jhansi,
described as the Competent Authority in
the matter, passed an order sanctioning
pension
to
the
second
respondentemployee. The said pension payment
order has been passed in accordance with
the applicable Government Orders and is
addressed to the District Basic Education
Officer, Hamirpur. It indicates the date of
commencement of entitlement to pension
as 01.09.2000. It is the petitioner's further
case that the second respondent-employee
is in receipt of regular pension since
01.09.2000. It is, however, specifically
urged that upon retirement an employee
of the petitioner, the Board of Basic
Education, that is the second respondent,
is not entitled to payment of gratuity
under
the
Act,
or
Rules
framed
thereunder.
The
second
respondentemployee asserted his claim to payment
of gratuity and also leave encashment.
According to the petitioner, earlier there
was provision for encashment of earned
leave, but that was nullified by a certain
Government
Order
No.3049/15-5-91370/82 dated May, 1992.

7.

Nevertheless,
the
second
respondent-employee filed Civil Misc.
Writ Petition no.38566 of 2003 seeking to
enforce
his
claim
regarding
leave
encashment and gratuity. This petition
was disposed of on 01.09.2003 directing a
2 All. District Basic Education Officer Vs Niyantrak Pradhikari Anutoshik Bhugtan Adhiniyam 1972 & Anr. 1549
representation to be made to some
Authority of the Board of Basic Education
described as respondent no.3 in the order
of this Court last mentioned, requiring the
said Authority to decide the second
respondent's representation, if made along
with a certified copy of the order of this
Court,
within
three
months of
its
presentation, in case the Basic Shikha
Adhikari had power to decide the question
about the second respondent's entitlement
to these post retiral benefits.

8. It is claimed by the petitioner that
the order of this Court dated 01.09.2003
last mentioned was never served upon the
District Basic Education Officer. Instead,
the District Basic Education Officer was
proceeded in contempt before this Court,
and shorn of unnecessary detail about
those proceedings, the District Basic
Education Officer, Hamirpur, passed an
order dated 21.06.2004, holding that
gratuity as well as leave encashment is
not payable to the second respondentemployee.

9. Disillusioned with the decision of
the District Basic Education Officer,
dated 21.06.2004, the second respondentemployee moved the Authority under the
Act vide P.G. Case no.74 of 2007. The
Authority issued notice to the petitioner
on 16.07.2008 returnable on 13.08.2008
requiring the petitioner to show cause by
submitting his reply by the said date, and
for the determination of the application.
The petitioner in compliance with the
notice issued by the Authority, authorized
the Finance and Accounts Officer in the
office of the District Basic Education
Officer, Hamirpur to file a reply and
contest the matter on behalf of the
petitioner. The Finance and Accounts
Officer submitted a reply on 13.08.2008.
In the said reply, it was asserted in
substance that the second respondentemployee was not a workman. He was a
regular employee in the cadre of Class-III
with the Board of Basic Education. His
service conditions were regulated by the
Act of 1972 and departmental Service
Regulations,
governing
post
retiral
benefits.
It
was
asserted
that
in
accordance with the Act of 1972 and the
Service Regulations applicable to the
second respondent, no gratuity was
payable to him. Another plea about
territorial jurisdiction was raised through
a separate reply, where it was said that the
Authority had held earlier that territorial
jurisdiction
relating
to
the
District
Hamirpur vested with the Authority at
Jhansi, and not with the Authority at
Kanpur, exercising jurisdiction under the
Act.

10. It may be mentioned here that
the plea as to territorial jurisdiction was
not at all urged before this Court at the
hearing of these writ petitions. The
challenge was confined to the issue that
the Act was not at all applicable to the
petitioner in the matter of entitlement of
their employees to receive gratuity. It
was, therefore, argued that the Authority
went beyond jurisdiction in holding the
Act to be applicable to the petitioner's
establishment, and calculating gratuity
payable to the second respondent in
accordance with the Act. It was urged that
the second respondent's entitlement is
governed by the Act of 1972, whereunder
a Class-III employee of the Board of
Basic Education was entitled to receive
pension, but not gratuity. In substance, the
contention of the petitioner is that the Act
is not at all applicable to the petitioner's
establishment, and would not enure to the
benefit
of
the
second
respondent-
1550 INDIAN LAW REPORTS ALLAHABAD SERIES
employee, entitling him to gratuity as
ordered by the Authority.

11. The applicability of the Act to an
employer is governed by Section 1(3)
thereof, which reads:

"1.Short
title,
extent,
application and commencement. -- (1) x
x x x

(2) x x x x

(3) It shall apply to--

(a) every factory, mine, oilfield,
plantation, port and railway company;

(b) 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;

(c) 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, by notification, specify
in this behalf.

[(3-A) x x x x

(4) x x x x"
 (Emphasis by Court)

12. The other important provision
that governs the question, whether the Act
would apply to the employer, vis-a-vis,
the claimant-employee are the provisions
of Section 2(e) of the Act, that define an
employee. The provisions of Section 2(e)
of the Act are extracted infra:

"2. Definitions.--In this Act
unless the context otherwise requires,--

(a) x x x x

(b) x x x x

(c) x x x x

(d) x x x x

(e)
"employee"
means
any
person (other than an apprentice) who is
employed for wages, whether the terms of
such employment are express or implied,
in any kind of work, manual or otherwise,
in or in connection with the work of a
factory, mine, oilfield, plantation, port,
railway
company,
shop
or
other
establishment to which this Act applies,
but does not include any such person who
holds
a
post
under
the
Central
Government or a State Government and is
governed by any other Act or by any rules
providing for payment of gratuity;

(f) x x x x

(g) x x x x

(h) x x x x

(i) x x x x

(j) x x x x

(m) x x x x

(n) x x x x

(o) x x x x

(p) x x x x

(q) x x x x

(r) x x x x

(s) x x x x"
 (Emphasis by Court)

13. It is the submission of Mr. Kunal
Shah, learned counsel appearing on behalf
of the petitioner, that the Act does not
apply to the petitioner, who is an officer
of the Board of Basic Education, and
represents that establishment, which is
incorporated under the Act of 1972. He
submits that the Board of Basic Education
performs
sovereign
functions
as
distinguished from commercial functions.
It is urged by Mr. Shah that the words of
Section 3(1)(a) of the Act are express,
which in no way could be held referable
to an employer, like the petitioner. Again,
he submits that Clause (c) of sub-Section
(3) of Section 1 of the Act also make it
2 All. District Basic Education Officer Vs Niyantrak Pradhikari Anutoshik Bhugtan Adhiniyam 1972 & Anr. 1551
explicit that every establishment, or class
of establishments not covered by Clause
(a) or (b) of sub-Section (3) of Section 1,
may be brought under the regime of the
Act, provided they employ ten or more
employees, or in the past, have employed
that number in the preceding twelve
months, but this extended application of
the
Act,
would govern
only
such
establishments
which
the
Central
Government may specify by notification
in this behalf, to borrow the phraseology
of the statute. Mr. Shah has urged that
Clause (b) of sub-Section (3) of Section 1,
last mentioned comes closest to rendering
the petitioner vulnerable, but the said
Clause also does not take a sovereign
establishment like the petitioner, in its
fold.

14. It is further submitted by the
learned counsel for the petitioner that the
words, "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", are of
considerable significance. It is Mr. Shah's
contention that the words, "shop or
establishment",
carry
a
definitive
connotation, which is not decisively
determined by the word 'or', that separates
them. In his submission, it is not decisive
to
determine
the
connotation
of
'establishment' whether the word 'or'
really means an 'and'; not whether that 'or'
is conjunctive or disjunctive, but the real
legislative intent is to be discerned on the
basis of an altogether different principle.
Mr.
Shah
submits
that
the
word
'establishment' occurring after the word
'shop' bears reference to a shop like
establishment,
a
commercial
establishment as distinguished from an
establishment performing a sovereign
function. According to him, this inference
is based on a well established cannon of
statutory construction. It is the principle
of noscitur a sociis. It is urged by the
learned
counsel
that
the
word
'establishment' in the context where it has
been placed, and the fact that it occurs
after the word 'shop', which is a specific
word, would confine the otherwise wide
and
generic
import
of
the
word
'establishment', in the sense that it would
have
to
be
understood
as
an
establishment, that has the likeness of a
shop. According to Mr. Shah, there is
nothing said in the statute, that may
suggest that the word 'establishment' is to
be understood in the widest import of the
word so as to take in its fold all the
myriad kinds of establishments, whatever
be the essential nature of their activity. He
elaborates on that contention to submit
that in the absence of a definitive
indicator to be found in Clause (b) of subSection (3) of Section 1 of the Act, from
which
the
meaning
of
the
word
'establishment' there, may be inferred to
be its use in the most generic sense of it,
one has to fall back upon the rule of
noscitur a sociis. It is his submission that
the principle only means that a word in a
statute is to be understood by the
company it keeps. The submission further
proceeds that the word 'establishment' if
not understood by application of the
principle last mentioned, would take
within its fold, the most sovereign of
establishments,
including
the
Government. This, in the submission of
Mr. Shah, cannot be the legislative intent.
He, therefore, moots a restricted meaning
to be placed on the word 'establishment',
that is conditioned by its immediate
predecessor,
separated
by
just
a
conjunction, that is the word 'shop'.
Learned counsel for the petitioner in
support of his contention, that the word
1552 INDIAN LAW REPORTS ALLAHABAD SERIES
'establishment' must be read conditioned
by the word 'shop', by applying the
principle of noscitur a sociis, has relied
upon the decision of the Supreme Court in
Rohit Pulp and Paper Mills Ltd. vs.
CCE1. In the said decision, explaining
the principle of noscitur a sociis, it was
said by their Lordships thus:

"12. The principle of statutory
interpretation by which a generic word
receives a limited interpretation by reason
of its context is well established. In the
context with which we are concerned, we
can legitimately draw upon the "noscitur a
sociis" principle. This expression simply
means that "the meaning of a word is to
be judged by the company it keeps."
Gajendragadkar, J. explained the scope of
the rule in State of Bombay v. Hosptial
Mazdoor Sabha [(1960) 2 SCR 866 : AIR
1960 SC 610 : (1960) 1 LLJ 251] in the
following words: (SCR pp. 873-74)

"This
rule,
according
to
Maxwell, means that, when two or more
words which are susceptible of analogous
meaning are coupled together they are
understood to be used in their cognate
sense. They take as it were their colour
from each other, that is, the more general
is restricted to a sense analogous to a less
general. The same rule is thus interpreted
in "Words and Phrases" (Vol. XIV, p.
207):
"Associated
words
take
their
meaning from one another under the
doctrine
of
noscitur
a
sociis,
the
philosophy of which is that the meaning
of a doubtful word may be ascertained by
reference to the meaning of words
associated with it; such doctrine is
broader than the maxim ejusdem generis".
In fact the latter maxim "is only an
illustration or specific application of the
broader maxim noscitur a sociis". The
argument is that certain essential features
of attributes are invariably associated with
the words "business and trade" as
understood
in
the
popular
and
conventional sense, and it is the colour of
these attributes which is taken by the
other words used in the definition though
their normal import may be much wider.
We are not impressed by this argument. It
must be borne in mind that noscitur a
sociis is merely a rule of construction and
it cannot prevail in cases where it is clear
that
the
wider
words
have
been
deliberately used in order to make the
scope
of
the
defined
word
correspondingly wider. It is only where
the
intention
of
the
legislature
in
associating wider words with words of
narrower significance is doubtful, or
otherwise not clear that the present rule of
construction can be usefully applied. It
can also be applied where the meaning of
the words of wider import is doubtful;
but, where the object of the legislature in
using wider words is clear and free of
ambiguity, the rule of construction in
question cannot be pressed into service."

This principle has been applied
in a number of contexts in judicial
decisions where the court is clear in its
mind that the larger meaning of the word
in question could not have been intended
in the context in which it has been used.
The cases are too numerous to need
discussion here. It should be sufficient to
refer to one of them by way of illustration.
In Rainbow Steels Ltd. v. CST [(1981) 2
SCC 141 : 1981 SCC (Tax) 90] this Court
had to understand the meaning of the word
''old' in the context of an entry in a taxing
traffic which read thus:

"Old, discarded, unserviceable
or obsolete machinery, stores or vehicles
including waste products......"

Though the tariff item started
with the use of the wide word ''old', the
2 All. District Basic Education Officer Vs Niyantrak Pradhikari Anutoshik Bhugtan Adhiniyam 1972 & Anr. 1553
court came to the conclusion that "in
order to fall within the expression ''old
machinery' occurring in the entry, the
machinery must be old machinery in the
sense that it has become non-functional or
non-usable". In other words, not the mere
age of the machinery, which would be
relevant in the wider sense, but the
condition of the machinery analogous to
that indicated by the words following it,
was considered relevant for the purposes
of the statute.

13. The maxim of noscitur a
sociis has been described by Diplock, C.J.
as a "treacherous one unless one knows
the societas to which the socii belong"
(vide Letang v. Cooper [(1965) 1 QB 232
: (1964) 2 All ER 929] ). The learned
Solicitor General also warns that one
should not be carried away by labels and
Latin maxims when the words to be
interpreted is clear and has a wide
meaning. We entirely agree that these
maxims and precedents are not to be
mechanically
applied;
they
are
of
assistance only insofar as they furnish
guidance by compendiously summing up
principles based on rules of common
sense and logic. As explained in CCE v.
Parle Exports (P) Ltd. [(1989) 1 SCC 345,
357 : 1989 SCC (Tax) 84] and Tata Oil
Mills Co. Ltd. v. CCE [(1989) 4 SCC 541,
545-46 : 1990 SCC (Tax) 22] in
interpreting the scope of any notification,
the court has first to keep in mind the
object and purpose of the notification. All
parts of it should be read harmoniously in
aid of, and not in derogation of, that
purpose. In this case, the aim and object
of the notification is to grant a concession
to
small
scale
factories
which
manufacture paper with unconventional
raw materials. The question naturally
arises: Could there have been any
particular object intended to be achieved
by introducing the exceptions set out in
the proviso? Instead of proceeding on the
premise that it is not necessary to look for
any reason in a taxing statute, it is
necessary to have a closer look at the
wording of the proviso. If the proviso had
referred only to ''coated paper', no special
object or purpose would have been
discernible and perhaps there would have
been no justification to look beyond it and
enter into a speculation as to why the
notification should have thought of
exempting
only
''coated
paper'
manufactured by these factories from the
purview of the exemption. But the
notification excepts not one but a group of
items. If the items mentioned in the group
were totally dissimilar and it were
impossible to see any common thread
running through them, again, it may be
permissible to give the exceptions their
widest latitude. But when four of them --
undoubtedly, at least three of them -- can
be
brought
under
an
intelligible
classification and it is also conceivable
that the government might well have
thought that these small scale factories
should not be eligible for the concession
contemplated by the notification where
they manufacture paper catering to
industrial purposes, there is a purpose in
the limitation prescribed and there is no
reason
why
the
rationally
logical
restriction should not be placed on the
proviso based on this classification. In our
view, the only reasonable way of
interpreting
the
proviso
is
by
understanding the words ''coated paper' in
a narrower sense consistent with the other
expressions used therein."

15. Learned counsel for the
petitioner has further submitted that the
Board of Basic Education, which is a
statutory body established under the Act
1554 INDIAN LAW REPORTS ALLAHABAD SERIES
of 1972, falls generally within the class of
an establishment that would be considered
by the law to be a statutory body. He has
drawn the attention of the Court to the
fact that the petitioner's are not an
establishment, or part of a class of
establishments employing ten or more
employees,
which
the
Central
Government has, by its notification
specified in this regard under Section 1
(3) (c) of the Act. Mr. Kunal Shah, has
drawn the attention of the Court to some
eight notifications issued by the Central
Government in exercise of their powers
under Clause (c) of sub-section(3) of
Section 1 of the Act, that refer to various
establishments, specifically by name or by
reference to there class, to which the
application of the Act has been extended.
None
of
those
notifications
bear
reference, in the submission of learned
counsel for the petitioner, to a statutory
body as a class, or specifically in some
manner, indicating that the application of
the Act is extended to the petitioner.

16. This submission of learned
counsel for the petitioner about the
petitioner being covered under Clause (c)
of sub-section (3) of Section1, can be
straightaway disposed of without much to
be examined about the issue, inasmuch as
none of the notifications issued under the
Act, even remotely apply to a statutory
body, like the Board of Basic Education.

17. Ms. Fasiha Fatma, and Mr.
Ambika Prasad Tiwari, learned counsel
appearing for respondent No.2-employee
have also not brought to the notice of this
Court any notification under Section
1(3)(c)
of
the
Act,
extending
its
application to the petitioner specifically or
by reference to a class, which may include
the petitioner. Both learned counsel
representing the employee do not dispute
this submission of learned counsel for the
petitioner. This Court is, therefore, of
opinion that the Act has not been
extended in its application to the Board of
Basic Education, by a notification of the
Central Government issued under Section
1(3)(c) of the Act. This clearly confines
the question about applicability of the Act
to the petitioner-Board, to be determined
with reference to Clause (b) of subsection (3) of Section 1 of the Act, alone.

18. In this regard, learned counsel
for the petitioner has placed reliance upon
the decision of a Division Bench of this
Court in High Court Bar Association,
Allahabad
Vs.
Deputy
Labour
Commissioner, Allahabad and others2,
where speaking for the Division Bench, it
was held by M.Katju, J. (as His Lordship
then was of the High Court):

"6. As regard clause (b) of
Section 1(3) this too will not apply
because this relates to a shop or
establishment within the meaning of any
law for the time being in force in relation
to shops and establishments in the State.
In U.P., this law is the U.P. Dookan Aur
Vanijya Adhishthan Adhiniyam, 1962.
The
High
Court
Bar
Association,
Allahabad is not a shop or establishment
which comes within the purview of the
aforesaid U.P. Act, 1962."

19. Learned counsel for the
petitioner has depended upon this view of
their Lordships of the Division Bench
with much emphasis to submit that the
earlier part of his contention, applying the
principle of noscitur a sociis, accords
with the aforesaid view of their Lordships
where they have interpreted the word
establishment in the same genre as the
2 All. District Basic Education Officer Vs Niyantrak Pradhikari Anutoshik Bhugtan Adhiniyam 1972 & Anr. 1555
word "shop", though without referring to
the principle last mentioned. Learned
counsel for the petitioner has also placed
reliance upon a Division Bench decision
of this Court in Ms. Usha Hamilton and
another Vs. State of U.P.3, where it was
held thus:

"8. On behalf of the petitioner
no.1 reliance is placed upon certain
provisions of the Payment of Gratuity Act
to show that in the event of an employee
having no "Family" within the meaning of
the said Act gratuity payable to a
particular employee shall be paid to his or
her nominee. To get over Rule 4 of the
Rules, section 14 of the Payment of
Gratuity, which gives an overriding effect
to the provisions of the said Act and over
other enactment, has been pressed into
service. There may be some force in the
contention of the learned counsel if the
Payment of Gratuity Act was applicable
to the case of Miss Elias. Our reading of
the said Act shows that it has no
application to her. The preamble of the
Payment of Gratuity Act, 1972, sets out
that it has been enacted to provide for a
scheme for the payment of gratuity to
employees engaged in factories, mines,
oilfields,
plantations,
ports,
railway
companies, shop or other establishments.
Sub-section (3) of Section 1 makes it
clear that the Act shall apply to (a)
factory, mines, etc. (b) other shop or
establishment
and
(c)
such
other
establishments or class of establishments
in which 10 or more persons are
employed, or were employed, on any day
of the preceding twelve months, as the
Central Government may, by notification,
specify in this behalf. If at all, the
provisions of sub-section 1(3)(c) of the
Act alone may have some relevance.
However, we are clear that even that subsection had no application to the College
wherein Miss. Elias was surviving as a
teacher. The preamble coupled with the
provisions of section 1(3) of the Act
makes it crystal clear that the Payment of
Gratuity Act, 1972 is applicable only to
commercial and industrial establishment."
 (Emphasis by Court)

20. Learned counsel for the
petitioner has drawn the attention of the
Court
to
the
concluding
lines
in
paragraph-8 of the report to submit that
their Lordships of the Division Bench in
the said case again, read Section 1(3)(b)
of the Act in a manner where without
specifically referring to the principle of
noscitur a sociis, they read the word
establishment conditioned by the specific
word "shop" to hold that it connotes a
commercial and industrial establishment.

21. Learned counsel appearing for
the employees, on the other hand, have
disputed
the
aforesaid
submission
advanced on behalf of the petitioner. It is
their
contention
that
the
word
establishment employed under clause (b)
of sub-section (3) of Section 1 of the Act,
is in no way conditioned by the word
"shop" which carries a disjunctive "or"
between the two. In their submission, read
as a whole, Section 1(3)(b) would show
that the word "or" is to be read as "and". It
is not conjunctive but disjunctive. The
word establishment has been used in its
widest
generic
sense,
completely
independent of the word "shop". It is the
submission
of
learned
counsel
for
respondent
No.2-employee
that
the
'establishment' envisaged under Section
1(3)(b)
would
be
any
kind
of
establishment, not necessarily commercial
or industrial. Confining the scope of the
word establishment by reading it ejusdem
1556 INDIAN LAW REPORTS ALLAHABAD SERIES
generis with the word "shop", or by
applying the more settled principles of
noscitur a sociis would lead to bogging
down the statute and result in curtailing
its application to subjects, to which the
legislature intended it to apply. It is their
submission
that
there
is
absolutely
nothing to suggest upon a reading of the
provisions of Section 1(3)(b) of the Act,
that may lend itself to the kind of a
restricted meaning being given to the
word 'establishment' in terms urged by
learned counsel for the petitioner.

22. This Court has carefully
considered
the
rival
submissions
advanced.

23. The question whether the word
establishment has been used in a restricted
sense, conditioned by the word "shop", to
mean that establishments commercial
alone fall within the mischief of Section
1(3)(b)
of
the
Act,
or
the
word
establishment followed by the words,
"within the meaning of any law for the
time being in force in relation to shops
and establishment in a State", are to be
read considering "establishment" free
from
the
shadows
of
it
being
a
commercial one and in its widest sense,
was considered by their Lordships of the
Supreme Court in State of Punjab Vs.
Labour Court, Jullunder and Others4.
In State of Punjab Vs. Labour Court,
Jullunder (supra), their Lordships were
confronted with this question in the
context of facts where employees of a
certain
"Hydle
Upper
Bari,
Doab
Construction Project", undertaken by the
Hydle Department of the Government of
Punjab, moved the Labour Court for
payment of gratuity upon retrenchment,
when the project came to an end. The
claim was considered by the Labour
Court, under Section 33-C(2) of the
Industrial Disputes Act, 1947. The claim
was granted, holding the employees
entitled to gratuity. It was contended that
the
employers
were
an
industrial
establishment within the meaning of
Section 2(ii)(g) of the Payment of Wages
Act, as held by the Labour Court, and
that, according to the parties in that case,
the question was required to be examined
with reference to Section 1(3)(b) of the
Act alone. In the aforesaid context, it was
held in the State of Punjab Vs. Labour
Court, Jullunder (supra) thus:

"3. ............According to the
parties, it is clause (b) alone which needs
to be considered for deciding whether the
Act applies to the Project. The Labour
Court has held that the Project is an
establishment within the meaning of the
Payment of Wages Act, Section 2(ii)(g) of
which
defines
an
"industrial
establishment"
to
mean
any
"establishment in which any work relating
to the construction development or
maintenance of buildings, roads, bridges
or canals, relating to operations connected
with navigation, irrigation or the supply
of water, or relating to the generation,
transmission and distribution of electricity
or any other form of power is being
carried on". It is urged for the appellant
that the Payment of Wages Act is not an
enactment
contemplated
by
Section
1(3)(b) of the Payment of Gratuity Act.
The Payment of Wages Act, it is pointed
out, is a Central enactment and Section
1(3)(b), it is said, refers to a law enacted
by the State Legislature. We are unable to
accept the contention. Section 1(3)(b)
speaks of "any law for the time being in
force
in
relation
to
shops
and
establishments in a State". There can be
no dispute that the Payment of Wages Act
2 All. District Basic Education Officer Vs Niyantrak Pradhikari Anutoshik Bhugtan Adhiniyam 1972 & Anr. 1557
is in force in the State of Punjab. Then, it
is submitted, the Payment of Wages Act is
not a law in relation to "shops and
establishments". As to that, the Payment
of Wages Act is a statute which, while it
may not relate to shops, relates to a class
of establishments, that is to say, industrial
establishments. But, it is contended, the
law referred to under Section 1(3)(b) must
be a law which relates to both shops and
establishments, such as the Punjab Shops
and Commercial Establishments Act,
1958. It is difficult to accept that
contention because there is no warrant for
so limiting the meaning of the expression
"law" in Section 1(3)(b). The expression
is comprehensive in its scope, and can
mean a law in relation to shops as well as,
separately,
a
law
in
relation
to
establishments, or a law in relation to
shops and commercial establishments and
a law in relation to non-commercial
establishments.
Had
Section
1(3)(b)
intended to refer to a single enactment,
surely the appellant would have been able
to point to such a statute, that is to say, a
statute
relating
to
shops
and
establishments, both commercial and noncommercial. The Punjab Shops and
Commercial Establishments Act does not
relate to all kinds of establishments.
Besides shops, it relates to commercial
establishments alone. Had the intention of
Parliament been, when enacting Section
1(3)(b), to refer to a law relating to
commercial establishments, it would not
have left the expression "establishments"
unqualified. We have carefully examined
the various provisions of the Payment of
Gratuity Act, and we are unable to discern
any reason for giving the limited meaning
to Section 1(3)(b) urged before us on
behalf of the appellant. Section 1(3)(b)
applies to every establishment within the
meaning of any law for the time being in
force in relation to establishments in a
State. Such an establishment would
include an industrial establishment within
the meaning of Section 2(ii)(g) of the
Payment of Wages Act. Accordingly, we
are of opinion that the Payment of
Gratuity Act applies to an establishment
in which any work relating to the
construction, development or maintenance
of buildings, roads, bridges or canals, or
relating to operations connected with
navigation, irrigation or the supply of
water, or relating to the generation,
transmission and distribution of electricity
or any other form of power is being
carried on. The Hydel Upper Bari Doab
Construction
Project
is
such
an
establishment,
and
the
Payment
of
Gratuity Act applies to it."
 (Emphasis by Court)

24. A reading of the part of their
Lordships decision in State of Punjab
Vs. Labour Court, Jullunder (supra),
extracted above, shows an authoratative
and explicit exposition of law, that the
word establishment is to be given its
widest meaning, without restricting its
scope to commercial establishments. No
further illustration is required on the
reasoning about it, in view of what their
Lordships have held in the said decision.
It must, however, be remarked that the
fact that in State of Punjab Vs.