# Mahak Singh v. Appellate Authority/Deputy Labour Commissioner Payment of Gratuity

- **Citation:** (2019) 1 ILRA 1212
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-07-24
- **Case number:** Writ - C No. 11140 of 2019
- **Bench:** J.J. Munir
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/mahak-singh-v-appellate-authority-deputy-labour-commissioner-payment-of-gratuity-44437
- **Pages:** 25

## Headnote

C.S.C., Sri Chandan Sharma

A.
Whether
the
Additional
Labour
Commissioner/Prescribed
Authority
under the Timely Payment of Wages Act,
1978 had exceeded in its jurisdiction in
issuing the recovery certificates while
exercising power under Section 3 of the
said Act.

B. Whether there was an illegal strike or
valid closure of the factory and the
denial on the part of the employer to pay
wages to the workmen since 7.8.2001
was "default" on its part of the employer
within the meaning of the Act, 1978 or
there was a valid dispute with regard to
entitlement of the workmen to wages
which
required
adjudication
by
an
industrial adjudicator.

Whether the settlement dated 14.1.2002
was binding on all the workmen or the
union. (Para-44)

The
enquiry
conducted
by
the
Labour
Commissioner to record reasons while arriving
at the conclusion of default on the part of the
employer was well within the limited exercise
of jurisdiction conferred on him under Section
3 of the Act, 1978. It cannot be said that the
Labour Commissioner had acted beyond its
jurisdiction in making enquiry to reach at the
conclusion of genuineness of denial on the
part of the workmen. In absence of legal
lockout or illegal strike, the orders of recovery
cannot be said to be wrongful exercise of
power on the part of the Labour Commissioner
(Para80). The petitioner had not been able to
establish before the Labour Commissioner that
there was a genuine dispute pertaining to
strike or validity of settlement, which required
adjudication by an industrial adjudicator, there
was no question of relegating the workmen to
approach the industrial adjudicator. (Para-94).

Such a settlement would not be binding on
those who are not signatories to the same.
 (Para-96)

Writ Petitions dismissed

CHRONOLOGICAL LIST OF CASES CITED:
1:- 1994 SCC (1) 159, Modi Industries Ltd. vs.
State Of U.P

2:- 2006 (5) SCC 442, Hotel and Restaurant
Karamchari Sangh vs. Gulmarg Hotel and others
1 All. Mahak Singh Vs. Appellate Authority/Deputy Labour Commissioner Payment Of Gratuity 1213
3:- AIR 1970 SC 150,A.K.Kraipak &Ors. Vs.
Union of India &Ors.

4:- 2013 (5) AWC 4745, Silk and Kapda
Karmchari Union, Varanasi vs. Deputy Labour
Commissioner, Varanasi and others

5:- AIR 2000 SC 469, National Engineering
Industries
Ltd.
vs.
State
of
Rajasthan
andothers

6:- 2013 (5) ADJ 544,Hawkins Cookers
Mazdoor Union vs. Conciliation Officer

7:- 2000 (84) FLR 162,National Engineering
Industries Limited vs. State of Rajasthan and
others

8:- J.T. 2005 (9) SC 413,ANZ Grindlays Bank
Ltd. vs. Union of India

9:- 2002 LLR 433, Tata Consulting Engineers
and Associates Staff Union Vs. Tata Consulting
Engineers and Another

10:- 1998 (1) UPLBEC 391,Posysha Industries
Company Limited vs.Collector (E-7)

## Text

_Characters 0–39,859 of 84,680. This is a partial read: ask again with offset=39859 for what follows._

1212 INDIAN LAW REPORTS ALLAHABAD SERIES
voluntary under an option exercised
availing the V.R.S., seems to be contrary
to what the Act says. The resolution dated
08.06.2010 passed by the petitioner's
Board, therefore, would equally apply to
the third respondent's case, as it does in
the case of a workman who retires on
attaining the age of superannuation.

25. This Court, therefore, finds that
the
conclusions
of
the
Controlling
Authority and the Appellate Authority on
this score, may be for different or added
reasons, are right and unassailable.

26. In the result the writ petition fails
and is dismissed with costs.

27. The amount of gratuity deposited with
the Controlling Authority be paid to the
petitioner within 15 days of receipt of a certified
copy of this order by the said Authority.
----------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 24.07.2019

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

Writ - C No. 11140 of 2019

Mahak Singh ...Petitioner
Versus
Appellate
Authority/Deputy
Labour
Commissioner Payment of Gratuity
 ...Respondent

Counsel for the Petitioner:
Sri Dinesh Rai.

Counsel for the Respondent:
C.S.C., Sri Chandan Sharma

A.
Whether
the
Additional
Labour
Commissioner/Prescribed
Authority
under the Timely Payment of Wages Act,
1978 had exceeded in its jurisdiction in
issuing the recovery certificates while
exercising power under Section 3 of the
said Act.

B. Whether there was an illegal strike or
valid closure of the factory and the
denial on the part of the employer to pay
wages to the workmen since 7.8.2001
was "default" on its part of the employer
within the meaning of the Act, 1978 or
there was a valid dispute with regard to
entitlement of the workmen to wages
which
required
adjudication
by
an
industrial adjudicator.

Whether the settlement dated 14.1.2002
was binding on all the workmen or the
union. (Para-44)

The
enquiry
conducted
by
the
Labour
Commissioner to record reasons while arriving
at the conclusion of default on the part of the
employer was well within the limited exercise
of jurisdiction conferred on him under Section
3 of the Act, 1978. It cannot be said that the
Labour Commissioner had acted beyond its
jurisdiction in making enquiry to reach at the
conclusion of genuineness of denial on the
part of the workmen. In absence of legal
lockout or illegal strike, the orders of recovery
cannot be said to be wrongful exercise of
power on the part of the Labour Commissioner
(Para80). The petitioner had not been able to
establish before the Labour Commissioner that
there was a genuine dispute pertaining to
strike or validity of settlement, which required
adjudication by an industrial adjudicator, there
was no question of relegating the workmen to
approach the industrial adjudicator. (Para-94).

Such a settlement would not be binding on
those who are not signatories to the same.
 (Para-96)

Writ Petitions dismissed

CHRONOLOGICAL LIST OF CASES CITED:
1:- 1994 SCC (1) 159, Modi Industries Ltd. vs.
State Of U.P

2:- 2006 (5) SCC 442, Hotel and Restaurant
Karamchari Sangh vs. Gulmarg Hotel and others
1 All. Mahak Singh Vs. Appellate Authority/Deputy Labour Commissioner Payment Of Gratuity 1213
3:- AIR 1970 SC 150,A.K.Kraipak &Ors. Vs.
Union of India &Ors.

4:- 2013 (5) AWC 4745, Silk and Kapda
Karmchari Union, Varanasi vs. Deputy Labour
Commissioner, Varanasi and others

5:- AIR 2000 SC 469, National Engineering
Industries
Ltd.
vs.
State
of
Rajasthan
andothers

6:- 2013 (5) ADJ 544,Hawkins Cookers
Mazdoor Union vs. Conciliation Officer

7:- 2000 (84) FLR 162,National Engineering
Industries Limited vs. State of Rajasthan and
others

8:- J.T. 2005 (9) SC 413,ANZ Grindlays Bank
Ltd. vs. Union of India

9:- 2002 LLR 433, Tata Consulting Engineers
and Associates Staff Union Vs. Tata Consulting
Engineers and Another

10:- 1998 (1) UPLBEC 391,Posysha Industries
Company Limited vs.Collector (E-7)

(Delivered by Hon'ble J.J. Munir, J.)

1. This writ petition under Article
226 of the Constitution has been brought
by Mahak Singh, an employee of
Cooperative Cane Development Limited,
Railway Road, Deoband, Saharanpur
through its Secretary, who are a Cane
Cooperative Society registered under the
U.P. Co-operative Societies Act, 1965.
Admittedly, the petitioner was appointed
as a seasonal clerk with respondent no. 3,
last mentioned (for short the 'society') on
09.12.1975 and retired from service, as
such, on 31.08.2014, upon attaining the
age of superannuation. The petitioner
rendered 39 years of service. At the time
of retirement, the last salary drawn by the
petitioner was Rs. 16,690/- per mensem.
Upon retirement, the petitioner was paid a
sum of Rs. 3,62,754/- in gratuity,
calculating it at the rate of seven days
wages for each season, multiplying it with
the total number of seasons that were
reckoned to be 37 by the Society. Thus
calculated, the petitioner was paid gratuity
in the sum of Rs. 3,62,754/-, in
accordance with the provisions of the
second proviso to sub-section (2) of
Section 4 of the Payment of Gratuity Act,
1972 (for short the 'Act').

2. The petitioner claims that though
employed as a seasonal clerk by the
Society, he has admittedly worked for
more than 240 days regularly, thus
being employed throughout the year,
and, upon that fact even if the Society
are
held
to
be
a
seasonable
establishment, the petitioner is entitled
to be paid gratuity @ 15 days wages
based on the rate of wages last drawn
for every completed year of service or
part thereof in excess of six months in
accordance with sub section (2) of Section
4 of the Act. Reckoned thus, the petitioner
would be entitled to gratuity in the sum of
Rs. 7,77,330/-, which after deducting the
sum already paid to him on that account,
short of his entitlement, the Society still
owes to the petitioner a sum of Rs.
4,14,576/-.

3. It is also contended by the
petitioner that apart from designating him
a seasonable clerk, the Society are not
entitled to rely on the second proviso to
sub section (2) of Section 4 of the Act,
inasmuch as, they are not at all a seasonal
establishment.
It
is
urged
in
the
supplementary affidavit filed by the
petitioner, in particular, that the Society
are not a seasonal establishment within
the meaning of the second proviso to
Section 4(2) of the Act. He has relied on a
specific certification tendered in answer
1214 INDIAN LAW REPORTS ALLAHABAD SERIES
to information about the status of the
society sought by one Suresh Pal Singh
s/o Amar Singh from the District Cane
Officer, Saharanpur, where it has been
certified vide Memo No. 1297, amongst
other things, that Cooperative Cane
Societies are not seasonal establishments,
but Cooperative Societies.

4. This petition has arisen from
proceedings taken by the petitioner under
the Act before the Controlling Authority
and the Appellate Authority. The course
of those proceedings and disposition of
the petitioner's claim by those Authorities,
is described hereinafter.

5. The petitioner approached the
Controlling Authority under the Act
seeking to enforce recovery of the balance
of his gratuity from the Society. The
Controlling Authority appointed under the
Act for the District of Saharanpur vide an
order dated 15.05.2017, rejected the
petitioner's claim on application of a
simple principle that the petitioner being a
seasonal employee, he was entitled to
gratuity calculated in accordance with the
second proviso to sub section (2) of
Section 4 of the Act. The said order was
challenged in appeal to the Appellate
Authority under Section 7(7) of the Act.
The appeal aforesaid, registered as PGA
Appeal No. 13 of 2017, was dismissed by
the Appellate Authority vide order dated
30.07.2018, affirming the order of the
Controlling Authority, dated 15.05.2017,
refusing the petitioner's prayer as above
detailed. The orders dated 15.05.2017
passed in PGA Appeal No. 13 of 2017 by
the Controlling Authority and the Order
dated 30.07.2018 passed by the Appellate
Authority affirming the said order,
wherever referred together are hereinafter
referred are called the 'impugned orders'.

6. Aggrieved by the impugned
orders rejecting the petitioner's claim, the
present writ petition has been filed.

7. It may be mentioned here that this
petition was filed on 22.03.2019. It came
up before Court on 01.04.2019 when it
was adjourned to 01.04.2019, in order to
enable the learned counsel for the
petitioner to serve a copy of the writ
petition upon learned counsel appearing
for the Society. On 02.04.2019, the matter
was heard at the admission stage and
learned counsel for the Society was
required to seek instructions regarding the
copy of a document enclosed as Annexure
1 to the writ petition, particularly, about
the number of working days shown there
by the petitioner from 1979 to 2014, for
the specific purpose of verifying whether
that was a correct statement of account
about his working days. Since learned
counsel for the Society also sought to
raise some objections that the Payment of
Gratuity Act would not apply to the
Society, he was also required to disclose
his stand on the issue. The matter was
adjourned to 08.04.2019. On 08.04.2019,
a supplementary affidavit, some of the
contents whereof have been referred to
hereinbefore, was filed by the petitioner
after service upon learned counsel for the
respondent no. 3. The matter was
adjourned to 16.04.2019. The writ petition
was taken up thereafter on 16.04.2019 and
learned counsel for both parties desired
that the matter be heard finally at the
stage of admission with learned counsel
for respondent no. 3 consenting to that
course, without any affidavit being filed
on behalf of the Society. The matter was,
accordingly, heard on 16.04.2019. It was
further heard on 22.04.2019, and finally
on 25.04.2019, when judgment was
reserved.
1 All. Mahak Singh Vs. Appellate Authority/Deputy Labour Commissioner Payment Of Gratuity 1215

8. Heard Sri Dinesh Rai, learned
counsel for the petitioner, Sri Chandan
Sharma, learned counsel appearing on
behalf of the Society (respondent no. 3)
and Sri R.M. Vishwakarma, learned
Standing Counsel appearing on behalf of
the State.

9. The following questions arise for
consideration in this petition:-

(a).
Whether
seasonal
employees of Cane Cooperative Societies
in Uttar Pradesh are governed in the
matter of payment of gratuity by the Act
or by the provisions of the U.P.
Cooperative Act, 1965 read with U.P.
Cane Cooperative Service Regulations,
1975?

(b). Whether a seasonal clerk
employed by a Cane Cooperative Society
who works for more than 240 days in a
year is entitled to gratuity at the rate 15
days wages, worked out on the wages last
drawn under Section 4(2) of the Act, or is
entitled to seven days wages for each
season under the second proviso to
Section 4(2)?

10. The submission of Sri Chandan
Sharma is that the Act does not apply
proprio vigore to seasonal employees of
Cane Cooperative Societies in U.P. He
submits that the Act has been made
applicable to such seasonal employees
only to the extent of calculation and
payment of gratuity in terms of a circular
issued by the Cane Commissioner, Uttar
Pradesh, in exercise of powers under
Regulation
200
of the U.P. Cane
Cooperative Service Regulations, 1975
(for short the 'Service Regulations of
1975'). Prior to the issue of the aforesaid
circular dated 25.02.1997, employees of
Cane Cooperative Societies like the
petitioner were governed by the Service
Regulations of 1975, even in the matter of
calculation and payment of gratuity which
was in accordance with the earlier order
of the Cane Commissioner/Registrar,
Cooperative
Cane
Societies,
U.P.,
Lucknow, dated 05.01.1987. A clear
formula for working out gratuity of an
employee like the petitioner was detailed
in the Cane Commissioner's Statutory
order of 05.01.1987, issued under Rule
200 of the Service Regulations of 1975,
which left no scope for calculation of
gratuity to be made in accordance with
the provisions of the Act.

11. Sri Chandan Sharma submits
that the Cane Commissioner's order of
25.02.1997, has amended the earlier order
of 05.01.1987, as already said to the
extent of calculation of gratuity, by
making the Act applicable to a seasonal
employee like the petitioner. It is not that
the Act has become applicable on its own
force, and, as a whole. He submits that
Authorities under the Act, have no
jurisdiction to determine disputes relating
to calculation or payment of gratuity to
employees of a Cane Cooperative Society
in U.P. All that has to be done by the
Authorities under the Service Regulations
of 1975 or the U.P. Cooperative Societies
Act, 1965 (for short the 'Act of 1965').

12. Stressing his submission as to
inapplicability of the Act, except to the
limited extent of calculation and payment
of gratuity, Sri Chandan Sharma has
submitted that the Act is a General Law
regulating payment of gratuity to all
classes of employees, as indicated by
Section 1 thereof, whereas the Act of
1965 and the Service Regulations of 1975
are a Special Act and Regulations framed
under the Special Act, that make
1216 INDIAN LAW REPORTS ALLAHABAD SERIES
provision for gratuity and the manner of
redressal of grievances of an employee.
The jurisdiction of the Authorities under
the Act is, therefore, completely excluded.
Shri
Chandan
Sharma
has
further
emphasized that Chapter 16 of the Service
Regulations
of
1975,
in
particular,
Regulations 141 to 149, provide for
everything about gratuity to an employee
of Cane Cooperative Societies like the
petitioner. He submits that the Service
Regulations of 1975 came into force on
18.10.1975, whereas the Act was brought
into force on 31.08.1972. The Service
Regulations of 1975 being a subsequent
statutory regulation carrying specific
provisions in relation to gratuity of
employees of a Cane Cooperative Society,
will prevail over a general statute like the
Act in matters of payment of gratuity,
except to the extent that the Act is made
applicable. In accordance with the last
part of his submission that the Act
governs to the extent that it is made
applicable by the Authorities acting under
the Service Regulations of 1975 or the
Act of 1965, it is pointed out by Sri
Sharma that the Cane Commissioner's
Order dated 25.02.1997 annexed to the
supplementary affidavit filed by the
petitioner shows, that the Act has been
made applicable for the limited purpose of
reckoning/calculation and payment of
gratuity under it, and according to its
provisions, from time to time in force. But
the said Order makes it clear that except
for the amendment, the earlier Statutory
Order made by the Cane Commissioner
dated 05.01.1987 will remain in force.

13. Sri Chandan Sharma has also
urged that the Act of 1965 is a self
contained
statute
and
it
excludes
applicability of all other labour laws, like
the U.P. Industrial Disputes Act, 1947 and
the Payment of Gratuity Act, 1972. Sri
Sharma has placed reliance in this context
upon a decision of the Supreme Court in
Ghaziabad Zila Sahkari Bank Ltd. vs.
Additional Labour Commissioner and
others, 2007 (11) SCC 756. In the said
decision of their Lordships it has been held
that on principle of statutory interpretation
which provides that a General Act should
yield to a Special Act, the Act of 1965
excludes the provisions of U.P. Industrial
Disputes Act, in matters governing service
conditions of employees of a cooperative
society like the Ghaziabad Zila Sahkari
Bank Limited (supra). It was held that the
Authorities under the Act of 1965 and the
Service Regulations framed thereunder,
alone would have jurisdiction to decide
entitlement to ex gratia payment that was
made the subject matter of dispute and
taken
to
the
Assistant
Labour
Commissioner under Section 6H(1) of the
U.P. Industrial Disputes Act by the
workman. He has, in particular, placed
reliance on paragraphs 37,39, and 41 of the
report in Ghaziabad Zila Sahkari Bank
Limited (Supra) where it is held:-

37. It was then submitted that
the U.P. Industrial Disputes Act is a
special statute dealing with industrial
disputes and therefore will exclude the
application of the U.P. Cooperative
Societies Act which is a general statute.

39. In the above Act, Section 70
provides for disputes which can be referred
to arbitration of the Registrar. Sub-section
(1) thereof provides that Section 70 applies
to "any dispute relating to the constitution,
management
or
the
business
of
a
cooperative society" (emphasis supplied).
Sub-section (2) thereof provides for
including in the above disputes any "claims
for amounts due" but this is also for the
1 All. Mahak Singh Vs. Appellate Authority/Deputy Labour Commissioner Payment Of Gratuity 1217
purposes of sub-section (1) and therefore
would have to be read along with subsection (1). This Court has specifically
held that disputes arising out of terms and
conditions of employment of the Society's
employees do not fall within the phrase
"any dispute relating to the constitution,
management
or
the
business
of
a
cooperative
society".
Thus
Registrar
cannot decide such disputes regarding
terms and conditions of employment. A
number of decisions of this Court were
cited on this point by the learned Senior
Counsel, Deccan Merchants Coop. Bank
Ltd. v. Dalichand Jugraj Jain [AIR 1969
SC 1320 : (1969) 1 SCR 887] ,Coop.
Central
Bank
Ltd.v.Addl.
Industrial
Tribunal[(1969) 2 SCC 43] ,Allahabad
District
Coop.
Ltd.v.Hanuman
Dutt
Tiwari[(1981) 4 SCC 431 : 1981 SCC
(L&S) 649] andMorinda Coop. Sugar
Mills Ltd. v. Workers' Union [(2006) 6
SCC 80 : JT (2006) 6 SC 374] .

41.This is further strengthened
by Rule 130(2) which provides that if the
resolution is not covered by Section 128
then it becomes operative immediately.

14. Sri Chandan Sharma has further
relied upon a decision of this Court in
Brahmawarta
Commercial
CoOperative Bank Ltd., Kanpur vs.
Presiding Officer, Industrial Tribunal
III, U.P. Kanpur, 2012 (10) ADJ 8,
where an employee of the Cooperative
Bank concerned whose services were
dispensed with, raised an industrial dispute
under Section 4K of the U.P. Industrial
Disputes Act. The petition was brought at
an interlocutory stage to quash proceedings
of the adjudication case on ground that the
Tribunal does not have jurisdiction, in
relation to service disputes of employees of
a Cooperative Society. In the said case, and
some of the connected matters disposed of
by the same judgment, the issue was about
some employees of Cooperative Banks who
had received gratuity determined in accordance
with the provisions of the Act, where the
entitlement was higher than the provisions of
the Act of 1965. About the issue of
applicability of the Act vis-a-vis an employee
of a Cooperative Society, governed by the Act
of 1965, it was held by this Court, after
considering the decision of their Lordships of
the Supreme Court in R.C. Tewari v. M.P.
State Co-operative Marketing Federation
Ltd. (1997) 5 SCC 125 and Ghaziabad Zila
Sahkari Bank Limited (Supra) that the
provisions of the Act of 1965 would exclude
the applicability of all Labour Laws, including
the Act. In this connection, learned counsel for
the society has placed particular reliance upon
paragraphs 10,11,12,15,16,17,18,19,20,24 of
the report in Brahmawarta(supra), where it has
been held:

10. Learned counsel for the
respondent has submitted that in the case
of Writ Petition Nos. 5860 of 2002; 5874
of
2002
and
5876
of
2002
the
respondents/employees have already been
paid their gratuity in terms of the relief
sought by them in writ petition, as such in
their cases no recovery in respect of the
difference of sum under Payment of
Gratuity Act, 1972 and under the
provisions of 1965 Act and Regulations
framed there under may not be recovered.
However,
learned
counsel
for
the
respondents have failed to dispute the
principle of law which emerged from the
judgments mentioned in forthcoming
paragraphs of this order. He has not
placed reliance on any judgment contrary
to the law laid down in the judgments of
the Supreme Court and of this Court
mentioned in this judgment.

11. I have considered the rival
submissions made by the learned counsels
1218 INDIAN LAW REPORTS ALLAHABAD SERIES
for the respective parties. Indisputably the
respondents in all the writ petitions are
employees of the various Co-operative
Banks who are the petitioner in the
present writ petition and in the connected
writ petitions. In all these matters the
employees have either invoked the
provisions of the U.P. Industrial Dispute
Act, 1947 or under the Payment of
Gratuity Act, 1972.

12. The Supreme Court in the
case of R.C. Tewari (supra) has held that
Co-operative Societies Act of M.P. Deals
with the dispute relates to the term of
employment,
working
conditions,
disciplinary action taken by the society
under Section 64 of the said Act.
Registrar is empowered to decide the
dispute and his decision shall be binding
on the society and its employees.

15. Coming to the second set of
case where the issue of gratuity is
involved. Civil Misc. Writ Petition No.
5860 of 2002 has been filed through its
Secretary/General Manager aggrieved by
the order of the Additional Labour
Commissioner/Controlling
Authority
under the Payment of Gratuity Act, 1972
dated 2.1.2002 and order passed by the
Appellate Authority under the Payment of
Gratuity Act, 1972 dated 22.5.2001.

16. In the
said case the
respondent No. 3 therein Surya Nath
Pathak was the employee of the petitioner
Bank, who was initially appointed on
23.7.1962 and attained the age of
superannuation on 30.11.1998. The Bank
paid him the amount of gratuity to the
tune of Rs. 2,76,412.10 p. in terms of the
Regulations 95 of the U.P. Employees
Service Regulations, 1975. The said
Regulation
was
framed
under
the
provisions of the U.P. Cooperative
Societies Act, 1965 and the Rules framed
thereunder. The employees of the Cooperative Bank are governed by the said
Regulations (for short 1975 Regulations).
The 1975 Regulations were framed by the
Institutional Board under Section 122 of
the U.P. Co-operative Societies Act,
1965. The Regulations 95 deals with the
gratuity, it provides that an employee is
entitled to gratuity equivalent not more
than 15 days salary for every completed
year of service, if he has attained the age
of superannuation. The Bank stand is that
it has paid the gratuity to its above
mentioned employee in terms of the said
Regulations. However, after receiving the
said amount the employee moved all
application under the provisions of the
Payment of Gratuity Act, 1972 and he
claimed a higher amount of the gratuity.
The
Controlling
Authority
had
his
application registered as APGA case No.
9 of 1999. The Bank filed a detailed
written statement refuting the claim of its
employee inter alia on the ground that the
Regulation 95 will override the provisions
of any agreement arrived at between the
parties.

17. The stand of the employees
before the Controlling Authority was that
there was an agreement between the U.P.
Bank
Employees
Union
and
the
management under the proviso 6-B(1) and
the said settlement provides that the
gratuity was payable at the rate of one
months salary of each completed year of
service. The Controlling Authority relying
on the said settlement allowed the
application of the employee and directed
the Bank to pay gratuity amount to the
tune of Rs. 4,97,880/- and also imposed
12% interest over the balance amount.
Aggrieved by the order of the Controlling
Authority the Bank filed an appeal under
the provisions of the Gratuity Act, 1972.
The appeal was also dismissed by the
Appellate Authority respondent No. 1
1 All. Mahak Singh Vs. Appellate Authority/Deputy Labour Commissioner Payment Of Gratuity 1219
herein, by order dated 22.5.2001 and
2.2.2001. The Bank aggrieved by the said
orders dated 22.5.2001 and 2.1.2002 has
filed the present writ petition.

18. Sri H.R. Mishra, learned
counsel for the petitioner in this case has
raised the same legal plea and has urged
that common settlement which arrived at
in the year 1966 which was registered
under Section 6B(1) of the U.P. Industrial
Dispute Act, 1947 was ineffective as its
life was only one year in terms of the said
sections. Further elaborating his argument
he has submitted that the Bank vide its
resolution
No.
10
dated
11.1.1991
terminated the said settlement. The
Regulations 95 which specifically deals
with the gratuity has override effect over
the provisions of the U.P. Industrial
Dispute Act, 1947 as well as Gratuity Act,
1972. The said Regulations have been
framed by the Institutional Board which
has been constituted under Section 122 of
the Act, 1965.

19. Sri Mishra has placed
reliance on the judgment of this Court in
case of Deo Raj Singh v. Fatehpur District
Co-operative Bank Ltd. (supra).

20. In the matter of Deo Raj
Singh (supra) the dispute arose under the
provisions of the Payment of Gratuity
Act, 1972. The issue raised before this
Court was whether the payment of
gratuity shall be made on the basis of the
calculation as provided under the Service
Regulations of 1995 or under the
provisions of the award/agreement, 1966.
In the said case the employees had
invoked the provisions of the Payment of
Gratuity Act, 1972,- as under the said Act
the gratuity was payable to the employee
@ one month wages per year service or it
was payable @ 15 days wages as per year
of services as provided in the Payment of
Gratuity Act, 1972. The employee in the
said case raised the dispute under Section
4K of the Industrial Dispute Act and the
matter was referred for adjudication to the
Industrial Tribunal at Allahabad.

24. Having regards to the facts
and circumstances of the case, I am of the
view that from the aforesaid judgments
what emerges is that the U.P. Cooperative Societies Act, 1965 is a self
contained Act and it excludes the
jurisdiction of all other labour law such as
Industrial Dispute Act and the Gratuity
Act etc.

15. Sri Chandan Sharma has also
pressed into service a Division Bench
decision of this Court in Shobhai Ram
vs. State of U.P., 2014 (142) FLR 457,
where in the context of applicability of
the Act to an employee of a Cooperative
Society, it has been held thus in
paragraphs 2,3,4 and 5 of the report:-

2. The contention of the learned
counsel for the petitioner is that the
Payment of Gratuity Act being an
Industrial Law is not applicable to the
employees of the Cooperative Societies in
view of the U.P. Cooperative Society Act
as also the pronouncement of the Supreme
Court in the case of Ghaziabad Zila
Sahkari Bank Ltd. v. Additional Labour
Commissioner
and
others,
MANU/SC/7040/2007 : (2007) 11 SCC
756 and the judgment rendered in the case
of
Brahmawarta
Commercial
CoOperative Bank Ltd., Kanpur v. Presiding
Officer, Industrial Tribunal-III, U.P.,
Kanpur, MANU/UP/1821/2012 : 2012
(134) FLR 574.

3. Learned counsel for the
petitioner further contends that in fact the
gratuity is payable under Regulation 95 of
the U.P. Cooperative Societies Employees
Service Regulations 1975.
1220 INDIAN LAW REPORTS ALLAHABAD SERIES

4. Sri K.N. Mishra appearing for
the respondent bank very fairly submits
that in fact the Gratuity Act is not
applicable to the cooperative society and
that it being an independent body the
relevant Government orders issued by the
State Government in pursuance of the
recommendations
of
the
6th
Pay
Commission are also not applicable
unless and until the respondent bank takes
a decision adopting the same.

5. Be as it may, the fact remains
that the impugned order has been passed
only on the ground of applicability of the
Gratuity Act 1972 which is clearly not
applicable in view of the provisions of the
U.P. Cooperative Societies as also the
aforesaid judgments mentioned.

16. Sri Dinesh Rai rebutting the
contention of Sri
Chandan Sharma
submits that the payment of gratuity Act
is not a general law vis-a-vis the Act of
1965. It is a dedicated legislation that has
for its object ensuring regulation of
payment, including determination and
realization of gratuity, to all classes of
employees to which the Act applies. He
submits that in matters of payment of
gratuity, the Act of 1965 and the Service
Regulations of 1975 cannot be said to be
special statutes that would exclude the
applicability of the Act. He submits that
the decision of their Lordships in
Ghaziabad Zila Sahkari Bank Limited
(supra) excludes the operation of labour
laws in general, like the Industrial
Disputes Act to Cooperative Societies,
governed by the Act of 1965. The
principle there does not exclude the
applicability of the Act, which is a special
Act so far as payment of gratuity to an
employee
of
any
establishment
is
concerned. It is not even limited in its
applicability to industrial workers or the
employees
of
a
commercial
establishment. It applies to various classes
of employees of different establishments,
except employees of the Central or State
Government who hold posts under such
Government and are governed by any
other Act or by any Rules, providing for
the payment of gratuity. The Act applies
to various kinds of establishments in the
submission of Sri Rai, as envisaged under
Section 1(3) of the Act, except those that
are exempted under Section 5. In short,
according to Sri Rai, the Act is not a
general law vis-a-vis the Act of 1965 or
the Service Regulations of the 1975
framed thereunder, in the sense that the
concept of a general law is postulated for
the Industrial Disputes Act in the decision
of their Lordships in Ghaziabad Zila
Sahkari Bank Limited (supra).

17. Sri Dinesh Rai has placed
particular reliance upon a recent decision
of this Court in General Manager Kisan
Sahakari Chini Mills Ltd. vs. Appellate
Authority Under Payment of Gratuity
Act, 1972 and Ors., 2019 (160) FLR
691, where this Court considered the
question of applicability of the Act vis-avis Cooperative Sugar Mills governed by
the Act of 1965 and the Service
Regulations
of
1975.
It
fell
for
consideration of this Court in the decision
last mentioned as to whether the Act
would apply to a Cooperative Sugar Mill
and the Controlling Authority under the
Act would have jurisdiction, given the
provisions of the Act of 1965 and the
Service
Regulations
of
1975.
The
question was examined on a consideration
of the impact of their Lordships decision
in
Ghaziabad Zila Sahkari Bank
Limited (supra), threadbare by this
Court. The issue aforesaid was posed and
answered in General Manager Kisan
1 All. Mahak Singh Vs. Appellate Authority/Deputy Labour Commissioner Payment Of Gratuity 1221
Sahakari Chini Mills Ltd.(supra) by this
Court thus:-

10. The short question that
arises for consideration before this Court
is as to whether the employees of the Cooperative Sugar Mills would be covered
by the Payment of Gratuity Act or
whether the Controlling Authority under
the
Payment
of
Gratuity
Act
has
jurisdiction to enter into the controversy.

11. To answer this question, the
law laid down by the Apex Court in
Ghaziabad Zila Sahakari Bank (supra) is
required to be examined first. In the said
case, the dispute was with regard to an
order passed by the Assistant Labour
Commissioner Ghaziabad, U.P. under
Section 6H(1) of the U.P. Industrial
Disputes
Act'
1947.
The
appellant
challenged the said order on the ground
that the Assistant Labour Commissioner
had no jurisdiction to pass such an order,
in as much as, the UP Industrial Disputes
Act had no application. The U.P. Cooperative Societies' Act' 1965 being a
special enactment will prevail over the
U.P. Industrial Disputes Act' 1947. The
U.P. Co-operative Societies Employees
Service Regulation' 1975 framed by the
U.P. Cooperative Institutional Service
Board, which has been approved by the
Governor and published in the Official
gazette under section 122 of the Act'
1965, provides a full fledged remedy and
complete mechanism to the employees of
the Co-operative Societies to agitate their
grievances.

12. In view of the said remedy,
the general Act namely the U.P. Industrial
Disputes Act as a whole has no
application.

14. The legal position regarding
applicability of U.P. Industrial Disputes
Act has been settled by the Apex Court on
the general principle of interpretation of
statutes that "the General Act should lead
to the special Act". It was held that the
U.P. Co-operative Societies Act being a
complete code in itself as regards
employment in cooperative societies and
its
machinery
and
provisions,
the
Assistant
Labour
Commissioner
had
wrongly invoked the jurisdiction under
Section 6-H (1) of the UP Industrial
Disputes Act. It was held that the
exclusion of UP Industrial Disputes Act
and the Industrial Disputes Act though
has been specifically contemplated under
section 135 of the Co-operative Societies
Act but the fact that the said provision has
not been enforced by the government
would be of no implication as the said
provisions
(section
135)
has
been
included in the Act' 1965 only by way of
clarification and abundant caution.

15. The dispute in the instant
case relates to the applicability of the
Payment of Gratuity Act' 1972 which
cannot be said to be a general enactment.
A perusal of the object and reason of the
said enactment indicates that it was
enacted to bring a central legislation to
regulate the payment of Gratuity to the
industrial workers. The Act provide for a
scheme for the payment of gratuity to
employees engaged in factories, mines,
oilfields,
plantations,
ports,
railway
companies, shops or other establishments
and for matters connected or incidental
thereto.

1. It extends to the whole of
India.

2. It applies to every factory,
mine, oilfield, plantation, port and railway
company; 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.
1222 INDIAN LAW REPORTS ALLAHABAD SERIES

16. The only provision which
excludes the applicability of the Act to the
employees of any establishment is in the
definition of word "employee" in section
2 (e) which excludes the employees of the
Central
Government
and
State
Governments who are governed by any
other act or by any rules providing for
Payment of Gratuity.

17. Section 5 of the Act' 1972
confer
powers
on
the
appropriate
government to exempt an establishment
from the operation of the provisions of the
Act, if in its opinion, the employees of
such establishment are in receipt of
gratuity or pensionary benefits not less
favourable than the benefits conferred
under this Act.

18. Section 14 of the Act' 1972
gives overriding effect to the Payment of
Gratuity Act for any
inconsistency
contained in any other enactment or in
any instrument or contract.

19. The Apex Court in the case
of Municipal Corporation of Delhi vs.
Dharam Prakash Sharma & another
reported in MANU/SC/1136/1998 : 1998
(7) SCC 221 recognized the said import
of the Payment of Gratuity Act to say that
it is a special provision for payment of
gratuity and unless there is any provision
which exclude its applicability to an
employee, it is not possible to hold that
the said employee would not be entitled to
the gratuity under the Payment of Gratuity
Act.

20. Even in the light of the legal
position as clarified by the Apex Court in
Ghaziabad Sahkari Bank (supra), it is not
possible for this Court to hold that the
Controlling Authority under the Payment
of Gratuity Act had no jurisdiction.

21. In other words, in the light
of the principle of interpretation of statute
that the Special Act would prevail over
General Act, as relied therein, the
Payment of Gratuity being the special
enactment would prevail over the general
provisions relating to Payment of Gratuity
provided
under
clause
29
of
the
Regulation' 2015 framed under Section
122 (2) of the Act' 1965. The overriding
effect given to the Payment of Gratuity
Act would further strengthen the case of
the respondent that he is entitled for
gratuity as payable under the Payment of
Gratuity Act' 1972.

18. Sri Rai submits, therefore, that
there is absolutely no question of
exclusion of a special statute like the Act
in the matter of payment of gratuity by the
Society, banking on the principle that the
Act of 1965 and the Service Regulations
of 1975 are a special law, that would
exclude the applicability of the Act. This
Court has carefully considered this rather
settled question, in the light of the
decision of their Lordships in Ghaziabad
Zila Sahkari Bank Limited (supra).

19. It must be acknowledged at once
that the decision of their Lordships in
Ghaziabad Zila Sahkari Bank Limited
(supra) expounds the principle that the
provisions of the Act of 1965, together
with the Service Regulations of 1975,
would exclude the provisions of all other
Labour Laws in matters of employment
under the Cooperative Societies. The
principle to the understanding of this
Court does not go further. What is,
therefore, to be seen in context of the
question about an exclusion of the Act in
the matters of payment of gratuity by the
Act of 1965 is whether the Act would fall
in the category of "all other labour laws"
vis-a-vis the Act of 1965, as postulated by
their Lordship's decision in Ghaziabad
Zila Sahkari Bank Limited (supra). The
1 All. Mahak Singh Vs. Appellate Authority/Deputy Labour Commissioner Payment Of Gratuity 1223
object and purpose of the Act apparently
is very different from other labour laws. It
is not designed to safeguard industrial
relations or to promote industrial peace,
amongst workman. It is a dedicated
central legislation brought by Parliament
to regulate "payment of gratuity to
employees engaged in factories, mines,
oil fields, plantations, ports, railway
companies, shops or other establishments,
and for matters connected therewith or
incidental thereto", to borrow the precise
words of the object of the Act, as
delineated in its preamble. The object of
the Act, therefore, is clearly to secure
payment of gratuity to employees of
myriad establishments; not just industrial
workers or workman. The way it applies
by virtue of Section 1(3), it can and does
take into its fold employees, even of
statutory bodies, such as local bodies,
educational establishments, subject only
to the employer falling in one of the
clauses of sub section (3) of Section 1 of
the Act. The Act, therefore, is a special
statute designed to secure payment of
gratuity to employees transcending the
character
of
the
establishment
or
employers, except those to whom the Act
does
not
apply
or
the
employer/establishment that are exempted
by notification under the Act. By no
means, therefore, can the Act be said to be
part of the corpus juris of labour laws in
general or, for that matter, a General Act
vis-a-vis the Act of 1965 to which it must
yield.
The
special
and
overriding
character of the Act in matters relating to
payment
of
gratuity
to
employees,
particularly, flows from the terms of
Section 14 of the Act that read thus:-

14.
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.
(Emphasis by court)

20. The acknowledgment about the
character of the Act being a special
legislation that works to exclude other
statutes governing regulation, reckoning,
payment and enforcement of a claim to
gratuity is to be found in the guidance of
their
Lordships
in
Municipal
Corporation of Delhi vs.