# Nagar Nigam Gorakhpur v. Suresh Pandey & Ors - **Citation:** (2019) 3 ILRA 1382 - **Court:** High Court of Judicature at Allahabad - **Decided:** 2019-09-12 - **Bench:** Dr. Yogendra Kumar Srivastava - **Source:** https://unisonlegal.in/judgment/allahabad-high-court/nagar-nigam-gorakhpur-v-suresh-pandey-ors-44747 - **Pages:** 32 ## Headnote A. Civil Law-Payment of Gratuity Act, 1972 - Section 5 - Payment of Gratuity - Applicability to Municipal Corporation - All local bodies including Municipal Corporations would continue to be covered by the provisions of the Act unless they are exempted by the appropriate government by issuance of a notification as provided for u/s 5 of the Act. (Para 14 & 56) B. Civil Law-Payment of Gratuity Act, 1972 - Uniformity of legislation throughout country - Earlier to it, some States, not all, had enacted legislations for payment of gratuity - There was no Central legislation - With object to ensure a uniformity in payment of gratuity to the employees throughout the country. The Payment of Gratuity Act, 1972 came to be enacted. (Para 25) C. Payment of Gratuity Act, 1972 - is a beneficial piece of legislation enacted to introduce a scheme for payment of gratuity for certain industrial and commercial establishments as a measure social security - Significance of the legislation lies in the acceptance of the principle of payment of gratuity as a compulsory statutory retiral benefit - Purpose is to provide for benefits to a workman upon his superannuation or on his retirement or resignation or on his death or disablement due to accident or disease. (Para 58) D. Civil Law-Payment of Gratuity Act, 1972 - Section 5 and section 14 - Only in case a person holds a post that is governed by another Act providing for payment of gratuity, a claim would lie for exclusion of applicability of the Payment of Gratuity Act, 1972 i.e. the Central Act. In the absence of such exemption having been granted to the Nagar Nigam by State Government u/s 5, the provisions of the Payment of Gratuity Act, 1972 would have overriding effect by virtue of Section 14. (Para 13) E. Payment of Gratuity Act, 1972 - Section 2(e) - Definition of 'Employee' - It means any person who is employed for wages in connection with the work of a factory, mine, oilfield, plantation, port, railway, company, shop or other establishment to which Payment of Gratuity Act, 1972 applies - It does not make any distinction between an employee on the basis of the fact that employees is paid daily wages or weekly wages or monthly wages. (Para 13, 20 & 24) F. Payment of Gratuity Act, 1972 - Section 1(3) (b) and (c) - Meaning of word 'Establishment' - It has wide meaning to include commercial, public sector establishment and also noncommercial establishment - Municipal Council falls within the ambit of S. 1(3) (b) of the P. G. Act, 1972. (Para no. 33) G. General Clause Act, 1897 - Section 3 (31) - Meaning of 'Local authority' - It means Municipal Committee, District Board etc., which are entrusted with the control or management of a Municipal or local fund. (Para 37) H. Interpretation - Rule of Beneficent Construction - Application to welfare legislation - The provisions of Payment of Gratuity Act, 1972 are to be interpreted liberally so as to give it a 3 All. Nagar Nigam Gorakhpur Vs. Suresh Pandey & Ors. 1383 wide meaning rather a restrictive meaning which may negate the very object of the enactment - A beneficial legislation is to be construed in its correct perspective so as to fructify legislative intent underlying its enactment. (Para 60, 61 & 65) Writ petition dismissed (E-1) Case law relied: - ## Text _Characters 0–39,904 of 98,170. This is a partial read: ask again with offset=39904 for what follows._ 1382 INDIAN LAW REPORTS ALLAHABAD SERIES (2019)11ILR A1382 ORIGINAL JURISDICTION CIVIL SIDE DATED: ALLAHABAD 12.09.2019 BEFORE THE HON'BLE DR. YOGENDRA KUMAR SRIVASTAVA, J. Writ C No. 45310 of 2017 connected with other cases Nagar Nigam Gorakhpur ...Petitioner Versus Suresh Pandey & Ors. ...Respondents Counsel for the Petitioner: Sri Sanjay Kumar Tripathi Counsel for the Respondents: C.S.C. A. Civil Law-Payment of Gratuity Act, 1972 - Section 5 - Payment of Gratuity - Applicability to Municipal Corporation - All local bodies including Municipal Corporations would continue to be covered by the provisions of the Act unless they are exempted by the appropriate government by issuance of a notification as provided for u/s 5 of the Act. (Para 14 & 56) B. Civil Law-Payment of Gratuity Act, 1972 - Uniformity of legislation throughout country - Earlier to it, some States, not all, had enacted legislations for payment of gratuity - There was no Central legislation - With object to ensure a uniformity in payment of gratuity to the employees throughout the country. The Payment of Gratuity Act, 1972 came to be enacted. (Para 25) C. Payment of Gratuity Act, 1972 - is a beneficial piece of legislation enacted to introduce a scheme for payment of gratuity for certain industrial and commercial establishments as a measure social security - Significance of the legislation lies in the acceptance of the principle of payment of gratuity as a compulsory statutory retiral benefit - Purpose is to provide for benefits to a workman upon his superannuation or on his retirement or resignation or on his death or disablement due to accident or disease. (Para 58) D. Civil Law-Payment of Gratuity Act, 1972 - Section 5 and section 14 - Only in case a person holds a post that is governed by another Act providing for payment of gratuity, a claim would lie for exclusion of applicability of the Payment of Gratuity Act, 1972 i.e. the Central Act. In the absence of such exemption having been granted to the Nagar Nigam by State Government u/s 5, the provisions of the Payment of Gratuity Act, 1972 would have overriding effect by virtue of Section 14. (Para 13) E. Payment of Gratuity Act, 1972 - Section 2(e) - Definition of 'Employee' - It means any person who is employed for wages in connection with the work of a factory, mine, oilfield, plantation, port, railway, company, shop or other establishment to which Payment of Gratuity Act, 1972 applies - It does not make any distinction between an employee on the basis of the fact that employees is paid daily wages or weekly wages or monthly wages. (Para 13, 20 & 24) F. Payment of Gratuity Act, 1972 - Section 1(3) (b) and (c) - Meaning of word 'Establishment' - It has wide meaning to include commercial, public sector establishment and also noncommercial establishment - Municipal Council falls within the ambit of S. 1(3) (b) of the P. G. Act, 1972. (Para no. 33) G. General Clause Act, 1897 - Section 3 (31) - Meaning of 'Local authority' - It means Municipal Committee, District Board etc., which are entrusted with the control or management of a Municipal or local fund. (Para 37) H. Interpretation - Rule of Beneficent Construction - Application to welfare legislation - The provisions of Payment of Gratuity Act, 1972 are to be interpreted liberally so as to give it a 3 All. Nagar Nigam Gorakhpur Vs. Suresh Pandey & Ors. 1383 wide meaning rather a restrictive meaning which may negate the very object of the enactment - A beneficial legislation is to be construed in its correct perspective so as to fructify legislative intent underlying its enactment. (Para 60, 61 & 65) Writ petition dismissed (E-1) Case law relied: - 1. St. of Punjab Vs Labour Court, Jullundur & ors. (1980) 1 SCC 4. 2. Chaman Lal Vs Municipal Committee Panipat (1985) 87 (1) PLR 513. 3. Municipal Corp. of Delhi Vs V.T.Naresh & anr. (1986) I LLJ 323 Del 4. Municipal Board, Gangapur, Vs Controlling Auth. 1987 LAB. I.C. 575 (Raj. H.C.). 5. Nagar Palika, Moradabad Vs Appellate Auth. & Addl. Lab. Com, U.P. Kanpur & ors. 1989 LAB I.C. 173 (Alld. H.C.). 6. Poona Cantonment Board Vs S.K.Das & ors. (1993) II LLJ 487 Bom. 7. Municipal Committee Vs A. Nathi Ram & ors. (1998) III LLJ 1230 P&H. 8. Municipal Corp. of Delhi Vs Dharam Prakash Sharma & anr. (1998) 7 SCC 221. 9. Nagar Ayukt, Nagar Nigam, Kanpur Vs Mujib Ullah Khan & ors. 2008 (117) FLR 277 (All.H.C.). 10. Nagar Nigam, Gorakhpur Vs Ram Shanker Yadav & anr. (2019) 6 SCC 103. 11. Nagar Ayukt Nagar Nigam Vs Meraj Ahmad & anr. 2019 (162) FLR 278 (Alld. H.C.). 12. Nagar Palika Parishad, Kairana, Muzaffarnagar 7 anr. Vs Controlling Auth. & ors. 2008 (119) FLR 412 (Alld. H.C.). 13. Nagar Ayukt, Nagar Nigam, Kanpur Nagar Vs Brij Kishore Bajpai & anr. 2016 (4) ADJ 513. 14. The W'men of M/s Firestone Tyre & Rubber Co. of India Pvt. Ltd. Vs The Management & ors. (1973) 1 SCC 813. 15. B.D. Shetty & ors. Vs CEAT Ltd. & anr. (2002) 1 SCC 193. 16. Allahabad Bank & anr. Vs All India Allahabad Bank Retired Employees Association (2010) 2 SCC 44. 17. Jeewanlal Ltd. & ors. Vs Appellate Authority under the Payment of Gratuity Act & ors. (1984) 4 SCC 356. 18. Bharat Singh Vs Management of New Delhi Tuberculosis Centre, New Delhi & ors. (1986) 2 SCC 614. 19. U.P.S.R.T.C., Kanpur Vs St. of U.P. & 3 ors. (Writ C No. 6971 of 2017, decided by Allahabad HC on 28.08.2019) (Delivered by Hon'ble Dr. Yogendra Kumar Srivastava, J.) 1. Heard Sri Sanjay Kumar Tripathi, learned counsel for the petitioner and Sri Ajit Kumar Singh, learned Additional Advocate General assisted by Sri Mata Prasad, learned Standing Counsel appearing for the respondent nos. 2, 3 and 4. 2. The present writ petition and the connected writ petitions have been filed by the petitioner-Nagar Nigam, Gorakhpur through its Nagar Ayukt against the orders passed by the Controlling Authority under the Payment of Gratuity Act, 1972/Assistant Labour Commissioner, U.P. Gorakhpur and also the orders passed by the Appellate Authority/Deputy Labour Commissioner, U.P. Gorakhpur. 3. Upon the writ petition being filed, notice was issued to the respondent no. 1 by registered post and in terms of office report dated 24.07.2019 the service of notice was deemed to be sufficient. 1384 INDIAN LAW REPORTS ALLAHABAD SERIES 4. The particulars with regard to the orders under challenge in the bunch of writ petitions are as follows :- Sl .N o. Writ Petitio n No. Part y Nam e Date of order of the Contro lling Author ity Date of order of the Appellate Authority 1 45310/ 2017 N aga r Nig am Gor akh pur Vs. Sur esh Pan dey and oth ers 25.02. 2016 20.06.2017 2 45311/ 2017 Nag ar Niga m Gor akhp ur Vs. Sha hid and othe rs 25.02. 2016 20.06.2017 3 45314/ 2017 Nag ar Niga m Gor akhp ur Vs. Smt. Kant i Devi 25.02. 2016 20.06.2017 4 45316/ 2017 Nag ar Niga m Gor 25.02. 2016 20.06.2017 akhp ur Vs. Kail ash Cha nd Seth and othe rs 5 45318/ 2017 Nag ar Niga m Gor akhp ur Vs. Lad dan and othe rs 25.02. 2016 20.06.2017 6 45533/ 2017 Nag ar Niga m Gor akhp ur Vs. Raju and othe rs 25.02. 2016 20.06.2017 7 45536/ 2017 Nag ar Niga m Gor akhp ur Vs. Smt. Khat un 25.02. 2016 20.06.2017 8 45542/ 2017 Nag ar Niga rm Gor akhp ur Vs. Man t Bali 23.04. 2012 30.09. 2016 (order passed in review ) 20.06.2017 3 All. Nagar Nigam Gorakhpur Vs. Suresh Pandey & Ors. 1385 9 45545/ 2017 Nag ar Niga m Gor akhp ur Vs. Smt. Sam irun and othe rs 25.02. 2016 20.06.2017 10 45550/ 2017 Nag ar Niga m Gor akhp ur Vs. Mod . Ali and othe rs 25.02. 2016 20.06.2017 11 45558/ 2017 Nag ar Niga m Gor akhp ur Vs. Smt. Sew ati and othe rs 25.02. 2016 20.06.2017 12 45570/ 2017 Nag ar Niga m Gor akhp ur Vs. Vind hyac hal and othe rs 25.02. 2016 20.06.2017 13 45581/ 2017 Nag ar 23.04. 2012 20.06.2017 Niga m Gor akhp ur Vs. Para g and othe rs 30.09. 2016 (order passed in review ) 14 45589/ 2017 Nag ar Niga m Gor akhp ur Vs. Mah esh 25.02. 2016 20.06.2017 15 45602/ 2017 Nag ar Niga m Gor akhp ur Vs. Raje ndra Pras ad and othe rs 25.02. 2016 20.06.2017 16 45605/ 2017 Nag ar Niga m Gor akhp ur Vs. Smt. Jam uni and othe rs 25.02. 2016 20.06.2017 17 45608/ 2017 Nag ar Niga m Gor akhp 25.02. 2016 20.06.2017 1386 INDIAN LAW REPORTS ALLAHABAD SERIES ur Vs. Alir aja and othe rs 18 45611/ 2017 Nag ar Niga m Gor akhp ur Vs. Pre mch and and othe rs 23.04. 2012 30.09. 2016 (order passed in review ) 20.06.2017 19 45613/ 2017 Nag ar Niga m Gor akhp ur Vs. Ban arasi and othe rs 25.02. 2016 20.06.2017 20 45641/ 2017 Nag ar Niga m Gor akhp ur Vs. Jhin ak 25.02. 2016 20.06.2017 21 45751/ 2017 Nag ar Niga m Gor akhp ur Vs. Ayu b Kha n 23.04. 2012 30.09. 2016 (order passed in review ) 20.06.2017 5. The writ petitions are based on similar set of facts and with the consent of the parties they are being taken up and decided together. 6. Writ-C No. 45310 of 2017 which has been treated to be leading petition seeks to challenge the order dated 25.2.2016 passed by the Controlling Authority in P.G. Case No. 38/2009 and also the order dated 20.6.2017 passed by the Appellate Authority in Appeal No. 11/2016. 7. Briefly stated the facts of this case are that upon an application filed by the respondent no. 1 before the Controlling Authority for a direction under Section 7 (4) of the Payment of Gratuity Act, 19721 read with Rule 10 of the Uttar Pradesh Payment of Gratuity Rules, 1975, P.G. Case No. 38/2009 was registered. In terms of the aforementioned application it was stated that as against the total amount of Rs.1,10,229/- which was due to the respondent towards gratuity a payment of Rs. 69,630/- had been made by the employers, and accordingly a claim was raised for the balance amount which was said to be due. 8. The aforesaid claim was contested by the petitioner-Nagar Nigam by filing objections whereunder it was stated that the entire amount of gratuity due to the respondent-employee had been paid to him and the claimwhich had been sought to be raised was legally untenable. It was submitted that the computation of the gratuity amount had been made as per the Regulation 3 (5) of the Gorakhpur Nagar Mahapalika Non-Centralized Employees (Retirement Benefit) Regulations, 19902. 3 All. Nagar Nigam Gorakhpur Vs. Suresh Pandey & Ors. 1387 9. The Controlling Authority upon a consideration of the facts of the case came to the conclusion that there was no dispute with regard to the last drawn wages, and also the fact that the employee was in continuous service in terms of Section 2-A of the P.G. Act, 1972, and accordingly held the employee entitled for payment of gratuity in terms of the said Act and allowed the application issuing a direction for payment of the difference of amount as claimed by the respondent-employee. 10. Challenging the order passed by the Controlling Authority, an appeal was filed under Section 7 (7) of the P.G. Act, 1972 which was registered as P.G.Appeal No. 11/2016. The grounds taken in the appeal were that the provisions of the P.G. Act, 1972 are not applicable to the petitioner-Nagar Nigam and the services of its employees are governed under its own service regulations and that the respondent-employee had been paid the gratuity amount as per the terms of the aforesaid Regulations. The Appellate Authority upon considering the facts of the case held that since there was no order of exemption granted to the petitioner under Section 5 (2) of the P.G. Act, 1972 in view of the overriding provision under Section 14, the P.G. Act 1972 would override the Regulations which were sought to be relied upon by the Nagar Nigam and accordingly the order passed by the Controlling Authority was held to be valid and was affirmed. 11. Counsel for the petitioner has sought to assail the orders passed by the Appellate Authority and the Controlling Authority by submitting that the provisions with regard to payment of gratuity under the Regulations of the Nagar Nigam are more beneficial in comparison to the provisions under the P.G. Act of 1972, and as such the employees of the Nagar Nigam were not entitled to claim gratuity under the said Act. It has been submitted that in addition to payment of gratuity the employees of the Nagar Nigam were also entitled for pension. It is furthercontended that the Regulations of 1990 have come into force subsequent to the enactment of the Act therefore the Regulations would override the provisions of the P.G. Act, 1972 and there was no requirement of seeking any exemption in terms of Section 5 of the said Act. 12. Per contra, learned Additional Advocate General appearing for the State of U.P. submits that the Regulations 1990 upon which reliance is sought to be placed by the petitioner -Nagar Nigam have not been framed by the State Government but have been framed by the Executive Committee of the Nagar Nigam under Section 548 (1) (f) of the Uttar Pradesh Municipal Corporation Act, 19593 and have been confirmed by the Corporation and thereafter published in the gazette. 13. It is further submitted that as per the definition of the term "employee" under Section 2 (e) of the P.G. Act, 1972 only persons holding a post under the Central Government or the State Government and who are governed by any other Act or by any Rules providing for payment of gratuity can claim exclusion from the provisions of the P.G. Act, 1972, and in the absence of any exemption having been granted to the petitioner-Nagar Nigam by the State Government under Section 5, the provisions of the P.G. Act, 1972 would 1388 INDIAN LAW REPORTS ALLAHABAD SERIES have overriding effect as per the provisions contained under Section 14. 14. The core issue which falls for consideration in the present petition is as to whether the employees of the petitioner-Nagar Nigam who governed by the Regulations 1990 are entitled for payment of gratuity under the provisions of the Payment of Gratuity Act, 1972. 15. In order to appreciate the controversy, the relevant statutory provisions under the Payment of Gratuity Act, 1972 may be adverted to :- "Short title, extent, application and commencement. (1) This Act may be called the Payment of Gratuity Act, 1972. (2) It extends to the whole of India: Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir. (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, or, any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf. (3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.] (4) It shall come into force on such date as the Central Government may, by notification, appoint. "2. Definitions.--In this Act, unless the context otherwise requires,-- x x x x x (b) "completed year of service" means continuous service for one year; (c) "continuous service" means continuous service as defined in Section 2-A; x 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; x x x x x (s) "wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employments and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance. 3 All. Nagar Nigam Gorakhpur Vs. Suresh Pandey & Ors. 1389 2-A. Continuous service.--For the purpose of this Act,-- (1) An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act; (2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer-- (a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than-- (i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and (ii) two hundred and forty days, in any other case; (b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than-- (i) ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and (ii) one hundred and twenty days, in any other case. Explanation.--For the purpose of clause (2) the number of days on which an employee has actually worked under an employer shall include the days on which-- (I)he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment; (ii) he has been on leave with full wages, earned in the previous year; (iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment; and (iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks. (3) where an employee, employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventyfive per cent of the number of days on which the establishment was in operation during such period. x x x x x 4. Payment of Gratuity.--(1) Gratuity shall be payable to an employee on the termination of his employment 1390 INDIAN LAW REPORTS ALLAHABAD SERIES after he has rendered continuous service for not less than five years,-- (a) on his superannuation, or (b) on his retirement or resignation, or (c) on his death or disablement due to accident or disease : Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement : Provided further that in case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is minor, the share of such minor, shall be deposited with the Controlling Authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority. Explanation.--For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement. (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 case 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 who is employed in a seasonal establishment, and who is not so employed throughout the year, the employer shall pay the gratuity at the rate of seven days' wages for each season. Explanation.--In the case of a monthly rated employee, the fifteen days' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen. (3) The amount of gratuity payable to an employee shall not exceed ten lakh rupees. (4) For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced. (5) Nothing in this section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer. (6) Notwithstanding anything contained in sub-section (1),-- (a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer shall be forfeited to the extent of the damage or loss so causes; (b) the gratuity payable to an employee may be wholly or partially forfeited. (i) if the services of such employee have been terminated for his 3 All. Nagar Nigam Gorakhpur Vs. Suresh Pandey & Ors. 1391 riotous or disorderly conduct or any other act of violence on his part, or (ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment. 5. Power to exempt :- (1) The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act. (2) The appropriate Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act, if, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act. (3) A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively a date not earlier than the date of commencement of this Act, but no such notification shall be issued so as to prejudicially affect the interests of any person. 14. Act to override other enactments, etc. The provisions of this Act or any rule made there under 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." 16. The petitioner-Nagar Nigam is a Municipal Corporation governed in terms of the provisions contained under the Act, 1959 which was enacted to provide for the establishment of Municipal Corporations in certain cities with a view to ensure better municipal government of the said cities. 17. The word 'Corporation' or 'Municipal Corporation' has been defined in terms of Section 2 of the Act, 1959 in the following terms :- "2.(11-A) "Corporation" or "Municipal Corporation" means the Municipal Corporation constituted for a city under sub-clause (c) of clause (1) of Article 243-Q of the constitution." 18. Chapter XXIII of the Act, 1959 deals with the subject Rules, Bye-laws and Regulations and Section 548 empowers the Executive Committee of the Municipal Corporation to frame regulations not inconsistent with the Act, the Rules and the Bye-laws, and in consonance with any resolution that may be passed by the Corporation. 19. For ease of reference Section 548 of the Act, 1959, referred to above, is being extracted below. "548. Regulations-(1) The Executive Committee shall from time to 1392 INDIAN LAW REPORTS ALLAHABAD SERIES time frame regulations not inconsistent with this Act and the rules and bye-laws but in consonance with any resolution that may be passed by the Corporation - (a) fixing the amount and the nature of the security to be furnished by any Corporation officer or servant from whom it may be deemed expedient to require security; (b) regulating the grant of leave to Corporation officers and servants; (c) determining the remuneration to be paid to the persons appointed to act for any of the said officers or servants during their absence on leave; (d) authorizing the payment of traveling or conveyance allowance to the said officers and servants; (e) regulating the period of service of all the said officers and servants; (f) determining the conditions under which the said officers and servants, or any of them, shall on retirement or discharge receive pensions, gratuities or compassionate allowances, and under which the surviving spouse or children and in the absence of the surviving spouse or children, the parents, brothers and sisters, if any, dependent on any of the said officers and servants, shall after their death, receive compassionate allowances and the amounts of such pensions, gratuities or compassionate allowances; (g) authorising the payment of contributions, at certain prescribed rates and subject to certain prescribed conditions, to any pension or provident fund which may, with the approval of the Executive Committee be established by the said officers and servants or to such provident fund, if any, as may be established by the Corporation for the benefit of the said officers and servants; (h) prescribing the conditions under which and, the authority by whom, any officer or servant, may be permitted while on duty or during leave to perform a specified service or series of services for a private person or body or for a public body, including a local authority, or for the Government and to receive remuneration therefor; (i) in general, prescribing any other conditions of service of the said officers and servants. (2) The Executive Committee may also from time to time frame regulations not inconsistent with the provisions of this Act and the rules - (a) determining the standards of fitness of buildings for human habitation; (b) regulating the declaration of expenses incurred by the Municipal Commissioner under the provisions of this Act and the rules in respect of any materials or fittings supplied or work executed or thing done to, upon or in connection with some building or land which are recoverable from the owner or occupier to be improvement expenses; (c) regulating the grant of permission by the Municipal Commissioner for the construction of shops, ware-house, factories, huts or buildings designed for particular uses in any streets, portion of streets or localities specified in a declaration in force under Section 335. (3) No regulation under subsection (1) or under clause (a) of subsection (2) shall have effect until it has been confirmed by the Corporation and, if made under clause (h) of sub-section (1), until it has in addition been confirmed by the State Government and in either case, 3 All. Nagar Nigam Gorakhpur Vs. Suresh Pandey & Ors. 1393 has been published in the Official Gazette. (4) The Corporation or the State Government may decline to confirm a regulation when placed before it under sub-section (3) or confirm it without modification or after making such modifications as it may think fit." 20. In terms of Section 2(e) of the P.G. Act, 1972, an "employee" has been defined as meaning 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. The only exclusion is in respect of persons holding a post under the Central Government or a State Government who are governed by any other Act or any Rules providing for payment of gratuity. 21. Section 4 of the P.G. Act, 1972 provides for payment of gratuity to an employee on the termination of his employment after he has rendered continuous service for not less than five years, upon occurrence of either of the following contingencies: (i) on his superannuation, (ii) on his retirement, (iii) on his death or disablement due to accident or disease. Sub-section (2) of Section 4 mandates that 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. The expression "completed year of service" has been defined under Section 2(b) to mean continuous service for one year. As per Section 2(c), "continuous service" means continuous service as defined in Section 2-A. Further, in terms of Section 2A an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order treating the absence as break in service has been passed in accordance with the standing orders, rules or regulations governing the employees of the establishment), lay-off, strike or a lockout or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act. 22. A conjoint reading of the aforementioned provisions lead to the inference that gratuity becomes payable to an "employee" on his superannuation after he has rendered "continuous service", for not less than five years. The computation of the amount payable as gratuity is to be made at the rate of fifteen days' wages, for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by the employee concerned. 23. The expression "completed year of service" having been defined as "continuous service" for one year and the term "continuous service" being defined under Section 2(c) as per the terms of Section 2-A of the P.G. Act, 1972 which is to mean uninterrupted service including service which may be interrupted on account of certain exigencies specified therein. 24. It, therefore, follows that the P.G. Act, 1972 does not make any distinction between an employee on the 1394 INDIAN LAW REPORTS ALLAHABAD SERIES basis of the fact that the employee is paid daily wages or weekly wages or monthly wages. The only condition is that he should be employed by the employer on wages in an establishment covered by the P.G. Act, 1972 and that he should be in continuous service as required under Section 2-A and that he should have completed a minimum of five years of service in the said capacity. The computation of gratuity as per terms of Section 4 is to be made at the rate of fifteen days' wages for every completed year of service or part thereof in excess of six months based on the rate of wages last drawn. 25. The statement of objects and reasons of the P.G.Act, 1972 indicates that the need for the enactment was felt for the reason that there was no central legislation to regulate the payment of gratuity to industrial workers except the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955. The Governments of the States of Kerala and West Bengal had enacted legislations for payment of gratuity to various categories of workers but other States had not done so. It was therefore felt necessary that instead of having different legislations for different States there should be a common legislation which would ensure a uniform pattern of payment of gratuity to the employees throughout the country and accordingly the P.G. Act, 1972 came to be enacted. The preamble of the Act shows 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, shops or other establishments and for matters connected therewith or incidental thereto. 26. In terms of Section 1 (3) (a), the P.G.Act, 1972 applies to every factory, mine, oilfield, plantation, port and railway company and under Section 1 (3) (b) to 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. Clause (c) of Section 1 empowers the Central Government to apply the Act to 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, by notification in this behalf. 27. The applicability of clause (b) of sub-section (3) of Section 1 of the P.G.Act, 1972 came up for consideration in the case of State of Punjab Vs. Labour Court, Jullundur and others4, and it was held that the aforementioned provision applies to every establishment within the meaning of any law for the time being in force in relation to establishments in a State. The relevant observations made in the judgment are as follows:- "3....Section 1(3)(b) speaks of "any law for the time being in force in relation to shops and establishments in a State". ..... 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) 3 All. Nagar Nigam Gorakhpur Vs. Suresh Pandey & Ors. 1395 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...." 28. The question with regard to applicability of the provisions of P.G.Act, 1972 to Municipalities was taken up for determination in the case of Chaman Lal Vs. Municipal Committee Panipat5, and after noticing the provisions under Section 1 (3) (b), it was held that the Gratuity Act applies to all establishments which are covered by any law relating to establishments in a State. The relevant extracts from the judgment are as follows :- "2. The only question that arises for determination is, whether the provisions of the Gratuity Act are applicable to the Municipalities in Haryana. In order to determine the question it is necessary to notice Section 1(3) (b) of the Gratuity Act, which reads as follows Section 1(3)" It shall apply to: (a) x x x x (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." 3. It is evident from a bare reading of the section that the Gratuity Act applies to all establishments which are covered by any law relating to the establishments in a State. If there are more than one statutes in a State dealing with the said term, the provision of the Gratuity Act can be read in conjunction with any of such statutes. The Payment of Wages Act, 1936 (referred to as the 'Wages Act') deals with establishments and is applicable to all the States including the State of Haryana. Therefore, the provisions of Wages Act can be taken into consideration to find out whether a Municipality in Haryana is an establishment or not..." 29. The meaning of the word "establishment" under Section 1 (3) (b) of the P.G.Act, 1972 was explained in the case of Municipal Corporation of Delhi Vs. V.T.Naresh and another6, and the Municipal Corporation of Delhi was held to be an establishment within the meaning of the aforementioned Act. The observations made in the judgment are as follows :- "6. It will be noticed that the word "establishment" used in the aforesaid clause of Payment of Gratuity Act, 1972 is not controlled by any type of establishment. It will include commercial, public sector establishment, private sector establishment as also the non-commercial establishment. Therefore, it is merely 1396 INDIAN LAW REPORTS ALLAHABAD SERIES because Municipal Corporation of Delhi which is created by Delhi Municipal Corporation Act, 1957 is also a local body or local authority, it does not mean that the Corporation will not be an "establishment" so long as it is so in relation to any law relating to "establishment". It need not multiply the instances. Only one is sufficient to make the Act applicable.