# St. Joseph'S College & Anr v. Appellate Authority/ Deputy Labour Commissioner & Ors

- **Citation:** (2016) 4 ILRA 210
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2015-08-19
- **Bench:** Suneet Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/st-joseph-s-college-anr-v-appellate-authority-deputy-labour-commissioner-ors-43443
- **Pages:** 6

## Text

210 INDIAN LAW REPORTS ALLAHABAD SERIES
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 19.08.2015

BEFORE

THE HON'BLE SUNEET KUMAR, J.

Writ C No.- 45515 Of 2015

St. Joseph'S College & Anr. ...Petitioners
Versus
Appellate Authority/ Deputy Labour Commissioner & Ors. ...Respondents

Counsel for Petitioners
Subhash Ghosh, Ashok Khare

Counsel for Respondents
Vivek Ratan Agrawal

The petitioner is an Intermediate College being administered by the second petitioner "Gyandeep Vidya
Society" registered under the Societies Registration Act, 1886. The third respondent was appointed Teacher
vide contract dated 1 July, 1976. She retired from service on attaining the age of superannuation on 31
March, 2003. The petitioner institution is assailing the order dated 20 July, 2015 passed in P.G. Appeal No.
01/2015 and in P.G. (Cross) Appeal No. 02/2015 passed by the first respondent Appellate Authority/Deputy
Labour Commissioner under the Payment of Gratuity Act, 1972

Counsel for the petitioner argued that two separate appeals were preferred, one by the petitioner being P.G.
Appeal No. 1/2015 and the other being P.G. Appeal No. 2/2015 filed by the third respondent the appeal of the
third respondent has been decided on merits but the contentions raised in the memo of appeal by the
petitioner institution has not been considered nor noticed by the Appellate Authority.

The main grievance of the petitioner is that the teachers were brought under the ambit of the Act 1972 by
Payment of Gratuity (Amendment) Act, 2009, as per Section 13A, the teachers were entitled to gratuity with
effect from 3 April, 1997.

The Appellate Authority, whereas, has rejected the deduction by merely stating that, since the Act 1972 was
not applicable upon the teachers, therefore, the sum paid by the institution would not be taken to be sum
paid towards gratuity. The view taken by the Appellate Authority is untenable for the reason that the case of
the institution is that the third respondent was paid gratuity as per the scheme applicable.

Court held that the first respondent Appellate Authority/Deputy Labour Commissioner shall decide both the
appeals afresh.

The writ petition is allowed

List of Cases cited

1. Ahmedabad Private Primary Teachers Association Versus Administrative Officers and others AIR 2004 SC
1426
4 All. St. Joseph'S College & Anr. Vs Appellate Authority/ Deputy Labour Commissioner &
 Ors.
211
2. Management, Goodyear India Ltd. Versus K.G. Devessar AIR 1985 SC 1759
3. Grindwell Norton Ltd. Versus N.L. Abhyankar and another 1980 (40) FLR 53
4. Ms. Ananta Vishwanathan Versus Shri Narayana Guru High School and others 2012-I-LLJ-350 (Bom)
5. Workmen of Metro Theatre Ltd., Bombay Versus Metro Theatre Ltd., Bombay 1981 Law Suit (SC) 311

(Delivered by Hon'ble Suneet Kumar, J.)

1. Supplementary affidavit filed today is taken on record.

2. The petitioner institution is assailing the order dated 20 July, 2015 passed in P.G. Appeal
No. 01/2015 and in P.G. (Cross) Appeal No. 02/2015 passed by the first respondent Appellate
Authority/Deputy Labour Commissioner under the Payment of Gratuity Act, 1972.

3. The petitioner is an Intermediate College being administered by the second petitioner
"Gyandeep Vidya Society" registered under the Societies Registration Act, 1886. The third
respondent was appointed Teacher vide contract dated 1 July, 1976. She retired from service on
attaining the age of superannuation on 31 March, 2003.

4. The submission of the learned Senior counsel for the petitioner is that against the order of
the Controlling Authority, two separate appeals were preferred, one by the petitioner being P.G.
Appeal No. 1/2015 and the other being P.G. Appeal No. 2/2015 filed by the third respondent. Both
the appeals were heard together. It is contended that the appeal of the third respondent has been
decided on merits but the contentions raised in the memo of appeal by the petitioner institution has
not been considered nor noticed by the Appellate Authority. The main grievance of the petitioner is
that the teachers were brought under the ambit of the Act 1972 by Payment of Gratuity
(Amendment) Act, 20092, (No. 47of 2009), as per Section 13A, the teachers were entitled to
gratuity with effect from 3 April, 1997 which is a sync with the Government of India notification
referred to in Section 13A, which reads as follows:

"13A Notwithstanding anything contained in any judgment, decree or order of any court
for the period commencing on and from the 3rd of April 1997 and ending on the day on which the
Payment of Gratuity (Amendment) Act, 2009, receives the assent of the President, the gratuity
shall be payable to an employee in pursuance of the notification of the Government of India
in the Ministry of Labour and Employment vide number S.O. 1080, dated the 3rd day of April,
1997 and the said notification shall be valid and shall be deemed always to have been valid as if the
Payment of Gratuity (Amendment) Act, 2009 had been in force at all material times and the
gratuity shall be payable accordingly."

5. The Government of India notification referred to in Section 13A, reads as follows:

"In exercise of the powers conferred by clause (c) of sub-section (3) of Section 1 of the
Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specifies the
educational institutions in which ten or more persons are employed or were employed on any day
212 INDIAN LAW REPORTS ALLAHABAD SERIES
preceding 12 months as a class of establishments to which the said Act shall apply with effect from
the date of publication of this notification.

Provided that nothing contained in this notification shall affect the operation of the
notification of the Ministry of Labour, S.O. No. 239, dated 8th January, 1982."

6. It is, therefore, contended that the entire service rendered by the third respondent was
computed by the Authorities while calculating the gratuity is erroneous. The third respondent is
entitled to count her service for the purpose of gratuity since 1997. Further, submission advanced,
is based on the document at annexure 4 of the record, which reflects that Rs. 1,35,000/- was paid to
the third respondent on the date of superannuation in settlement of gratuity which was rightly
deducted by the Controlling Authority from the total sum of gratuity computed, however, it was
erroneously ignored by the Appellate Authority.

7. The learned counsel appearing for the third respondent would not dispute that the
contentions and arguments advanced on behalf of the Institution has not been considered by the
Appellate Authority. On the contrary, it is submitted that the contentions being advanced before
this Court was not raised by the petitioner before the Appellate Authority, it is for the first time the
legal issues are being pressed before this Court. Shri Agrawal would submit that in terms of Section
2A of Act 1972, the third respondent is entitled to gratuity upon computing the entire continuous
service rendered by the third respondent which would include service rendered prior to 1997. He
would further contend that there is no illegality or infirmity in the impugned order.

8. Rival submissions call for consideration.

9. The Supreme Court in the matter of Ahmedabad Private Primary Teachers Association
Versus Administrative Officers and others, held that the definition of employee under Section
2(e) does not cover teachers. Subsequently, the Government amended the definition of employee
under the Act 1972 to include teachers. The said amendment comes into force with retrospective
effect from 3 April 1997. As per the amended provisions of Section 2(e), a teacher is covered
within the definition of employee.

10. It is not in dispute between the parties that the Act 1972 is applicable upon the third
respondent who is an employee/teacher of the petitioner institution.

11. Learned counsel for the petitioner relying on the decision rendered in Management,
Goodyear India Ltd. Versus K.G. Devessar4, would submit that by the Amendment of 2009,
teachers were brought within the ambit of the Act 1972 with retrospective effect from 3 April 1997,
therefore, the service rendered by the third respondent prior to 1997 would not be considered for
payment of gratuity.

12. The Supreme Court in Goodyear's case (supra), held that the date of coming into force of
the Act has relevance to the date on which gratuity becomes payable. Gratuity becomes payable on
4 All. St. Joseph'S College & Anr. Vs Appellate Authority/ Deputy Labour Commissioner &
 Ors.
213
the termination of employment and therefore, in order to be eligible to payment of gratuity, the
termination of employment whether it be due to superannuation or retirement or resignation or
death or disablement, has to be after the date of coming into force of the Act. The Court observed
as follows:

"We think the only reasonable way of construing Section 4 in the light of the definition of
employee in Section 2(e) is to hold that a person whose services are terminated for any of the
reasons mentioned in Section 4(1), after the coming into force of the Act is entitled to the payment
of gratuity, if he has rendered continuous service for not less than five years, for that period during
which he satisfied the definition of employee under Section 2(e) of the Act."

13. The Supreme Court in Grindwell Norton Ltd. Versus N.L. Abhyankar and another5
held that reading of the relevant provisions of the Act 1972 would clearly indicate that the period of
employment to be taken into consideration for determination of the amount of gratuity is not
restricted only to the period subsequent to the coming into force of the Act, but the period of
employment prior to that date has to be taken into consideration. Section 4 is charging section and
it provides that gratuity shall be payable to an employee on the termination of his employment, and
the termination of the employment is either by superannuation, retirement or resignation, or his
death or disablement due to accident or disease. This Section requires that employee must have put
a continuous service of 5 years for entitlement of gratuity and the term "continuous service' have
been defined under Section 2(c) of the Act.
The provisions of Section 4 comes into play not on the date when the Act came into force but only
on the date of the termination of employment. The Court observed as follows:-

"The reading of the relevant provisions clearly indicates that the period of employment to
be taken into consideration for the purpose of determination of the amount of gratuity is not
restricted only to the period subsequent to the coming into force of the Act, but the period of
employment prior to that date has to be taken into consideration."

14. The Court, therefore, held that the service rendered by the workman prior to coming into
force of Act 1972 was to be considered regarding computation of service rendered anterior to
coming into force of the Act.

15. The Bombay High Court in Ms. Ananta Vishwanathan Versus Shri Narayana Guru
High School and others, relying upon several judgments of the Supreme Court held that the
notification dated 3 April 1997 read with Section 2(c) of the Act 1972 are made applicable to the
employee for the service rendered before or after commencement of this Act, I do not find any
reason to take a different view, accordingly, hold that the service rendered by the third respondent
prior to 1997 would be considered while computing the gratuity.

16. The learned Appellate Authority did not concur with the Controlling Authority that the
sum of Rs. 1,35,000/- paid by the institution to the third respondent was gratuity merely for the
reason that the provisions of the Act 1972 was not applicable at the relevant point, therefore, the
214 INDIAN LAW REPORTS ALLAHABAD SERIES
sum paid was not taken to be a sum towards gratuity. The plea is not sustainable. The document at
Annexure 4 of the record would reflect that the sum was paid towards gratuity and for settlement of
all retiral benefits upon the retirement of the third respondent. Upon enforcement of the Act 1972
on the teachers, the legislature ensured (1) that teachers are entitled to gratuity (2) the minimum
amount of gratuity as prescribed under the Act 1972 is payable[sub-section (3) of Section 4]. The
provisions of sub-section (5) of Section 4 provides that the section shall not affect the right of an
employee to receive better terms of gratuity under any award or agreement or contact with the
employer.

17. In Workmen of Metro Theatre Ltd., Bombay Versus Metro Theatre Ltd., Bombay7, it
was held:

"the view taken by the Tribunal that it could not go beyond the scheme of gratuity
contemplated by the Act is clearly erroneous. The Act enacts a complete code containing detailed
provisions covering all essential features of the scheme for payment of gratuity. But the scheme
envisaged by the enactment secures the minimum for the employees in that behalf and express
provisions are found in the Act under which, better terms of gratuity, if already existing, should be
conferred on the employees. It was held that the scheme of gratuity under the Act clearly suggests
that no standardization of the gratuity scheme contemplated by the Act was intended by the
legislature."

18. It follows that the scheme if framed by the employer does not provide for the minimum
sum of gratuity as contemplated under Sub-section (3) of Section 4 upon enforcement of the Act
1972, then in that eventuality the employee would be entitled to the balance sum.

19. In the facts of the case at hand, the Controlling Authority had deducted the sum of Rs.
1,35,000/- paid to the third respondent towards gratuity by the employer from the sum due under
the Act 1972. The Appellate Authority, whereas, has rejected the deduction by merely stating that,
since the Act 1972 was not applicable upon the teachers, therefore, the sum paid by the institution
would not be taken to be sum paid towards gratuity. The view taken by the Appellate Authority is
untenable for the reason that the case of the institution is that the third respondent was paid gratuity
as per the scheme applicable, further, the records would reveal that the third respondent had
accepted the sum upon superannuation towards gratuity. In the event of the third respondent
disputing the sum so received is not gratuity but ex- gratia payment then the onus is upon the
employee to prove the plea being raised by her, which being a question of fact has to be determined
by the Authority upon material and evidence that may be led by the respective parties.

20. The Appellate Authority has enhanced the rate of interest from 8% to 12% which is not in
terms of sub-section (3A) of Section 7. The enhanced rate of interest has been granted on a vague
observation of the Appellate Authority that it is as per the directions/orders rendered by courts from
time to time. The statutory mandate requires that the employer is liable to pay interest, provided the
gratuity payable within the period specified in sub-section (3) is not paid by the employer, simple
interest at such rate, not exceeding the rate notified by the Central Government from time to time
4 All. Smt. Kusum Yadav & Anr. Vs State Of U.P. & Ors.
215
for repayment on long term deposits, as that Govt. may by notification specify. The Authorities
have no choice but to grant interest as notified by the Government.

21. Having due regard to the facts of the case, it is provided that the first respondent Appellate
Authority/Deputy Labour Commissioner shall decide both the appeals afresh, the respective parties
undertake to file their written statement within fifteen days from today, in the event of compliance,
it is expected that the appellate authority shall conclude and decide the appeal by a reasoned and
speaking order within eight weeks thereafter, the order dated 20 July 2015 passed in both the
appeals is set aside.

22. Subject to the above, the writ petition is allowed.

23. No order as to costs.
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ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 04.11.2015

BEFORE

THE HON'BLE PANKAJ MITHAL, J.

Writ C No.- 60941 Of 2015

Smt. Kusum Yadav & Anr. ...Petitioners
Versus
State Of U.P. & Ors. ...Respondents

Counsel for Petitioners:
Shiv Babu Dubey

Counsel for Respondents:
C.S.C., Kaushalendra Kumar

HELD:

1. Petitioners sought protection alleging they were majors who married of free will, but serious allegations
emerged during proceedings.

2. Petitioner No. 1, when produced before the Court, categorically stated that petitioner No. 2 forcibly took
her away, detained her for many days, and coerced her into signing the affidavit and vakalatnama.

3. She denied having married petitioner No. 2 and expressed her desire to return to her parents.

4. Her demeanor and statements in Court convinced the Court that the petition was not filed out of her free
and voluntary act.