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Spun Pipe and Construction Company of India Limited Vs. Sewaram Popatmal Asanani - Court Judgment

LegalCrystal Citation
SubjectService
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Application No. 1999 of 1975
Judge
Reported in1982(2)BomCR291
ActsPayment of Gratuity Act, 1972 - Sections 4, 4(2) and 4(5); Constitution of India - Article 227; Bombay Industrial Relations Act, 1946 - Sections 3(39), 42, 44, 46 and 116
AppellantSpun Pipe and Construction Company of India Limited
RespondentSewaram Popatmal Asanani
Advocates:M.P.M. Pillai, Adv.
Excerpt:
.....not aware of existence of agreement under which he was entitled to higher amount of gratuity - appellate authority passed order to pay gratuity according to agreement - petition challenging such order - no error of fact in decision of appellate authority - high court cannot while exercising jurisdiction under article 227 interfere with findings of fact recorded by subordinate court. - - section 4 of the said act confers a right on the employee to get gratuity and the quantum of amount of gratuity as well as the eligibility of the employee and certain limitations on his right to get this amount of gratuity are spelt out in provisions of section 4. sub-section 2 of section 4 of the said act provides as to how the gratuity is to be calculated an employee who has completed minimum..........that the worker in this case has not entitled to receive higher benefit or claim of 15 months of wages as gratuity under the agreement even though it ceased to exist prior to the date of resignation of the respondent worker.9. in our view, the order of the appellate authority allowing the appeal can also be supported from another angle. what the learned counsel for the petitioner contended before us was that after termination of the agreement, there was change in the terms and conditions of the employment of the employee with the petitioner employer. if employer intended to effect any change, then it is not disputed before us, that the provisions of section 42 of the bombay industrial relations act, 1946 would be attracted. in effect the submission of the learned counsel was that the.....
Judgment:

R.S. Bhonsale, J.

1. The petitioner by this petition under Article 227 of the Constitution of India challenges the impugned order passed by Appellate Authority under the Payment of Gratuity Act, 1972 allowing the appeal filed by the respondent employee Sewaram Popatmal Asanani and substituting an amount of Rs. 1776/- in place of an amount of Rs. 226/- as amount of gratuity due and payable to the respondent employee. The facts of this petition which lie in a narrow compass can be stated briefly as follows :--

2. The respondent employee has been employed with the petitioner company in the capacity of a Mistry and had joined the services on 19th May, 1954. After the completion of 20 years of continuous service, he willingly resigned on January 8, 1974. It is not disputed before us that the last drawn wages of the respondent employee were Rs. 310.18 per month. Respondent employee made an application to the petitioner company on 17-1-1974 for payment of gratuity amount only for the period of 10 months. The petitioner company did not choose to appear before the Controlling Authority under the Payment of Gratuity Act in Case No. P.G.A. 37/74. The Controlling Authority, therefore, accepted the evidence of the respondent employee regarding the dates of the joining of employment, the total period of service with the petitioner company and that the last drawn wages were at Rs. 310/- per month. The Controlling Authority, after considering various provisions of the Payment of Gratuity Act calculated the total amount of gratuity at Rs. 3100/-. According to the Controlling Authority under the provisions of the Act, since the employee had continuously worked for a period of 20 years, on the basis of wages of 15 days for each completed year of service, he was entitled to a total amount of Rs. 3100/- i.e. for 10 months. The respondent has already received from the petitioner company a sum of Rs. 2874/- on account of gratuity. After deducting that amount, it was held by the Controlling Authority that the respondent was entitled to an amount of Rs. 226/- only as a balance of the total amount of gratuity due and payable to respondent employee. Accordingly, on 28th October, 1975, the respondent's application was partly allowed and the petitioner company was directed to deposit on that count a sum of Rs. 226/- being the difference between the gratuity amount due and payable and the one which was actually paid to the respondent employee.

3. The respondent being aggrieved by the said order of the Controlling Authority filed appeal No. 1 of 1975 before the Appellate Authority under the Payment of Gratuity Act. In the appeal memo filed by the respondent, the respondent employee claimed higher amount of gratuity on the basis that he was not aware of the agreement of gratuity dated 27-1-1972 which the employer had not disclosed. It was further stated that the respondent employee was under the impression that the amount of gratuity due and payable would be calculated on the basis of this agreement and that there was no need to state about the said agreement in his original application. He, therefore, prayed that respondent was entitled under the provisions of the said agreement an amount equal to 15 months wages instead of 10 months wages and to that extent the order of the Controlling Authority was liable to be modified. The learned Appellate Authority heard the appeal of the respondent. It also heard the petitioner company which on this occasion chose to appear and contest the said appeal. The learned Appellate Authority found as a matter of fact that the respondent employee was in fact not aware of the existence of the agreement under which he was entitled to higher amount of gratuity. The copy of agreement between the parties was produced before the Appellate Authority and according to the provisions of the said agreement, it was clear that if an employee had completed 15 years of service, he would be entitled to wages for 15 months by way of gratuity which was the maximum. The only point raised before the Appellate Authority was that the agreement which came into existence on January 27, 1972 was terminated by the union by giving notice under section 116 of the Bombay Industrial Relations Act, 1946 and that on the date of the resignation of the respondent employee this agreement ceased to exist and therefore, respondent employee was not entitled to derive any benefit of higher amount of gratuity to 15 months period as against 10 months wages awarded as gratuity by the Controlling Authority. The question that was posed before the Appellate Authority under the said Act was whether employee's right to gratuity arises after he completes service of five years or whether it was co-terminus with the termination of his services either by way of resignation or in any other manner. The main contention canvassed on behalf of the petitioner employer before the Appellate Authority that the right to gratuity arises only on the date of termination of the employment, was not accepted by the Appellate Authority. After considering the arguments of both the sides, the learned Appellate Authority came to the conclusion that respondent employee was entitled to the higher amount of gratuity equivalent to 15 months wages, and therefore, the appeal of the respondent was allowed and the Appellate Authority substituted Rs. 1776/- in place of Rs. 226/- awarded as amount of gratuity by the Controlling Authority by judgment and order dated August 26,1975. It is against this order passed in the appeal by the Appellate Authority under the Payment of Gratuity Act, 1972 that the petitioner company has challenged the same by filing this petition under Article 227 of the Constitution of India.

4. Shri M.P.M. Pillai, the learned Counsel who appeared on behalf of the petitioner company, has substantially reiterated the submission made before the Appellate Authority to which a reference has already been made above.

5. The Parliament passed the Payment of Gratuity Act, 1972 (Act No. 39 of 1972) and it came into force on August 21, 1972. As the preamble of the Act indicates that this Act is enacted to provide for payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops and other establishments and for matters connected therewith or incidental thereto. Section 4 of the said Act confers a right on the employee to get gratuity and the quantum of amount of gratuity as well as the eligibility of the employee and certain limitations on his right to get this amount of gratuity are spelt out in provisions of section 4. Sub-section 2 of section 4 of the said Act provides as to how the gratuity is to be calculated An employee who has completed minimum five years of employment with the employer is entitled to payment of gratuity. The amount of gratuity is to be paid at the rate of 15 days' wages based on the wages last drawn by the employee concerned. The maximum limit on payment of such amount of gratuity shall not to exceed 20 months wages. Sub-section 5 of section 4 confers a positive right on an employee that his right to receive better terms of gratuity under any award or agreement or contract with the employer shall not be affected by the other provisions of the said Act. It is not necessary to discuss the other provisions of the said Act for the purpose of this decision. When the respondent employee first made an application to the Controlling Authority for payment of gratuity he did not claim gratuity for 15 months. Obviously, he was totally unaware of the existence of the agreement between the union and the employer and this has been found concurrently by both the authorities as a matter of fact. Again, there is no dispute that the agreement in question has been terminated on July 27, 1973. By notice dated July 27, 1973, the General Secretary of the Karmachari Sangh of the petitioner company cancelled the agreement and as per the provisions of the section, it was to come into effect on September 27, 1973.

6. The only challenge to the respondent's right to get the amount of gratuity under the agreement as made before the learned Appellate Authority and reiterated is this Court is that, an employee's right to receive gratuity arises only on the date of termination of employment and the very agreement on which the claim was based before the Appellate Authority having come to an end, the respondent employee was not entitled for higher amount i.e. 15 months wages as amount of gratuity instead of 10 months wages as the respondent would be entitled under the provisions of the Act itself. As stated above under the provisions of section 4 gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than 5 years. The sections speak of the amount being payable as co-terminus with the termination of the employment. However, there is no warrant for an interpretation and to hold on the language of this sub-section that the very right to receive payment of gratuity accrues on the date of termination. The language of sub-section 1 of section 4 is plain enough to indicate that such right accrues or vests in an employee who has rendered continuous service for not less than five years. The respondent was employed in the month of May 1954 and under the provisions of this section the right to receive gratuity accrued to him at the end of five years i.e. in May 1959. The section makes a distinction between the date of accrual of right to payment of gratuity and a different date when it becomes payable. Firstly, such amount of gratuity as would be calculated on the provisions of the Act would be payable;

(a) on his super annuation,

(b) on his retirement or resignation, or

(c) on his death or disablement due to accident or disease.

According to the first proviso it is obvious that this period of continuous service of five years shall not be necessary where the termination of the employment of the employee is due to death or disablement. In such a case gratuity as payable to him shall be paid to his nominee or if no nomination has been made, to his heirs. In other words, right to receive gratuity in case of an employee who has completed five years of service or has died earlier than that period, has nothing to do with the factum of termination of service. Both provisions have to be read independently.

7. Sub-section 5 of section 4 confers a further benefit on an employee inasmuch as a right is conferred on him to receive better terms of gratuity under any award or agreement or contract with employer. There can be no dispute that this legislation is a piece of social legislation and provisions have been made to award 15 days wages for each completed year of service if the employee has put in minimum five years of service with the employer. The agreement in question confers better terms of gratuity. In other words, under the agreement a better right has accrued to the employee to receive higher amount of gratuity than one provided under the provisions of section 4. If that is so, on the fact of it, the interpretation which the learned Counsel wants us to place on the provisions of section 4 that benefit of better terms of gratuity came to an end with the termination of agreement cannot be accepted. In our view, the Appellate Authority has given cogent reasons for allowing the appeal of the respondent employee.

8. As stated above, the Payment of Gratuity Act is a social legislation conferring certain benefits on the workers. In interpreting the social legislation the Court cannot be obvious to the object and policy of the legislature in enacting the said provision of the statute. The purpose and policy behind sub-section 5 of section 4 is that notwithstanding the provisions of section 4, if a right is conferred on the employee to receive better terms of gratuity under any award, agreement or contract with the employer, the said provisions must be interpreted liberally. In enacting this sub-section, this provision was designedly enacted. The legislature must be deemed to have been aware of the fact that instead of minimum amount of gratuity equivalent to 10 months wages were to be received by a worker who had completed minimum five years of service with the employer and maximum 20 years of service, there may be occasions where under an award or agreement or contract a worker might be entitled to receive more amount by way of gratuity. We must put a liberal construction on this provision and as has been held by this Court in A.B. Tukaral v. Javalkar, A.I.R. 1981 Bom. 77:

'It is always safe to have an eye on the object and the purpose of the statute, or reason or spirit behind it. In more than one English decision it has been laid down that the Judges must look to what the purpose of the legislature is and as observed by Sir John Nicholl in Attorney General v. H.R.H. Prince Ernest Augustus of Hanover, 1957 (1) All.E.R. 49 that 'the key to the opening of every law is the reason and the spirit of the law'. This aspect of 'purpose' is the very foundation of the rule in Heydon's case reported by Lord Coke as far back as in 1584. Statutes 'should be construed not as theorems of Euclid' said learned Hand, J., 'but with imagination of purpose behind them'.

In our opinion, therefore, the very purpose and the policy of the legislature in enacting sub-section 5 of section 4 was to confer more benefits on the workers under the respective agreement, award or contract. Having held that the right to receive gratuity arises or accrues on completion of minimum five years of service with the employer and having held that this right is co-terminus with the termination of service, we are unable to persuade ourselves to accept the submission of the learned Counsel that the worker in this case has not entitled to receive higher benefit or claim of 15 months of wages as gratuity under the agreement even though it ceased to exist prior to the date of resignation of the respondent worker.

9. In our view, the order of the Appellate Authority allowing the appeal can also be supported from another angle. What the learned Counsel for the petitioner contended before us was that after termination of the agreement, there was change in the terms and conditions of the employment of the employee with the petitioner employer. If employer intended to effect any change, then it is not disputed before us, that the provisions of section 42 of the Bombay Industrial Relations Act, 1946 would be attracted. In effect the submission of the learned Counsel was that the respondent employee would not be entitled to higher amount of gratuity and, therefore, on the date of his termination, he would be entitled to lesser amount of wages for the purpose of calculating the gratuity. In effect the submission was that a change in terms and conditions of service can be brought about without recourse to provisions of section 42 of the Bombay Industrial Relations Act. Section 42 of the Bombay Industrial Relations Act, 1946 reads as follows :

'Any employer intending to effect any change in respect of an industrial matter specified in Schedule II shall give notice of such intention in the prescribed from to the representative of employees. He shall send a copy of such notice to the Chief Conciliator, the Conciliator for the industry concerned for the local area, the Registrar, the Labour Officer and such other person as may be prescribed. He shall also affix a copy of such notice at a conspicuous place on the premises where the employees affected by the change are employed for work and at such other place as may be directed by the Chief Conciliator in any particular case'.

Amongst one of the matters specified in Schedule II at Serial No. 9 is, wages including the period and mode of payment. 'Wages' are defined under the defining section of the Act and this definition is divided in two parts, meaning part and inclusive part. Section 3, sub-section 39 of the Bombay Industrial Relations Act, 1946 defines 'Wages' defines 'wages' as remuneration of all kinds capable of being expressed in terms of money and payable to the employee in respect of his employment or work done for such employment and includes---

'(i) ...

(ii) ...

(iii) ...

(iv) ...

(v) ...

(vi) gratuity payable, if any.'

In defining 'wages' under section 3(39) of Bombay Industrial Relations Act, 1946, the words 'gratuity payable, if any', were added by sub-clause (vi) of Amended Act of Mah. 22 of 1965. As we have indicated earlier, the meaning part of the definition 'wages' is all embracing and includes all remuneration of all kinds capable of being expressed in terms of money. On plain interpretation of definition, the amount of gratuity would be covered by definition of 'wages' which is of widest possible amplitude. However, in view of the Amending Act of 22 of 1965 which specifically included the gratuity, it is not possible for us to accept the contention raised by the learned Counsel. As change in the 'wages' would amount change in the terms and conditions of service, it was open for the petitioner employer to effect change in terms and conditions of service under section 42 or section 46 of the Bombay Industrial Relations Act, 1946 after giving the necessary notice and after following the procedure to effect change in wages. However, that has not been done by the employer in this case. What was contended before the Appellate Tribunal was that since the agreement had come to an end prior to the termination of the service by resignation, it was not applicable in this case. The agreement had ceased to have any effect whatsoever. In our view that contention was rightly rejected by the learned Appellate Authority. Looked from any angle, we see no substance in any merits whatsoever.

10. The learned Appellate Authority had found as a matter of fact that the respondent worker was not aware of the agreement. We have not accepted the learned Counsel's contention that the agreement ceased to have any effect whatsoever, and therefore, the respondent worker was not entitled to higher amount of gratuity. The fact that the agreement did exist and the respondent worker was not aware of it is the question of fact and this Court in exercising jurisdiction under Article 227 of the Constitution which is extraordinary and must be exercised rarely and in appropriate cases, cannot be expected to correct an error of fact which only a superior Court can do in exercise of its statutory power as a Court of appeal. In our opinion, there is no error of fact whatsoever in the decision of the learned Appellate Authority. The High Court cannot in guise of exercising its jurisdiction under Article 227 convert itself into a Court of appeal when the legislature has not conferred a right of appeal and made the decision of the subordinate Court or Tribunal final on facts. The High Court cannot while exercising jurisdiction under Article 227, interfere with the findings of fact recorded by the subordinate Court or Tribunal. It's function is limited to seeing that the subordinate Court or Tribunal functions within the limits of its authority. It cannot correct mere errors of fact by examining the evidence and reappreciating the same. See Babhutmal v. Laxmibai, : AIR1975SC1297 .

11. In the result, we confirm the order passed by the learned Appellate Authority under Payment of Gratuity Act, dismiss the petition and the rule is discharged. However, in the circumstances of the case, there would be no orders as to costs.


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