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Duncan Agro Industries Limited Vs. Subbanna, B. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Case NumberW.P. Nos. 1676, 1677 and 3785 of 1981
Judge
Reported in(1984)ILLJ96AP
ActsIndustrial Disputes Act, 1947 - Sections 2; Payment of Gratuity Act, 1972 - Sections 2, 3 and 4
AppellantDuncan Agro Industries Limited
RespondentSubbanna, B.
Excerpt:
.....and industrial - gratuity - section 2 of industrial disputes act, 1947 and sections 2, 3 and 4 of payment of gratuity act, 1972 - eligibility for gratuity on closure or retrenchment of industrial unit - retirement used in section 4 includes termination of service due to closure or retrenchment - in such circumstances employee terminated due to retrenchment entitled for gratuity. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the..........of gratuity act appointed by the central government, but not the authority constituted by the state government. 3. the controlling authority, 2nd respondent herein, stated in the counter-affidavit that the contention that the employee is not eligible for payment of gratuity in the event of closure of the unit is untenable as the requirement defined in s. 2(q) takes in the situation of closure of the unit. with regard to the want of jurisdiction of the state government, the petitioner did not plead or place the basic jurisdictional factors before the primary authority and as such, this primary objection was rejected. in the absence of any facts in support of the contention regarding jurisdiction, it is not possible to decide the issue. 4. the learned counsel for the petitioners.....
Judgment:

1. Identical issues are involved in all these three writ petitions. W.P. No. 3785 of 1981 is a petition for issue of writ of certiorari for quashing the order of the Controlling Authority under the Payment of Gratuity Act, Rajahmundry made in Case No. 19 of 1981, dated 21st May, 1981. W.P. Nos. 1676 and 1677 of 1981 are for issue of writ calling for records in P.G. Appeal Nos. 11 and 15 of 1980 on the file of the Controlling Authority under the Payment of Gratuity Act, Eluru and quash dated 23rd September, 1980 and 28th September, 1980 therein.

2. The facts stated in support of the Writ Petition No. 3785 of 1981 may be considered and the facts and allegations in the other writ petitions are similar. The petitioner is a company established at Agarpura, 24 Parganas in the State of West Bengal and has branches at Guntur and Bikkavole in Andhra Pradesh. The 1st respondent and others, who were daily-rated seasonal workmen in Biccavole factory, which was closed down in 1974, presented an application under the Payment of Gratuity Act claiming gratuity. Section 4 of the Payment of Gratuity Act, 1972 confers right on the employee to claim gratuity in the event on rendering continuous service for not less than five years on the conditions enumerated in S. 4. Section 4 does not enable the employee to claim gratuity in the event of closing down the unit. When the Controlling Authority under the Payment of Gratuity Act formerly accorded the gratuity to the 1st respondent, the petitioner was obliged to file appeal and in appeal, the orders were passed remanding the matter to the preliminary authority for fresh disposal. The petitioner establishments has branches in more than one State i.e., in West Bengal and Andhra Pradesh and therefore, the appropriate Government in respect of the petitioner is the Central Government and the authority for considering the issue is Central Authority, under the Payment of Gratuity Act appointed by the Central Government, but not the authority constituted by the State Government.

3. The Controlling Authority, 2nd respondent herein, stated in the counter-affidavit that the contention that the employee is not eligible for payment of gratuity in the event of closure of the unit is untenable as the requirement defined in S. 2(q) takes in the situation of closure of the unit. With regard to the want of jurisdiction of the State Government, the petitioner did not plead or place the basic jurisdictional factors before the primary authority and as such, this primary objection was rejected. In the absence of any facts in support of the contention regarding jurisdiction, it is not possible to decide the issue.

4. The learned counsel for the petitioners contended that the petitioner-company has branches outside the State and as such the appropriate Government is the Central Government as provided under S. 2(1)(a) of the Payment of Gratuity Act and as such, the Controlling Authority constituted by the State Government has no jurisdiction to determine the issue. It is further contended that the Payment of Gratuity is not contemplated in the event of closure of the unit and that the Payment of Gratuity Act, 1972 came into force on 16th September, 1972 and therefore the qualifying period of service for 5 years should be reckoned from 16th September, 1972 only and not anterior thereto. The learned Government Pleaded contended that the details with regard to the branches are not furnished and in the absence of jurisdictional facts, the issue with regard to jurisdiction cannot be raised and the payment of gratuity is contemplated in the event of termination of the services of employees, including the closure of the unit and the provisions of Payment of Gratuity Act came into force on 16th September, 1972 and the Act applies to all service personnel who put continuous service of 5 years.

5. Section 3 of the Payment Act empowers the appropriate Government to appoint any officer to be the Controlling Authority who is the primary authority for the adjudication of disputes and for implementation of the provisions of this Act. Section 3 must be read along with S. 2 of the Act to get at the connotation and meaning of appropriate Government. Section 2(a)(i) (a) to (d) pertain to the coverage of Central Government and the relevant portion is clause (b) which provides that the appropriate Government is the Central Government in respect of an establishment having branches in more than one State. The other clauses admittedly do not apply. Section 2(a)(ii) 'in any other case, the State Government' is in the nature of a residuary clause which is concerned with a situation other than the circumstances enumerated in the preceding sub-clause. No material is placed before the authority that the establishment has branches in more than one State. The factory of leaf tobacco is situated in Biccavole and the factory in which the workers are working is registered under the Factories Act within the State and on this score, it can be said the State Government is competent to constitute the Controlling Authority. The jurisdictional facts regarding the assumption of jurisdiction have not been processed by the primary authority or the appellate authority as this aspect was not brought to limelight at the instance of the petitioner. In the absence of pleading and relevant material or facts, the petitioner is precluded, from raising this contention at this stage and further, the disputed questions of facts cannot be investigated in the writ petition. The decision relied upon by the learned counsel for the petitioner in Binny Ltd. v. Commissioner of Labour [1981-I LLJ 178], turned upon the facts in that case, namely, the situation of Head Office of Binny Ltd. at Madras and branch in Karnataka and on those facts, the Karnataka High Court held that the Central Government is the appropriate State.

This decision cannot be pressed into service in the instant case. Therefore, this contention lacks substance.

6. It is not disputed that the termination of service is sequel to the closure of the unit and in the context of consideration of eligibility to gratuity, the controlling provision is S. 4, which is as follows, to the extent relevant :

'4. Payment of Gratuity : (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not lees 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.'

Section 4 postulates the payment of gratuity on the termination of employment due to the reasons stated therein provided, the requirement of period of service is satisfied. It is stressed by the learned Counsel for the petitioner that the termination of employment is visualised due to abolition or voluntary exercise of option by the employee or by efflux of time or on the final exit or disability of the employee and the events enumerated in S. 4 are inextricably connected with the age or disability of the employee but not extraneous aspects and the closure of unit is not in anyway associated with the incidents touching the longevity or disability by efflux of time or bodily ailments or otherwise. It is true that the expression 'retirement' is generally associated in common parlance with nipping the service by attainment of certain age or voluntary refrain from service by the employee, but the comprehensive connotation given to the expression 'retirement' in S. 2(q) dispels the excursion to common parlance. Section 2(q) defines retirement as follows :

'2(q). 'retirement' means termination of the service of an employee otherwise than on superannuation.'

The retirement takes in its sweep the termination of service due to any reason except by superannuation. Section 4 itself excludes the coverage of superannuation under the expression retirement as both the expressions have been used to denote distinct situations. Therefore, the expression 'retirement' reaches every situation or contingency except superannuation. The termination of employment visualised under the main provision in S. 4 can be by closure oft unit or retrenchment. The focus is made on the expression 'his' preceding retirement and other events and it is sought to be contended that 'his' furnishes a clue to an act by volition or the event consequent upon efflux of time or physical disability of the person and does not fit in within the mould of adventitious or extraneous circumstances. The cessation of employee's service by whatever reasons except the other reasons enumerated in S. 4 coupled with the wide definition contained in S. 2(q) is within the fold of the expression 'retirement' and the use of 'his' denotes the events associated or pertaining to the employee and does not control the wide spectrum of the expression 'retirement'. Likewise, the expression 'retrenchment' is given a wide connotation under S. 2(oo) of the Industrial Disputes Act. The learned Government Pleaded relied upon the decision of the Supreme Court in State of Punjab v. Labour Court [1981-I LLJ 345], wherein the amplitude of the expression 'retirement' is considered in the context of retrenchment of the employee. Krishna Iyer, J., held as follows at page 356 :

'The expression 'retirement' has been defined by S. 2(1) to mean 'termination of the service of an employee otherwise than on superannuation'. The definition is framed in the widest terms. Except for superannuation, any termination of service would amount to 'retirement'. For the purpose of the Act, retrenchment is a termination of service. It is immaterial that the termination is occasioned by the need to discharge of surplus labour.'

Therefore, the contention of the petitioner is unteanable.

7. The other aspect that survives for consideration is regarding the computation of service rendered anterior to coming into force of the Act. The essence of the contention of the petitioner is that the five years period of services should be reckoned from 16th September, 1972, only when the Act came into force and the consideration of service prior to 16th September, 1972, tantamounts to attributing retroactivity to the statute. The contention appears to be misconceived. The Act applies to the employees who are in service as on 16th September, 1972 and computation of service of five years for eligibility to gratuity should be the total duration of service rendered either prior to 16th September, 1972 or subsequent thereto. The computation of five years service from 16th September, 1972 only cannot be spelt out from any provision and the Act applies on and from 16th September, 1972 to the employees who have the credit of five years service. The position is made amply clear by the definition of continuous service contained in S. 2(c) of the Act wherein it is stated that service, whether rendered prior or after the commencement of the Act, should be taken into consideration. The learned Government Pleader relied upon the decision of the Bombay High Court in Grindwell Norton Limited v. N. L. Abhayankar (1980) 40 F.L.R. 53, wherein it is held that the period of employment for the purpose of gratuity comprises the period subsequent to and also prior to the commencement of the Act. In C.B. of India v. T. K. Ramamoorthy (1978) 52 F.J.R. 490, handed down by the Andhra Pradesh High Court, Madhusudan Rao, J., speaking for the Division Bench observed as follows at page 184 :

'The section does not say the gratuity is payable only to employees appointed after the Act came into force. On the other hand the words of the section are clear in directing payment of gratuity to an employee on his superannuation, retirement or resignation, provided, by the date of the superannuation, retirement or resignation, he rendered continuous service of not less than five years.'

Therefore, this contention also fails.

8. In the result, writ petitions are dismissed. No costs. Advocate's fee Rs. 150 each.


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