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Municipal Corporation of Delhi Vs. Smt. V.T. Naresh and Another - Court Judgment

LegalCrystal Citation
Subject Labour and Industrial
CourtDelhi High Court
Decided On
Case NumberCivil Writ Petition No. 128/83
Judge
Reported in1985(9)DRJ173; (1986)ILLJ323Del
ActsPayment of Gratuity Act 1972 - Sections 1, 1(3) and 4
AppellantMunicipal Corporation of Delhi
RespondentSmt. V.T. Naresh and Another
Advocates: J.K. Mehra and; Dinesh Agnani, Advs
Cases ReferredState of Punjab v. The Labour Court
Excerpt:
.....and can mean a law in relation to shops as well as, separately, a law in relation to shops as well as, separate, a law in relation to establishments, or a law in relation shops and commercial establishments and law in relation to non-commercial establishments. it is only common which can be said that an employee cannot have benefit of both under payment of gratuity act as well as scheme of regulations/pension framed by the corporation but if he has availed of the benefit under payment of gratuity act, to that extent benefit will be denied to him under the regulations/pension scheme framed by the corporation. the employee cannot have complete benefit under both the payment of gratuity act as well as under the scheme of regulations/pensions......shop or establishment within the making of any law for the time being in force in relation to shops and establishments in state, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months; (c) such other establishment or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the central government may, by notification, specified in this behalf.' 3. the argument of mr. j. k. mehra, learned counsel is that the petitioner - corporation is a local authority created under the delhi municipal corporation act, 1957 and is not an establishment within the meaning of sub-clause (b) of sub-s. 3 of s. 1 of the act reproduced earlier. for appreciating the submission after.....
Judgment:

1. By this petition under Act. 226 of the Constitution of India, Municipal Corporation of Delhi has impugned the order of the Controlling Authority appointed under the Payment of Gratuity Act, 1972 which transpires in to be an order dated 22nd December, 1980 as stated in the appeal filed before the Appellate Authority appointed under the aforesaid Act the order dates 26th July, 1982 passed by the Appellate Authority appointed under the aforesaid Act.

2. Smt. V. T. Naresh, respondent No. 1 had filed an application under S. 4 of the Payment of Gratuity Act, 1972 (hereinafter referred to the 'Act') for payment of gratuity on her retirement from service on 6th February, 1976. Her case was that she had been employed on 1st August, 1953 and she is entitled to gratuity as she has served the Corporation for 22 years 6 months and 6 days. The petitioner - Corporation pleased that the Act is not applicable to the employees of the Petitioner - Corporation and that the Corporation has its own gratuity Regulations/pensions Rules to allow gratuity to retiring employees and, thereforee, the application before the Controlling Authority was not maintainable. The controlling Authority negatived both the submissions. The said submission were also repeated before the Appellate authority. The Appellate Authority also negatived both the submissions. Before me Mr. J. K. Mehra, learned counsel urged the same points again. Before noticing the submissions made before me, certain relevant provisions of the Act may be seen. Section 1 of the Act provides for applicability of the Act. Relevant part of Sub-s. (3) of S. 1 of the Act is as under :-

(3) It shall apply to -

(a) Every factory, mine oilfield, plantation, port and railway company :

(b) every shop or establishment within the making of any law for the time being in force in relation to shops and establishments in State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;

(c) such other establishment or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specified in this behalf.'

3. The argument of Mr. J. K. Mehra, learned Counsel is that the petitioner - Corporation is a local authority created under the Delhi Municipal Corporation Act, 1957 and is not an establishment within the meaning of Sub-clause (b) of Sub-s. 3 of S. 1 of the Act reproduced earlier. For appreciating the submission after leaving the unnecessary word of Sub-clause (b), it would read,

'every establishment within the meaning of any law for the time being in force in relation to establishment is a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;'

The submission of Mr. J. K. Mehra, learned Counsel for the Corporation is that the local authority like the petitioner is not an 'establishment' within the meaning of any law in force in relating to 'establishment' in Delhi. The meaning of the word, 'establishment' within the meaning of any law for the time being came up for consideration before the Supreme Court in the case of State of Punjab v. The Labour Court, Jullundur and others 1981-I L.L.J. 354 The Appellate Authority has taken the view that though the word 'establishment' has not been defined in the Payment of Gratuity Act, 1972 but by virtue of applicability of Employment Exchange (Compulsory Notification of Vacancies) Act, 1959, Equal Remuneration Act, 1976, and Minimum Wages Act, 1948 to the Municipal Corporation Act, the department in which the respondent Smt. V. T. Naresh was working is covered under S. 1(3)(b) of the Payment of Gratuity Act, 1972. Pathak, J. speaking for the Supreme Court in the aforesaid case observed, 'Section 1(3)(b) speaks of' any law for the time being in force in relation to shops and establishments in a State. 'There can be no dispute that the Payment of Wages Act is in force in the State of Punjab. Then it is submitted the Payment of Wages Act is not a law in relation to 'shops and establishment.' As to that the payment of Wages Act is a statue which, while it may not relate to shops, relates to a class of establishments, that is to say, industrial establishments. But, it is contended, the law referred to under S. 1(3)(b) must be a law which relates to both shops and establishments, such as the Punjab Shops and Commercial Establishments act, 1958. It is difficult to accept that contention because there is no warrant for so limiting the meaning of the expression 'Law' in S. 1(3)(b). 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 shops as well as, separate, a law in relation to establishments, or a law in relation shops and commercial establishments and law in relation to non-commercial establishments. Had S. 1(3)(b) intended to refer to a single enactment, surely, the appellate would have been able to point to such a statute, that is to say, a statute relating to shops and establishments, both commercial and non-commercial. 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 S. 1(3)(b), to refer to a law relating to commercial establishments, it would not have been left the expression 'establishment' 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 S. 1(3)(b) urged before us on behalf of the appellant S. 1(3)(b) appliers to every establishment within the meaning of any law for the time being force in relation to establishments in a State. Such and establishment would include an industrial establishment within the meaning of S. 2(ii)(g) of the Payment of Wages Act. Accordingly, was are of opinion that the Payment of Gratuity Act applies to an establishment in which any work relating to the construction, development and maintains of buildings - roads, bridges or canals, or relating to operations connected with navigation irrigation or the supply of water or relating to the generation, transmission and distribution of electricity or any other form of power is being carried on. The Hydel Upper Bari Dop Construction Project is such an establishment, and the payment of Gratuity Act Applies to it.'

4. The Supreme Court for making the aforesaid Act applicable to the employees involved in that case had taken recourse to the meaning of the word, 'establishment' with the meaning of the Payment of Wages Act, S. 2(ii)(j) which defines an 'industrial establishment' to mean any,

'establishment in which any work relating to the construction, development or maintenance of buildings, roads, bridges or canals or relating to operations connected with navigation irrigation or the supply of water, or relating to the generation, transmission and distribution of electricity or any other form of power is being carried on'.

5. There are, in fact, numerous other Acts which defined the word 'establishment'. Reference may be made to the provisions of S. 2(i) of the Apprentices Act, 1961 which reads as under :-

'(i) 'establishment in public sector' means an establishment owned, controlled or managed by (1) the Government or a department of the Government;

(2) a Government company as defined in S. 617 of the Companies Act, 1956;

(3) a corporation (including a co-operative society) establishment by or under under a Central, Provincial or State Act, which is owned, controlled or managed by the Government;'

Thus, a Corporation and/or Local Authority are included within the definition of 'establishment';

6. It will be notice 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. thereforee, it is merely 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. I have, thus, no doubt that the Municipal Corporation of Delhi is an 'establishment' within the meaning of S. 1, Sub-S. (3) Clause (b) of the Act.

7. Coming to the second point, even if Municipal Corporation of Delhi has certain schemes, it is no bar to the applicability of the employees of the petitioner-Corporation. It is only common which can be said that an employee cannot have benefit of both under Payment of Gratuity Act as well as scheme of regulations/pension framed by the Corporation but if he has availed of the benefit under Payment of Gratuity Act, to that extent benefit will be denied to him under the regulations/pension scheme framed by the Corporation. If the Scheme framed by the Corporation gives higher benefit to the extent the employee obtains benefit under the 'Payment of Gratuity Act, to that extent those benefits will be adjusted while claiming benefit under the Scheme of Regulations/pensions framed by the Corporation. The employee cannot have complete benefit under both the Payment of Gratuity Act as well as under the Scheme of regulations/pensions. The extent the benefit has been granted to him under the Payment of Gratuity Act, only to that extent the benefit will be adjusted while enforcing the scheme of regulations/pension framed by the Corporation. Similarly, if under a Scheme framed by the Corporation the benefit is less than that which is available in the Payment of Gratuity Act, the employee will be entitled to claim difference under the Payment of Gratuity Act. No other point was argued. The petition, thereforee, fails and is dismissed. Since nobody has put in appearance on behalf of the respondent parties are left to bear their own costs.


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