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General Manager, the Hindustan Times Ltd. Vs. Amar Singh and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Case NumberLetter Patent Appeal No. 48 of 1971
Judge
Reported inILR1972Delhi191; 1972LabIC46
ActsIndustrial Disputes Act, 1947 - Sections 33
AppellantGeneral Manager, the Hindustan Times Ltd.
RespondentAmar Singh and anr.
Advocates: V.M. Tarkunde,; Anand Prakash,; M. Kapoor,;
Cases Referred(India) Ltd. v. Their
Excerpt:
.....wage plus dearness allowance.; (ii) industrial disputes act (1947) - section 33 (c)(2)--scope of--gratuity scheme applicable to workman of a management--containing various clauses--management wrongly construing that workman's case falls under a particular clause--interference by labour court--called for.; that the contention of the respondent namely, that section 33(c)(2) has only a limited scope, and the management having held that the claim of respondent workman fell under clause (2) of the gratuity scheme, the only point which the labour court could determine was one in relation to the computation of the benefits in terms of money and that the labour court could not have held that the case of the said respondent fell under clause (3)(c) of the gratuity scheme, has no force. - - in..........on the other hand a person whose services are terminated under clause (3)(c) after completion of 5 years service would be entitled to gratuity. in the former case a person must have rendered meritorious service and may not have looked to any other concern for alternative employment. but he will not be entitled to any gratuity while in the latter case an employee whose services are terminated because the employer is not satisfied with his work and finds him un-fit for the job, will be entitled to a gratuity. according to the learned single judge, this contradiction further brings out the absurdity and incongruity of the situation if it were to be held that the case of an employee retiring on reaching the age of superannuation is to be covered by clause (2). (20) learned single judge has.....
Judgment:

Hardayal Hardy, J.

(1) This appeal under clause 10 of the Letters Patent is connected with another appeal viz. LPANo.49of 1971. Both these appeals arise out of the same judgment of the learned Single Judge. Lpa No. 48 of 1971 is against the decision in Civil Writ Petition No. 518-D of 1964 while Lpa No. 49 of 1971 is against the decision in Civil Writ Petition No. 199-D of 1965.

(2) The appellant in either case is the management of The Hindustan Times, a daily newspaper published in Delhi. The contesting res- pondent in both the appeals is Shri Amar Singh (respondent No. 1) who was a peon employed with the appellant. The other respondent is Shri Roop Chand who was the presiding officer of the Labour Court in Delhi.

(3) The question involved in both the appeals is with regard to the amount of gratuity payable to the respondent

(4) It appears that in an industrial Dispute between the appellant and its workmen (being Industrial Dispute No. 29 of 1959), the ageof retirement was fixed by the Industrial Tribunal at 55 years, but in appeal before the Supreme Court the age of retirement was raised to 58 years. In May 1963, respondent No. 1 reached the age of 58 years and retired from service. In the scheme of gratuity for the benefit of non-journalist staff (like respondent No. 1) the award had provided as under:--

(1) On the death of an employee while in 15 days' salary or service of the company or his becoming wages for each comphysically or mentally incapable of future pleted year of service, subject to a service maximum of 15 months' salary or wages payable to the disabled employee or if he dies to his heirs or legal representatives or assignees. (2) On Voluntary retirement or resignation 15 days' salary or of an employee after 15 years conti- wages for each comnuous service, pleted year of service. {3) On termination of service of an employee by the company. (a) After completion of 5 years' service - 1/2 months salary but less than 10 year' service or wages for each completed year of service. (b) [After 10 years' continuous service 3/4 months' salary in the company but less than 15 or wages for each years, completed year of service. (c) After 15 years continuous service 5 months' ' salary in the company, or wages.

Respondent No. 1 having completed 19 years of service on the date of his retirement, made an application under Section 33-C(2) of the Industrial Disputes Act, 1947 for computation of the benefit due to him under the Gratuity Scheme. The application was heard by the Labour Court Delhi and the following two issues were framed :-

1. Whether the applicant is entitled to 15 months' salary or wages as gratuity in accordance with clause (3)(c) of gratuity scheme or is only entitled to 15 days salary or wages for each completed year of service in accordance with clauses (1) & (2) of the scheme 2. Whether gratuity has to be calculated on basic salary or on the consolidated amount of salary and dearness allowance?

(5) By its award dated 22-5-1964 the Labour Court held on issue No. I that the case of respondent No. 1 fell under clause (2) of the gratuity scheme and not under clause (3)(c) as claimed by respondent No. 1. On issue No. 2 the Labour Court held that the gratuity is to be calculated on the total amount payable to a workman including pay and deal-ness allowance. Against the decision of the Labour Court on issue No. 1 the respondent No. 1 filed a Civil Writ Petition No. 518-D of 1964 while Civil Writ Petition No. 199-D of 1965 was filed by the management of the Hindustan Times against the decision on issue No-2

(6) The learned Single Judge accepted the contention urged on behalf of respondent No. 1 and held that the case was covered by clause (3)(c). The learned Judge also up-held decision of the Labour Court holding that gratuity is to be paid on the total amount payable to a workman including pay and dearness' allowance. The appellant has now come up in appeal against the decision of the learned Judge in both the writ petitions and contends that according to the scheme of gratuity the case of respondent No. 1 comes under clauses (1) and (2) or, in any case, under clause (2) and that clause (3)(c) has no application to the facts of the case at all.

(7) As against the second part of the award, the contention is that the award itself makes a distinction between wages and consolidated wages and that dearness allowance is not to be included in the wages on which gratuity is claimed by respondent No. 1.

(8) The contention urged on behalf of the appellant is that Section 33-C(2) has only a limited scope. The management having held that the claims of respondent No. 1 fell under clause (2) of the gratuity scheme, the only point which the Labour Court could determine was one in relation to the computation of the benefits in terms of money The Labour Court could not have held that the case of respondent No. I fell under clause (3)(c) of the gratuity scheme. This is precisely the argument that was raised before the Supreme Court in Central Bank of India Ltd and others v. Rajagopalan (P.S.) and others [1963(2) Llj 89] and was negatived.

(9) It is next contended that the Labour Court having accepted the stand of the appellant this Court in exercise of its powers under Article 226 of the Constitution, could not issue a writ of certiorari correcting the decision of the Labour Court. Reliance was placed on a decision of the Supreme Court in Agnani v. Badri Das and others l 963(l) Llj, 684

(10) It was urged that the decision of the Labour Court on a construction of the gratuity scheme did involve any error of law apparent on the face of the record and was thereforee not amenable to a writ of cortiorari. The retirement of respondent No. 1 could as well be treated as voluntary retirement after 15 years continuous service under clause (2) as it could be treated as termination of his service after lie had completed 15 years continuous service with the company. The finding of the Labour Court thereforee could not be interfered with by the learned Single Judge, particularly when the learned Judge had himself held that a look at the gratuity scheme made it quite obvious that there was an omission so far as the mention of the word 'retirement' on reaching the age of superannuation was concerned.

(11) We are not impressed by this argument. The learned Single Judge has held that the conclusion that on reaching the age of superannuation a workman who had put in 19 years of continous service would not be entitled to gratuity could not be within the contemplation of the parties to the dispute and that the conclusion reached by the Labour Court was so manifestly absurd and anamologus that it could not be accepted.

(12) The award makes it clear that one of the points dealt in by it was with reference to a gratuity scheme for workmen. In the gratuity scheme there is a provision for paying gratuity to workmen on death or on their becoming physically or mentally incapable before reaching age of superannuation. Persons whose services are terminated after completing five years of service are also entitled to the benefit of gratuity. Can it be said in these circumstances that an employee who serves the management for full term till he reaches the age of superannuation, has to be retired without getting any benefit under the scheme? The learned Judge is thereforee right when he says that the case of those employees who were retiring at the age of super annualion was very much under contemplation and was included in the gratuity scheme that was framed by the award.

(13) The argument in favor of clause (2) which weighed with the LabourCourt seemed to be that as the employee had himself agreed that when he reached the age of superannuation he would retire from service. This amounted to a sort of voluntary retirement. Counsel for the appellant drew support for this argument from a decision of Orissa High Court in Hhuiustan. Steel Ltd. .RourkelaMazdoarSabhaund others (1970 (2) Llj 533) (3) and also from an un-reported decision of Bench of this Court consisting of the Hon'ble the Chief Justice and P. N.KhaiinaJ.in Civil Writ No. 71 of 1969: The MotWgeimniot associated Trail- ers & Engineers P'f. Ltd. v. Basailt Lal Bhambri etc. decided on May 13. 1971 (4).

(14) In the case before the High Court of Orissa the question was about an employee who was on a contract lor a period of three years. The contract was to expire on 5-1-1964. Meanwhile the service of the employee was terminated for mis-conduct. The Labour Court held that the dismissal was un-justified and ordered re-instatement with back wages. The finding of the Labour Court was up-held by the High Coui't and it was said that the order of dismissal was un-justified, but so far asan order regarding payment of back wages was concerned the Labour Court could not award re-instatement after the expiry of the contracl period. The award granting back wages for the period from the date of his removal til] 5-1-1964 was up-held but the orde of re-instatement and payment of back wages subsequent to 5-1-1964 was quashed. The argument of the employee's counsel was that when a workman reached the age of superannuation his services automatically came to an end and no order was necessary to terminate his services. The retirement of the workman was thereforee voluntary retirement.

(15) In the Division Bench case before this Court the employee was on a fixed contract of service for a specific period of two years. On the expiry of that period his services came to an end automatically and thereforee it was not necessary to serve the respondent with a notice terminating his services as no termination was involved. It was in fact the completion of the period of service by afflux of time.

(16) Both these cases are clearly distinguishable on their own facts. In both the cases the service of the employee was for a fixed period which automatically came to an end on a certain date There was thus no question of the employee continuing beyond that period unless the same was extended by mutual consent of the employer and the employee.

(17) In the present case, the age of retirement has been fixed at 58 years but an option has also been given in the award to retain the person up to the age of 60 years. There is no specific bar against an employee being retained in service beyond 60 years as such. In these circumstances, to say that when respondent No. 1 reached the age of superannuation and was told by the management as per the General Manager's letter dated. March 4, 1963 which was attached as annexure B to the writ petition that his retirement would become effective on May 1. 1963 and the accounts department was being advised to square up his account in due course, the retirement amounted to voluntary retire- ment within the meaning of clause (2) of gratuity scheme appears to us to be an un-supportable conclusion. The learned Judge has said so and we are in complete agreement with him on the point.

(18) The plain and simple meaning of clause (2) is that it refers to those cases where a person of his own accord, wants to retire from service. In such a case the award has made a further limitation that unless the workman has completed 15 years of continuous service he would not be entitled to the benefit of gratuity. The reason for providing a longer minimum period for earning gratuity in the case of voluntary retirement or resignation is to see that the workmen do not leave one concern after another, after putting in a short minimum service of 5 years. A longer minimum in the case of voluntary retirement or resignation makes it more probable that the workmen would stick to the company where they are working.

(19) There is another reason why it cannot be accepted that clause (2) covers cases of all employees retiring on reaching the age of superannuation. That clause provides that before an employee is entitled to its benefit it is incumbent upon him to have put in 15 years of service. This would mean that if a person who reaches the age of superannuation ten years of service, will not be entitled to any gratuity at all. On the other hand a person whose services are terminated under clause (3)(c) after completion of 5 years service would be entitled to gratuity. In the former case a person must have rendered meritorious service and may not have looked to any other concern for alternative employment. But he will not be entitled to any gratuity while in the latter case an employee whose services are terminated because the employer is not satisfied with his work and finds him un-fit for the job, will be entitled to a gratuity. According to the learned Single Judge, this contradiction further brings out the absurdity and incongruity of the situation if it were to be held that the case of an employee retiring on reaching the age of superannuation is to be covered by clause (2).

(20) Learned Single Judge has also referred to Fundamental Rule 56(a) and to Article 459 of the Civil Service Regulations and Liberalised Pension Rules contained in Appendix 41 of Civil Service Regulations, We however do not consider it necessary to go into those rules as on a plain construction of the gratuity scheme we are satisfied that the view of the Labour Court that a person retiring on reaching the age of superannuation can be deemed to be covered by clause (2) does not commend itself to us. The case of the respondent appears to us to be fully covered by clause (3)(c) of the Gratuity Scheme and he is thereforee entitled to 15 months, wages as provided therein. The order of the Labour Court has thereforee been rightly quashed by the learned Single Judge and the appeal filed by the appellant on that part of the judgment of the learned Single Judge is dismissed.

(21) We have already said that Civil Writ petition No. 199-D of 1965 was directed against the second part of the decision of the Labour Court. The Labour Court had held that the mention of the word 'wages' in the gratuity scheme included the total amount payable on account of pay and dearness allowance. In doing so, the Labour Court held that the words used in the scheme were 'salary' or 'wages'. This means that the two words have the same meaning. The word 'wages' has been defined in Section 2(rr) in the Industrial Disputes, Act. 1947 as meaning all remuneration capable of being expressed in terms of money and includes allowances such as dearness allowance. The same definition has been given to that word in the Payment of Wages Act, the Minimum Wages Act and other statutes where the word has been defined. The Labour Court thereforee held that the gratuity is to be calculated on the total amount payable to a workman as pay and dearness allowance

(22) The learned Judge lias accepted that definition. Before the learned Single Judge a decision of the Supreme Court in Ghaziabad Engineering Company (Private) Lid. v. Its workmen (1969(2) LLJ777 was cited on behalf of the appellant. It was held in that case that the normal rule is that determination of gratuity should be related to basic pay unless there was evidence to show that the company's profits were abnormally high or the practice in the region was that other similar concerns paid gratuity on the basis of consolidated wages. In the absence of such evidence there could be no departure from the normal rule and that wages meant basic wages only.

(23) In the present case, the grievance of the workmen before the Tribunal was that whereas gratuity was being paid to the journalists by virture of the provisions of the Working Journalists (Conditions of Service) and Misc. Provisions Act, 1955 there was no gratuity scheme in the case of non-journalists in the same establishment. The union representing the workmen had suggested that they would be satisfied if the scheme in so far as it applied to journalists, was adopted for the non-journalists. The Tribunal had also before it the terms and conditions of the workmen employed by Messrs Bennet, Coleman & Company Limited where while granting gratuity it was specifically made clear that pay shall include only basic pay for this purpose and yet the Tribunal did not choose to so limit the award while making gratuity scheme in the present case.

(24) Learned Single Judge has also referred to the definition of the word 'wage' in the Webster's Third New International Dictionary, Vol. Ii, wherein the word is defined as 'monetary remuneration by an employer especially for labour or services usually according to the contract and on an hourly,daily or piece-work basis and often including bonuses, commissions, and amounts paid by the employer for insurance, pension hospitalisation and other benefits ! according to the learned Judge, this definition shows that in the normal course wages are not necessarily exclusive of allowances and unless this is specially made clear they would include the allowances. The award not having limited the meaning of the wages to mean basic wages according to the learned Judge, there is no reason why the definition of the word 'wages' as including all wages be not accepted.

(25) It appears to us that neither the Labour Court nor the learned Single Judge was right in the view taken by them. The Supreme Court has held in the case of Ghaziabad Engineering Co. (Pvt.) Ltd.(5) that the normal rule is that determination of gratuity should be related to basic pay. This view is supported by several other decisions of the supreme Court. In Delhi Cloth and General Mills Co. Ltd. v. Its workmen 1969 2 Llj 755 the Supreme Court had to consider whether gratuity payable to workmen the textile industry in the Delhi region should be related to the consolidated wages. It was observed that although it was not easy to extract any principle from the cases to which the attention of the Court was invited for as precedents they were conflicting. It was also noticed that the Tribunal in that case had failed to take into account the prevailing pattern in the textile industry over the country where except in one case, gratuity had never been granted on the basis of consolidated wages.

(26) In British Paints (India) Ltd. v. Its Workmen 1966 (1) Llj 407 the Supreme Court while introducing a gratuity scheme for the first time in the concern directed that the amount of gratuity shall be related to the basic wage or salary and not to the consolidated wage including dearness allowance. A similar order was also made in May and maker (India) Ltd. v. Their workmen 1965 (2) Llj 94 In British India Corporation v. their workmen 1965 (2) Llj 556 an award made by the Tribunal fixing quantum of gratuity on gross salary i.e. basic wage plus dearness allowance was no doubt upheld by the Supreme Court but it was affirmed that the usual pattern in fixing the gratuity was to relate it to the basic wage. The actual decision of the Tribunal was however up-held and the Court refused to interfere with the order because the practice in that concern was to fix gratuity on the consolidated wage.

(27) In Hindustan Antibiotics Ltd. v. their workmen (1967 (1) Llj 114 the Tribunal directed that gratuity be paid at the rate of 1/2 of wages for each month including dearness allowance but excluding house rent and all other allowances for each completed year of service subject to a maximum of wages for ten months.. In rejecting the claim of the employers to relate gratuity to the basic wage, the Supreme Court observed at page 129 :-

'If tile industry is a flourishing one, we do not see any reason why the labour shall not have the benefit of both the schemes, i.e. the employees' provident fund and the gratuity scheme. ...Gratuity is an additional form of relief for the workmen to fall back upon. If the industry can bear the burden. there is no reason why he shall not be entitled to both the retirement benefits. The tribunal considered all the relevant circumstances, the suitability of the concern, the profits made by it is in the post. its future prospects and its capacity, and came to the conclusion that. in the concern in question, the labour should be provided with a gratuity schemes in addition to that of a provident fund scheme. There was no justification to disturb this conclusion.

(28) In Ramington Ram of India Limited v. their workmen (1968 (1) Llj 542 the Supreme Court declined to interfere with the order of the Tribunal awarding gratuity on the basis of the consolidated wage . including dearness allowance. The court however did so in view of the flourishing nature of the concern, the enormous profits it was making, the reserve it had build up as also in view of the fact that it was paying gratuity to executives on the basis of consolidated wages.

(29) No such considerations appear to have weighed with the Labour Court or with the learned Single Judge. News-paper industry a country-wide industry. The only example that was placed before learned Single Judge was of Bennet.Coleman& Co. Limited. In that case gratuity had been granted on the basis of basic wages and not consolidated wages. There was also no evidence about the fiourshing nature of the concern and the enormous profits it was making. There was also no evidence of reserves built up by the concern and all that was stated was that gratuity was being paid to journalist on the basis of consolidated wages. If the Labour Court and the learned Single Judge wanted to base their decision on the flourishing nature of the concern and other matters they should have said so and evidence should have been called in that behalf. The Labour Court however went into the definition of wages in the Industrial Disputes act. 1947 and so it seems, was done by the learned Single Judge,for it was observed that the award not having limited the meaning of wages to mean basic wages, there was no reason why the definition of the word wages as including all wages be not accepted. It appears to us that there an error in the approach of the learned Single Judge for a reference to paras 21, 21. 22 and 35 of the award makes it plain that the word basic wage has been used in contradistinction to the word consolidated wage which includes dearnees allownce. The Tribunal after setting out the revised scales has stated that the same should further be supplemented by a flat rate of dearness allowance in all cases vis. with retrospective effect from the date of reference so that the lowest paid worker will start on not less than Rs. 75.00. In para 22 the Tribunal went to the length of saying that it was difficult to determine what part of the existing wages exactly represented the basic wage as distinct from dearness allowance and thereforee any attempt to disrupt the same with that object was likely to give rise to un-necessary complications.

(30) In the circumstances, this part of the order of the learned Single Judge will have to be reversed. The gratuity payable to respondent. No. I should be on the basis of his basic wage and not on the basic wage plus dearness allowance. The necessary calculations may be made by the appellant and the amount paid to respondent No. 1 accordingly.

(31) There will be no order as to costs in both the appeals.


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