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Brunton and Co. Engineers Ltd. Vs. Francis (N.L.) and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Judge
Reported in(1966)IILLJ219Ker
AppellantBrunton and Co. Engineers Ltd.
RespondentFrancis (N.L.) and anr.
Cases ReferredUnion v. Indian Aluminium Co. Ltd.
Excerpt:
.....that the company has been doing none too well and that it has fallen on lean years and that the time when it can be expected to make such profits as will leave a surplus after reasonable claims of capital for a fair share therein are met is not at all near in sight. 198, to the case on hand, and to institute only such a limited scheme of gratuity which will cease to exist after the case or claims are satisfied of employees who will not be substantially benefited by the provident fund scheme, that is to say, of employees who will be severing their connexion with the company within the next few years, say, by or before 1960. 4. emphasis was placed by counsel on the last portion of para......33c(2) requesting the labour court to determine the amount of gratuity due to him under the gratuity scheme framed by the industrial tribunal, coimbatore, in industrial disputes nos. 9 and 22 of 1953 between the management and the workmen of the engineering workshop of the company. this petition was tried along with a similar petition filed by another workman who resigned and claimed similar relief. the company resisted the claim for gratuity on the ground that the gratuity scheme under which gratuity is claimed is no longer in force and that the payment of gratuity is not a condition of service of the workmen. but respondent 2, by his award, negatived the contention of the company and held that respondent 1 is entitled to gratuity under the gratuity scheme referred to above......
Judgment:

K.K. Mathew, J.

1. Petitioner in this case is Brunton & Co. Engineers, Ltd., Cochin, hereinafter called the company. Respondent 1 is a workman in the engineering workshop belonging to the company. He resigned his post on 24 September 1962. He had 16 years and 9 months of service at the time of his resignation. He filed an application before the labour court under Section 33C(2) requesting the labour court to determine the amount of gratuity due to him under the gratuity scheme framed by the industrial tribunal, Coimbatore, in Industrial Disputes Nos. 9 and 22 of 1953 between the management and the workmen of the engineering workshop of the company. This petition was tried along with a similar petition filed by another workman who resigned and claimed similar relief. The company resisted the claim for gratuity on the ground that the gratuity scheme under which gratuity is claimed is no longer in force and that the payment of gratuity is not a condition of service of the workmen. But respondent 2, by his award, negatived the contention of the company and held that respondent 1 is entitled to gratuity under the gratuity scheme referred to above. Exhibit A is a copy of the order and this writ petition seeks to quash that order.

2. The main submission of Sri P.K. Kurien, who appeared for the petitioner, was that under the award above referred to, the petitioner was not entitled to get any gratuity as he would not come within the terms thereof, under the gratuity scheme framed under Ex. P. 7, award for the workmen in the engineering workshop, the company was to pay gratuity at the rate of fifteen days' wages for each year of continuous service subject to the specific condition that the Scheme as a whole should cease to exist at the end of seven years from the date when the award became enforceable. Paragraph 17 of Ex. P. 7, award, runs as follows:

It is to be reiterated that the scheme applies only to workers who were in the company's pay-roll on the date of reference and that the scheme should as a whole cease to exist at the end of seven years from the date when the award becomes enforceable.

3. The award became enforceable on 10 November 1953, and the period of seven years expired on 10 November 1960. According to the petitioner, after that date the gratuity scheme framed under Ex. P. 7 automatically came to an end and respondent 1 having resigned from the service on 24 September 1962, when there was no gratuity scheme, he was not entitled to claim any amount. Counsel for the petitioner referred to Para. 12 of the award which is as follows:

I would not at all adopt as justified the rosy picture drawn by the learned representative for the workers. On the contrary, I am of opinion, the learned representative of the company was more nearly correct when he said that the company has been doing none too well and that it has fallen on lean years and that the time when it can be expected to make such profits as will leave a surplus after reasonable claims of capital for a fair share therein are met is not at all near in sight. My finding is that in its present state of finances the company has not the capacity to bear the dual burden of a provident fund scheme (that has already been instituted and which is presently framed) and of any long-term gratuity scheme. That being so, I find, it is right to apply the principle of the ruling in the case of Kamdars, Ltd. 1952-II L.L.J. 198, to the case on hand, and to institute only such a limited scheme of gratuity which will cease to exist after the case or claims are satisfied of employees who will not be substantially benefited by the provident fund scheme, that is to say, of employees who will be severing their connexion with the company within the next few years, say, by or before 1960.

4. Emphasis was placed by counsel on the last portion of Para. 12 and he contended that since respondent 1 resigned after 1960, he was not in any way entitled to gratuity.

5. Respondent 2 relied on the fact that the company paid gratuity to four other workers even though they resigned from service only in 1961 as indicating that the award continued to be binding even after the period of seven years. He also relied upon Exs. P. 1 to P. 4 to show that the company has thought itself bound by the gratuity scheme framed under the award even after the expiry of the seven years. Respondent 2 held that since the award has not been terminated under Section 19(6), it continued to be binding and the fact that the seven years' period mentioned in the award expired when respondent 1 resigned was immaterial, as the operation of the award was not terminated by notice under Section 19(6).

6. It is clear law that an award will be binding on the parties even after the date mentioned therein, unless it is terminated by a notice under Section 19(6). Section 19(6) is as follows:

Notwithstanding the expiry of the period of operation under Sub-section (3), the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award.

7. In Indian Aluminium Co. Ltd., Alwaye v. their workmen and Anr. 1958-II L.L.J. 403 which was confirmed in appeal in Aluminium Factory Workers' Union v. Indian Aluminium Co. Ltd. 1962-I L.L.J. 210, it was held:

Section 19 of the Industrial Disputes Act does not visualize the automatio termination of any award framed under the Industrial Disputes Act. Even in a case where the award mentions the date till which it would be binding on the parties, notice of termination under Section 19 of the Industrial Disputes Act must beheld to be necessary. See the headnote.

8. But Sri P.K. Kurien contended that the nature of the award under consideration here is such that it would enure only to the benefit of persons specifically mentioned in the award and that the character of the award cannot be changed by the fact that no notice under Section 19(6) was given so that even if the award continued to be binding it cannot benefit a person who does not come within the category, and as respondent 1 did not resign from the company on or before 1960, he was not entitled to the benefit of the gratuity scheme. On the other hand, it was argued on behalf of respondent 1 that under Clause 17, all persons who were on the pay-roll of the company on the date of the reference and who have served the company for seven years are entitled to the benefit of gratuity. I think, as the binding character of the award has not been terminated by a notice under Section 19(6), the obligations under the award continued. The company also thought itself bound by the award although the period mentioned therein expired. If that be so, the finding by the labour court that respondent 1 was entitled to gratuity, he being on the pay-roll and having served the company more than seven years, cannot be said to be wrong or erroneous in point of law.

9. The petition, therefore, fails and it dismissed without any order as to costs.


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