Kirori Mal High School v. Controlling Authority Under Payment of Gratuity Act Bhiwani and Others

INoTHEoHIGHoCOURToOFoPUNJABo&oHARYANAo AToCHANDIGARH **** CWP-16173-2023 DateoofoDecision:o31.07.2023 KirorioMaloHighoSchool,oBhiwani .....oPetitioner Versus ControllingoAuthorityounderoPaymentoofoGratuityoActoandoothers ooooooo .....oRespondents CORAM:oHON'BLEoMR.oJUSTICEoHARSHoBUNGER Present: Mr.oAnkitoBishnoi,oAdvocate forotheopetitioner. ***** HARSHoBUNGERoJ.o(ORAL)

¶1Petitioner-SchoolohasofiledotheoinstantopetitionounderoArticles 226/227oofotheoConstitutionoofoIndiaoseekingoissuanceoofoaowritoinotheonature ofocertiorarioforoquashingoofoorderodatedo13.03.2023o(AnnexureoP-6)opassed byotheolearnedoControllingoAuthorityounderotheoPaymentoofoGratuityoAct, 1972o(foroshort,o'1972oAct'),owherebyotheoapplicationoofopetitioneroforosetting aside oexoparteo ordersodatedo10.12.2021o(AnnexureoP-2)oando22.11.2022 (AnnexureoP-3)ohaveobeenodismissed.oAofurtheroprayerohasobeenomadeofor directingotheolearnedoControllingoAuthorityounderotheo1972oActotoopermitothe petitionerotoojoinotheoproceedingsoandopresentoitsodefenceoandothereafter,othe matterobeodecidedoafresh,ouponoconsideringotheoversionoofopetitioner-School.

¶2Briefly,orespondentoNo.3o(MadanoLal)oapproachedotheolearned ControllingoAuthorityounderotheo1972oActobyofilingoanoapplicationounder Sectiono7(3)oofotheo1972oActoclaimingothatoheowasoentitledotoopaymentoof gratuityounderoSectiono4oofotheo1972oActoonoaccountoofohisosuperannuation, withoeffectofromo31.05.2020,oafterocompletionoofo34oyearso10omonthsoando19 daysoofocontinuousoandounblemishedoservice.oItowasotheocaseooforespondent No.3o(MadanoLal)othatoheowasoinitiallyoappointedoasoDrawingoTeacheroon

12.07.1985oagainstoaidedopostoandoasosuch,oheowasopostedoatoKirorioMal HighoSchool,oBhiwanio(petitioner)oandoheoworkedothereoupotoo14.02.2018. RespondentoNo.3ostatedothatothereafter,ohisoservicesowereotakenooverobyothe Government o and o he o joined o his o services o as o Drawing o Teacher o at o the GovernmentoSenioroSecondaryoSchoolowithoeffectofromo15.02.2018oandohe superannuatedoono31.05.2020.oItowasoclaimedothatotheoGovernmentohadonot releasedohisoshareoofogratuityotootheotuneoofoRs.o8,73,288/-ooutoofototal gratuityoofoRs.11,64,384/-oandotheoManagingoCommitteeoofopetitioner-SchoolowasotoopayoitsoshareoofogratuityoamountingotooRs.2,91,096/-.oItowas theocaseooforespondentoNo.3othatotheoemployerohadoneitheropaidogratuityoto himoinspiteooforepeatedorequestsoandonoticeodatedo18.01.2021onoroamountoof gratuityowasodepositedowithotheoOfficeoofoControllingoAuthorityounderothe 1972oAct.

¶3It o appears o that o on o 10.12.2021, o the o petitioner-School o was proceededoagainstoex-parteobyotheoControllingoAuthorityounderotheo1972oAct (respondentoNo.1)oandotheomatterowasofinallyodecidedovideoorderodated

22.11.2022o(AnnexureoP-3)obyoholdingoasounder:- " - x - x - InoviewoofofindingoonoissueoNo.1otheoapplicantoisoentitled tootheoamountoofogratuityotootheotuneoofoRs.2,91,096/-oalong withointerestotootheotuneoofoRs.65,494/-ototaloamountingoto Rs.3,56,590/-. I attest to the accuracy and I,otherefore,odirectotheorespondentoNo.1otoodepositothe amount o of o Rs.3,56,590/- o within o 30 o days o from o the communication o of o this o order o failing o which o the o amount gratuityowillobeorecoveredowithointeresto@o10%operoannum. - x - x - "

¶4Asoperotheopetitioner-School,oit ocameotooknowoabout othe aforesaidoorderoono05.12.2022,owhenoitoreceivedocopyoofotheosameobyopost andothereafter,otheopetitioner-Schooloisostatedotoohaveomovedoanoapplication forosettingoasideoordersodatedo10.12.2021o(AnnexureoP-2)oando22.11.2022 (AnnexureoP-3)obeforeotheoauthorityoconcerned.oTheosaidoapplicationowas contestedobyorespondentoNo.3o(MadanoLal)obyofilingohisoreply.oThereafter, theoControllingoAuthorityounderotheo1972oAct,oBhiwaniodismissedothe aforesaidoapplicationoofopetitioner-Schoolovideoitsoorderodatedo13.03.2023 (AnnexureoP-6).oAccordingly,otheoinstantowritopetitionohasobeenofiledobefore thisoCourt.

¶5Learnedocounseloforotheopetitionerocontendsothatoorderodated

13.03.2023o(AnnexureoP-6)ohasobeenopassedoinoaoslipshodoandohurried manneroandoaverments/submissionsoofotheopetitioner-Schoolohaveonotobeen consideredobyotheoControllingoAuthorityounderotheo1972oAct,oBhiwani (respondentoNo.1).oItoisofurtherosubmittedothatotheosaidoorderoisoaonon-speakingoorderoandoisoaccordingly,ounsustainableoinotheoeyesoofolaw.oLearned counseloforotheopetitioner-SchoolocontendsothatotheoControllingoAuthority underotheo1972oAct,oBhiwaniohasofailedotooappreciateothatotheopetitioner-Schoolowasoonlyoseekingotooparticipateoinotheoproceedings,ohowever,othe sameohasobeenowronglyodeclined.oItoisosubmittedothatoevenootherwise, respondentoNo.3odoesonotofallowithinotheopurviewoofo1972oActoasoheohad workedoasoao'teachingopersonnel'oinoanoEducationaloInstitutionoandoasonotoa 'labouroofficial'oinotheoMinisterialoStaff.oAccordingly,orespondentoNo.3 (MadanoLal)oisonotocoveredounderotheodefinitionoofoanoemployeeoasoprovided inotheo1972oActoasotheopetitioner-SchooloisoaoGovernmentoaidedoInstitution. Learnedocounseloforotheopetitioner-SchoolocontendsothatotheoControlling Authorityounderotheo1972oAct,oBhiwaniohasoexceededoitsojurisdictionoin entertainingoandoallowingotheoapplicationofiledobyorespondentoNo.3ofor claiming ogratuityoundero theo1972 oAct.o It ois oalso ocontended othat o the proceedingsoconductedobyotheoControllingoAuthorityounderotheo1972oActoare violativeoofoprinciplesoofonaturalojustice,oaccordinglyoitoisoprayedothat impugnedoorderobeoquashedoandotheomatterobeoremittedotootheoControlling Authorityounderotheo1972oAct,oBhiwani,opermittingotheopetitioner-Schooloto joinotheoproceedingsoandotoopresentoitsodefence,owithoaofurtherodirectionoto theoControllingoAuthorityounderotheo1972oAct,oBhiwaniotoodecideotheomatter afreshoafteroconsideringotheosubmissionsoofopetitioner-School.

¶6Iohaveoheardolearnedocounseloforotheopetitioneroandogone throughotheopaperobookowithohisoableoassistance.

¶7Concededly, o respondent o No.3 o (Madan o Lal) o has o filed o an applicationounderoSectiono7(3)oofotheo1972oActoagainstotheopetitioner-School andoDistrictoEducationoOfficer,oBhiwani,oclaimingogratuityounderotheo1972 Act.oItoappearsothatotheopetitioner-Schoolowasoproceededoagainstoex-parteoon

10.12.2021oandovideoorderodatedo22.11.2022o(AnnexureoP-3),otheoapplication filedo byorespondent oNo.3 oseekingo gratuityoamount owas o allowed.o The petitionerofiledoanoapplicationoforosettingoasideothe oex-parteo orderodated

10.12.2021oasowelloasotheofinaloorderodatedo22.11.2022oonotheopleaothatothe petitioner-Schooloneveroreceivedosummonsopersonallyoofotheosaidocase, hence o it o could o not o appear o before o the o concerned o authority o and, o was accordingly,oproceededoagainst oex-parteo ono10.12.2021.oTheopetitioner-Schoolofurtheropleadedothatoitocameotooknowoaboutotheoaforesaidodecision only o when o it o received o the o intimation o of o order o dated o 22.11.2022 o on

05.12.2022 o through o post. o It o was o pleaded o that o non-appearance o of o the petitioner-School o before o the o concerned o authority o was o unintentional, accordinglyoprayeroforosettingoasideoex-parteoorderodatedo10.12.2021oandothe finaloorderodatedo22.11.2022owasomade.oItoappearsothatoaforesaidoapplication wasocontestedobyorespondentoNo.3o(MadanoLal)obyofilingohisoreply.oItowas theostandooforespondentoNo.3othatopetitioner-Schoolowasoproceededoagainst ex-parteoono10.12.2021oandotheoapplicationoforosettingoasideotheoex-parte proceedingsowasofiledoono03.01.2023,oi.e.oafteroaodelayoofoalmostooneoyear.oIt wasoalsootheostandooforespondentoNo.3othatotheonotice/summonsowereoserved uponotheopetitioner-SchoolothroughoitsoofficialoBhupenderoSingh,ohowever, theopetitioner-SchoolodidonotoappearobeforeotheoControllingoAuthorityounder theo1972oAct,oBhiwanioandoconsequently,oitowasoproceededoagainstoex-parte.

¶8Considering o the o rival o stands o of o the o parties, o the o learned Controlling o Authority o under o the o 1972 o Act, o Bhiwani o dismissed o the applicationoforosettingoasideoex-parteoorderodatedo10.12.2021oandofinaloorder datedo22.11.2022,ovideoitsoorderodatedo13.03.2023o(AnnexureoP-6)oby holdingoasounder:- " - x - x - Onoperusaloofotheomainocaseofileoandosummonsoissuedoto theoapplicant/respondentoNo.1oitoisoveryomuchoclearothat notice/summonotootheorespondentono.1owasoservedothrough thisocourtoandoreceivedobyoofficialoofotheorespondentono.1 schooloono16.4.2021.oHoweverorespondentono.1ochoseonototo appearoononextodateoofohearingoono3.5.2021.oThereafter, keepingoinoviewointerestoofojustice,onoticeowasoagainoserved throughothisocourtoandoreceivedobyoofficialoofotheorespondent I attest to the accuracy and no.1oschooloono12.11.2021.oHoweverorespondentono.1oagain choseonototooappearoononextodateoofohearingoono10.12.2021. Ono10.12.2021,orespondentono.1owasoproceededoex-parte. Hence,otheocontentionoraisedobyotheorespondentono.1/applicant thatoheohasoneveroreceivedotheosummonsoofotheocaseopersonally isonototenable.oMoreover,otheorespondentono.1ohasonotoraised anyoobjectionoregardingoaddressoofoSchool. Inoviewoofomyofindingsoaboveotheoapplicationoofothe respondentono.1/applicantoforosettingoasideoex-parteoorder datedo10.12.2021oandofinaloorderodatedo22.11.2022oisohereby dismissedowithonooorderoasotoocosts."

¶9Aoperusaloofotheoaforesaidofindingoreturnedobyotheolearned ControllingoAuthorityounderotheo1972oAct,oBhiwaniowouldomanifestothatothe notices/summonsowereoservedouponotheopetitioner-Schooloandowasoduly receivedobyotheoofficialoofopetitioner-Schooloono16.04.2021.oItoisofurther recordedothatonoticeowasoagainoservedouponotheopetitioner-School,owhich wasoalsooreceivedobyotheoofficialoofopetitioner-Schooloono12.11.2021, however,opetitioner-Schooloagainochoseonototooappearoonotheonextodate,oi.e.

10.12.2021,oandoaccordinglyoonotheosaidodate,otheopetitioner-Schoolowas proceededoagainstoex-parte.oItohasobeenoheldobyotheoControllingoAuthority underotheo1972oAct,oBhiwaniothatotheocontentionoraisedobyotheopetitioner-Schoolowithoregardotootheofactothatoitoneveroreceivedotheosummonsoofocase personallyoisonototenable;omoreoso,otheopetitioner-Schooloneveroraisedoany objectionoregardingotheoaddressoofoSchool.

¶10Iohaveoconsideredotheoaforesaidoobservationsomadeobyothe ControllingoAuthorityounderotheo1972oAct,oBhiwaniovideoitsoorderodated

13.03.2023o(AnnexureoP-6),owherebyotheoapplicationoforosettingoaside ex-parteo orderodatedo10.12.2021oandofinaloorderodatedo22.11.2022owas dismissedoandoIodoonotofindoanyoillegalityooroperversityoinotheosaidoorder. 2023.09.15 10:22 Moreoso,owhenoitohasobeenoheldoasoaomatteroofofactothatosummonsosentobyothe ControllingoAuthorityounderotheo1972oActowereodulyoreceivedobyotheoofficial ofopetitioner-School,onotoonlyoono16.04.2021obutoalsooono12.11.2021, however,otheopetitioner-Schoolochoseonototooappearobeforeotheoauthority concernedoforotheoreasonsobestoknownotooit.oMoreover,oitohasoalsoobeen observedothatotheopetitioner-Schoolodidonotoraiseoanyoobjectionoregarding addressoofotheoSchool.oStillofurther,oIohaveoperusedotheoentireowritopetition andoalsootheocategoricostandotakenobyorespondentoNo.3o(MadanoLal)oinohis replyotootheoapplicationoforosettingoasideotheoex-parteoorder,owhereinoitowas statedothatonotices/summonsoofotheocaseowereoservedouponopetitioner-School throughoitsoofficialoBhupenderoSingh,ohowever,otheosaidofactohasoalsoonot beenodisputedobyotheopetitioner-Schooloinotheoentireopetition.

¶11Asoregardsotheosubmissionoofotheopetitioner-Schoolothato1972 ActoisonotoapplicableouponoitoandorespondentoNo.3o(MadanoLal)oasoheowas workingoasoaoteacheroandotheopetitioneroisoaoGovernmentoaidedoSchool, sufficeoitotoosayothatoissueoregardingoapplicabilityoofo1972oActoasoregardsothe schools/aidedoschoolsoisonoomoreoresointegraoasotheosameohasobeenodecided byotheoHon'bleoSupremeoCourtoinotheocaseoof o"IndependentoSchool's FederationoofoIndiao(Regd.)oVs.oUnionoofoIndiaoandoanother",o2022(4) S.C.T.o119,owhereinoitohasobeenoheldoasounder:-" -x -x -

10.oTheoobjectoandoreasonsoforotheoAmendmentoAct,o2009 refers o to o the o judgment o in o Ahmedabad o Private o Primary Teachers'oAssociationo(supra),oandostatesothatotheolegislature, to o cover o the o definition o of o "employee" o to o all o kinds o of employees,ohasousedolanguageosimilarotootheowideolanguageoof clauseo(f)oofoSectiono2oofotheoEmployees'oProvidentoFundsoand MiscellaneousoProvisionsoAct,o1952.oItoisoalsoocrystaloclear thatotheoParliamentohasopassedoandoenactedotheoAmendment I attest to the accuracy and Act,o2009otooconfer,owithoretrospectiveoeffectofromotheodateoof rdtheonotificationoono% otipril,o1999,o&enefitoofogratuityotoothe teachersowhoohaveorenderedocontinuousoserviceoforonotoless than o # o years, o on o their o superannuation, o retirement o or resignation,ooroonotheirodeathoorodisa&lementodueotooaccident orodisease. -x -x -

¶14The legislature, vide the Amendment Act, 2009, has given retrospective effect to the amended provision of Section 2(e) and the newly inserted Section 13A with effect from 3rd April 1997, which is also the date of the notification issued by the Government under Section 1(3)(c), making the PAG Act applicable to the educational institutions with ten or more employees. The amendment enforces and gives effect to what was intended by the notification, but could not be achieved on account of the technical and legal defect. The lacuna, a distortion in the language that had the unwitting effect of leaving out teachers, has been rectified so as to achieve the object and purpose behind the issuance of the notification, making the PAG Act applicable to all educational institutions. The argument of the educational institutions that they have been taken by surprise is incorrect and unacceptable as the legislation had cured the inadvertent defect in a statute, as pointed out by this Court, through legislative repair. Private schools, when they claim a vested right arising from the reason of defect, should not succeed, for acceptance would be at the expense of teachers who were denied and deprived of the intended benefit. Marginal inconvenience in the form of financial outgo or difficulty is of little weight, when curing of an inadvertent defect is made retrospectively in greater public interest, which consideration will overrule the interest of one or some institutions. We find little merit in this argument also for the reason, that the observations of this Court in Ahmedabad Private Primary Teachers' Association (supra) in 2023.09.15 10:22 paragraph 26 were sufficient to indicate that a legislation should intervene to grant the benefit of gratuity to teachers. The contention that the private schools were sure to succeed as to deny the teachers the benefit of the Notification No. S-42013/1/95-SS.(II) dated 3rd April 1997, is questionable and farfetched to be accepted. The challenge was contested and had remained pending before the High Courts and then this Court. The private schools had relied on some judgments of this Court, but these judgments have interpreted the word "employee" under other enactments. The law is subject to uncertainty ex-ante when two or more views are possible, but there may be certainty ex-post litigation in view of the law of precedents, which reduces uncertainty. -x -x -

¶19The provisions of the PAG Act, even post the retrospective amendments, will apply only to those teachers who were in service as on 3rd April 1997, and at the time of termination have rendered service of not less than 5 years. The period of 5 years may be partly before 3rd April 1997, as the date on which the person was employed does not determine the applicability of the PAG Act. The date of termination of service, in the form of superannuation, retirement, or resignation, or death or disablement due to accident or disease, should be post the enforcement date, which in the present case is 3rd April 1997. The entire length of service, including the service period prior to 3rd April 1997, is to be counted for the purpose of computing the entitlement condition of 5 years of service. This is the correct effect of the ratio and decision in Management of Goodyear India Limited. (supra) and the decisions explaining retroactive effect of a statute. This legal position would be equally true and correct when the PAG Act was first enforced with effect from 16th September 1972, and when Notification No. S-42013/1/95-SS.(II) under Section 1(3)(c) of the PAG Act was issued and I attest to the accuracy and enforced with effect from 3rd April, 1997. It would be the positionoinocaseoofoallonotificationsoissuedounderoSection 1(3)(c) o of o the o PAG o Act, o unless o a o contrary o intention o is expressed,owhichoisonototheosituationoinotheopresentocaseoand thusoneedonotobeoexamined. -x -x -

20.o...oInothisobackground,otheoargumentoofotheoprivateoschools thatotheyodoonotohaveocapacityoandoabilityotoopayogratuityoto theoteachersoisounaptoandoparsimonious.o Alloestablishments areoboundotoofollowotheolaw,oincludingotheoPAGoAct.oAs observedoearlier,otheoprivateoschoolsowereocertainlyoawareoof theointentoofotheoGovernmentothatotheoeducationaloinstitutions, asoanoestablishment,owouldobeocoveredoandomustopayogratuity uponoissueoofonotificationoNo.oS-42013/1/95-SS.(II)odatedo3rd Aprilo1997.oSomeoschoolsohaveoraisedoanoargumentorelying uponodecisionoofothisoCourtoin oT.M.A.oPaioFoundationoand Othersov.oStateoofoKarnatakaoandoOtherso(2002)o8oSCCo481, whichoobservesothatoasoaomatteroofoprinciple,ochargingoof capitationofeeooroprofiteeringobyoeducationaloinstitutionsois impermissible.oHowever,otheojudgmentodoesonotostateothatothe teachersoshouldonotobeopaidogratuity.oInofact,otheojudgment holds o that o the o educational o institutions o are o entitled o to reasonable o surplus o to o meet o the o cost o of o expansion o and augmentationoofotheofacilitiesoandothisodoesonotoamountoto profiteering.oItoisopossibleothatoinosomeoStatesothereoareofee fixationolawsowhichowillohaveotoobeocompliedowith. oBut complianceowithotheseolawsodoesonotomeanothatotheoteachers shouldobeodeprivedoandodeniedogratuity,owhichotheyowere/oare entitledotooreceiveoasootheroemployeesoofoanoeducational institution.o Regulationoofofeeoisotooensureothatothereoisono commercialisationoandoprofiteering,oandotheoeffectoisonototo prohibit o a o school o from o fixing o and o collecting o "just o and permissibleoschoolofee",oasohasobeenoheldobyothisoCourtoin IndianoSchool,oJodhpuroandoAnotherov.oStateoofoRajasthanoand Otherso(2021)o10oSCCo517. I attest to the accuracy and - x - x - "

¶12Keepingoinoviewoofotheoaboveodiscussion,oIodoonotofindoany meritoinotheopresentowritopetitionoandotheosameoisoaccordinglyodismissed.

¶13Allopendingoapplication(s),oifoany,oshalloalsoostandoclosed.

31.07.2023o o(HARSHoBUNGER) Apurva oooooooooooJUDGE

1.oWhetherospeaking/reasoned : Yes/No

2.oWhetheroreportable : Yes/No