Chander Shekhar Sharma v. Additional Labour Commissioner

o INoTHEoHIGHoCOURToOFoPUNJABoANDoHARYANAoo AToCHANDIGARHo o ****o o o o o o o CWP-7061-1991o(O&M)o o o Dateoofodecision:23.08.2023o o CHANDERoSHEKHARoSHARMAoo o o ,.Petitionero o o o o o o Versuso o THEoADDITIONALoLABOURoCOMMISSIONER-CUM-o APPELLATEoAUTHORITYoANDoOTHERSooooooooo ooooooooo,.Respondentso o CORAM:oo HON'BLEoMR.oJUSTICEoHARSHoBUNGERo Presento:o Mr.oRahuloAggarwal,oAdvocateo o o forotheopetitioner.o HARSHoBUNGER,oJ.oo

1.o o Petitionero(ChanderoShekharoSharma)ohasofiledothisopetitiono underoArticleso226/227oofotheoConstitutionoofoIndiaoprayingoforoaowritoino theonatureoofocertiorari,omandamusooroanyootherowrit,oorderoorodirectionooooooooooooooooooo tooquashotheoimpugnedoorderodatedo18.03.1991o(AnnexureoP-2)opassedoooooooooooooooooooo byo respondento No.1o (Appellateo Authorityo undero theo Paymento ofoooooooooooooooooooooooooo Gratuityo Act)o wherebyo theo appealo filedo byo respondento No.3oooooooooooooooooooooo (M/so J.C.T.o Electronicso Ltd.)o againsto theo ordero datedo 31.01.1990o (AnnexureoP-1)opassedobyorespondentoNo.o2.(ControllingoAuthorityoundero theoPaymentoofoGratuityoAct),owasoallowedoandotheopetitionerowasoheldo notoentitledotoogratuity.oo o o Itoisonotedothatovideoorderodatedo31.01.1990o(AnnexureoP-1)o passedobyorespondentoNo.o2o(ControllingoAuthority),oanoapplicationofiledo byotheopetitioneroforopaymentoofogratuityowasoallowedoandorespondentoNo.o 3o(M/soJ.C.T.oElectronicsoLtd.)owasodirectedotoopayotootheopetitioner,oano 2023.09.05 12:18 1/37o o o amounto ofo Rs.o 3,465/-o alongwitho 10%o interesto witho effecto fromo

11.02.1988.o

2.o o Briefly,o theo petitionero waso employedo byo M/so J.C.T.o ElectronicsoLtd.o(RespondentoNo.o3),oono30.05.1982oandowasodrawingoao salaryo ofo Rs.1001/-o pero montho wheno heo resignedo fromo hiso jobo ono

10.02.1988oandothusoheoservedotheorespondentoNo.o3oforoaoperiodoofo05o yearso08omonthsoando20odays.oo

3.o o Itoisotheocaseoofotheopetitionerothatoafterohisoresignationowaso accepted,o heo madeo ao demando foropaymentoofo gratuityoino termso ofo theo Paymento ofo Gratuityo Act,o 1972o (ino shorto `theo Act,o 1972')o aso theo RespondentoNo.o3o(M/soJ.C.T.oElectronicsoLtd.)ohadobeenopayingogratuityo tootheoemployeesowhoohadoresignedofromotheiroserviceoafterocompletingo fiveoyearsoofocontinuousoserviceoinotermsoofoSectiono4(1)(b)oofotheoAct,o 1972.o Petitionero claimedo thato oneo Sh.o H.S.o Kapoor,o Junioro Technicalo AssistantoofoWatchoAssemblyoUnitoandoSh.oMooloChand,oTVoDepartment,o whooresignedofromojoboafterocompletingofiveoyearsoofoservice,owereopaido gratuityobyorespondentoNo.o3.o

4.o o ItoappearsothatorespondentoNo.3odidonotoacceptotheorequestoofo theopetitioner,owhereuponoheofiledoanoapplicationobeforeotheoControllingo AuthorityounderotheoAct,o1972,oforopaymentoofogratuity.oTheoclaimoofotheo petitioneroforopaymentoofogratuityoamountowasocontestedobyorespondento No.3o(M/soJ.C.T.oElectronicsoLtd.).oFromotheopleadingsoofotheoparties,otheo followingoissuesowereoframed:-o 1)o Whetherotheoapplicationohasobeenomadeowithino theoprescribedotime.o 2)o Whetherotheoapplicantoisoentitledoforogratuity.o 3)o Relief.o 2023.09.05 12:18 2/37o o o o

5.o o TheoControllingoAuthorityo(underotheoPaymentoofoGratuityo Act),oallowedotheoapplicationofiledobyopetitioneroforopaymentoofogratuityo video ordero datedo 31.01.1990o (Annexureo P-1)o ando respondento No.3oooooooooooooooooooo (M/so J.C.T.o Electronicso Ltd.)o waso directedo too payo ano amounto ofoooooooooooooooooooooooo Rs.o3,465/-oalongwitho10%ointerestowithoeffectofromo11.02.1988.o

6.o o Beingo dis-satisfiedo witho theo ordero datedo 31.01.1990o (AnnexureoP-1)opassedobyotheoControllingoAuthority;orespondentoNo.o3o (M/so J.C.T.o Electronicso Ltd.)o filedo ano appealo undero sub-sectiono (7)oofo Sectiono 7o ofo theo Paymento ofo Gratuityo Acto beforeo respondento No.o 1o (AppellateoAuthority).o

7.o o Theo Appellateo Authorityo (respondento No.1)o video itso ordero datedo18.03.1991o(AnnexureoP-2)oallowedotheoappealofiledobyorespondento No.3o (M/so J.C.T.o Electronicso Ltd.)o byo settingo asideo theo ordero datedo

31.01.1990o(AnnexureoP-1)oandoasoaoconsequenceothereof,otheoapplicationo ofotheopetitioneroforopaymentoofogratuityowasodismissed.o

8.o o Ino theo above-mentionedo circumstances,o theo petitionero haso filedotheoinstantowritopetitionobeforeothisocourt.o

9.o o Uponoissuanceoofonoticeoinothisocase,onoooneoappearedoforotheo respondentsodespiteoservice,oaccordingly,ovideoorderodatedo15.04.1998,o theyowereoproceededoex-parte.o

10.o o Learnedocounseloforotheopetitionerosubmitsothatotheoimpugnedo ordero datedo 18.03.1991o (Annexureo P-2)o passedo byo theo Appellateo Authorityoisoagainstotheolawoandofactsoonotheofile.oItoisosubmittedothatotheo Appellateo Authorityo hado wronglyo dismissedo theo applicationo ofo theo petitioneroforopaymentoofogratuityobyoplacingorelianceouponoaojudgmento passedo byo thiso Courto ino M/so Darshano Engineeringo Workso Versuso 2023.09.05 12:18 3/37o o o ControllingoAuthorityoandoothers,o1983(2)oILRo(Punjab)o533,ooholdingo thato whereo theo workero himselfo resigns,o theno heo iso noto entitledo too theo paymento ofo gratuityo undero Sectiono 4(1)(b)o ofo theo Act,o 1972.o Learnedo counseloforotheopetitionerosubmitsothatotheoviewoexpressedobyothisoCourtoino theocaseoofoM/soDarshanoEngineeringoWorkso(supra)owasonotoaogoodolawo inoviewoofotheojudgmentorenderedobyotheoHon'bleoSupremeoCourtoinotheo caseoofoManagementoofoGoodoYearoIndiaoLtd.oVersusoK.G.oDevessar,o 1985oAIRo(SupremeoCourt)o1759o:o1985(4)oSCCo45.oLearnedocounseloforo theopetitionero furthero submitso thato evenootherwiseotheo decisionoofo thiso CourtoinotheocaseoofoM/soDarshanoEngineeringoWorkso(supra)owasoseto asideo byo Hon'bleo Supremeo Courto ino Bakshisho v.o M/s.o Darshano Engineeringo 1994(1)o S.C.T.o 410.o Ito iso thereforeo contendedo thato theo findingoofotheoAppellateoAuthorityothatoaopersonoisonotoentitledotoopaymento ofogratuityoonoresignation,ocannotobeosustained.oo

11.o o Learnedo counselo foro theo petitionero nexto submitso thato theo AppellateoAuthorityohasowronglyonon-suitedotheoclaimoofotheopetitioneroono theo groundo thato theo applicationo filedo byo himo beforeo theo Controllingo Authorityo waso beyondo theo periodo prescribedo undero Ruleo 10o ofo theo Paymento ofo Gratuityo (Punjab)o Rules,o 1973;o thuso theo claimo ofo theo petitionerocouldobeoonlyoentertained,oinocase,otheopetitionerohadomovedotheo applicationoforocondonationoofodelayobyoshowingosufficientocause.oItoiso contendedothatobyovirtueoofotheostatutoryoprescriptionounderoSectiono7oofo theo Act,o 1972,otheo employero waso boundotoodetermineo theoquantumo ofo gratuityo payableo ono terminationo ofo theo employment,o irrespectiveo ofo whetheroanoapplicationoforopaymentoofogratuityowasofiledobyotheoemployeeo oronot.oItoisofurtherocontendedothatoRuleo10ocannotocontrolotheostatutoryo 2023.09.05 12:18 4/37o o o prescriptionounderoSectiono7oreadowithoSectiono4oofotheoAct.oItoisoalsoo submittedo thato eveno otherwise,o ao readingo ofo theo provisoo too Ruleo 10o indicateso thato ao separateo applicationo too condoneo theo delayo iso noto mandatoryoandotheoonlyorequirementoisothatotheoauthorityomustobeosatisfiedo thatothereoisosufficientocauseoforotheodelayoinopresentingotheoapplication.oooo

12.o o Learnedo counselo foro theo petitionero alsoo contendso thato respondento No.3o haso discriminatedo againsto theo petitionero byo denyingo gratuityo too himo whereaso respondento No.3o hado paido gratuityo too someo employeesowhoohadoresigned,omoresoowhenoControllingoAuthorityohado returnedoaospecificofindingothatorespondentoNo.3ohasoshownoitsoinabilityotoo produceoanyorecordoandorefusedotooproduceorecordoregardingopaymentoofo gratuityotooSh.oH.S.oKapoor,oSh.oMooloChandoandoSh.oSatpal.oTherefore,o itoisosubmittedobyolearnedocounseloforotheopetitionerothatotheoinstantowrito petitiono mayo beo allowedo byo settingo asideo theo impugnedo ordero datedo

18.03.1991o(AnnexureoP-2)opassedobyotheoAppellateoAuthorityoandotheo ordero datedo 31.01.1990o (Annexureo P-1)o passedo byo theo Controllingo Authorityomayobeorestored.o

13.o o Iohaveoheardolearnedocounseloforotheopetitioneroandoperusedo theopaperbookowithohisoableoassistance.o

14.o o Ao perusalo ofo theo impugnedo ordero datedo 18.03.1991o (AnnexureoP-2)opassedobyotheoAppellateoAuthorityowouldomanifestothato theoclaimoofotheopetitionerotoogratuityowasonon-suited,oprimarilyoonotwoo grounds:o o(i)o Theo petitionero (worker)o hado filedo hiso applicationounderoruleo10oinoFormo'N'obyodelayoofo63o daysoandothatotheosameocouldobeoonlyoentertainedoino 2023.09.05 12:18 ?/37o o o caseotheopetitionero(worker)ohadomovedoanoapplicationo forocondonationobyoshowingosufficientocause;o

(ii)oo Theoclaimoofotheopetitionerotoogratuityoafterohiso resignationowasorejectedobyorelyingouponotheodecisiono ino caseo ofo M/so Darshano Engineeringo Workso Versuso Controllingo Authorityo ando others,o 1983(2)o ILRo (Punjab)o533oandoVictoryoPublicoHilloMotoroTransporto Co.(P)oLimitedov.oControllingoAuthority,o1986(4)oSLRo 687o ando observingo thato whereo theo workero himselfo resigns,o theno heo iso noto entitledo too theo paymento ofo gratuityounderosectiono4(1)(b)oofotheoAct,o1972.o

15.o o Asoregardsotheorejectionoofoclaimoofotheopetitionerobyotheo AppellateoAuthorityoonotheogroundothatowhereotheoworkerohimselforesigns,oo heoisonotoentitledotoogratuityounderoSectiono4(1)(b)oofotheoAct,o1972,oitoiso observedothatotheosaidofindingowasorecordedoonotheobasisoofoaodecisiono renderedobyothisoCourtoinotheocaseoofoM/soDarshanoEngineeringoWorkso VersusoControllingoAuthorityoandoothers,o1983(2)oILRo(Punjab)o533,o whichowasofurtherofollowedoinotheocaseoofoVictoryoPublicoHilloMotoro TransportoCo.(P)oLimitedov.oControllingoAuthority,o1986(4)oSLRo687.o However,o theo aforesaido judgmento ino theo caseo ofoooooooooooooooooooooooooo M/so Darshano Engineeringo Workso (supra)o waso seto asideo byoooooooooooooooooooooooo Hon'bleoSupremeoCourtoinoBakshish'socaseo(supra)oandoitowasoheldothato theoprovisionsoforopaymentoofogratuityocontainedoinoSectiono4(1)(b)oofotheo Act,o1972oareooneoofotheominimaloserviceoconditionsowhichomustobeomadeo availableotootheoemployeesonotwithstandingotheofinancialocapacityoofotheo employerotoobearoitsoburden.oAccordingly,otheovalidityoofoSectiono4(1)(b)o ofotheoAct,o1972owasoupheld.o

16.o o InooBakshish'soocaseoo(supra),ooHon'bleooApexooCourtooheldooasoo o 2023.09.05 12:18 6/37o o o under:o "…TheseotwooappealsooneobyotheoUnionoofoIndiaoando theo othero byo theo aggrievedo employeeo -o areo directedo againstotheodecisionodatedo24thoMarch,o1983oofotheo PunjaboandoHaryanaoHighoCourtowherebyotheoHigho CourtohasostruckodownoSectiono4(1)(b)oofotheoPaymento ofoGratuityoAct,o1972o(hereinafteroreferredotooasotheo 'Act')o aso beingo violativeo ofo Articleo 19(1)o (g)o ofo theo ConstitutionoofoIndia.oo

2.o Theo admittedo factualo matrixo ofo theo caseo iso ino ao narrowo compass.o Bakshisho Singh,o theo appellant-employeeojoinedotheoservicesoofotheorespondent-M/s.o Darshano Engineeringo Workso aso ao Fittero ono 2ndo March,o 1968o ando resignedo fromo serviceo ono 10tho December,o 1978o aftero ao totalo periodo ofo continuouso serviceoofomoreothano10oyears.oHisolastodrawnowageso wereoRs.o335/-operomonth.oItoisonotodisputedothatoatotheo timeoheojoinedotheoemploymentoono2ndoMarch,o1968,o hisoageowaso54oyearso3omonths,ohisodateoofobirthobeingo 17tho December,o 1913.o Thiso waso knowno too theo respondent-employer.oo

3.o Theo Acto cameo intoo forceo w.e.f.o 21sto September,o 1972.o Ono theo employee'so resignationo w.e.f.o 10tho December,o 1978o whicho waso acceptedo byo theo respondent-o employer,o heo claimedo gratuityo undero Sectiono4o(1)(b)oofotheoAct.oHisoclaimonotohavingobeeno accepted,o heo approachedo theo Controllingo Authorityo underoSectiono7oofotheoAct.oTheoclaimowasoresistedobyo theoemployeroonotheogroundofirstlyothatotheoemployeeo wasoentitledotoogratuityoonlyotillotheodateoheoreachedo hisosuperannuationoageowhichowaso58oyearsoandosinceo beohadonotocompletedo5oyearsoofoserviceobyotheotimeoheo attainedo 58o yearso ofo age,o heo waso noto entitledo too gratuityo undero Sectiono 4(1)o ofo theo Act.o Secondly,o ito 2023.09.05 12:18 7/37o o o wasocontendedothatoinoanyocaseotheoamountoofogratuityo payableotootheoemployeeowasoonlyoforotheoperiodouptoo theo superannuationo ageo ando sinceo heo waso drawingo wagesoofoRs.o230/-operomonthoonotheodayoheoattainedo theosuperannuationoage,oheowasoentitledotooaosumoofo Rs.o 460/-o only,o beingo theo gratuityo calculatedo ato theo rateoofo15odays'osalaryoperoyearoofoserviceotillotheodateo ofosuperannuation.oo

4.o Botho theo contentionso wereo negativedo byo theo Controllingo Authorityo byo pointingo outo thato Sectiono 4[1]oprovidedoforopaymentoofogratuityotootheoemployeeo ono theo terminationo ofo hiso employmento aftero heo haso renderedocontinuousoserviceoofonotolessothanofiveoyearso onotheooccurrenceoofoanyoofothreeoeventsoviz.,o[a]oono theoemployeeoreachingohisosuperannuationoage,ooro[b]o onohisoretirementoororesignation,ooro[c]oonohisodeathooro disablementodueotooaccidentoorodisease.oInocaseoofotheo thirdoevents,otheoqualifyingocontinuousoserviceoofofiveo yearsoisonotonecessary.oTheo'retirement'oisodefinedobyo Sectiono2[q]oofotheoActotoomeano'terminationoofotheo serviceo ofo ano employeeo otherwiseo thano ono superannuation.'oTheofirstotwooeventsoareoindependento ofoeachoother.oSinceoinotheopresentocaseotheoemployero hadonotochosenotoosuperannuateotheoemployeeoonohiso attainingo58oyearsoofoageoandohadocontinuedohimoino serviceo tillo theo employeeo himselfo resignedo ono 10tho December,o 1978o byo whicho dateo heo hado completedo moreo thano 10o yearso ofo service,o theo employeeo waso entitledo too theo gratuityo foro theo periodo ofo hiso entireo serviceo uptoo theo dateo ofo hiso resignation.o Theo Controllingo Authority,o therefore,o calculatedo theo amountoofogratuityodueotootheoemployeeoasoRs.o1782/-o atotheorateoofo15odays'owagesoperoyearoofoserviceoforo allo theo 10o yearso takingo theo lasto drawno wageso ofooooooooooooooooo Rs.o 335/-o pero montho aso theo basiso ofo theo saido 2023.09.05 12:18 8/37o o o calculation.o Thiso ordero waso challengedo byo theo employero beforeo theo Appellateo Authorityo undero theo Act.oTheoAppellateoAuthorityoconfirmedotheofindingoofo theoControllingoAuthorityoandodismissedotheoappeal.oIno theo writo petitiono filedo beforeo theo Higho Courto undero Articleso 226o ando 227o ofo theo Constitution,o theo Higho CourtoconfirmedotheointerpretationoplacedoonoSectiono 4[1]o ofo theo Acto byo theo Controllingo aso wello aso theo Appellateo Authorityo ando alsoo heldo thato theo ageo ofo superannuationo iso irrelevanto wheno theo gratuityo iso payableo undero clauseo [b]o ofo Sectiono 4[1]o ono retiremento oro resignation,o theo saido clauseo beingo independento ofo clauseo [a]o ofo thato sectiono whicho providedoforopaymentoofogratuityoonoattainingotheoageo ofosuperannuation.oHowever,otheoCourtoheldothatotheo provisionsoofosectiono4[1]o(b)oofotheoActowhichoentitleso ano employeeo too gratuityo ono hiso retiremento oro resignationoafteroaocontinuousoserviceoofoonlyo5oyearso wasoanounreasonableorestrictionoonotheoemployerotoo carryo ono hiso businesso and,o therefore,o violativeo ofo Articleo19[1]o(g)oofotheoConstitution.oWeoshouldohaveo thoughtothatoonotheofactsoofotheopresentocaseotheoCourto waso noto calledo upono too decideo theo allegedo unreasonablenessoofotheoqualifyingoperiodoofo5oyearso ofoserviceoforoentitlementotoogratuityoonoretirementooro resignation,osinceoasopointedooutoaboveotheoemployeeo hadoputoinomoreothano10oyearsoofoservice.oTheoCourto furtheronotoonlyowentointootheosaidoquestionoandostrucko downo theo provisionso ofo sectiono 4[1]o (b)o buto foro reasonsowhichoareonotoapparentotoous,oalsoodeniedotheo gratuityo awardedo too theo employeeo byo theo lowero authoritieso eveno aftero acceptingo theo findingo ofo theo loweroauthoritiesothatotheoemployeeohadoputoinomoreo thano10oyearsoofoservice.oItodoesonotoappearofromotheo judgmentoofotheoHighoCourtowhether,oalthoughoitofoundo 2023.09.05 12:18 9/37o o o thato theo fiveo years'o qualifyingo serviceo waso unreasonable,otenoyears'oqualifyingoserviceowouldoalsoo beosimilarlyounreasonableoaccordingotooit.oInofact,otheo HighoCourtohasonotothoughtoitonecessaryotooindicateo whatoaccordingotooitowouldobeoaoreasonableoqualifyingo periodoofoserviceoforoentitlementotootheogratuityoinocaseo oforetirementoororesignationobyotheoemployee.oFurther,o ifotheoallegedoshortoperiodoofo5oyearsowasotheoreasono foro holdingo thato theo provisiono ino questiono casto ano unbearableoburdenoonotheoemployerosooasotooviolateo hisofundamentalorightounderoArticleo19[1]o(g)oofotheo Constitution,obyotheosameoreasoningotheoprovisionoofo Sectiono4[1]o(a)oofotheoAct,owhicholaysodownotheosameo qualifyingoperiodotooentitleotheoemployeeotootheoreceipto ofogratuityoonosuperannuationohadoalsootoobe,ostrucko down.o XXXo o XXXo o XXXo

24.oComingonowotootheoprovisionsoofotheopresentoAct,oito willobeoseenothatotheoActoextendsotootheowholeoofoIndiao exceptotooplantationsoandoportsoinotheoStateoofoJammuo &oKashmir.oTheoprovisionsoofotheoActoapplyouniformlyo too"[a]oeveryofactory,omine,ooilofield,oplantation,oporto ando railwayo company;o [b]o everyo shopo oro establishmentowithinotheomeaningoofoanyolawoforotheo timeo beingo ino forceo ino relationo too shopso ando establishmentso ino ao State,o ino whicho teno oro moreo personsoareoemployed,oorowereoemployed,oonoanyodayo ofotenoprecedingotwelveomonths;oando[c]osuchoothero establishmentso oro classo ofo establishments,o ino whicho teno oro moreo employeeso areo employed,o oro wereo employed,oonoanyodayoofotheoprecedingotwelveomonths,o aso theo Centralo Governmento may,o byo notification,o specifyoinothisobehalf"oasoprovidedoinosub-sectiono[3]o ofoSectiono1oofotheoAct.oItodefineso"retirement"oundero Sectiono2[q]otoomeano"terminationoofotheoserviceoofoano 2023.09.05 12:18 10/37o o o employeeootherwiseothanoonosuperannuation".oSectiono 2[s]odefineso"wages"otoomeano"alloemolumentsowhicho areoearnedobyoanoemployeeowhileoonodutyooroonoleaveo inoaccordanceo withotheotermso ando conditionsoofohiso employmentoandowhichoareopaidooroareopayableotoohimo inocashoandoincludesodearnessoallowanceobutodoesonoto includeoanyobonus,ocommission,ohouseorentoallowance,o overtimeowagesoandoanyootheroallowance".o XXXo o XXXo o XXXo

27.oItowouldothusobeoapparentobothofromoitsoobjectoaso welloasoitsoprovisionsothatotheoActowasoplacedoonotheo statuteo booko aso ao welfareo measureo too improveo theo serviceoconditionsoofotheoemployees.oTheoprovisionsoofo theo statuteo wereo appliedo uniformlyo throughouto theo countryo too allo establishmentso coveredo byo it.o Theyo appliedo too allo employeeso drawingo ao monthlyo salaryo uptoo ao particularo limito ino factories,o shopso ando establishmentso etc.o whethero theo employeeso wereo engagedo too doo anyo skilled,o semi-skilled,o unskilled,o manual,osupervisory,otechnicalooroclericalowork.oTheo provisionsoofotheoActowereothusomeantoforolayingodowno gratuityo aso oneo ofo theo minimalo serviceo conditionso availableotooalloemployeesocoveredobyotheoAct.oThereoiso noo provisiono ino theo Acto foro exemptingo anyo factory,o shopoetc.ofromotheopurviewoofotheoActocoveredobyoito excepto thoseo where,o aso pointedo outo above,o theo employeeso areo ino receipto ofo gratuityo oro pensionaryo benefitsowhichoareonoolessofavourableothanotheobenefito conferredo undero theo Act.o Theo paymento ofo gratuityo undero theo Acto iso thuso obligatoryo beingo oneo ofo theo minimumoconditionsoofoservice.oTheonon-complianceo ofo theo provisionso ofo theo Acto iso madeo ano offenceo punishableowithoimprisonmentoorofine.oItoisosettledolawo thatotheoestablishmentsowhichohaveonoocapacityotoogiveo tootheiroworkmenotheominimumoconditionsoofoserviceo 2023.09.05 12:18 11/37o o o prescribedobyotheoStatuteohaveonoorightotooexisto[video BijayoCottonoMillsoLtd.ov.oTheoStateoofoAjmer,o[(1955)o 1oSCRo752],oM/s.oCrownoAluminiumoWorksov.oTheiro Workmen,o[(1958)oSCRo65oandoU.oUnichoyi&Ors.ov.o StateoofoKerala,o[(1962)o1oSCRo946].o XXXo o XXXo o XXXo

30.oTheopresentoActoisoofotheogenreoofoMinimumoWageso Act,otheoPaymentoofoBonusoAct,otheoProvidentoFundso Act,o Employeeso Stateo Insuranceo Act,o ando othero likeo statutes.o Theseo statuteso layo downo theo minimumo relevantobenefitsowhichomustobeomadeoavailableotootheo employees.o Weo haveo solemnlyo resolvedo too constituteo thisocountry,oamongoothers,ointooaosocialistorepublico ando too secureo too allo itso citizens,o which,o ofo course,o includeoworkmen,osocialoandoeconomicojustice.oArticleo 38orequiresotheoStateotoostriveotoopromoteotheowelfareo ofotheopeopleobyosecuringoandoprotectingoasoeffectivelyo asoitomay,oaosocialoorderoinowhich,oamongootherothings,o socialo ando economico justiceo shallo informo allo theo institutionsoofotheonationalolife.oArticleo39ostatesothato theoStateoshall,oinoparticular,odirectoitsopolicyotowardso securing,o amongo others,o thato theo citizenso haveo theo rightotooanoadequateomeansotoolivelihoodoandothatotheo healthoandostrengthoofoworkersoareonotoabused.oArticleo 41o ofo theo Constitutiono directso theo Stateo too makeo effectiveoprovision,oamongoothers,oforosecuringopublico assistanceoinooldoageoandoinootherocasesoofoundeservedo want.oArticleo42oenjoinsotheostateotoomakeoprovisiono foro securingo justo ando humaneo conditionso ofo worko whileoArticleo 43o requireso theo Stateo too endeavouro too secureobyosuitableolegislationotooalloworkersoaolivingo wage,oconditionsoofoworkoensuringoaodecentostandardo ofolifeoandofulloenjoymentoofoleisureoandosocialoando culturalo opportunities.o Articleo 47o requireso thato theo Stateoshalloregardotheoraisingoofotheoleveloofonutritiono 2023.09.05 12:18 12/37o o o ando standardo ofo livingo ofo itso peopleo ando theo improvementoofopublicohealthoasooneoofoitsoprimaryo duties.oo

31.o Further,o thereo iso ao restrictiono placedo ono theo exerciseoofotheofundamentalorightounderoArticleo19(1)o

(g)obyoclauseo(6)oofotheosaidoArticle.oThatoclauseostateso thatonothingoinosub-clauseo(g)oofoclauseo(1)oshalloaffecto theooperationoofoanyoexistingolawooropreventotheoStateo fromomakingoanyolawoimposingoinotheointerestsoofotheo generalopublicoreasonableorestrictionsoonotheoexerciseo ofotheorightoconferredobyothatosub-clause.oItocannotobeo disputedo thato theo presento Acto iso ao welfareo measureo introducedo ino theo interesto ofo theo generalo publico too secureo socialo ando economico justiceo too workmeno too assisto themo ino theiro oldo ageo ando too ensureo themo ao decentostandardoofolifeoonotheiroretirement.oo

32.o Ono botho grounds,o therefore,o viz.,o thato theo provisionso foro paymento ofo gratuityo containedo ino Sectiono4[1]o(b)oofotheoActoareooneoofotheominimalo serviceoconditionsowhichomustobeomadeoavailableotoo theoemployeesonotwithstandingotheofinancialocapacityo ofotheoemployerotoobearoitsoburdenoandothatotheosaido provisionsoareoaoreasonableorestrictionoonotheorighto ofotheoemployerotoocarryoonohisobusinessowithinotheo meaningoofoArticleo19[6]oofotheoConstitution,otheosaido provisionsoareobothosustainableoandovalid.oHenceotheo decisionoofotheoHighoCourtohasotoobeosetoaside.oo

33.Inotheoresult,oweoallowotheoappeals,osetoasideotheo decisionoofotheoHighoCourtoandoupholdotheovalidityoofo Sectiono 4[1]o (b)o ofo theo Paymento ofo Gratuityo Act,o 1972.oTheorespondentsotoopayotheocosts…"o

17.o o Further,oinotheocaseoofoManagementoofoGoodoYearoIndiao Ltd.oVersusooK.G.ooDevessar,oo1985ooAIRo(SupremeoCourt)o1759:o1985(4)oo o 2023.09.05 12:18 13/37o o o SCCo45.,otheoHon'bleoSupremeoCourtoheldoasounder:o "…TheomanagementoofoGoodyearoIndiaoLimitedoareo theoappellantsoinothisoappealobyospecialoleaveoofothiso courto undero Articleo 136o ofo theo Constitution.o Theo questiono relateso too theo gratuityo payableo too theo respondentoinorelationotootheoperiodoofohisoserviceofromo Januaryo24,o1961otooDecembero31,o1974.oWithoeffecto fromo Septembero1,o 1972,o heo waso drawingo wageso ofo moreo thano Rs.o 1000/-o pero month.o Theo Paymento ofo Gratuityo Act,o 1972o cameo intoo forceo ono Septembero 16,1972.oByosectiono4oofotheoAct,oitowasoprescribedo thatogratuityoshallobeopayableotooanoemployeeoonotheo terminationoofohisoemploymentoafteroheohasorenderedo continuousoserviceoforonotolessothanofiveoyearso-o(a)oono hiso superannuationo oro (b)o ono hiso retiremento oro resignationooro(c)oonohisodeathoorodisablementodueotoo accidento oro disease.o Ano employeeo iso definedo byo Sectiono2(e)oofotheoActoasomeaningoaopersonoemployedo ono wageso noto exceedingo oneo thousando rupeeso pero mensemo ino anyo establishmento etc.o Theo figureo Rs.o 1000/-owasolaterosubstitutedobyotheofigureoRs.o1600/-o butoduringotheorelevantoperiod,oitowasoRs.o1000/-oonly.o Theosubmissionoonobehalfoofotheomanagementowasothato bothoonotheodateowhenotheoActocameointooforceoandoono theodateowhenotheorespondentoretiredofromotheoservice,o heo waso drawingo wageso exceedingo Rs.o 1000/-o and,o therefore,o heo waso noto entitledo too paymento ofo anyo gratuity.oTheosubmissionoofotheolearnedocounselowaso thatoifotheodefinitionoofoemployeeowasoreadointooSectiono 4oofotheoPaymentoofoGratuityoAct,oitowouldoshowothato onlyo thoseo personso whoo areo drawingo wageso ofo lesso thano Rs.o 1000/-o ono theo dateo ofo superannuation,o retirement,o etc.o wouldo beo entitledo too paymento ofo gratuityo providedo thato sucho retirement.o 2023.09.05 12:18 14/37o o o superannuation,oetc.owasoafterotheodateoofocomingointoo forceoofotheoAct.oWeodoonotoagreeowithotheosubmission.o TheodateoofocomingointooforceoofotheoActohasorelevanceo too theo dateo ono whicho gratuityo becomeso payable.o Gratuityo becomeso payableo ono theo terminationo ofo employmentoandotherefore,oinoorderotoobeoeligibleotoo paymento ofo gratuity,o theo terminationo ofo employmento whetheroitobeodueotoosuperannuationoororetirementooro resignationoorodeathoorodisablement,ohasotoobeoaftero theodateoofocomingointooforceoofotheoAct.oOnceothato conditionoisosatisfied,otheofurtheroquestionowouldobeo regardingo theo amounto ofo gratuityo payable.o Gratuityo willo haveo too heo paido too allo thoseo personso whoseo employmento cameo too ano endo aftero theo comingo intoo forceoofotheoActoforothatoperiododuringowhichoheocameo withino theo definitiono ofo ano employeeo withino theo meaningoofoSectiono2(e)oofotheoPaymentoofoGratuityo Act.oTooholdootherwiseomayorenderoaowholeoclassoofo personsowhooallotheirolivesogotowagesoofolessothanoRs.o 1000/-operomonth,obutoonotheoeveoofotheiroretiremento startedogettingowagesoofoRs.o1000/-operomonth.oSurelyo thatocouldonotohaveobeenotheointentionoofoParliament.o Weo thinko theo onlyo reasonableo wayo ofo construingo Sectiono4oinotheolightoofotheodefinitionoofoemployeeoino Sectiono2(e)oisotooholdothatoaopersonowhoseoserviceso areoterminatedoforoanyoofotheoreasonsomentionedoino Sectiono4(1),oafterotheocomingointooforceoofotheoActoiso entitledotootheopaymentoofogratuity,oifoheohasorenderedo continuousoserviceoforonotolessothanofiveoyears,oforothato periodo duringo whicho heo satisfiedo theo definitiono ofo employeeounderoSectiono2(e)oofotheoAct.oInothatoview,o theoappealohasotoobeodismissedoandoitoisoaccordinglyo dismissedowithocosts…"o 2023.09.05 12:18 1?/37o o o

18.o o Ino Rajasthano Stateo Roado Transporto Corporationo Ltd.o v.o Mohanio Devi,o 2020(2)o S.C.T.o 632,o Hon'bleo Supremeo Courto heldo aso under:-o "13.o Theolearnedo counselo foro theorespondento wouldo submito thato eveno ifo ito iso ao caseo ofo resignationo theo deceasedohusbandoofotheorespondentowasoentitledotoo theopaymentoofogratuityoasoheohadoputoinotheoqualifyingo service.oTheolearnedocounseloforotheoappellantowouldo contendothatotheogratuityoamountohadobeenopaid.oIno thatoregard,otheoreferenceomadeotooparao9oofotheowrito appealo filedo beforeo theo Higho Courto wouldo howevero indicateothatothoughoreferenceoisomadeotootheopaymento disbursedo too theo respondent'so husbando whileo acceptingotheoresignation,otheosameodoesonotodiscloseo thatotheogratuityoamountohasobeenopaid.oFurther,oinotheo appealo filedo beforeo thiso Courto theo appellantso haveo soughtotoojustifyotheonon-paymentoofotheogratuityoaso theo husbando ofo theo respondento hado resignedo fromo service.oAsorightlyopointedooutobyotheolearnedocounselo forotheorespondents,osectiono4(1)(b)oofotheoPaymento ofoGratuityoAct,o1972oprovidesothatotheogratuityoshallo beopayableoifotheoterminationoofoemploymentoisoaftero 5oyearsoofocontinuousoserviceoandosuchoterminationo wouldoincludeoresignationoasowell.oInothatoview,oifotheo gratuityoamountohasonotobeenopaidotootheorespondent'so husband,otheoliabilityotoopayotheosameowouldosubsisto andotheorespondentoNo.1owillobeoentitledotooreceiveotheo sameoinoaccordanceowithotheoprovisionsoofotheoAct.oIno thato regardo ito iso directedo thato theo appellantso shallo accordinglyocalculateotheogratuityoandopayotheosameotoo theo respondento No.1,o ifo alreadyo noto paid.o Sucho paymentoshallobeomadeowithinofouroweeksofromothiso date…"o 2023.09.05 12:18 16/37o o o

19.o o Inotheoinstantocase,othereoisonoodisputeothatotheopetitionerohado resignedo fromo theo serviceo ofo respondento No.3o ono 10.02.1988,o aftero renderingoserviceoforoaoperiodoofo05oyearso08omonthsoando20odays,owhicho isoafterotheocomingointooforceoofotheo1972oAct.oTherefore,okeepingoinoviewo theoaboveomentionedoauthoritativeojudicialopronouncementsoandoalsooino termsoofoSectiono4(1)(b)oofotheoAct,o1972,otheopetitioneroisoentitledotoo gratuity.o

20.o o Asoregardsotheorejectionoofoclaimoofotheopetitioneroonotheo groundothatotheoapplicationoforopaymentoofogratuityowasofiledobyopetitionero beyondo theo timeo prescribedo byo Ruleo 10o ofo theo Paymento ofo Gratuityo (Punjab)oRules,o1973,oitowouldobeoappositeotooreferotooSectionso4oando7oofo theoPaymentoofoGratuityoAct,o1972oandoalsootheoRuleo7oandoRuleo10oofotheo Paymento ofo Gratuityo (Punjab)o Rules,o 1973.o Sectionso 4o ando 7o ofo theo PaymentoofoGratuityoAct,o1972oreadoasounder:o-o

4.oPaymentoofogratuity.-(1)oGratuityoshallobeopayableo tooanoemployeeoonotheoterminationoofohisoemploymento afteroheohasorenderedocontinuousoserviceoforonotolesso thanofiveoyears,-oo

(a)oonohisosuperannuation,ooro

(b)oonohisoretirementoororesignation,ooro

(c)o onohiso deathoorodisablemento dueotooaccidento oro disease:o Providedothatotheocompletionoofocontinuousoserviceoofo fiveo yearso shallo noto beo necessaryo whereo theo terminationoofotheoemploymentoofoanyoemployeeoisodueo toodeathoorodisablement:oo [Providedo furthero thato ino theo caseo ofo deatho ofo theo employee,ogratuityopayableotoohimoshallobeopaidotoohiso nomineeoor,oifonoonominationohasobeenomade,otoohiso heirs,o ando whereo anyo sucho nomineeso oro heirso iso ao 2023.09.05 12:18 17/37o o o minor,otheoshareoofosuchominor,oshallobeodepositedowitho theocontrollingoauthorityowhooshalloinvestotheosameoforo theo benefito ofo sucho minoro ino sucho banko oro othero financialoinstitution,oasomayobeoprescribed,ountilosucho minoroattainsomajority.]oo Explanationo .-Foro theo purposeso ofo thiso section,o disablementomeansosuchodisablementoasoincapacitateso anoemployeeoforotheoworkowhichoheowasocapableoofo performingobeforeotheoaccidentoorodiseaseoresultingoino suchodisablement.oo

(2)o Foro everyo completedo yearo ofo serviceo oro parto thereofoinoexcessoofosixomonths,otheoemployeroshallopayo gratuityo too ano employeeo ato theo rateo ofo fifteeno days'o wagesobasedoonotheorateoofowagesolastodrawnobyotheo employeeoconcerned:oo Providedothatoinotheocaseoofoaopiece-ratedoemployee,o dailyowagesoshallobeocomputedoonotheoaverageoofotheo totalo wageso receivedo byo himo foro ao periodo ofo threeo monthsoimmediatelyoprecedingotheoterminationoofohiso employment,oand,oforothisopurpose,otheowagesopaidoforo anyoovertimeoworkoshallonotobeotakenointooaccount:oo Providedofurtherothatoinotheocaseoofo[anoemployeeowhoo isoemployedoinoaoseasonaloestablishmentoandowhooiso notosooemployedothroughoutotheoyear],otheoemployero shallopayotheogratuityoatotheorateoofosevenodays'owageso foroeachoseason.oo [Explanationo .-Ino theo caseo ofo ao monthlyo ratedo employee,otheofifteenodays'owagesoshallobeocalculatedo byodividingotheomonthlyorateoofowagesolastodrawnobyo himo byo twenty-sixo ando multiplyingo theo quotiento byo fifteen.]oo

(3)oTheoamountoofogratuityopayableotooanoemployeeo shallonotoexceedo[suchoamountoasomayobeonotifiedobyo theoCentraloGovernmentofromotimeotootime].oo 2023.09.05 12:18 18/37o o o

(4)oForotheopurposeoofocomputingotheogratuityopayableo too ano employeeo whoo iso employed,o aftero hiso disablement,o ono reducedo wages,o hiso wageso foro theo periodoprecedingohisodisablementoshallobeotakenotoobeo theowagesoreceivedobyohimoduringothatoperiod,oandohiso wagesoforotheoperiodosubsequentotoohisodisablemento shallobeotakenotoobeotheowagesoasosooreduced;oo

(5)oNothingoinothisosectionoshalloaffectotheorightoofoano employeeotooreceiveobetterotermsoofogratuityounderoanyo awardooroagreementoorocontractowithotheoemployer.oo

(6)oNotwithstandingoanythingocontainedoinosub-sectiono

(1),-o

(a)otheogratuityoofoanoemployee,owhoseoservicesohaveo beeno terminatedo foro anyo act,o willfulo omissiono oro negligenceo causingo anyo damageo oro losso to,o oro destructiono of,o propertyo belongingo too theo employer,o shallobeoforfeitedotootheoextentoofotheodamageoorolosso soocaused;o

(b)o theo gratuityo payableo too ano employeeo [mayo beo whollyooropartiallyoforfeited]-o

(i)o ifo theo serviceso ofo sucho employeeo haveo beeno terminatedo foro hiso riotouso oro disorderlyo conducto oro anyootheroactoofoviolenceoonohisopart,ooro

(ii)o ifo theo serviceso ofo sucho employeeo haveo beeno terminatedoforoanyoactowhichoconstitutesoanooffenceo involvingomoraloturpitude,oprovidedothatosuchooffenceo isocommittedobyohimoinotheocourseoofohisoemployment.o

7.o Determinationo ofo theo amounto ofo gratuity.-(1)o Ao personowhooisoeligibleoforopaymentoofogratuityoundero thisoActooroanyopersonoauthorised,oinowriting,otooactoono hiso behalfo shallo sendo ao writteno applicationo too theo employer,owithinosuchotimeoandoinosuchoform,oasomayo beoprescribed,oforopaymentoofosuchogratuity.oo

(2)o Aso soono aso gratuityo becomeso payable,o theo employeroshall,owhetheroanoapplicationoreferredotooino 2023.09.05 12:18 19/37o o o sub-sectiono(1)ohasobeenomadeooronot,odetermineotheo amountoofogratuityoandogiveonoticeoinowritingotootheo personotoowhomotheogratuityoisopayableoandoalsootootheo controllingoauthorityospecifyingotheoamountoofogratuityo soodetermined.oo [(3)oTheoemployeroshalloarrangeotoopayotheoamountoofo gratuity,owithinothirtyodaysofromotheodateoitobecomeso payableotootheopersonotoowhomotheogratuityoisopayable.oo (3-A)o Ifo theo amounto ofo gratuityo payableo undero sub-sectiono (3)o iso noto paido byo theo employero withino theo periodospecifiedoinosub-sectiono(3),otheoemployeroshallo pay,o fromo theo dateo ono whicho theo gratuityo becomeso payableotootheodateoonowhichoitoisopaid,osimpleointeresto atosuchorate,onotoexceedingotheorateonotifiedobyotheo CentraloGovernmentofromotimeotootimeofororepaymento ofo long-termo deposits,o aso thato Governmento may,o byo notificationospecify:oo Providedothatonoosuchointerestoshallobeopayableoifotheo delayo ino theo paymento iso dueo too theo faulto ofo theo employeeoandotheoemployerohasoobtainedopermissiono ino writingo fromo theo controllingo authorityo foro theo delayedopaymentoonothisoground.]oo

(4)(a)o Ifo thereo iso anyo disputeo aso too theo amounto ofo gratuityopayableotooanoemployeeounderothisoActooroaso tootheoadmissibilityoofoanyoclaimoof,ooroinorelationoto,o ano employeeo foro paymento ofo gratuity,o oro aso too theo personoentitledotooreceiveotheogratuity,otheoemployero shallo deposito witho theo controllingo authorityo sucho amountoasoheoadmitsotoobeopayableobyohimoasogratuity.oo [*o*o*]oo [(b)o Whereo thereo iso ao disputeo witho regardo too anyo matterooromattersospecifiedoinoclauseo(a),otheoemployero oroemployeeooroanyootheropersonoraisingotheodisputeo mayomakeoanoapplicationotootheocontrollingoauthorityo forodecidingotheodispute.]o 2023.09.05 12:18 20/37o o o [(c)]oTheocontrollingoauthorityoshall,oafterodueoinquiryo ando aftero givingo theo partieso too theo disputeo ao reasonableoopportunityoofobeingoheard,odetermineotheo matterooromattersoinodisputeoandoif,oasoaoresultoofosucho inquiryo anyo amounto iso foundo too beo payableo too theo employee,o theo controllingo authorityo shallo directo theo employerotoopayosuchoamountoor,oasotheocaseomayobe,o sucho amounto aso reducedo byo theo amounto alreadyo depositedobyotheoemployer.o [(d)]oTheocontrollingoauthorityoshallopayotheoamounto deposited,o includingo theo excesso amount,o ifo any,o depositedo byo theo employer,o too theo persono entitledo thereto.o [(e)]oAsosoonoasomayobeoafteroaodepositoisomadeoundero clauseo (a),o theo controllingo authorityo shallo payo theo amountoofotheodeposit-o

(i)otootheoapplicantowhereoheoisotheoemployee;ooro

(ii)owhereotheoapplicantoisonototheoemployee,otootheo [nomineeoor,oasotheocaseomayobe,otheoguardianoofosucho nomineeoor]oheiroofotheoemployeeoifotheocontrollingo authorityoisosatisfiedothatothereoisonoodisputeoasotootheo righto ofo theo applicanto too receiveo theo amounto ofo gratuity.o

(5)oForotheopurposeoofoconductingoanoinquiryoundero sub-sectiono (4),otheo controllingo authorityo shallo haveo theosameopowersoasoareovestedoinoaoCourt,owhileotryingo aosuit,ounderotheoCodeoofoCiviloProcedure,o1908o(5oofo 1908),oinorespectoofotheofollowingomatters,onamely:-o

(a)o enforcingo theo attendanceo ofo anyo persono oro examiningohimoonooath;o

(b)o requiringo theo discoveryo ando productiono ofo documents;o

(c)oreceivingoevidenceoonoaffidavits;o

(d)o issuingo commissionso foro theo examinationo ofo witnesses.o 2023.09.05 12:18 21/37o o o

(6)oAnyoinquiryounderothisosectionoshallobeoaojudicialo proceedingo withino theo meaningo ofo sectionso 193o ando 228,oandoforotheopurposeoofosectiono196,oofotheoIndiano PenaloCodeo(45oofo1860).oo

(7)o Anyo persono aggrievedo byo ano ordero undero sub-sectiono(4)omay,owithinosixtyodaysofromotheodateoofotheo receipto ofo theo order,o prefero ano appealo too theo appropriateo Governmento oro sucho otheroauthorityo aso mayobeospecifiedobyotheoappropriateoGovernmentoino thisobehalf:oo Providedo thato theo appropriateo Governmento oro theo appellateoauthority,oasotheocaseomayobe,omay,oifoitoiso satisfiedothatotheoappellantowasopreventedobyosufficiento causeo fromo preferringo theo appealo withino theo saido periodo ofo sixtyo days,o extendo theo saido periodo byo ao furtheroperiodoofosixtyodays.oo [Providedofurtherothatonooappealobyoanoemployeroshallo beo admittedo unlesso ato theo timeo ofo preferringo theo appeal,otheoappellantoeitheroproducesoaocertificateoofo theo controllingo authorityo too theo effecto thato theo appellantohasodepositedowithohimoanoamountoequalotoo theoamountoofogratuityorequiredotoobeodepositedoundero sub-sectiono (4),o oro depositso witho theo appellateo authorityosuchoamount.]oo

(8)o Theo appropriateo Governmento oro theo appellateo authority,oasotheocaseomayobe,omay,oafterogivingotheo partieso too theo appealo ao reasonableo opportunityo ofo beingoheard,oconfirm,omodifyoororeverseotheodecisiono ofotheocontrollingoauthority.o o o Ruleo7o ando Ruleo 10o ofotheo PaymentoofoGratuityo (Punjab)o Rules,o1973,oreadoasounder:-o

7.oApplicationoforoGratuity.--o(1)oAnoemployeeowhooiso eligibleoforopaymentoofogratuityunderotheoAct,ooroanyo persono authorized,o ino writing,o too acto ono hiso behalf,o 2023.09.05 12:18 22/37o o o shalloapply,oordinarilyowithinothirtyodaysofromotheodateo ofo gratuityo becameo payable,o ino Formo 'I'o too theo employer:o Providedo thato whereo theo dateo ofo superannuationo oro retiremento ofo ano employeeo iso known,o theo employeeo mayoapplyotootheoemployerobeforeothirtyodaysoofotheo dateoofosuperannuationoororetirement.o

(2)o Ao nomineeo ofo ano employeeo whoo iso eligibleo foro paymentoorogratuityounderotheosecondoprovisootoosub-sectiono(1)oofoSectiono4oshalloapply,oordinarilyowithino thirtyo dayso fromo theo dateo ofo theo gratuityo becameo payableotoohim,oinoFormo'J'otootheoemployer:o Providedo thato ano applicationo ino plaino papero witho relevanto particularso shallo alsoo beo accepted.o Theo employeromayoobtainosuchootheroparticularsoasomayobeo deemedonecessaryobyohim.o

(3)oAolegaloheiroofoanoemployeeowhooisoeligibleoforo paymentoofogratuityounderotheosecondoprovisootoosub-sectiono(1)oofoSectiono4oshalloapply,oordinarilyowithino oneoyearofromotheodateoofotheogratuityobecameopayableo toohim,oinoFormo'K'otootheoemployer.o

(4)o Whereogratuityo becomesopayableo underotheoAct,o beforeotheocommencementoofotheseorules,otheoperiodoofo limitationospecifiedoinosub-ruleo(1),o(2)oando(3)oshallo beo deemedo too beo operativeo fromo theo dateo ofo sucho commencement.o

(5)oAnoapplicationoforopaymentoofogratuityofiledoaftero theoexpiryoofotheoperiodsospecifiedoinothisoruleoshallo alsoobeoentertainedobyotheoemployer,oifotheoapplicanto adducesosufficientocauseoforotheodelayoinopreferringo hisoclaim,oandonooclaimoforogratuityounderotheoActo shallobeoinvalidomerelyobecauseotheoclaimantofailedotoo presentohisoapplicationowithinotheospecifiedoperiod.o Anyodisputeoinothisoregardoshallobeoreferredotootheo controllingoauthorityoforohisodecision.o 2023.09.05 12:18 23/37o o o

(6)oAnoapplicationounderothisoruleoshallobeopresentedo too theo employero eithero byo personalo serviceo oro byo registeredopostoacknowledgmentodue.o

10.Applicationotoocontrollingoauthorityoforodirection-o

(1)oIfoanoemployero–o

(i)o refuseso too accepto ao nominationo oro too entertaino ano applicationo soughto too beo filedo underoRuleo7,ooroo

(ii)oissuesoaonoticeounderosub-ruleo(1)oofoRuleo8o eitherospecifyingoanoamountoofogratuityowhichoiso consideredobyotheoapplicantolessothanowhatoiso payableo oro rejectingo eligibilityo too paymento ofo gratuity,ooroo

(iii)ohavingoreceivedoanoapplicationounderoRuleo 7o failso too issueo anyo noticeo aso requiredo undero Ruleo8owithinotheotimeospecifiedotherein.oo theoclaimantoemployee,onomineeoorolegaloheir,oasotheo caseo mayo be,o may,o withino ninetyo dayso ofo theo occurrenceoofotheocauseoforotheoapplication,oapplyoino formo'N'otootheocontrollingoauthorityoofotheoareaoforo issuingoaodirectionounderosub-sectiono(4)oofoSectiono7o withoasomanyoextraocopiesoasoareotheooppositeoparties:oo Providedothatotheocontrollingoauthorityomayoaccepto anyo applicationo undero thiso sub-rule,o ono sufficiento causeobeingoshownobyotheoapplicant,oafterotheoexpiryo ofotheospecifiedoperiod.oo

(2)o Applicationo undero sub-ruleo (1)o ando othero documentso relevanto too sucho ano applicationo shallo beo presentedo ino persono too theo controllingo authorityo oro shallobeosentobyoregisteredopostoacknowledgmentodue.ooo

21.o o ItoisoappositeotoostateohereothatotheoaboveoextractedoRuleo10o ofo theo Paymento ofo Gratuityo (Punjab)o Rules,o 1973o iso pario materiao toooooooooooooooooooooooo Ruleo10oofotheoPaymentoofoGratuityo(Central)oRules,o1972.o 2023.09.05 12:18 24/37o o o

22.o o Theo effecto ando consequenceo ofo filingo ofo applicationo foro paymento ofo gratuityo beyondo theo timeo prescribedo byo Ruleo 10o ofo theo PaymentoofoGratuityo(Central)oRules,o1972owasoconsideredobyotheoMadraso Higho Courto ino Muthukumarano Instituteo ofo Technologyo v.o J.o Rajalakshmi,o2021o(3)oCTCo107,owhereinoitohasobeenoheldoasounder:oo "…Wheno theo employero failso too makeo oro thereo iso shortfallo ino paymento ofo gratuity,o theo employeeo iso entitledo too makeo ano applicationo foro paymento ofo gratuityo too theo Controllingo Authorityo undero Sectiono 7(4)(b)oofotheoAct.oTheoschemeoofotheoActoasoperotheo amendedoprovisionso clearlyo revealothatothereoisonoo periodo ofo limitationo restrictingo theo righto ofo theo employeeo too makeo sucho applicationo too theo ControllingoAuthority.oo

4.oTheolegalopositionoisowellosettledothatoaoprovisiono forolimitationocannotobeomadeobyowayoofosubordinateo legislationo wheno theo parento enactmento doeso noto contemplateotheosameoasoheldobyotheoHon'bleoSupremeo CourtoofoIndiaoinoBharatoBarreloandoDrumoMfg.oCo.o Ltd.,ov.oESIoCorpn.,o[(1971)o2oSCCo860].oFurther,oito isotriteolawothatotheosubordinateolegislationowhichoiso inconsistento witho theo parento enactmento wouldo beo ultraoviresoandocannotohaveoanyoeffect.oo

5.oItobecomesoevidentothatoafterotheoamendmentsomadeo tootheoActowithoeffectofromo01.10.1987,otheoperiodoofo limitationo prescribedo ino Ruleo 10o ofo theo Ruleso iso ino derogationoofoclauseso(2),o(3),o(3-A)oando(4)oofoSectiono 7o ofo theo Act.o Aso ao consequenceo thereof,o ito wouldo necessarilyofollowothatothoughotheoFirstoRespondento condonedo theo delayo ino filingo theo applicationo foro paymentoofogratuityoinotermsoofoRuleo10oofotheoRules,o resortotoothatoprocedureowasonotoactuallyowarranted.o ThisoviewoisofortifiedobyotheodecisionoofothisoCourtoino 2023.09.05 12:18 2?/37o o o M.Vairamuthuo v.o Regionalo Labouro Commissionero (Orderodatedo21.10.2010oinoW.P.o(MD)oNo.o10377oofo 2007oetc.,obatch),owhereoitohasobeenoheldoasofollows:-oo "7.oThoughoinitiallyotheoIREoLimitedowantedotoo contendo delayo ando lacheso ono theo parto ofo theo workmeno ino movingo theo authorityo undero theo PaymentoofoGratuityoAct,ohowever,onooseriouso submissionsowereomadeoonothatoscore.oHenceoito iso unnecessaryo too dealo witho theo issueo elaboratelyo excepto wheno dealingo witho W.P.(MD)No.10377o ofo 2007.o Eveno otherwise,o thiso courto haso alreadyo heldo thato ifo thereo iso unpaido gratuity,o theo workmeno cano moveo theo authorityoandotheoprescriptionoofolimitationobyo ruleso iso beyondo theo powero conferredo ono theo ruleomakingoauthority."o

6.oTheoBombayoHighoCourtoinoH.JayaramaoShettyov.o Sanglio Banko Ltd.,o [(2005)o 3o LLJo 637o (Bom)]o haso elaboratelyo discussedo thiso aspecto ofo theo mattero aso follows:-oo "5.oTheosecondoreasonowhichoweighedowithotheo AppellateoAuthorityowasothatotheoclaimoofotheo Petitioneroforopaymentoofogratuityowasobarredo byo limitation.o Theo Petitionero submittedo ino hiso applicationothatotheobreachoonotheopartoofotheo employero waso ofo ao continuouso ando recurringo nature.oTheoPetitioner,ohowever,osubmittedothato ifo theo authorityo cameo too theo conclusiono thato thereowasoaodelay,oheowouldocraveoleaveotoofileoao separateo applicationo foro theo condonation.o Counselo foro theo Petitionero haso madeo ao statementobeforeotheoCourtoonoinstructionsothato thereo waso noo separateo applicationo foro condonation.o 2023.09.05 12:18 26/37o o o

6.o sectiono 4o ofo theo Paymento ofo Gratuityo Act,o 1972oprovidesothatogratuityoshallobeopayableotoo ano employeeo ono theo terminationo ofo hiso employmentoaftero heo haso renderedo continuouso serviceo foro noto lesso thano fiveo years,o ono superannuationo or,o aso theo caseo mayo be,o ono retirement,o resignation,o deatho oro disablement.o Sub-sectiono (1)o ofo Sectiono 7o provideso thato ao persono whoo iso eligibleo foro theo paymento ofo gratuityoshallosendoaowrittenoapplicationotootheo employer,owithinosuchotimeoandoinosuchoform,oaso mayobeoprescribed,oforotheopaymentoofogratuity.o Sub-sectiono (2),o however,o layso downo thato irrespectiveo ofo whethero ano applicationo aso providedoinosub-sectiono(1)ohasobeenomadeooro not,o theo employero shallo aso soono aso gratuityo becomeso payable,o determineo theo amounto ofo gratuityo ando giveo ao noticeo ino writingo too theo personotoowhomotheogratuityoisopayableoandotoo theoControllingoAuthorityospecifyingotheoamounto ofogratuityosoodetermined.oSubsectionso(3)oando

(3A)oofoSectiono7owereosubstitutedobyoAmendingo Acto 22o ofo 1987o witho effecto fromo 1sto Octobero 1987.o Sub-sectiono (3)o provideso thato theo employeroshalloarrangeotoopayotheoamountoofo gratuityo withino thirtyo dayso fromo theo dateo ono whicho ito becomeso payableo too theo persono too whomo gratuityo iso payable.o Sub-sectiono (3A)o stipulatesothatoifotheoamountoofogratuityothatoiso payableoisonotopaidobyotheoemployeroasospecifiedo ino sub-sectiono (3),o theo employero shallo payo simpleointerestoatosuchorate,onotoexceedingotheo rateonotifiedobyotheoCentraloGovernmentofromo timeo too timeo foro repaymento ofo longo termo deposits.oNoointerestois,ohowever,opayableoifotheo 2023.09.05 12:18 27/37o o o delayo ino paymento iso dueo too theo faulto ofo theo employeeo ando theo employero haso obtainedo permissiono ino writingo fromo theo Controllingo Authorityoforodelayedopaymentoonothatoground.o Paymento ofo interesto ono delayedo paymento ofo gratuityoisotheostatutoryonormoandoevenoifodelayo iso dueo too theo employee,o theo employero haso too obtainopermissionoofotheoControllingoAuthorityo ino writingo ono thiso groundo withouto whicho gratuityo musto carryo statutoryo interest.o Sub-sectiono(4)(a)othenoprovidesothatoifothereoisoanyo disputeoasotootheoamountoofogratuityopayableotoo ano employeeo undero theo Act,o oro aso too theo admissibilityoofoanyoclaimoof,ooroinorelationoto,o anoemployeeoforopaymentoofogratuityooroasotoo theopersonoentitledotooreceiveotheogratuity,otheo employero musto deposito witho theo Controllingo Authorityo sucho amounto aso heo admitso too beo payable.oSub-sectiono(4)(b)oprovidesothatoupono thereobeingoaodisputeowithoregardotooanyomattero specifiedo ino clauseo (4)(a),o theo employero oro employeeo oro anyo othero persono raisingo theo disputeo mayo makeo ano applicationo too theo ControllingoAuthorityoforodecidingotheodispute.o TheoControllingoAuthorityohasothereuponobeeno empoweredotooadjudicateouponotheodispute.o

7.oTheseoprovisionsoofotheoPaymentoofoGratuityo Act,o1972oprovideoaostatutoryoelucidationoofotheo natureoofogratuityoasoaoterminalobenefit.oUndero Sectiono4oofotheoAct,opaymentoofogratuityotooano employeeo iso ao mandateo ofo theo statute,o ono theo terminationo ofo employmento aftero continuouso serviceo foro noto lesso thano fiveo years.o Thiso mandateo iso subjecto too theo limitedo exceptiono whicho iso carvedo outo ino sub-sectiono (6)o ofo 2023.09.05 12:18 28/37o o o Sectiono4otoowhichoaoreferenceowouldobeomadeo shortlyo hereafter.o Theo employero iso undero ao mandateo ando ano obligationo too determineo theo amountoofogratuityothatoisopayableoasosoonoaso gratuityo becomeso payable.o Theo employero iso underoanoobligationotooarrangeoforotheopaymento ofotheoamountoofogratuityowithino30odaysofromo theo dateo ono whicho ito becomeso payableo too theo persono too whomo iso payable.o Aftero theo amendmentoofo1987,oaostatutoryoprovisionohaso beeno madeo foro theo paymento ofo interest.o Theo employero cano avoido thato obligationo too payo interestoonlyoifotheodelayoinopaymentoisodueotooao faultoofotheoemployeeoandoifoemployeroisograntedo permissiono ino writingo byo theo Controllingo Authorityo foro theo delayedo paymento ono thato ground.o Theseo provisionso emphasiseo thato theo determinationoofotheoamountoandotheopaymentoofo gratuityoisotheoobligationoofotheoemployer.oTheo employerohasotoomakeoaodeterminationoofotheo gratuityo whicho iso payableo whethero oro noto ano applicationo haso beeno madeo byo theo employee.o Theoemployerohasotooarrangeopayment.o

8.o Theseo provisionso haveo beeno interpretedo byo theo Supremeo Courto ino H.o Gangahanumeo Gowdao v.o Karnatakao Agroo Industrieso Corpno Ltd.,o[(2003)o1oCLRo705],owhereotheoCourtoheldo asofollows:o "FromotheoprovisionsomadeoinoSectiono7,oaoclearo commandocanobeoseenomandatingotheoemployero toopayotheogratuityowithinotheospecifiedotimeoando too payo interesto ono theo delayedo paymento ofo gratuity.oNoodiscretionoisoavailableotooexemptooro relieveotheoemployerofromopaymentoofogratuityo withoorowithoutointerestoasotheocaseomayobe.o...o 2023.09.05 12:18 29/37o o o Paymentoofogratuityowithoorowithoutointerestoaso theocaseomayobeodoesonotolieoinotheodomainoofo discretiono buto ito iso ao statutoryo compulsion.o Specifico benefitso expresslyo giveno ino ao socialo beneficialo legislationo cannoto beo ordinarilyo denied."o Theo Supremeo Courto heldo thato ino viewo ofo theo clearo mandateo ofo Sectiono 7,o noo residualo discretionovestedoinotheoHighoCourtotoorelieveo theo obligationo imposedo ono theo employero ofo payingo interesto ono accounto ofo theo delayedo paymentoofogratuity.o

9.o Ono behalfo ofo theo Respondent,o however,o relianceowasosoughtotoobeoplacedoonotheoruleso framedo undero theo Paymento ofo Gratuityo Act,o 1972.o Theseo Rules,o ito musto beo notedo ato theo outset,owereoframedopriorotootheoAmendingoActso ofo1984oando1987.oTheoPaymentoofoGratuityoAct,o 1972,oitomayobeonoted,ohasomadeonooprovisiono foroaospecifiedoperiodoforotheosubmissionoofoano applicationo too theo Controllingo Authorityo ino Sectiono 7(4)(b)o ofo theo Act.o Aso contrao distinguishedo fromo this,o Sectiono 7(7)o provideso foroaospecificoperiodoofolimitationoofosixtyodayso foro preferringo ano appealo too theo appropriateo Governmento againsto theo decisiono ofo theo Controllingo Authorityo undero Sectiono 7(4).o Ino Sitaramo v.o M.N.Nagrashanao AIRo 1960o Supremeo Courto 260,o theo Supremeo Courto consideredo Sectiono 10o ofo theo Workmen'so CompensationoActowhichoprovidedoaoperiodoofo limitationotoomakeoaoclaimoforocompensationotoo theoCommissionerobutoempoweredotheolatterotoo condoneo delayo foro sufficiento cause.o Thiso provisionoofotheoActowasoheldobyotheoSupremeo 2023.09.05 12:18 30/37o o o Courto too beo similaro too Sectiono 5o ofo theo Limitationo Acto ando theo Courto heldo thato theo explanationo musto covero theo wholeo periodo ofo delay.oInoGurunathoVithaloTamseov.oNationalo Textileo Corporationo [2002]o 1o CLRo 809]o thiso Courto heldo thato significantly,o theo legislatureo hado advisedlyo noto specifiedo anyo particularo periodo ofo limitationo foro movingo theo ControllingoAuthorityo undero theo Paymento ofo GratuityoAct,o1972.oButotheosubmissionobeforeo theoCourtonowoonobehalfoofotheoRespondent,oiso thatotheolimitationowhichohasobeenoprovidedoforo inoRuleso7oando10oofotheoRulesoframedounderotheo PaymentoofoGratuityoAct,o1972owasonotobroughto tootheoattentionoofotheoCourtoinothatocase.oBeforeo dealingowithothisosubmissionoonofirstoprinciple,o itowouldobeonecessaryotoonoteothatoatoleastothreeo HighoCourtsohaveohadooccasionotooconsiderotheo question.oTheoDelhioHighoCourt,oinoM.C.D.ov.o NandoKishoreo[2003o(97)oFLRo158],odealtowitho theo submissiono thato theo Controllingo Authorityo hadonototakenointooconsiderationotheodelayoofo theoemployeeoinofilingoanoapplicationounderotheo PaymentoofoGratuityoAct,o1972.oTheoDelhioHigho Courtoheldothato"theogrievanceoofotheoappellanto iso misconceivedo aso theo non-o paymento ofo gratuityo dueo too theo Respondento waso ao continuingowrongoandothereowasonooquestiono ofoanyodelayoinoapproachingotheoControllingo Authority.o Ao Learnedo Singleo Judgeo ofo theo KeralaoHighoCourtoinoNeelakandanov.oStateoofo Keralao [2001o IIo CLRo 448]o advertedo too theo provisionsoofoSectiono7oofotheoActoasoamendedo andoheldothatowhileoRuleo7oofotheoGratuityoRuleso providesothatoanoapplicationobeofiledowithinoao 2023.09.05 12:18 31/37o o o prescribedo time,o theseo provisionso undero theo Ruleso "cannoto ofo course,o beo takeno aso overo reachingo theo provisiono ofo Sectiono 7(2)o ofo theo Act".oTheoCourtoheldothatoperhapsotheoimpactoofo theoAmendingoActsoofo1984oando1987ohadonoto beenotakenonoticeoofobyotheoruleomakingobody.o UponotheoamendmentoofoSectiono7,oitohasonowo unambiguouslyo beeno laido downo thato ano employerohasoaodutyotoopayogratuityowhetherooro noto ano applicationo iso filed.o Theo Paymento ofo GratuityoActoisoaopieceoofobeneficialolegislationo andoaoliberalointerpretationowouldohaveotoobeo adoptedosinceoanoemployee,oitowasoheld,omayo notoatotimesobeoawareoofohisorights.oTheoActo imposesoanoobligationoonotheoemployeroandoito wouldonotobeoopenotootheoemployerotoobenefito fromoaodelayoinomakingoanoapplicationoforotheo paymento ofo gratuity.o Theo Karnatakao Higho Courto ino Generalo Secretary,o Vokkaligarao Sangha,oBangaloreov.oR.oChandramoulio[2002o IIoCLRo1070]onotedothatoRuleo7(5)opermitsotheo entertainmentoofotheoapplicationsoforopaymento ofo gratuityo aftero theo expiryo ofo theo periodo specifiedoandoclaimoshallonotobeoinvalidomerelyo becauseo theo claimanto failedo too presento theo applicationowithinotheospecifiedoperiod.o

10.o Theo Ruleso framedo undero theo Paymento ofo Gratuityo Act,o 1972o provideo foro twoo separateo periodsoofotimeoinorelationotootheomakingoofoano application.o Theo firsto undero Ruleo 7o iso ano applicationotootheoemployerowithino30odaysofromo theo dateo ono whicho gratuityo becomeso payable.o Ruleo 7(5),o however,o provideso thato ano applicationoforopaymentoofogratuityofiledoaftero theoexpiryoofotheoperiodospecifiedoshalloalsoobeo 2023.09.05 12:18 32/37o o o entertainedo byo theo employero ifo theo applicanto adducesosufficientocauseoforodelayoandonooclaimo forogratuityoshallobeoinvalidomerelyobecauseotheo claimantofailedotoopresentohisoapplicationowithino theo specifiedo period.o Thiso musto beo ino ao juxtaposedowithoSectiono7(2)owhichorequiresotheo employerotoomakeoaodeterminationoofogratuityo payableoandotoofurnishoaonoticeotootheoemployeeo ando too theo Controllingo Authorityo aso soono aso gratuityo becomeso payableo whethero oro noto ano applicationounderoSectiono7(1)ohasobeenomade.o Clearlyotherefore,otheoemployerocannotosetoupo limitationoasoaodefenceoonotheogroundothatotheo applicationo too himo waso noto presentedo withino thirtyodays.oTheoclearoanswerotoosuchoaodefence,o ifoitoisosetoupoisothatotheoemployeroisoobligedotoo determineo ando makeo arrangemento too payo gratuityowhetherooronotoanoapplicationoisomade.o Theo secondo timeo periodo thato iso prescribedo iso undero Ruleo 10.o Ruleo 10o intero aliaoprovidesoao periodo ofo 90o dayso foro makingo ano applicationo beforeo theo Controllingo Authorityo upono theo employerofailingotooissueoaonoticeoasorequiredo underoRuleo8ouponotheoreceiptoofoanoapplicationo fromo theo employeeo undero Ruleo 7.o Theo delayo undero Ruleo 10o cano beo condonedo byo theo ControllingoAuthorityoonosufficientocauseobeingo shown.o

11.oTheorulesowhichowereoframedoino1972omusto beoreadoinoaomannerowhichoisoconsistentowitho theo statutoryo provisionso ofo Sectiono 7o particularlyo aftero theo amendmentso thato wereo introducedobyoAmendingoActo25oofo1984o(witho effectofromo1stoAprilo1984)oandobyoAmendingo Acto22oofo1987o(withoeffectofromo1stoOctobero 2023.09.05 12:18 33/37o o o 1987).oTheoprovisionsoofoSectiono7oemphasiseo thatotheoobligationoisothatoofotheoemployerotoo determineoandotoomakeoarrangementsoforotheo paymentoofogratuityoandouponohisofailureotoodoo so,o too payo interesto ato theo rateo whicho iso statutorilyoprescribed.oEvenoifotheoperiodothato iso prescribedo ino theo Ruleso iso takeno intoo consideration,otheoRulesothemselvesolayodowno thatotheodelayoonotheopartoofotheoemployer,oifo any,o cano beo condonedo ifo sufficiento causeo iso shown.oAo breacho ofo theo employero too complyo withohisoobligationounderosectiono7oprovidesoao recurringoandocontinuousocauseoofoaction.oTheo Actoisoaopieceoofosocialowelfareolegislationoando theoemployerocannotobeopermittedobyoreasonoofo hiso owno defaulto ino complyingo witho hiso obligationotoodefeatotheojustoentitlementoofotheo employee.o Finally,o ito mayo beo notedo thato theo employero haso too determineo ando payo gratuityo whetherooronotoanoapplicationoisofiledotoohim.o Theofilingoofoanoapplicationobeforeotheoemployero iso noto ao conditiono precedent.o Ruleo 7o makeso proceduraloprovisionsoforosuchoanoapplication.o OnoreceiptoofoanoapplicationounderoRuleo7,otheo employero haso too issueo ao noticeo undero Ruleo 8o eithero admittingo theo claimo oro too specifyo theo reasonsowhyoheoholdsotheoclaimoinadmissible.oIto isothereafterothatotimeoisoprescribedoinoRuleo10o foroanoapplicationotootheoControllingoAuthority.o Theo makingo ofo ano applicationo undero Ruleo 7o thereforeoinvokesoaochainoofoeventsoinoRuleso8o ando10.oOnceotheomakingoofoanoapplicationotoo theo employero iso noto mandatoryo undero theo provisionso ofo Sectiono 7(2)o ofo theo substantiveo provisionsoofotheoact,otheolimitationounderotheo 2023.09.05 12:18 34/37o o o Rulesowhichoisotriggeredouponotheofilingoofotheo applicationo undero Ruleo 7o cano obviouslyo noto defeatotheoclaimoofotheoemployee."o

23.o o InotheocaseoofotheoKeralaoStateoCo-operativeoBankoLtdov.o CourtoofoDeputyoLabouroCommissioner,o2021(1)oKLTo466,oKeralaoHigho Courtohasoheldoasounder:o "8.o Thougho petitionero retiredo ono 30.06.2010,o theo noticeo Ext.P1o askingo himo too showo causeo aso too whyo disciplinaryo proceedingso shallo noto beo initiatedo waso datedo29.06.2010,owhichoisoclaimedobyotheopetitionero toohaveobeenoservedoonlyoono30.06.2010-theodateoofo retirement.oThusopetitionerohadonotobeenoterminatedo fromoserviceobyovirtueoofoanyoact,owilfuloomissionooro negligenceo causingo damageo oro losso oro sucho othero conditionsoasospecifiedoinoSectiono4(6)oofotheoAct.oTheo onlyomethodoinowhichogratuityodueotooanoemployeeocano beodetainedoororefusedoisobyovirtueoofoSectiono4(6)oofo theo Act.o Sectiono 4o reado witho Sectiono 7o ofo theo Acto createsoanoobligationouponotheoemployerotoopayotheo gratuityodueotooanoemployeeoonotheodateoofoterminationo ofo hiso employmento aftero carryingo outo theo quantification.oThisoisoaostatutoryodutyovestedouponotheo employer.oThisostatutoryodutyocannotobeoabdicatedobyo anoemployeroonotheogroundothatotheoemployeeohasonoto preferredoanoapplicationoasocontemplatedounderoRuleo 10oofotheoPaymentoofoGratuityo(Central)oRules,o1972.oo

9.oSectiono4oofotheoActoexpositsotheoobligationouponoano employerotoopayotheogratuityodueotooanoemployeeoono terminationoofohisoemployment.oTheoquantificationoando otheromodalitiesoofotheosaidoobligationoareospecifiedoino Sectiono7.oWhenoSectiono4oisoreadoalongowithoSectiono7o ofo theo Act,o ito iso explicito thato eveno withouto ano applicationo madeo byo theo employee,o theo employero iso 2023.09.05 12:18 3?/37o o o boundotooquantifyoandopayotheogratuityoonoterminationo ofohisoemployment.oo

10.oPaymentoofogratuityoisoaostatutoryoobligationoando iso noto madeo dependento ono ano application.o Theo Acto doesonotocontemplateotheopaymentoofogratuityotoobeo dependentoonoanoapplicationobyotheoemployee.oThisoiso allo theo moreo evidento fromo Sectiono 7(2)o ofo theo Act,o whichospecifiesothat,oasosoonoasotheogratuityobecomeso payable,otheoemployeroshall,owhetheroanoapplicationo haso beeno madeo oro not,o determineo theo amounto ofo gratuity.oRuleo10ocannotocontroloSectiono4ooroSectiono 7(2)oofotheoActoasoitoisoonlyoaosubordinateolegislation.o Itoisoelementaryothatotheorulesocannotocontrolotheotermso ofo ao statute.o Henceo theo delayo ino preferringo ano applicationo undero Ruleo 10o ofo theo Ruleso cannoto beo detrimentalotootheoentitlementoofogratuityodueotootheo 2ndorespondent…"o

24.o o ConsideringotheoentireoschemeoofotheoPaymentoofoGratuityo Acto alongwitho theo Rule(s)o aso reproducedo above,o thiso Courto iso ino agreemento witho theo viewso expressedo byo theo Madraso Higho Courto ino MuthukumaranoInstituteoofoTechnologyo(supra).oandotheoKeralaoHigho CourtoinoKeralaoStateoCo-operativeoBankoLtd.o(supra).o

25.o o Further,o ino Natarajao Pillaio vso Regionalo Jointo Labouro Commissionero1993(1)oCLRo927,oitowasoheldobyoKeralaoHighoCourtothatoao readingoofotheoprovisootooRuleo10oindicatesothatoaoseparateopetitionotoo condoneotheodelayoisonotomandatoryoandotheoonlyorequirementoisothatotheo Authorityo musto beo satisfiedo thato thereo iso sufficiento causeo foro delayo ino presentingotheoapplication.o

26.o o Inotheoinstantocase,otheoControllingoAuthorityohadoheldoissueo No.1oi.e.owhetherotheoapplicationohasobeenomadeowithinotheoprescribedo 2023.09.05 12:18 36/37o o o time,o ino favouro ofo theo petitionero hereino byo observingo thato theo caseo ofo gratuityoofoemployeesoshouldonotobeorejectedoonomereotechnicalopleas.o Thus,o onceo theo Controllingo Authorityo ino theo factso ofo thiso caseo hado entertainedotheoapplicationoofopetitionerounderotheoAct,o1972,owhichowaso filedomerelyoaftero63odays;otheoAppellateoAuthorityowasonotojustifiedoino non-suitingotheoclaimoofotheopetitioneroonotheogroundoofodelay.o

27.o o Ito iso wello settledo thato theo paymento ofo Gratuityo Acto iso ano enactmentoforotheowelfareoofotheoworkman/employeesoandoisoaowelfareo legislation;otherefore,otheointerpretationotoosuchoaostatuteocannotobeoagainsto theointerestoofotheoworkmen.ooo

28.o o Inoviewoofotheoaboveodiscussionoandoalsootheolegalopositiono asoindicatedoabove,oitowouldobeoapparentothatobothotheogroundsoonowhicho theoclaimoofotheopetitionerowasonon-suitedobyotheoAppellateoAuthority;oareo notosustainableoinolaw.oTherefore,otheoimpugnedoorderodatedo18.03.1991o (Annexureo P-2)o passedo byo theo Appellateo Authorityo iso accordinglyo seto aside.oConsequently,otheoorderodatedo31.01.1990o(AnnexureoP-1)opassedo byotheoControllingoAuthorityoisorestored.o

29.o o Theoinstantowritopetitionoisodisposedoofoinoaforestatedoterms.oo

30.o o Allopendingoapplications,oifoany,oshallostandoclosed.ooo o rdAugusto23 ,o2023oo o o o o (HARSHoBUNGER)o gurpreeto o o o o o o o oJUDGEo o Whetherospeaking/reasonedo:o Yes/Noo Whetheroreportableo:o o Yes/Noo 2023.09.05 12:18 37/37o o