TMI Blog2015 (8) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... liability to pay gratuity to Respondent coupled with promise to pay same as per content terms It was agreed and confirmed by appellant that gratuity shall be paid to Respondent on account of his resignation No infirmity in order of CLB Appeal dismissed Decided in favour of Respondent. - Company Appeal No. 65 of 2014, Company Application No. 59 of 2014, CLB Company Petition No. 44 of 2010, Company Application No. 47 of 2014, Company Application No. 438 of 2014 - - - Dated:- 10-7-2015 - S. C. Gupte,J. For the Appellants : Mr. Mayur Khandeparkar with M/s. T. N. Tripathi Co. For the Respondent : Mr. P. D. Sampat i/b. Mr.Vilas A. Jadhav. ORDER P.C. : The Appellants challenge an order passed by the Company Law Board ('CLB') in a company application directing the Appellants (non-Applicants before the CLB) to make payment of gratuity to the Respondent (Applicant before the CLB). 2 The original company petition (in which the company application was taken out) was filed by Appellant No.2 before the CLB against Appellant No.1 and the Respondent herein under Sections 397 and 398 of the Companies Act,1956 alleging acts of oppression and misman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal, it is submitted by learned Counsel for the Appellants, firstly, that the Respondent was an 'employer' rather than an 'employee' within the meaning of the Act. It is submitted that the payments made by the first Appellant company to the Respondent were in the nature of director's remuneration and not wages within the meaning of the Act, and there is, thus, no gratuity payable under the Act. It is secondly submitted that any dispute as to either admissibility or quantum of gratuity payable to an employee could only be decided by the authorities under the Act and that the CLB did not have jurisdiction to do so. Learned Counsel relies upon the judgment of the Supreme Court in the case of State of Punjab vs. Labour Court, Jullundur AIR 1979 SC 1981 and the judgments of the Calcutta High Court in the case of Monitron Securities Pvt.Ltd. and Mukundlal Khushalchand Dhavan (2001) ILLJ924Guj and of the Gujarat High Court in the case of Surendra Vikram Singh Agarwala vs. Kanhaya Lal Agarwalla (1999) IIILLJ 404Cal, in support of his submissions. 4 On the other hand, it is submitted by learned Counsel for the Respondent that the Act does not cover all employees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or part thereof in excess of six months at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned. The Act also provides for compulsory insurance for the employer's liability of payment of gratuity under the Act. Such insurance has to be obtained from the LIC. It is the case of the Appellants that the first Appellant company has obtained such insurance and that there is a scheme of gratuity prepared in that behalf. The scheme is in the form of a trust deed between the employer, i.e. the first Appellant company, and the trustees. This trust deed has various clauses which inter alia include the definition of employees, which is in the following terms: Employees shall mean the employees participating in the Gratuity Fund other than personal and domestic servants and shall be deemed to include the Directors who are wholetime bonafide employee of the Company and do not beneficially own shares in the Company carrying more than 5% voting rights in the Company. The submission is that the Respondent, being a director of the company carrying more than 5% voting rights in the company (he admittedly has 33.33% shareholding in the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amounts towards gratuity payable to the employees including the Respondent with the LIC. There is an admitted document on record in this behalf, namely, the letter dated 3 January 2014 addressed by the LIC that the total accumulation value of gratuity payable to the Respondent as on 1 November 2012 was ₹ 10 lakh as per the scheme rules. This was in response to a query addressed by the Respondent to the LIC under Master Policy No. GGCA/658728 taken by the Appellant company from the LIC in relation to gratuity payable by it to its employees. Then, there are also other documents on record which show that the Respondent was actually included in the gratuity scheme and policy taken from the LIC in connection with the scheme. There is a letter addressed by Appellant No.1 to the Respondent on 30 November 2012, writing to him about the former having forwarded his request for payment of gratuity to the LIC - Group Gratuity Scheme. There is also another letter on record, namely, letter dated 1 November 2011 addressed by Appellant No.1 to the LIC in connection with the Group Gratuity Scheme giving a list of its employees on its payroll as on 1 November 2011. This list shows the name o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abour Court for the gratuity denied to them, under Section 33-C(2) of the Industrial Disputes Act, 1947. The employer's contention that the application did not lie before the Labour Court under the Industrial Disputes Act, was accepted by the Supreme Court. The Court held that the Payment of Gratuity Act was a complete code covering all essential features of a scheme for payment of gratuity. The task of administering this scheme was entrusted under the Act to a controlling authority, thus intending that all proceedings for payment of gratuity must be taken under the Act and before the controlling authority. To the same effect are the observations of the Calcutta High Court in Surendra Vikram Singh Agarwala's case. There a retired employee had applied for payment of his gratuity dues in a civil suit. A scheme was framed by the Court in a civil suit for administration of a public trust for religious and charitable purposes. It was the case of the applicant that under this scheme, he as an employee of the trust was entitled to receive gratuity upon his superannuation. The learned trial judge allowed the application, under Section 92 of the Code of Civil Procedure. On appeal, C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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