TMI Blog2003 (1) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner liable to pay gratuity to the Respondent No. 1 on the basis that he was in continuous service of 17 years, 7 months and 14 days for the purpose of calculating his gratuity. 2. The 1st Respondent was employed as a Weaver in Western India Spinning and Manufacturing Mills which owned a textile mill. That company ran into financial difficulty and the textile mill was closed from July, 1976. 3. The creditors of the mill moved a winding up petition before this Court. On 13th January, 1977 this Court ordered the winding up of the company and appointed the Official Liquidator as Liquidator of the Company. By an order dated 10th March, 1977 this Court ordered the Central Government to authorise a person or body of persons to take over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turing Mill from 23rd April, 1966 till 13th January, 1977 which is the date on which this court appointed the Official Liquidator in the aforesaid company petition for winding up. There is also no dispute about the fact that the Respondent was reemployed afresh on 14th November, 1977 i.e. after the Petitioner was appointed as an authorised agent on 11th March, 1977 under Section 18FA of the Industries (Development and Regulation) Act, 1951. 7. The 1st Respondent, however, disputes that his reemployment was a fresh employment in law. According to the learned Counsel appearing for the 1st Respondent, his services cannot be taken to have been terminated on 13th January, 1977 when the winding up order was passed, since the subsequent order u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of management of the mill under Section 18FA of the Industries (Development and Regulation) Act, 1951 on 11th March, 1977. Therefore, according to the learned Counsel for the Petitioner, the period from 13th January, 1977 to 14th November, 1977 was in fact a break in service and must be recognised as such for the purpose of computing gratuity. 13. Mr. Ganguli, the leaned Counsel for the Respondent disputes the above contention since according to him though normally the consequences of a winding up order is the termination of employment, in the present case the application of Sub-section (10) of Section 18FA of the Industries (Development Regulation) Act, 1951 had the effect of staying the proceedings in the winding up of the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulation) Act, enables the Central Government to authorise, with the permission of the High Court a person or persons to take over management or control of an industrial undertaking. Sub-section (10) thereof provides as follows:- (10) The proceedings in the winding up of the company is so far as they relate to- (a) the industrial undertaking, the management of which has been taken over by the authorised person under this section, or (b) the concerned part in relation to which any function of control is exercised by the authorised person under this section. shall, during the period of such management or control, remain stayed, and in computing the period of limitation for the enforcement of any right, privilege, obligation or li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies under the Payment of Gratuity Act have erroneously construed Section 10 of the Nationalisation Act No. XXXIII of 1982. Section 10 reads as follows:- 10. (1) Every person, who has been, immediately before the appointed day, employed in any undertaking of either of the two textile Companies shall become, on and from the appointed day, an employee of the State Textile Corporation, with the same rights and privileges as to pension, gratuity and other matters as would have been admissible to him if the rights in relation to the undertaking had not been transferred to, and vested in, the Corporation, and shall continue to do so unless and until his employment in the Corporation is duly terminated or until his remuneration and other conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service of the Corporation shall be borne by the Corporation in respect of the period on and after the date of taking over of the management of the undertaking under Section 18FA of the Industries (Development and Regulation) Act. This sub-section, therefore, clearly shows the intention of the legislature to fasten the liability for the continuance of any employee in respect of the period after the taking over of management of the undertaking. The phrase liability accruing or arising as a result of continuance of any employee in the service of the Corporation certainly includes the liability as to pension, gratuity and other matters. It cannot be said that merely because the words pension, gratuity and other matters are absent in Sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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