TMI Blog2007 (5) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... f Gratuity Act, 1972), Mandi under sub-rule (1) of Rule 10 of the Himachal Pradesh Payment of Gratuity Rules, 1972. The gist of the claim before the Labour Officer was that the employer has not included the period of daily wages service from March, 1982, to December 31, 1993. 3. The Executive Engineer, Irrigation and public Health division Sarkaghat sent a letter to the Labour Officer-cum-Controlling Authority on August 16, 2002 mentioning therein, that the petitioner was only entitled to sum of ₹ 17,269/-. 4. The Labour Officer has adjudicated upon the application preferred by the workman and consequently directed the Executive Engineer, Irrigation and Public Health Division, Sarkaghat to pay the workman an amount of ₹ 36,604/- within thirty days of the receipt of the notice on September 23, 2002, failing which the employer was liable for 9% simple interest for further delay of the payment from the date of the order. 5. The petitioner-State filed an appeal before the Appellate Authority. The Appellate Authority vide order dated October 24, 2003 rejected the plea of the employer i.e. the Executive Engineer, Irrigation and Public Health Division, Sarkaghat, Mand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or maintenance of buildings, roads, bridges or canals, or relating to operations connected with navigation, irrigation or the supply of water, or relating to the generation, transmission and distribution of electricity or any other form of power is being carried on, It is urged for the appellant that the Payment of Wages Act is not an enactment contemplated by Section 1(3)(b) of the Payment of Gratuity Act. The Payment of Wages Act, it is pointed out, is a central enactment and Section 1(3)(b), it is said, refers to a law enacted by the State Legislature. We are unable to accept the contention. Section 1(3)(b) speaks or any law for the time being in force in relation to shops and establishments in a State . There can be nor dispute that the Payment of Wages Act is in force in the State of Punjab. Then, it is submitted, the Payment of Wages Act is not a law in relation to shops and establishments . As to that, the Payment of Wages Act is a statue which, while it may not relate to shops, relates to a class of establishments, that is to say, industrial establishments. But, it is contended, the law referred to under Section 1(3)(b) must be a law which relates to both shops and es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged a large number of workmen. Taking; into consideration the entire functioning of the H.P. Irrigation and Public Health Department and the principles laid down by the Hon'ble Supreme Court in the above cited case, I hold the H.P. Irrigation and Public Health Department to be an establishment under Section 1(3) of the Payment of Gratuity Act, 1972. 9. The next argument advanced on behalf of the State is that the workman is disentitled to claim gratuity under the Payment of Gratuity Act because he is a person excluded from the scope of the expression employee as defined in Section 2(e) of the Act by reason of his having been the holder of a post under the State Government at the time of his superannuation from service. It is an admitted fact that the workman became the holder of post only when he was regularized on January 1,1994 under the State Government and was appointed as Water Guard-Helper. But the workman had admittedly worked as daily wage labourer during the period w.e.f. March, 1982 to December 31, 1993. There was notional termination of the employment of the Workmen as daily labourer when he was regularized as Water Guard-Helper from January 1, 1994. 10. Tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from April 29, 1954 till June 16, 1975, There was a notional termination of the employment of the writ petitioner as casual labourer when he was absorbed as temporary Lascar in the regular service of the Railway on June 17, 1975. Such termination having taken place only subsequent to the coming into force of the Act, the provisions of Section 4 get attracted and a tight accrued to the petitioner to have gratuity paid to him in respect of the service rendered by him as casual labourer for the period from April 29, 1954 till June 16, 1975. It is contended on behalf of the appellants that because the writ petitioner was absorbed as a temporary Lascar while functioning as a casual labourer, there was no break at all in his service and no termination of service could be said to be implied in his absorption as regular employee. We are unable to accept this contention. A casual labourer is not in the service of the Railway at all in any strict or real sense. The petitioner became a Railway servant only when he was appointed as temporary Lascar under the order Exhibit R-1. In accepting that appointment he had necessarily to forsake or abandon his status as a casual labourer and that invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that gratuity could only be computed on the: basis of period of service rendered by him after the take over of the college by the State Government. Their Lordships have held as under at p. 928 of LLJ: 10. We do not find any merit in this contention of the learned Counsel for the respondent State. Para 3 of the memo dated March 28, 1979 Indicates that the employees in private colleges who were to retire on or after April 1, 1979 have to be treated on a par with Government employees in the matter of gratuity. The mere fact that the appellant did not retire prior to the take-over of the college by the State Government, but retired after it was so taken over, does not mean that he is not entitled to claim gratuity in respect of the period of service rendered by him before the college was taken over by the State. If the appellant would have been entitled to payment of gratuity on the basis of the service rendered by him when the college was under private management if he had retired prior to the college being taken over by the State Government, there appears to be no reason why the said period of service of the appellant while the college was under private management should be ign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gratuity under the Payment Gratuity Act when the MCD itself has adopted the provisions of the CCS (Pension) Rules, 1972 (hereinafter referred to as the Pension Rules ), whereunder there is a provision both for payment of pension as well as of] gratuity. The contention of the learned Counsel appearing for the appellant in this 'Court is that the payment of pension and gratuity under the Pension Rules is a package by itself and once that package is made applicable to the employees or the MCD, the provisions of payment of gratuity under the Payment of Gratuity Act can not be held applicable. We have examined carefully the provisions of the Pension Rules f as well as the provisions of the Payment of Gratuity Act. The Payment of Gratuity Act being a special provision for payment of gratuity unless there is any provision therein which excludes its applicability to an employee who is otherwise governed by the provisions of the Pension Rules it is not possible for us to hold that the respondent is not entitled to the gratuity under the Payment of Gratuity Act. The only provision which was pointed out is the definition of 'employee' in Section 2(e) which excludes the employee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainable; (ii) Section 40(3) of the State Act stood repealed on the corning into force of the Andhra Pradesh Shops and Establishment Act, 1988 and gratuity became payable under Section 47(5) of the State Act where payment of gratuity is not payable under the Central Act;, (iii) Section 14 of the Central Act overrides other enactments in relation to gratuity, and (iv) the respondents have been paid gratuity under the Central Act for the period covered and for the balance period of service gratuity is paid under the prevailing Trust Scheme. At the relevant time when the respondents voluntarily retired from service the definition of employee under Section 2(e) of the Central Act read as not to include an employee whose wages exceeds ₹ 1000 per mensem while the respondent employees were all getting wages more than ₹ 1600 per mensem and, therefore, the Central Act could not be applied. If that is so, it is certainly permissible for the respondents to have made an application for payment of gratuity under Section 40(3) of the State Act. Further the scheme of the Central Act would indicate that it would not be applicable in cases where the State Act is more benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has to be considered as something given freely, voluntarily or without recompense. It is a sort of financial assistance to tide over post-retrial hardships and inconveniences. 20. Mr. M.S. Chandel, learned Advocate General has lastly submitted that the interest as per the operative portion of the appellate order could not be directed to be paid by the employer. The payment of gratuity without interest is not discretionary but it is a statutory compulsion. The Hon'ble Supreme Court in H. Gangahanume Gowda v. Karnataka Agro Industries Corporation Ltd. (2003)ILLJ1119SC , has held that there is a clear mandate in the provisions of Section 7 to the employer for payment of gratuity within time and to pay interest on the delayed payment, of gratuity and there was also provision to recover the amount of gratuity with compound interest in case the amount of gratuity payable was not paid by the employer in terms of Section 8 of the Act. Their Lordships of the Hon'ble Supreme Court have opined as under at pp. 1120, 1121 and 1122 of LLJ: 3. The learned Counsel for the appellant urged that claim for Interest on belated payment of gratuity is a statutory right as envisaged unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the Central Government may, by notification, specify, from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto: Provided that the controlling authority shall, before issuing a certificate under this Section, give the employer a reasonable opportunity of showing cause against the issue of such certificate: Provided further that the amount of interest payable under this Section shall, in no case exceed the amount of gratuity payable under this Act. 6. It is evident from Section 7(2) that as soon as gratuity becomes payable, the employer, whether any application has been made or not, is obliged to determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of gratuity. Under Section 7(3), the employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable. Under Sub-section (3-A) of Section 7, if the amount of gratuity is not paid by the employer within the period specified in Sub-section (3), he shall pay, from the date on which the gratuity becomes payable to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought about the incorporation of Sub-section (3-A) in Section 7. That provision has prospective application. 7. In the background of this legal position, now we turn to the facts of the present case. The appellant was under suspension from March 15, 1999 to May 21, 1999. On attaining the age of superannuation, he retired from service of the respondent Corporation on January 1, 2000. The learned single Judge, after considering the rival contentions, disposed of the writ petition issuing directions to the respondent Corporation to settle the full salary and allowances for the period of suspension, gratuity, cash equivalent to leave salary, deferred leave, concession amount etc. As regards the claim of interest on gratuity, the learned single Judge held as under: Since there was doubt as to whether the petitioner is entitled to the gratuity, cash equivalent of leave salary etc., in view of the divergent opinion of the Courts during the pendency of an enquiry proceedings of a retired employee, in my view, the petitioner is not entitled to the relief of interest for the belated payment of gratuity and other amounts. 8. It is clear from what is extracted above that from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o interpret a provision, especially a beneficial provision, liberally so as to give it a wider meaning rather than a restrictive meaning which would negate the very object of the rule. 22. In the present case, the Controlling Authority while calculating the gratuity payable to the Workman has counted the entire period from March, 1982 to October 31, 2001, i.e. twenty years and has directed the Executive Engineer, Irrigation Public Health Division, Sarkaghat to pay a sum of ₹ 53,873/- initially and after deducting a sum of ₹ 17,269/-finally directed the State to pay sum of ₹ 36,604/-. 23. In view of the above discussion, the Controlling Authority was required to calculate the gratuity for the period w.e.f. March, 1982 to December 31, 1993 under the Payment of Gratuity Act, 1972 and for the remaining period, i.e. January 1, 1994 to January 31, 2001 (regular period only), the State was bound to pay the gratuity under the CCS (Pension) Rules, 1972. Accordingly, the writ petition is disposed of with the following directions: (i) The workman is entitled to get the gratuity for the period w.e.f. March, 1982 to December 31, 1993 under the Payment of Gratuity A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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