AI Structured Summary
Not yet generated for this judgment
Judgment
M.M. Sundresh, J.—The writ petition has been filed by the Petitioner which is manufacturing and selling beedis, seeking a writ of declaration
to declare that the Payment of Gratuity Act, 1972 is not applicable to the beedis and Cigars workers of the Petitioner''s firm without notification u/s
1(3)(c) of the Payment of Gratuity Act, 1972.
The case of the Petitioner is that it is manufacturing and selling beedis and for doing the above said process which has been engaging home
workers for rolling beedis. The said home workers have been paid the salary directly by the Petitioner. Contending that the provision of the
Payment of Gratuity Act, 1972 cannot be made applicable to the home workers engaged by the Petitioner without a notification as required u/s
1(3)(c) of the Payment of Gratuity Act, 1972 (hereinafter called as ""the Act""), the present writ petition has been filed.
The learned Counsel appearing for the Petitioner submitted that the notification has not been published. The Commissioner of Labour himself
has stated that Section 2(8) of the Act is yet to be amended and the amendment is still awaited. Therefore, in the absence of a notification as
required u/s 1(3)(c) of the Act, the second Respondent does not have the authority of law to insist on the payment of gratuity for the home
workers engaged by the Petitioner.
Per contra, the learned Counsel appearing for the first Respondent submitted that the provisions of the Act is a welfare, social legislation
intended for the benefit of the workers working in a industry. Therefore, the provisions will have to be construed liberally taking into consideration
of the object of the Act. It is further submitted that the Petitioner''s company would come under the definition of Section 1(3)(a) and (b) of the Act
being a factory and also an establishment. Therefore, in view of the above said position, the contention of the Petitioner that in the absence of a
notification as required u/s 1(3)(c) the provisions of the Act cannot be made applicable to the Petitioner''s case cannot be sustained.
The learned Counsel has made reliance upon the judgment of the Honourable Apex Court in Sudhoo Vs. M/s. Haji Lal Mohd. Biri Works and
others, and submitted that while construing the social legislation, the provisions should be literally interpreted. The learned Counsel has also relied
upon the judgment of the Andhra Pradesh High Court rendered in K. Gangadhar and Others Vs. The Appellate Authority Under Payment of
Gratuity Act and Others, and submitted that the provisions contained u/s 1(3)(a) and (b) would be made applicable. Reliance was also made upon
by this Honourable Court in Dhakshinamurthy s. v. Deputy Commissioner of Labour (Appeals) (2003) I LLJ 142 for the legal position that in as
much as the Petitioner is the principal employer, a duty is cast upon him to pay the gratuity for the employees concerned.
The learned Counsel appearing for the Respondent No. 3 submitted that the word ''factory'' cannot be given a narrow interpretation by holding
that only those employees who are working within the premises of the factory alone would be covered under the purview of the Act. The learned
Counsel submitted that what is important is the employment of an employee under the principal employer for whose benefit the work is done and
the place of work is irrelevant. In support of his contention, the learned Counsel has made reliance on the judgment of the Honourable Apex Court
in Rajangam, Secretary Distt. Beedi Workers Union V. State of T.N. and Ors. 1990 STPL (LE) 15896 SC. Therefore, the learned Counsel
submitted that in as much as it is not in dispute that the employees are the employees of the Petitioner being home workers and they are having
been paid by the Petitioner, the provisions of the Act will have to be made applicable to the Petitioner.
It is not in dispute that the Petitioner has been engaged in the manufacturing and selling beedis. It is also not in dispute that the Petitioner has
been engaging home workers for rolling beedis and after the said process, they have been handed over to the Petitioner. Further fact that the
Petitioner has been paying the salary to those home workers are also not in dispute. In order to appreciate the contentions of the learned Counsels
appearing for the parties, it is useful to extract the relevant provisions of the Payment of Gratuity Act, 1972.
Short title, extent, application and commencement,-(1)This Act may be called the Payment of Gratuity Act, 1972.
It extends to the whole of India:
Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir.
(3)It shall apply to
(a) every factory, mine, oilfield, plantation, port and railway company;
(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which
ten or more persons are employed, or were employed, on any day of the preceding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the
preceding twelve months, as the Central Government may, by notification, specify in this behalf.
Section 1(3)(a) of the Act speaks about the applicability of the provisions of every factory, mine, oil field, plantation, port and railway company.
The legislation has thought it fit to include every factory under the definition. The said definition is an exhaustive definition and no exception has
been carved from the same. Similarly, Section 1(3)(b) speaks about every shop or establishment. Therefore, all shops and establishment within the
meaning of any law are to be included for the purpose of application of the provisions of the Act. The above said provision would make it clear
that the Petitioner would come under both within the definition u/s 1(3)(a) and (b). Section 1(3)(c) is an exception to Section 1(3)(a) and (b) and
therefore the same has got no application. The Honourable Supreme Court in Sudhoo Vs. M/s. Haji Lal Mohd. Biri Works and others, while
interpreting the provisions of Beedi and Cigar Workers (Conditions of Employment) Act, 1966 has held as follows:
The High Court on the interpretation of above quote section came to the conclusion that Appellant Sudhoo was prevented from doing the
work by the establishment and since no order of retrenchment, discharge or dismissal was passed the provisions of Section 31 were not attracted.
The High Court was patently in error. The Act is a measure of social legislation to give protection to the workmen employed in the beedi and cigar
industry. The provisions of the Act are to be liberally construed. Whenever a workman approaches the Prescribed Authority u/s 31(2) of the Act
with a complaint that his employment has been brought to an end by the employer without any reasonable cause, the Prescribed Authority is bound
to adjudicate the same. It hardly mattes whether the employment was terminated by written order, oral direction or by stopping the workman from
entering the place of work. The Prescribed Authority in this case found as a fact that the Appellant was employee of Respondent-establishment
and his services were arbitrarily terminated. We are, therefore, of the view that High Court was wrong in holding that the appeal of Sudhoo was
not maintainable u/s 31(2) of the Act.
Similarly, the High Court of Andhra Pradesh in K. Gangadhar and Others Vs. The Appellate Authority Under Payment of Gratuity Act and
Others, has considered the scope f Section 1(3)(a) vis-a-vis 1(3)(b) of the Act with respect to the workers of Beedi rollers. The Honourable High
Court has held that a wider import will have to be given for the definition of factory and in as much as making of beedis is a manufacturing process
it would come under the purview of the definition of factory as defined u/s 1(3)(a) of the Act. While dealing with the above said principle of law,
the Honourable Andhra Pradesh has observed as follows:
Dealing with the first contention that the provisions of the Gratuity Act, 1972 are not applicable on the ground that the management is neither a
factory nor an establishment, I repel the contention of the management. The word ''factory'' is defined u/s 2(m) of Factories Act, 1948 and the
contention of the management is that there is no premises for carrying on manufacturing process by the management and as such, it cannot be
construed as a factory, is not acceptable for the reason that, it is the manufacturing process which is the criterion and not the premises or place in
question. It cannot be disputed that the making of beedis is a manufacturing process and the words ''manufacturing process'' under definition clause
contained u/s 2(k) of Beedi and Cigar Workers (Conditions of Employment) Act, 1966 clearly take in the process of making beedis as a
manufacturing process, wherever the manufacturing process is carried. May be, a particular place, a premises or the same are scattered over,
nevertheless, the object being the manufacturing process, a definite place or premises loses its significance and instances are galore, where in
judicial precedents, it was held that any place, even that of a sea shore, where prawn are processed, can be construed as a factory within the
meaning of Factories Act, 1948. As such, I have got no hesitation to hold that the management is a factory.
In so far as the applicability of provisions of Section 1(3)(b) of the Act is concerned, after making reliance upon the judgment of the
Honourable Apex Court, the High Court of the Andhra Pradesh in K. Gangadhar and Others Vs. The Appellate Authority Under Payment of
Gratuity Act and Others, has observed as follows:
As stated above, the making of beedis being manufacturing process and the employee being a worker, whether working in industrial premises or
in establishment, the latter taking in even the home worker, in any event of the matter, the management is an establishment and such an
establishment need not be Central or State and need not be one covered by A.P. Shops and Establishments Act, as the Beedi and Cigar Workers
(Conditions of Employment) Act, 1966 is an independent Act by itself and for conferring the benefits under the said Act, there is no need to have
resort even to the Factories Act or to the A.P. Shops and Establishments Act. The said Act of 1966 dealing with workmen engaged in the
manufacturing process of Beedis and Cigars, is for welfare of labour. The true nature and character of the legislation shows that it is for enforcing
better conditions of labour amongst those who are engaged in the manufacturing of beedis and cigars. It is intended to achieve welfare benefits and
amenities for the labour.
The Supreme Court while construing the scope of Section 1(3)(b) of Payment of Gratuity Act, 1972 has held in State of Punjab Vs. Labour
Court Jullunder and Others, that it is difficult to accept the contention that law referred to u/s 1(3)(b) of Payment of Gratuity Act, 1972 must be a
law which relates to both shops and establishments such as the Punjab Shops and Commercial Establishments Act, 1958 and that there is no
warrant for So limiting the meaning of the expression ""law"" u/s 1(3)(b). Held, the Supreme Court further, that the expression is comprehensive in its
scope and can mean a law in relation to shops as well as, separately, a law in relation to establishment, or a law in relation to shops and
commercial establishments and a law in relation to non-commercial establishments and further held that Section 1(3)(b) of Payment of Gratuity
Act, 1972 applies to every shop within the meaning of any law for the time being in force in relation to shops in a State. Relying upon the said
judgment, a Division Bench of Bombay High Court has held in B.N. Sarada Pvt. Ltd. v. Kisan K. Borada that the word ''establishment'' employed
u/s 1(3)(b) of Payment of Gratuity Act, 1972 is comprehensive in nature and rules emphatically that the provisions of Beedi and Cigar Workers
(Conditions of Employment) Act, 1966 will show that it is positively a legislation in relation to a particular kind of establishment where the workers
are engaged in the manufacturing of beedis and cigars and it is clearly a law in relation to an establishment as contemplated by the provisions of
Section 1(3)(b) of Payment of Gratuity Act, 1972. It held that for the applicability of Payment of Gratuity Act, 1972, it may be a shop or
establishment within the meaning of any law, whether it is a State Law or Central Law and that the provision of the Payment of Gratuity Act, 1972
will be applicable in the case of the employees in that establishment if the employees fall within the definition u/s 2(e) of the said Act. Similar
contentions were also raised before the said Court with regard to non-applicability of Payment of Gratuity Act, 1972. Repelling the said
contention, the said court held that the Beedi and Cigar Workers (Conditions of Employment) Act, 1966, is a law enacted by the Parliament and
deals with the establishment where the manufacturing of beedis is carried on and that the said establishment comes within the ambit of Section 1(3)
(b) of Payment of Gratuity Act and consequently, the said beneficial legislation i.e., Payment of Gratuity Act, 1972 is applicable to beedi and cigar
workers.
Having regard to the interpretation placed on the scope of Section 1(3)(b) of Payment of Gratuity Act, 1972 vis-a-vis the provisions of Beedi
and Cigar Workers (Conditions of Employment) Act, 1966, I hold that the management, in the instant case, is an establishment within the meaning
of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 and the said Act is a law relating to establishments operative in the State
of Andhra Pradesh and as such, come within the purview of Section 1(3)(b) of Payment of Gratuity Act, 1972 and consequently, the workers are
entitled for the payment of gratuity under the provisions of Payment of Gratuity Act, 1972 and the management is liable to pay the same as
specified under the said statute and the rules made thereunder.
This Court is in respectful agreement that the ratio laid down by the learned judge of the Andhra Pradesh High Court. Considering the object
of the enactment and the intention to benefit the workers the Act being the welfare legislation, a wider interpretation will have to be given paying
wages for the benefit under the Act. Therefore, this Court is of the opinion that the contention of the learned Counsel for the Petitioner that the
provisions of the Act contained in Section 1(3)(a) and (b) are not applicable to the present case cannot be accepted.
Further as submitted by Shri.A. Sirajudeen, learned Counsel appearing for the Respondent No. 3 the word ''Factory'' cannot be given a
restrictive meaning as confined to the place of the industry is concerned. In Rajangam, Secretary Distt. Beedi Workers Union v. State of T.N. and
Ors. 1990 STPL (LE) 15896 (SC) the Honourable Apex Court has held as under:
The Acts which are relied upon or referred to are Central Acts intended to benefit the workers. It is not in dispute that about 95% of the bidis is
actually rolled outside the real factory. This Court as early as 1958 in "" Chintaman Rao and Another Vs. The State of Madhya Pradesh, indicated
that the law relating to factory has to be extended to the place where manufacturing process, outside the factory, is carried on. The net effect of
that position is that the benefit available under the Factories Act are available to those who are concerned with the manufacturing process even in
their own residences for rolling of bidis.
Further, a declaratory relief cannot be granted by this Court for the mere asking unless it is very apparent that the proposed action is one
without the authority of law. As and when such an action is taken by the authorities constitutionally under the Act, it is always open to the Petitioner
to agitate his rights instead of seeking a declaration before this Court.
Therefore, for the reasons stated above, this Court is of the opinion that the writ petition is liable to be dismissed. Accordingly, the same is
dismissed. No costs.