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Judgment
P. Sathasivam, J.—Since the issue in all these writ petitions is one and the same, they are being disposed of by the following common order.
Municipal Bodies are the petitioner in all these writ petitions.
Writ Petition No. 2668 of 1994 is filed against the order of the Assistant Commissioner of Labour, Coimbatore, dated April 16, 1993, wherein
the said officer has determined the gratuity payable to the applicants therein respondents 2 to 6 herein.
Writ Petitions Nos. 3139 to 3149 of 1994 and 3564 to 3567 of 1994 are filed against the order of the Commissioner for Workmen''s
Compensation/appellate authority under the Payment of Gratuity Act- first respondent herein, remanding the matter to the controlling authority to
determine the gratuity payable to the applicants therein.
In Writ Petitions Nos. 7132 and 7256 to 7259 of 1994, the petitioner challenges the order of the controlling authority as well as the order of the
appellate authority, fixing the gratuity amount in favour of the first respondent herein.
Though Writ Petition No. 2668 of 1994 is filed against the order of the controlling authority, when there is a remedy by way of an appeal to the
appellate authority under the Payment of Gratuity Act, learned counsel appearing for the petitioner-Municipality request this Court that in view of
the question involved as well as the interpretation of Government Orders, orders may be passed on merits. Likewise, in W.P. Nos. 3139 to 3149
and 3564 to 3567 of 1994, the appellate authority has remitted the matter to the controlling authority to decide the applications on merits, learned
counsel appearing for the petitioner-Municipality, invited an order on merits. In the last batch of cases (namely, W.Ps. Nos. 7132 and 7256 to
7259 of 1994), this Court has to consider whether both the authorities are right in granting gratuity amount as claimed by the applicants therein.
For convenience, I shall refer the case of the petitioner in W.P. No. 2668 of 1994.
According to the petitioner Mettupalayam Municipality, respondents 2 to 6 were inducted in the Public Health Department of their Municipality
to carry on the sanitation work. Though they were inducted in service long ago in the health department, their services were regularised only from
October 1, 1973. All the service conditions of the sanitary workers have also been regularised with effect from October 1, 1973 as per G.O. Ms.
No. 2469 (Health and Family Planning Department), dated October 1, 1973. The sanitary workers were paid out of contingency fund as daily
worker, earlier to October 1, 1973. Thus, though the respondents 2 to 6 were inducted in service prior to 1973, their service to be reckoned only
from October 1, 1973. As per G.O. Ms. No. 2469 dated October 1, 1973, the sanitary workers are entitled to pensionary benefit, E.S.I.
Scheme, other service benefits including extension of gratuity scheme. As per the above said Government Order, the sanitary workers are entitled
for pension, only if they have completed 10 years of regular service from October 1, 1973. As per their representation, in G.O. Ms. No. 437
(Finance and Pension Department), dated June 23, 1988, the Government directed that half of the services of the sanitary workers paid from the
contingencies shall be allowed to count towards pensionary benefit, but the period starts only from January 1, 1961, they are not entitled to gratuity
earlier to October 1, 1973. The Assistant Commissioner of Labour, Coimbatore by the impugned proceedings has ordered payment of gratuity
from the date of their initial appointments as per Annexure A of the impugned order. The said order is erroneous and against law.
The second respondent has filed a counter-affidavit on his behalf and on behalf of respondents 4, 5 and 6, wherein it is stated that the petitioner
- Municipality did not file any document before the authority to show that they were contingency staff. Even assuming so, without admitting the
G.O. Ms. Nos. 1841 and 437 referred to by the petitioner were pertained. only to pension and not to gratuity. The legal position pleaded by the
petitioner as qualifying service is wholly inapplicable to the context of payment of gratuity involved in this writ petition. There is no substantial
question of law involved and all the questions involved could have been gone into by the appellate authority. Even payment of D.C.R.G. from the
date at which they brought on time-scale of pay to the date of superannuation does not bar the workman concerned from getting gratuity.
In the connected writ petitions, the beneficiaries have filed a counter-affidavit, wherein it is stated that their applications for payment of gratuity
are maintainable and sustainable. In view of the decisions of this Court reported in the case of Commissioner, Coimbatore Municipal Electrical
Undertaking, Coimbatore v. A.V. Poulose and Ors. reported in 1991 (1) L.L.N. 156, no notification is necessary, since the provisions of Payment
of Gratuity Act are applicable to the local bodies from 1972. The applicants are not excluded category as claimed. The orders passed by the
controlling authority, and the appellate authority are legally sustainable and there is no merit in all these writ petitions.
Heard Sri P.M. Baskaran as well as Sri Liagat Ali for the petitioners -Municipalities and Sri P.K. Rajagopal for the contesting
respondents/applicants.
P.M. Baskaran and Liagat Ali, after taking me through the various factual details of the applicants, such as their initial appointment as sanitary
workers in the respective Municipalities, date of their regularisation and relevant Government Orders would contend that, the controlling authority
ought not to have condoned the delay in filing an application for gratuity under the Payment of Gratuity Act. They also contended that, having
received the retirement benefits, such as D.C.R.G., family pension, etc., the authorities committed an error in granting gratuity as claimed under the
Payment of Gratuity Act. They also contended that, inasmuch as all the applicants/respondents retired from service i.e., on January 23, 1982, they
are entitled to maintain their applications for gratuity. In any event, according to them, inasmuch as their services were regularised with effect from
October 1, 1973, they are not entitled to gratuity prior to that date.
On the other hand, Sri P.K. Rajagopal, learned counsel appearing for the applicants would contend that, Payment of Gratuity Act came into
force with effect from August 21, 1972, and not as contended by the counsel for Municipalities. He further contended that, as per G.O. Ms. No.
2469, dated January 1, 1973, these persons were out on time-scale of pay and the said date cannot be characterised as a relevant date. He also
contended that, both the authorities, after considering all the relevant materials have rightly determined the gratuity. Considering their length of
service, absolutely there is no merit in all these writ petitions.
I have carefully considered the rival submissions.
Before considering the rival submissions, I shall refer the relevant provisions from the Payment of Gratuity Act, 1972 (in short the Act) and the
Rules made thereunder. Sections 1(3)(a), 1(3)(b) and 1(3)(c) referred to application of the Act. The term employee is defined u/s 2(e) of the Act.
Section 5 empowers the appropriate Government to exempt any establishment, factory etc., from the operation of the provisions of this Act.
Section 7 enumerates elaborate procedure in determination of the amount of gratuity. Sub-section (7) in Section 7 enables the aggrieved person to
prefer an appeal to the appellate authority as specified by the appropriate Government. Rule 7 of the Payment of Gratuity (Central) Rules, 1972,
speaks about application for gratuity. When the application has to be made, power to condone the delay, etc. if an employer refuses to accept the
nomination or to entertain an application sought to be filed under Rule 7 or fails to issue a notice even after receipt of an application within the time
specified therein, the claimant/employee, nominee or legal heir within 90 days of the occurrence for the cause for the application, apply in Form
N"" to the controlling authority for necessary direction under Rule 10 of the Tamilnadu Payment of Gratuity Rules, 1973.
Sri. P.M. Baskaran and Liagat Ali learned counsel appearing for the municipalities, by drawing my attention to the fact that the applicants were
retired long ago, i.e., even prior to application of the Act to municipal bodies and also of the fact that they were settled with D.C.R.G. amount as
well as other retirement benefits were disbursed, their present applications before the controlling authority for grant of gratuity under the Act are
not maintainable. It is true that the provisions of the Act were made applicable to the municipal bodies with effect from January 23, 1982.
However, it is to be noted that, in view of the fact that the municipal bodies are ""establishments"" within the meaning of Section 1(3)(b) of the Act.
The same is applicable to the said municipal bodies on the date of enactment, namely August 21, 1972. However Sri Liagat Ali, by drawing my
attention to Sub-clause (c) of Section 1(3) of the Act would contend that unless it is notified by the Central Government these provisions cannot be
made applicable and according to him notification was made only on January 23, 1982 covering all the Municipal Bodies under the purview of the
Act. I am unable to accept the said contention. There is no such condition or clause in Sub-clause (b) of Section 1(3) of the Act, and in any event
the notification referred to in Sub-clause (c) to Section 1(3) is applicable to such other establishment or class of establishment.
The very same question was considered by J. KANAKARAJ, J., in the case of Commissioner, Coimbatore Municipal Electrical Undertaking,
Coimbatore v. A.V. Poulose (supra). One of the petitioners in these writ petitions, namely the Commissioner, Coimbatore Municipal Corporation,
is the petitioner before the learned Judge and the very same question was raised by Sri P.M. Baskaran before the learned Judge. The question
before the learned Judge was, as to whether the first respondent in each case is entitled to gratuity on the basis that they had worked up to 58
years and at the scales of pay as revised in G.O. Ms. 859 Rural Development and Local Administration Department, dated May 26, 1980. After
retirement, the first respondent claimed before the controlling authority gratuity of Rs. 15,864.00 on the basis that he had worked from July 1,
1949 to October 14, 1981 and the wages payable should be on the basis of the revised scales of pay applicable to all employees in G.O. Ms. No.
859 Rural Development and Local Administration Department, dated May 26, 1980. The municipality in the said writ petition contested the claim
stating that the first respondent therein should be deemed to have retired on October 14, 1978 and his continuance on the basis of the stay order
granted by this Court cannot give him added benefits. Accordingly the gratuity has been worked out up to October 14, 1978 at the rate of Rs. 350
which was the salary last drawn by him on October 14, 1978. It was contended that the Act will not apply, because the first respondent is not an
employee within the meaning of the Act. All the said contentions were rejected by the controlling authority as well as the appellate authority.
Thereafter, the Municipal Corporation filed the said writ petition and the very same grounds were raised before the learned Judge.
Sri P.M. Baskaran has also contended before the learned Judge that the Act was specifically extended to local bodies only with effect from
January 8, 1982. The learned Judge has referred to Section 1(3)(b) of the Act and also the decision of the Supreme Court in the case of State of
Punjab Vs. Labour Court Jullunder and Others, : In the above referred decision, the Hon''ble Supreme Court has considered Section 1(3)(b) of
the Act and also referring the definition for ""establishment"" made in Section 2(e) of the Contract Labour (Regulation and Abolition) Act, 1970,
arrived at a conclusion that:
Inasmuch as the local authority is brought within the word ''establishment'' it seems to be wholly unnecessary to go into the other aspects of the
case and the conclusion is inescapable that the Payment of Gratuity Act applies to the Coimbatore Municipality which has since become a
Corporation:
2(e) ''establishment'' means -
(i) any office or department of the Government or a local authority; or
(ii) any place where any industry, trade, business, manufacture or occupation is carried on.
Ultimately, the learned Judge held that:
The Coimbatore Municipality"" will in any event come under the word ""establishment"".
Accordingly, the Act is squarely applicable to the first respondent therein. The learned Judge has further held that:
The contention that the Payment of Gratuity Act has been specifically extended to local bodies from January 8, 1982, does not help the petitioner
because even without such a notification, on the basis of the Act itself one can come to the conclusion that the Payment of Gratuity Act applies to
the local bodies ....
In the light of the specific provision, namely 1(3)(b) of the Act as well as the meaning of ""establishment"" as defined in Section 2(e) of the Contract
Labour (Regulation and Abolition) Act, 1970. I am in respectful agreement with the view expressed by the learned Judge and I hold that the
petitioner -Municipalities come under the definition ""establishment"" and the provisions the Act apply to the Municipalities even on the date of
enactment i.e. August 21, 1972 and accordingly, the applications made before the controlling authority are maintainable. Inasmuch as the Act being
a beneficial legislation, it should be construed only in that manner. In the light of my conclusion, the argument of Sri Liagat Ali cannot be accepted.
On the other hand, I am in agreement with the view expressed by the learned Judge and I hold that the provisions of the Act apply even from the
date of its inception viz., August 21, 1972 and not from the date of notification, i.e., January 23, 1982.
Inasmuch as the length of service of all the applicants are not disputed, it is unnecessary for me to refer those factual aspects in the present
order.
Next, I shall consider the other contention that the applicants are not employees within the meaning of Section 2(e) of the Act. I have already
referred to the definition of ""employee"" in Section 2(e) of the Act. By drawing my attention to the last part of the definition, i.e.:
... but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other
Act or by any rules providing for payment of gratuity.
Would contend that, in view of the other schemes, namely, D.C.R.G. and disbursement of other retirement benefits, the applicants are not
employees within the meaning of Section 2(e) of the Act. I am unable to accept the said contention. The perusal of the said provision, namely last
three lines in Sub-clause (e) of Section 2 of the Act clearly show that the exclusion clause should be read in conjunction with Central and State
Government employees and not as contented by the learned counsel for the petitioners.
Coming to the contention based on G.O. Ms. No. 2469 Health and Family Planning Department, dated October 1, 1973, namely that the
sanitary workers were regularised only from the date of the said Government Order i.e., October 1, 1973, here again, as rightly contended by Sri
P.K. Rajagopal Clause (4) of the said Government Order though refers ""regularisation of sanitary workers,"" it is made clear that, from October 1,
1973, the sanitary workers were granted time-sale of pay, accordingly it cannot be contended that only from October 1, 1973 their services have
to be counted for the purpose of gratuity and absolutely there is basis for such conclusion.
Regarding the contention relating to delay in filing application before the controlling authority, I have already referred to Section 7 of the Act
and Rules 7 and 10, which provided elaborate procedure in determining the amount of gratuity. The perusal of the relevant provisions clearly show
that, it is obligatory on the part of the management/employer to settle the gratuity in terms of the Act and if the employer refuses to accept the
nomination or to entertain application sought to be filed under Rule 7 or disputes the amount of gratuity payable or considered the amount less than
what is payable, the claimant/employee nominee or legal heirs are permitted to apply in Form ''N'' to the controlling authority for issuing necessary
direction under Sub-section (4) of Section 7 of the Act. The provisions also enable the authorities to condone the delay if sufficient cause is shown.
Inasmuch as it is the responsibility of the management to disburse the gratuity amount or process the application and settle the same, I am of the
view that, merely because there is a delay the statutory claim of the applicants cannot be rejected. Even otherwise, in the second group of cases,
the appellate authority after condoning the delay, remanded the matter to the controlling authority to determine gratuity on merits. In the absence of
prohibitory order, the controlling authority after hearing both parties, has determined the gratuity amount on merits even in 1994-95. Taking note of
all the above aspects. I am not inclined to disturb those orders at this juncture.
In the light of what is stated above, I am unable to accept any one of the contentions raised by the learned counsel for the petitioners-
municipalities and I do not find any error or infirmity in the orders impugned. Consequently, the writ petitions fail and are accordingly dismissed.
No costs.
In view of the dismissal of the main petitions, connected WMPS., are also dismissed.