Dhansai Sahu vs State Of Chhattisgarh & Ors

Leave granted.

The moot question involved in this appeal is: whether the service rendered as dailyÂ​wager before being regularized and given the status of a regular

Government servant, can be reckoned, so as to invoke the provisions of the Payment of Gratuity Act, 1972 (for short, “the 1972 Actâ€) after the

age of superannuation and retirement as State Government employee?

The High Court of Chhattisgarh, Bilaspur (for short, “the High Courtâ€) relying on the definition of “employee†in Section 2(e) of the 1972

Act, has taken the view that the provisions of the 1972 Act haveThe moot question involved in this appeal is: whether the service rendered as dailyÂ‐

wager before being regularized and given the status of a regular Government servant, can be reckoned, so as to invoke the provisions of the Payment

of Gratuity Act, 1972 (for short, “the 1972 Actâ€​) after the age of superannuation and retirement as State Government employee?

The High Court of Chhattisgarh, Bilaspur (for short, “the High Courtâ€) relying on the definition of “employee†in Section 2(e) of the 1972

Act, has taken the view that the provisions of the 1972 Act have no application to a person who holds a post under the State Government and is

governed by any other Act and in particular, the Chhattisgarh Civil Services (Pension) Rules, 1976 (for short, “the 1976 Rulesâ€​).

The appellant would, however, rely on the recent decision of this Court in Netram Sahu vs. State of Chhattisgarh & Anr. (2018) 5 SCC 430 (two-

Judge Bench), dealing with the similar argument by the appellant therein, who was appointed as a dailyÂwager and after working for 22 years, came

to be regularized on work charge establishment but was denied gratuity, because on the day when he attained the age of superannuation, he was

holding the post under the State Government. Indeed, the Court was called upon to answer the issue in identical situation, but it is obvious from the

observations in paragraph 14 of the reported decision that no provision of either the 1972 Act or the 1976 Rules was brought to the notice of the Court,

which would disentitle the appellant therein from claiming the gratuity or for that matter, any provision prohibiting the appellant therein from taking

benefit of his long and continuous service period of 22 years which he had rendered prior to being regularised. Notably, this Court had dealt with the

judgment of the High Court in the case of Netram Sahu vs. State of Chhattisgarh & Ors. Decided on 1.8.2014 in Writ Appeal No. 240/2014 (2014

SCC OnLine Chh 159), which in turn had relied on the exposition of this Court in the case of Bharat Sanchar Nigam Ltd., Jammu vs. Teja Singh

Decided on 16.1.2009 in Civil Appeal No. 292/2009 (two-Judge Bench) (unreported decision) and also the principle underlying the exposition in

Secretary, State of Karnataka & Ors. vs. Umadevi (3) & Ors.( 2006) 4 SCC 1. However, none of the above decisions has been referred to while

answering the issue by this Court in Netram Sahu (supra @ F.N. 1).

In the case of Teja Singh (supra), the coordinate Bench of two Judges of this Court considered the claim of a person who was an employee as a

dailyÂrated Mazdoor with a Central Government owned Corporation. He was recruited in the year 1973 and regularized with effect from 11.8.1986

and eventually superannuated on 30.8.1989. This Court was pleased to set aside the relief of gratuity given to that person by the Central

Administrative Tribunal and the High Court. In other words, the coordinate Bench of this Court opined that a daily rated Mazdoor who has been

regularized but did not have qualifying service in terms of the service rules for extending retiral benefits to him, would not be entitled for payment of

gratuity under the 1972 Act. In other words, the subsequent decision in Netram Sahu (supra @ F.N. 1) is in conflict with the said principle stated in

the unreported decision of this Court.

Reverting back to Section 2(e) of the 1972 Act, the same in no uncertain terms provides that if a person 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, the provisions of the 1972 Act will have no

application. The respondents are relying on the provisions of the 1976 Rules applicable to the post held by the appellant after being regularised on

1.9.2008. The said rules provide for grant of pension and gratuity. “Gratuity†has been defined in Rule 3(i) to include “Service Gratuityâ€

payable under sub Rule (1) of Rule 43; “DeathÂcumÂRetirement Gratuity†payable under subÂRule (1) of Rule 44 and; “Residuary

Gratuity†payable under sub Rule (2) of Rule 44 of the stated Rules (the 1976 Rules). Rule 5 deals with regulations of claims of pension/gratuity or

family pension, Rule 13 predicates that the service of a Government servant shall not qualify unless his duties and pay are regulated by the

Government or under conditions determined by the Government and Rule 16 envisages counting of service on contract for a specified period.

Obviously, these Rules were not brought to the notice of this Court in the case of Netram Sahu (supra @ F.N. 1). We may also notice the decision of

the High Court of Karnataka at Bangalore in the case of Assistant Executive Engineer CNNL vs. The Deputy Labour Commissioner & Appellate

Authority, Bangalore & Ors. Decided on 4.9.2012 in W.P. No. 15856/2012 and connected matters, which has taken the view that where provision for

payment of gratuity is made in the service Rules applicable to the person holding a post, his claim for gratuity must be decided on the basis of such

Rules and not by invoking the provisions of the 1972 Act.

Ordinarily, we would have proceeded to decide the matter on the construct of the relied upon Rules, but as noted above, the exposition by the

coordinate Bench of two Judges of this Court in the unreported decision of Teja Singh (supra) will also have to be taken note of and to observe judicial

propriety, we deem it appropriate to refer the issue under consideration to be considered by a larger Bench of three Judges. Accordingly, the Registry

is directed to place the file of the present matter before Hon’ble the Chief Justice for constitution of a larger Bench.