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Judgment
K. Chandru, J.—The Petitioner is a worker. He has come forward to challenge the order of the first Respondent Appellate Authority under
the Payment of Gratuity Act and seeks to set aside the order made in A.G.A. No. 57/2006 dated 13.10.2007. After setting aside the same, he
seeks to restore the order passed by the Controlling Authority in G.A. No. 268 of 2005 dated 03.07.2006.
The writ petition was admitted on 22.04.2009. Pending the writ petition, this Court granted an interim stay of the order passed by the first
Respondent.
The Petitioner claimed that he had raised an Industrial Dispute against his termination dated03.01.1997 before the Labour Court, Coimbatore.
The said dispute was taken on file as I.D. No. 120 of 1998. The Labour Court by its Award dated 19.12.2002 directed the second Respondent
Management to pay Rs. 30,000/-ascompensation in lieu of his reinstatement along with the other legal dues.
Thereafter, the Petitioner filed an application seeking for gratuity for the services rendered by him for the period from 1968 to 1997. The
authority took up the case as G.A. No. 268 of 2005. On notice from the authority, the second Respondent filed a counter statement. Before the
authority, the Petitioner examined himself as P.W.1.On the side of the second Respondent, no witnesses were examined. On the side of the
Petitioner, he had filed two documents, which were marked as Exs.P1 and P2. On the side of the second Respondent Management, three
documents were filed and were marked as Exs.R1 to R3.
On the basis of these materials, the Controlling Authority found that the Petitioner was entitled to get his gratuity and computed a sum of Rs.
38.481/-towardsgratuity payable. He also held that as per the provisions of the Act read with the government order, he was eligible to get 10%
interest.
The second Respondent filed an appeal u/s 7(7) of the Payment of Gratuity Act before the first Respondent Appellate Authority. As a condition
precedent, they had deposited the amount. The Appellate Authority found that since the Petitioner filed the gratuity application after considerable
delay and there was no sufficient reasons, the order of the Controlling Authority was not valid and the gratuity application filed by the Petitioner
was hit by limitation. In that view of the matter, he had allowed the appeal and set aside the order of the Controlling Authority dated03.07.2006 in
G.A. No. 268 of 2005.
Mr. G.B. Saravanabhavan, learned Counsel for the Petitioner submitted that along with gratuity application, the Petitioner had filed I.A. No. 157
of 2005stating sufficient reasons for the delay and that IA was allowed by a separate order which was not challenged by the second Respondent
Management. Therefore, the Appellate Authority was erroneous in allowing the appeal filed by the Management. This contention of the Petitioner
was well founded and the order of the first Respondent impugned in the writ petition is liable to beset aside. But however, this Court is of the view
that there was no necessity to remand the matter for fresh disposal of the appeal and parties have addressed on the merits of the order passed by
the Controlling Authority.
The Management contended that the Labour Cour thad given Rs. 30,000/-towards compensation taking into account all relevant criteria and
there cannot be any further amount. But the Petitioner contended that the Labour Court had only settled the dues towards non-employment and
after ordering Rs. 30,000/-, the Labour Court specifically directed other statutory dues to be paid apart from Rs. 30,000/-. This contention of the
Petitioner is well founded. There is nothing in the Labour Court''s Award that while ordering compensation in lieu of reinstatement, it had taken into
account all other dues payable. On the other hand, if the statutory payment of gratuity alone is worked out, it comes toRs. 38,480/-( as ordered by
the Controlling Authority). If that is correct, then the Labour Court could not have fixed Rs. 30,000/-as total compensation including all other
claims. At no point of time, the Petitioner had given up his claim for gratuity. Certainly a perusal of the Award of the Labour Court does not give
that impression.
In this context, it is necessary to refer to Section 14 of the Payment of Gratuity Act, which is as follows:
Act to override other enactments, etc.-The provisions of this Act or any rule made there under shall have effect not with standing any thing
inconsistent there with contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other
than this Act.
The Supreme Court in Allahabad Bank and Another Vs. All India Allahabad Bank Retired Emps. Assn., dealt with the scope of Section 14
and in Paragraphs 36 and 38 of the judgment, it was observed as follows:
The Appellant being an establishment is under the statutory obligation to pay gratuity as provided for u/s 4 of the Act which is required to be
read along with Section 14 of the Act which says that the provisions of the Act shall have effect not with standing any thing inconsistent there in
contained in any enactment or in any instrument or contract having effect by virtue of any enactment other than this Act. The provisions of the Act
prevail over all other enactments or instruments or contracts so far as the payment of gratuity is concerned. The right to receive gratuity under the
provisions of the Act cannot be defeated by any instrument or contract.
This Court in Hindustan Lever v. State of Maharashtra relying upon the decision of this Court in Purshottam H. Judye v. V.B. Potdar held that
the word ""instrument"" would include award made by the Industrial Tribunal. It is thus clear that notwithstanding the Desai and Shastry Awards and
the subsequent settlements the members of the Employees'' Association are entitled to avail the benefit conferred upon them for payment of gratuity
under the provisions of the Act. The employees cannot be deprived of their valuable statutory right conferred upon them to receive payment of
gratuity. Thus, even if the worker had given an undertaking, the same was not valid in the teeth of Section 14 of the P.G. Act.
Further, the Labour Court in the guise of passing an Award and ordering payment in lieu of reinstatement could not have deprived the
Petitioner''s right to receive gratuity which is a distinct and separate entitlement. The Labour Court is not the forum in which the entitlement for
gratuity claim can ever be decided. The Supreme Court in State of Punjab Vs. Labour Court Jullunder and Others, has held that the Gratuity Act is
a special law and since it also provides forum any dispute regarding gratuity can be settled only by authorities constituted under the Act. In
paragraphs 7 and 8, it was observed as follows:�
It is apparent that the Payment of Gratuity Act enacts a complete code containing detailed provisions covering all the essential features of a
scheme for payment of gratuity. It creates the right of payment of gratuity, indicates when the right will accrue, and lays down the principles for
quantification of the gratuity. It provides further for recovery of the amount, and contain san especial provision that compound interest at nine per
cent per annum will be payable on delayed payment. For the enforcement of it so provisions, the Act provides for the appointment of a controlling
authority, who is entrusted with the task of administering the Act. The fulfillment of the rights and obligations of the parties are made his
responsibility, and he has been invested with an amplitude of power for the full discharge of that responsibility. Any error committed by him can be
corrected in appeal by the appropriate government or an appellate authority particularly constituted under the Act.
Upon all these considerations, the conclusion is inescapable that Parliament intended that proceedings for payment of gratuity due under the
Payment of Gratuity Act must be taken under that Act and not under any other. That being so, it must be held that the applications filed by the
employee-Respondents u/s 33-C(2) of the Industrial Disputes Act did not lie, and the Labour Court had no jurisdiction to entertain and dispose of
them. On that ground, this appeal must succeed.
In the light of the above, the writ petition stands allowed and the order of the first Respondent in A.G.A. No. 57 of 2006 dated 13.10.2007
stands set aside. The order of the Controlling Authority in G.A. No. 268 of2005 dated 03.07.2006 stands restored. The Petitioner is entitled to
withdraw the amounts lying in deposit with the Controlling Authority. No costs. Consequently, connected miscellaneous petition is closed.