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Judgment
K. Chandru
The petitioner is the management of co-operative sugar mill at Madurantakam. In this writ petition, they have challenged the order passed by the
first respondent/Joint Commissioner of Labour cum Appellate Authority under the Payment of Gratuity Act in P.G.A.No. 9 of 2007 dated
24.06.2008. By the impugned order, the Appellate Authority computed the gratuity at Rs. 58,478/-together with simple interest at the rate of
10%.The writ petition was admitted on 27.11.2008. Pending the writ petition, interim stay was granted by this Court after observing that the entire
amount has been lying in deposit with the Controlling Authority. Thereafter, the contesting respondent filed M.P.No. 1 of 2009 seeking for
permission to withdraw the amount. That petition came to be disposed of by order dated 08.07.2009 permitting him to withdraw 50% of the
amount lying in deposit. The Controlling Authority was directed to deposit the balance amount in any one of the nationalised banks for two years
and the workman was permitted to withdraw the interest every six months.
It is seen from the records that the contesting third respondent was employed in the petitioner mill and got retired from service on 30.12.2003.
The workman claimed that he was in employment from 27.12.1977 and after getting retired from service, he claimed gratuity in terms of calculation
made u/s 4 of the Payment of Gratuity Act, 1972. In his claim application, he claims that he had put in 25 years 11 months and 3 days of service
and his last drawn salary was Rs. 169.80 per day and the total amount of gratuity claimed by him was Rs. 66,092/-. Since there was a delay in
filing the application, he has also filed I.A.No. 11 of 2004 to condone the delay. This application was resisted by the petitioner mill.
Notwithstanding the same, the Controlling Authority condoned the delay and took up the gratuity case on his file as P.G.No. 130 of 2004. The
Controlling Authority, by his order dated 25.10.2006, held that the total length of service of the workman was only 10 years and he will be eligible
for gratuity at the rate of 15 days for every completed year of service and computed the gratuity at Rs. 29,337/-. Before the authority, heavy
reliance was placed upon the circular issued by the Commissioner of Sugars dated 25.07.1990. In the circular, the authority directed all the sugar
mills as follows:
It is hereby ordered that the employees of the co-operative and public refer sugar mills, who retire as seasonal employee will be paid gratuity at the
wages per year of service provided they have put in the minimum period of twenty years of service in the mills. For the purpose of computing
twenty years service, the service as NMR/Casual will not be counted. In respect of missed employees, gratuity will be paid in accordance with the
provisions of the Payment of Gratuity Act, 1972.
Aggrieved by the order passed by the Controlling Authority, the petitioner management filed an appeal u/s 7(7) of the Payment of Gratuity Act
to the Appellate Authority. The said appeal was taken on file as P.G.A.No. 9 of 2007. As a condition precedent for preferring an appeal, the
amount was also deposited before the Controlling Authority. The contention raised by the management before the Appellate Authority was that the
grant of gratuity at the rate of 15 days was contrary to second proviso to Section 4(2) as for seasonal establishment, only 7 days wages will be
made available for every completed year of service and therefore, the Controlling Authority was erroneous. The Appellate Authority had
entertained the appeal and issued notice to the third respondent. Thereafter, after hearing both sides, the Appellate Authority dismissed the appeal.
The authority held that the circulars issued by the Commissioner of Sugars dated 25.07.1990 and 31.07.1991 inasmuch as provides full gratuity
for even seasonal worker, who had put in 20 years of service, the said circulars will apply to the case of the third respondent and he also found
that he had put in 23 years of service as seasonal worker and therefore, he is eligible to get the benefit of the said circular. In such circumstances,
the authority held that the restriction placed under the second proviso to Section 4(2) will not apply to the case of the workman. The contention of
the management that since the third respondent is only a NMR worker, the circular will not apply, was rejected by the Appellate Authority. In fact,
it is open to an employer to provide better terms of gratuity and if any such better offer is given by the employer, the same is protected in terms of
Section 4(5) of the Payment of Gratuity Act, wherein it is clearly stated that the provisions of the Act, more particularly, Section 4(1) will not affect
the right of the employee to receive better terms of gratuity without any award or agreement or contract with the employer. It is not the case of the
petitioner mill that these two circulars are not binding on them or that they are not accepting the circulars in respect of other workers other than
NMR workeRs. If once it is stated that the circular holds the field, the authority was correct in holding that the circular will apply even to NMRs,
who have rendered 20 years of service. Even that is accepted, then, calculation should be made on the basis of 15 days wages for every
completed year of service. The authority held that the workman had put in 23 years of service and there is no dispute regarding the last drawn
wages and therefore, calculated the amount as Rs. 58,478/-. It is challenging the same, the writ petition came to be filed.
The contention raised by Ms.Thilakavathy, learned counsel appearing for the petitioner sugar mill was that there is no proof that the workman
had worked continuously upto 20 yeaRs. According to the petitioner, the circular dated 25.07.1990 excludes the benefit to casual labours and
therefore, the authority cannot read the circular in a piece meal manner. The invocation of Section 4(5) of the Payment of Gratuity Act is
inappropriate in this case.
It must be noted that when the workman sent a notice in terms of Payment of Gratuity Act and also filed a claim petition before the Controlling
Authority, in the counter statement, excepting a bald denial about his length of service, no other details were furnished. Though there is a claim that
for one season i.e. during April, 2001, he was stopped from work, no materials were produced before the Controlling Authority. Therefore, the
Controlling Authority did not have opportunity to go into the actual length of service. The workman did not file any cross appeal for enhancing the
length of service. Yet, the Appellate Authority is entitled to correct the error committed by the Controlling Authority as ultimately the object of the
Payment of Gratuity Act is to pay gratuity on any one of the contingencies set out u/s 4(1) of the Payment of Gratuity Act.Considering the grave
mistake made by the Controlling Authority by taking into account the length of service mentioned in the provident fund slips, which has no
relevance to the length of service in terms of Section 2A of the Payment of Gratuity Act and considering the fact that the Payment of Gratuity Act
do not make any distinction between the casual, temporary or NMR worker while calculating the length of service, this Court do not find any grave
error committed by the Appellate Authority by passing the impugned order. Ultimately, the interest of justice must be upheld and inasmuch as the
first respondent has not committed any grave error either in terms of law or in terms of fact, this Court is not inclined to entertain the writ petition.
Accordingly, the writ petition shall stand dismissed. No costs.
In view of the dismissal of the writ petition, the third respondent is entitled to withdraw the balance amount lying in deposit with the nationalised
bank.