STATE OF PUNJAB versus LABOUR COURT, JULLUNDUR & ORS

953 STATE OF PUNJAB v . ·. ' ,, . ~ . LABOUR COURT, JULLUNDUR & ORS. Ocrober 16, 1979 [V. R. KRT~HNA lv!'R AND R. S. PATfr.\K, JJ.] Poymmt of Gratuity Act, 1972-S. 1(3)(b)-Scope of-A Gov~rnment projert wlmhtr an "Industrial Estnblishmcnr". Rttrrnched 11 orkers-1/ entitTccl to gratulty-"Rctrenc:liment"-Meaning of. t. Act, sdf-co~ttained Code-Application for gratuiry-Tf "'ou/d fie under 1[• ][J3 ][C(2} ][of ][Jndu.rtrial ][Di][spmcs ][Acl. ]~\ The re<>ponden!s. who were the employees of the H~dcl Department or the ~Go,·ernment of Punjab, were retrenched on the completion of the work assign--ed to !bern. Their claim for payment of gratuity under the Payment of Gratuity Act, 197:! having been rejected by the appellant,., th(y moved the bbour Coun under s. 33-C(2) of the IndtL<trial Dispute~ Act. 1947. The l.:lbonr (.curt allowed their claim. The High Court di<mi<<ed the appellant's arpcal /11 //mint. In appenl it .,..;J conkmkd that (I) the · view of the l.abour Court that the projrct Wll' 11n esb.bli>hmcnt within tbe me:min[l: of the definition of •Indus-trial establishment~ contained in ~. 2(ii) (g) of the Pa.ymcnt of Wages Act 1'3.< erroneous. and the i'a)•ment of We.sc.~ Act being Central Act ~ not au tnactment cont~mpl:>.ted by s. 1 (J )(b) of the Payment of Gr:lluity Act: (2) '~ retren.:.hment is not superannuation or retir~m~nt or re~ignation or death or di~blemcnt due to accident or disease as defined in s. 4( 1) ot th~ Act. the ret rene hell employees were not entitled to gmtuity; ond (3) the P11yment of Gratuity Act being self-contained cod~. it exclud~ recourse to any o~r \ ltltute for claimins; relief under thi' Act and. therefore, the respoodenl3' ( application under a. 33-<:(2) of th~ Industrial Disputes Act. w::ts misconceived. '?'; Allovrin;: the appenl In part; i' ol i HELD : 1( a). It Is not correct to say thnt whnt is contemplated by • s. I H3)(b) of the Payment or Grutuity Act is I:Jrw enacted by the State Legts-l:iture and not Central Act like the Payment of Wnge5 A.ct_ There can bo ?0 " relation doubt that to when $bop• 1, und 1(3 )(b) e~~tnbli!hmenu speao of in "any 11 law Stale :or. tt t~e lnclu<l~ hme t-e!ng the Payment in force <>f Wa~e; Act, which is 11 law in force in the Stnte. [956 B-C) fb) 'The Paayment or Wnse• Act i' ~tatute which. whi~e it m:t~ not re-late T< . to \ho... , .• , rc 1alA!~ [, ]to u.s 1 [. ](1 ~' 1a [. bli•htnents. i.e. in,tnstnal ]· [e>1llbh]"law~ [sbments. ]·n ~ '"''e ;. no Y.:trrnnt for limilillg tho meaning of the e.:rress•on 1 .. l>unj;.b lf3)(b) Sho~ to 1. :~ v.('~~.n:·r~~;l~ ·h' I· t. f:~t~blishmcnts 1 both shops and Act, esL'Ibhsh~n~ 1958: The e~presston such ~ th.e l~ eomf)rehen~; . . mean 0 Jnw in relatton to !hops as wdl a,, c-ar•t•r"e ml tt, l~~eope ~~~ teun t bli•hment~ or law in relation to &hOJ"S ·~ •' y. aw n reiMton o e• ·' .

buildings, roads, bridges or canals, or relating to oper:~tions connected l with navigation, irrigation or the supply of water, or relating to the _generation, transmission and distribution of electricity or any other form of power is being carried on." It is qrged for the appellant that _the Payment of Wages Act is not an enactment contemplated by sec-tion 1 (3) (b) of the Payment of Qratuity Act. The Payment of Wages Act, it is pointed out, is central enactment and seetion, 1 (3 )(b) , it is said, refers to law enacted by the State Legislature. We are unable to accept the contention. Section 1 (3)(b) speaks o[ _"any law for the time -being in force in relation to shops and establish· ments in State." There can be no dispute that the Paymcrlt of Wages Act is in force in the State of Punjab. Then. it is submitted, the Payment of \Vages Act is not law in relation to "shops and est;} .. blishments". As to that, the Payment of Wages Act is st:Jtuk which, while it may not relate to shops, relates to class of establish--ments, that is to say. industrial establishments. But, it is contended, the law referred to under section 1 ( 3) (b) must be law whh:h relates to both shops and establishments, such as the Punjab Shops & Commer-cial Establishments Act, 1958. It is difficult to accept th~tt conten-tion because t~1ere is no warrant for so limiting the meaning of _the expression ''law" in section 1 ( 3 )(b). The expression is comprehen-sive in its scope, and can mean law in relation to shops as well as, separately, law in relation to establishments~ or law in relation to shops and commercial establishments and law in relation to non-commercial establishments. Had sectiOn. 1 ( 3) (b) intended to refer to single enactment, surely the appellant would have been able to point to such statute, that is to say, statute relating to shops and establishments, both commercial and non-commercial. The Punjab Shops & Commercial Establishments Act does not relate to aU kinds of establishments. Besides shops, it relates to commercial establiSh~ ments alone. Had the intention of Parliament been, when enacting section 1 (3)(b), to refe.r to law relating to commercial establish-ments, it would not have left the expression "establishments" unquali-fied. We have carefully examined the various provisions of the Pay-ment of Gratuity Act, and we are unable to discern any reason for giving the limited meaning to section 1(3)(b) urged before us on be--half of the appellant. Section 1 (3) (b) applies to every establishment within the meaning of any law for the time being in force in relation to establishments in State. 'Such an establishment would include an industrial establishment within the meaning of section 2(ii)(g) of the Payment of Wages Act. Accordingly, we are of opinion that the Payment of Gratuity Act applies to an establishment in which any· work relating to lhc construction, development or maintenance of buildings,

contention has force nnd must be accepted. careful perusal of the ).... relevant provisions of the Payment of Gratuity Act shows that Parlia ment has enacted closely knit scheme providing for payment of gra-tuity.. controlling authority is appointed by the approp.riate Go vernment under section 3, and Parlinment has made him responsible for the administration of the entire Act. In what event gratuity will 8 become payable and how it will be quantified are detailed in section 4. Section 7 ( 1) entitled person eligible for payment of gratuity to apply in that behalf to the employer. Under sectiop. 7 (2), the. employer is obliged, as soon as gratuity becomes payable and whether an appli-cation has or has not been made for payment of gratuity, to deternrine the amount of gratuity and inform the person to whom the gratuity is ·• payable specifying the amount of gratuity so determined. He is obli-ged, by virtue of the same provision, to inform the controlling authority also, thus ensuring tha"t the controlling authority is seized at ail times of information in regard to gratuity as it becomes payable. If dis-pute is raised in regard to the amount of gratuity payable or as to the admissibility of any claim to gratuity, or as to the person entitled to receive the gratuity, section 7 ( 4) (a) requires the employer to deposit with the controlling authority such amount as he admits to be payable by him as gratuity. _The controlling authority is empo;wered. under section 7 ( 4) (b), to enter upon an adjudication of the dispute, and after due inquiry. and after giving the parties to the dispute reason-E able opportunity of being heard, he is required to determine the amount of gratuity payable. In this regard, the controlling authority has alii the powers as are vested in court while trying suit under the Code of Civil Procedure, 1908 in respect of obtaining evidentiary Inaterial and the recording of evidence. The amount deposited by the em-ployer with the controlling authority as the admitted amount of g.ra-F tuity will be paid over by the controlling authority to the employee or his nominee or heir. Section 7 (7) provides an appeal agaimt the order of the controlling authority under section 7 ( 4). to th~ appropriate Government priate Govenunent in or such other authority as may that behalf. The appropriate Government or be specified by the ·appro-1 ... the appellate authority is empowered under section 7(8), after giving the parties to the appeal reasonable opporttmity of being l1eard, to confirm, modify or reverse the decision of the controlling authority. • Where the amount of gratuity payable! is not paid by the employer with-in the prescribed time, the controlling authority is required by section 8, on application made to it by the aggrieved person, to issue certi~ .( ficate for that amount to the Collector. The Coneetor, thereupon, is empowered to recover the amount of gratui1y, together with compound intereit thereon at the rate of nine per cent per annum from fhe date

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of expiry of the prescribed time, as arrears of land revenue, and pay the same to the person entitled thereto.

It is apparent that the Payment of Gratuity Act enacts complete code containing detailed provisions covering all the essential features of :1 scheme for payment of gratuity. It creates the right to payment of gratuity, indicates when the right will accrue, and lays· down the princi-ples for qunntification of the gratuity. It provides further for re-covery of the amount, and contains an especial provision that compound interest at nine per cent per annum will be payable on delayed pay-ment. For the enforcement of its provisions, the Act provides for the appointment of controlling authority, who is entrusted with the task of administering the Act. The fulfilment of the rights and obli-gations of the parties are made his responsibility, and he has been invested with an amplitude of power for the full discharge of that res-ponsibility. Any error committed by him can be corrected in appeal by the appropriate Government or an appellate authority particubrly constituted under the Act.

Upon all these considerations, the conclusion is inescapable tha~ P:uliament inrended 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 applica-tions filed by the employee respondents under section 33-C(2) of the Industrial Disputes Act did not lie, and the Labour Court had no juris-diction to entertain and dispose of them. On that ground, this appeal must succeed.

In the circumstances, it is not necessary to notice the further sub-mission on behalf of the appellant that where se.rious dispute exists in regard to the basis of claim for payment of gratuity, no proceed-ings will lie under section 33-C(2) of the Industrial Disputes Act.

The appeal is allowed, and the order dated April 30, 1975 of the Labour Court, Jullundur is quashed. Having rega.rd to the terms on which special leave was granted by this Court to the appellant, the appellant shall pay to the employee respondents their costs of this appeal.

At this stage we put to the learned Solicitor-General, who appeared for the State whether in the special circumstances it was not fair that the entire amount be paid by the appellant ti the employees without

[1980] 1 S.C.lt. S.C.lt.

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