The meaning of "continuous service" in the context of an award scheme for gratuity is not automatically determined by statutory definitions, but must be examined on principle based on the circumstances of each case.

Judgment

GAJENDRAGADKAR, J. : This appeal by special leave is directed against the award passed by the industrial tribunal in a matter which was referred to it under S. 36-A (2) of the Industrial Disputes Act, 1947, for interpretation of certain terms of the award made by the said tribunal on April 28, 1951, in Reference No. 168 of 1950. It appears that a dispute had arisen between the appellant M/s. Jeewanlal (1929) Ltd. and its workmen in regard to certain demands made by the respondents against the appellant in 1950. The said dispute was referred for adjudication as a result of which an award was passed which, inter alia, provided for a gratuity scheme. Some provisions of this award have been referred for interpretation in the present reference.

2. On August 31, 1957, resignation submitted by the appellant s employee Bhanu Bala was accepted by the appellant. The said employee had joined the appellant s service in 1929 but there was a break in the continuity of his service for nearly 8 1/2 months because he had remained absent from duty without permission or leave from February 14, 1945, to the end of October, 1945. According to the appellant the said employee was not entitled to any gratuity under the scheme framed by the award. Even so the appellant offered him Rs. 1,165/- and odd on compassionate grounds. The employee was not willing to accept that amount because he claimed that he was entitled to Rs. 2,282-50 nP. by way of gratuity. The demand thus made by the employee led to an industrial dispute which was taken by the employee before the First Labour Court at Bombay under S. 33C of the Act. The Labour Court entertained the application, decided the point in dispute in favour of the employee and directed the appellant to pay him Rs. 1,781-80nP. as gratuity. The appellant then moved the Bombay High Court for a writ under Arts. 226 and 227 on the ground that the Labour court had no jurisdiction to entertain the application made before it by the employee. This writ petition was allowed and the order passed by the Labour Court was quashed. It was at this stage that the Government of Bombay referred the question of interpretation of the term "continuous service" contained in the award of 1951 to the Industrial Court under S. 36-A (1) of the Act. That is how the Industrial Court was possessed of the matter. It has held that the words "continuous service" as used by the tribunal when it framed the award in question mean service not broken or interrupted by the termination of the contract of employment by either the employer or the employee or by operation of law. It is this interpretation the correctness of which is challenged by the appellant in its present appeal.

3. The relevant part of the gratuity scheme which was framed by the tribunal in the earlier reference reads thus:

(i) On the death of an employee while in the service of the company or on an employee becoming physically or mentally disabled to continue further in service half a month s wages for each year of service subject to a maximum of ten months wages to be paid to him or to his heirs, executors, assigns or nominees as the case may be.

(ii) On the termination of his service by the company after five years continuous service - Gratuity at the same rate as above.

(iii) On voluntary retirement or resignation of an employee after 15 years continuous service-Gratuity at the same rate as above. As we have already seen the employee Bhanu Bala resigned and his resignation was accepted in August, 1957. He claimed the benefit of cl. (iii) whereas the appellant contended that the said employee had not been employed in continuous service for the requisite in continuous service for the requisite period because there was a break in his service between February 14, 1945, to the end of October 1945 and that affected the continuity of his employment which made his claim incompetent under cl. (iii). This contention has been rejected by the tribunal.

4. Mr. S. T. Desai contends that