State Of Punjab vs Labour Court, Jullundur

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1979 Supreme(SC) 436

SUPREME COURT OF INDIA
V.R. KRISHNA IYER AND R.S. PATHAK, JJ.
State of Punjab, Appellant
Versus
The Labour Court, Jullundur and others, Respondents.
Civil Appeal No. 8 of 1977,
D/- 16-10-1979.
Advocates appeared
Mr. Soli, J. Sorabji, Solicitor General (Mr. O. P. Sharma, Advocate with him), for Appellant; Mr. Hardev Singh, Advocate, for Respondents.

Advocates:
HARDEV SINGH, O.P.Sharma, SOLI J.SORABJI

Headnote:
Industrial Disputes Act, 1947 - Section 33-C (2) - Payment of Gratuity Act – Section 1(3)(b),4(1),2(r) and 2(q) - Claim for payment of gratuity - Retrenchment compensation - Hydel Department of Government of Punjab had undertaken a Project described as "Hydel Upper Bari Doab Construction Project" - Respondents Nos. 2 to 8 were employed as work-charged employees - On completion of work assigned to them they were retrenched, and retrenchment compensation was paid to them - Employee respondents claimed that they were also entitled to gratuity, bonus and certain other allowances and benefits - Gratuity was claimed under Payment of Gratuity Act, 1972 - Claim being disputed, respondents applied under Section 33-C (2) of Industrial Disputes Act, 1947 to the Labour Court - Labour Court made an order that the employee respondents were entitled to gratuity claimed by them but not to bonus and other allowance and benefits - In this appeal, learned Additional Solicitor-General contends on behalf of the appellant that Payment of Gratuity Act, 1972 cannot be invoked by respondents because Project does not fall within the scope of S. 1 (3) of that Act - Whether an application has or has not been made for payment of gratuity, to determine amount of gratuity and inform the person to whom gratuity is payable specifying amount of gratuity so determined – Held, upon all these considerations, 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 applications field by employee respondents under Section 33-C (2) of the Industrial Disputes Act did not lie, and Labour Court had no jurisdiction to entertain and dispose of them. On that ground, this appeal must succeed - In the circumstances, it is not necessary to notice further submission on behalf of the appellant that where a serious dispute exists in regard to the basis of a claim for payment of gratuity, no proceedings will lie under S. 33-C (2) of the Industrial Disputes Act - At this stage court put to learned Solicitor-General, who appeared for the State whether in the special circumstance it was not fair that the entire amount be paid by appellant to employees without driving them to a separate proceeding - He has fairly stated that appellant is willing to do so and the sole object of this litigation was to have the law clarified - Court therefore, direct appellant to pay to employee respondents within one month from today the amounts that may be due to them, if they have not already been paid - Appeal allowed.

Judgment

R. S. PATHAK, J.:- In this appeal by special leave the State of Punjab appeals against the judgment and order of the High Court of Punjab and Haryana refusing to quash an order under Section 33-C (2) of the Industrial Disputes Act, 1947 for payment of gratuity to the respondents under the Payment of Gratuity Act, 1972.

2. The Hydel Department of the Government of Punjab had undertaken a Project described as the "Hydel Upper Bari Doab Construction Project". The respondents Nos. 2 to 8 were employed as work-charged employees. On completion of the work assigned to them they were retrenched, and retrenchment compensation was paid to them. The employee respondents claimed that they were also entitled to gratuity, bonus and certain other allowances and benefits. The gratuity was claimed under the Payment of Gratuity Act, 1972. The claim being disputed, the respondents applied under Section 33-C (2) of the Industrial Disputes Act, 1947 to the Labour Court, Jullundur. The Labour Court made an order dated April 30, 1975 that the employee respondents were entitled to the gratuity claimed by them but not to bonus and the other allowance and benefits. A writ petition filed by the appellant has been dismissed in limine by the High Court of Punjab and Haryana.

3. In this appeal, the learned Additional Solicitor-General contends on behalf of the appellant that the Payment of Gratuity Act, 1972 cannot be invoked by the respondents because the Project does not fall within the scope of S. 1 (3) of that Act. Section 1 (3) provides that the Act will apply to:

"(a) every factory, mine, oilfield, plantation, port and railway company;

(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;

(c) such other establishment or class of establishments, in which ten or more employees are employed, or were employed on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf."

According to the parties, it is clause (b) alone which needs to be considered for deciding whether the Act applies to the Project. The Labour Court has held that the Project is an establishment within the meaning of the Payment of Wages Act, Section 2 (ii) (g) of which defines an "industrial establishment" to mean any establishment in which any work relating to the construction, development or maintenance of buildings, roads, bridges or canals, or relating to operations connected 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 urged for the appellant that the Payment of Wages Act is not an enactment contemplated by Section 1 (3) (b) of the Payment of Gratuity Act. The Payment of Wages Act, it is pointed out, is a central enactment and Section 1 (3) (b), it is said, refers to a law enacted by the State Legislature. We are unable to accept the contention. Section 1 (3) (b) speaks of "any law for the time being in force in relation to shops and establishments in a State". There can be no dispute that the Payment of Wages Act is in force in the State of Punjab. Then, it is submitted, the Payment of Wages Act is not a law in relation to "shop and establishments". As to that, the Payment of Wages Act is a statue which, while it may not relate to shops, relates to a class of establishments, that is to say, industrial establishments. But, it is contended, the law referred to under Section 1 (3) (b) must be a law which relates to both shops and establishment, such as the Punjab Shops & Commercial Establishments Act, 1958. It is difficult to accept that contention because there is no warrant for so limiting the meaning of the expression law in Section 1 (3) (b). The expression is comprehensive in its scope, and can mean a

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