1. Dispute over entitlement of a teacher to gratuity under the Payment of Gratuity Act, 1972, following retirement from a technical educational institute. (Para 14 , 15 , 16 , 17 , 18 , 19 )
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2019 Supreme(SC) 260
SUPREME COURT OF INDIA
Abhay Manohar Sapre, Indu Malhotra, JJ.
Birla Institute of Technology – Appellant(s)
Versus
The State Of Jharkhand And Ors. – Respondent(s)
Civil Appeal No. 2530 of 2012
Decided on : 07-03-2019
Advocates Appeared:
For the Appellant : Mr.Shambo Nandy, Adv. Mr.Arijit Mazumdar, Adv. Ms.Akanksha Kaushik, Adv. Ms.N.Annapoorani, AOR,
For the Respondent: Mr.Anil Kumar Jha, AOR Mr.Sunil Roy, AOR Mr.R.P.Gupta, AOR
For the Appellant : Mr.Shambo Nandy, Adv. Mr.Arijit Mazumdar, Adv. Ms.Akanksha Kaushik, Adv. Ms.N.Annapoorani, AOR,
For the Respondent: Mr.Anil Kumar Jha, AOR Mr.Sunil Roy, AOR Mr.R.P.Gupta, AOR
IMPORTANT POINTS
Supreme Court can recall its order suo motu in case there is apparent error.
Teachers are entitled to claim the amount of gratuity under the Payment of Gratuity Act, 1972.
Pendency of writ petition by itself does not affect the constitutionality of an Act.
Headnote:(a) Constitution of India – Article 137 – Order passed in ignorance of an amendment by Parliament having direct bearing over the controversy involved in this appeal – Apparent error – Order recalled for decision afresh. (Para 10)
(b) Payment of Gratuity Act, 1972 – Section 2(e) as amended by Amendment 2009 – Employee – Benefit of the Act also extended to teachers from 03.04.1997 – Effect – Nullifying the law laid down by (2004) 1 SCC 755 – Holding teachers entitled to claim the amount of gratuity under the Act. (Para 30)
(2004) 1 SCC 755 – Distinguished
(c) Administration of justice – Judicial discipline – Pendency of writ petition – By itself does not affect the constitutionality of an Act. (Para 33, 34)
Facts of the case:
On 07.01.2019, this Court placing reliance on the decision of this Court in Ahmadabad Pvt. Primary Teachers Association vs. Administrative Officer and Others (2004) 1 SCC 755, which was brought to the Court's notice by the learned counsel appearing for the appellant, allowed the appeal and set aside the order of the High Court.
However, after the pronouncement of the order in this appeal, it came to the notice of this Court that consequent upon the decision of this Court rendered in Ahmadabad Pvt. Primary Teachers Association (supra), the Parliament amended the definition of the word "employee" as defined in Section 2(e) of the Payment of Gratuity Act, 1972 by Amending Act No. 47 of 2009 on 31.12.2009 with retrospective effect from 03.04.1997. This amendment was not brought to notice of the Court while passing the order on 07.01.2019 in this appeal.
The Court, therefore, suo motu took up the appeal to its file and directed it to be listed on the Board. On 09.01.2019 the appeal was accordingly listed for orders. This Court then stayed its order dated 07.01.2019.
The respondent no. 4 joined the appellant-Institute as Assistant Professor on 16.09.1971 and superannuated on 30.11.2001 after attaining the age of superannuation.
Respondent No. 4 then made a representation to the appellant for payment of gratuity amount which under the Payment of Gratuity Act, 1972. The appellant, however, declined to pay the amount of gratuity as demanded by respondent No. 4.
Respondent No. 4, therefore, filed an application before the controlling authority under the Act against the appellant and claimed the amount of gratuity which, according to him, was payable to him under the Act.
The controlling authority (respondent No. 3) allowed the application filed by respondent No. 4 and directed the appellant to pay a sum of Rs. 3,38,796/- along with interest at the rate of 10% p.a. towards the gratuity to respondent No. 4.
The appellant filed appeal before the appellate authority under the Act which was dismissed. The appellant carried the matter to the High Court in a writ petition which was dismissed. The Letters Patent Appeal before the Division Bench was also dismissed.
Finding of the Court:
In view of the Amendment 2009, there is no merit in the appeal.
Result: Appeal dismissed with cost.
Legal Category Hierarchy
Table of Contents
2. Employer contended teachers are not employees under the Act based on precedent; teacher claimed entitlement under the amended definition of employee. (Para 8 , 20 , 32 )
3. The 2009 amendment to Section 2(e) of the Payment of Gratuity Act retrospectively expanded the definition of employee to include teachers. (Para 25 , 26 , 27 , 28 , 29 , 30 , 31 )
4. Retrospective amendment to Section 2(e) of the Payment of Gratuity Act, 1972, extends gratuity benefits to teachers employed in educational institutions. (Para 27 , 28 , 29 , 30 )
5. Appeal dismissed with costs. (Para 35 )
6. Does the Payment of Gratuity Act, 1972, cover teachers?
Yes. Following the Payment of Gratuity (Amendment) Act, 2009, the definition of employee under Section 2(e) was widened to include any person employed for wages in any kind of work, manual or otherwise, effectively extending gratuity benefits to teachers. (Para 27 , 28 , 29 )
7. What is the effect of the 2009 amendment to the Payment of Gratuity Act regarding its commencement?
The amendment to Section 2(e) was given retrospective effect from April 3, 1997, the date on which the provisions of the Act were made applicable to educational institutions. (Para 2 , 3 , 25 , 27 , 28 )
8. Does the pendency of a constitutional challenge against an amendment affect its current application?
No. The pendency of a writ petition challenging the constitutionality of an Act does not affect its validity or the rights of parties until the Court declares the statute ultra vires. (Para 33 , 34 )
JUDGMENT
Abhay Manohar Sapre, J.
On 07.01.2019, this Court placing reliance on the decision of this Court in Ahmadabad Pvt. Primary Teachers Association vs. Administrative Officer and Others (2004) 1 SCC 755, which was brought to the Court's notice by the learned counsel appearing for the appellant, allowed the appeal and set aside the order of the High Court.
2. However, after the pronouncement of the order in this appeal, it came to the notice of this Court that consequent upon the decision of this Court rendered in Ahmadabad Pvt. Primary Teachers Association (supra), the Parliament amended the definition of the word "employee" as defined in Section 2(e) of the Payment of Gratuity Act, 1972 by Amending Act No. 47 of 2009 on 31.12.2009 with retrospective effect from 03.04.1997. This amendment was not brought to our notice while passing the order on 07.01.2019 in this appeal.
3. This Court, therefore, suo motu took up the appeal to its file and directed it to be listed on the Board. On 09.01.2019 the appeal was accordingly listed for orders. This Court then stayed its order dated 07.01.2019 and passed the following order:
“On 07.01.2019 this Court delivered the judgment allowing the appeal and setting aside the order of the High Court impugned therein.
Today, we have listed the matter suo motu. The reason being that during the course of hearing of the appeal it was not brought to the notice of the Bench that the judgment of this Court in Ahmedabad Pvt. Primary Teachers Association vs. Administrative Officer & Ors. (2004) 1 SCC 755 on which the reliance was placed for allowing the appeal necessitated the Parliament to amend the definition of "employee" under Section 2(e) of the Payment of Gratuity Act by Amending Act No. 7 of 2009 with retrospective effect from 03.04.1997.
In other words, though the definition was amended in 2009 by Act No. 7 of 2009, yet the same was given retrospective effect from 03.04.1997 so as to bring the amended definition on Statute Book, from 03.04.1997.
Keeping in view the amendment made in the definition of Section 2(e), which as stated above was not brought to the notice of the Bench, this issue was not considered though had relevance for deciding the question involved in the appeal. It is for this reason, we prima facie find error in the judgment and, therefore, are inclined to stay the operation of our judgment dated 07.01.2019 passed in this appeal
The judgment dated 07.01.2019 shall not be given effect to till the matter is reheard finally by the appropriate Bench.
The Registry is directed to list this matter for rehearing before the appropriate Bench comprising of Hon'ble Mr. Justice Abhay Manohar Sapre and Hon'ble Ms. Justice Indu Malhotra as early as possible."
4. It is in the light of the aforementioned order, the matter was listed before this Bench for passing the appropriate order in the disposed of appeal.
5. We heard the learned counsel for the parties. Both the parties have also filed their written submissions.
6. Having heard the learned counsel for the parties and on perusal of the record of the case including the written submissions, we are inclined to recall our order dated 07.01.2019 because, in our view, it contains an error apparent on the face of the order.
7. The apparent error is that it was not brought to our notice that the Parliament, consequent upon the decision of this Court in Ahmadabad Pvt. Primary Teachers Association (supra), had amended the definition of "employee" as defined in Section 2(e) of the Payment of Gratuity Act by amending Act No. 47 of 2009 with retrospective effect from 03.04.1997. This amendment, in our opinion, had a direct bearing over the issue involved in this appeal.
8. What was brought to our notice was only the decision of this Court rendered in Ahmadabad Pvt. Primary Teachers Association (supra) by contending that the issue involved in this appeal remains no longer res integra and stands answered in appellant's favour. We accepted this submission.
9. In our vi
