1. Appeal concerning the definition of employee under Section 2(e) of the Payment of Gratuity Act and the impact of a retrospective amendment. (Para 1 , 2 )
Back
Next 
2019 Supreme(SC) 653
SUPREME COURT OF INDIA
Abhay Manohar Sapre, R. Subhash Reddy, JJ.
BIRLA INSTITUTE OF TECHNOLOGY - Appellant
Vs.
STATE OF JHARKHAND - Respondent
Civil Appeal No. 2530 of 2012
Decided On : 09-01-2019
Important Points
The court's decision was influenced by the retrospective amendment of the definition of 'employee' under section 2(e) of the Payment of Gratuity Act.
Subject
Civil Law - Employment Law
Act Referred
PAYMENT OF GRATUITY ACT: S.2(e)
Headnote
Retrospective Amendment - Definition of 'Employee' - The court found error in the judgment due to the failure to consider the retrospective amendment of the definition of 'employee' under section 2(e) of the Payment of Gratuity Act, which necessitated the Parliament to amend the definition with retrospective effect from 03.04.1997. The court stayed the operation of the previous judgment and directed the matter to be reheard before the appropriate Bench.
Fact of the Case:
The court found error in the previous judgment due to the failure to consider the retrospective amendment of the definition of 'employee' under section 2(e) of the Payment of Gratuity Act.
Finding of the Court:
The court stayed the operation of the previous judgment and directed the matter to be reheard before the appropriate Bench.
Issues: Failure to consider the retrospective amendment of the definition of 'employee' under section 2(e) of the Payment of Gratuity Act.
Ratio Decidendi: The failure to consider the retrospective amendment of the definition of 'employee' under section 2(e) of the Payment of Gratuity Act necessitated the court to stay the operation of the previous judgment and direct the matter to be reheard before the appropriate Bench.
Final Decision: The court stayed the operation of the previous judgment and directed the matter to be reheard before the appropriate Bench.
Legal Category Hierarchy
Advocates appeared:
For the Appellant : Mr.Shambo Nandy, Mr.Arijit Mazumdar, Ms.N.Annapoorani, AOR.
For the Respondent: Mr.Anil Kumar Jha, AOR Mr.Sunil Roy, AOR.
For the Appellant : Mr.Shambo Nandy, Mr.Arijit Mazumdar, Ms.N.Annapoorani, AOR.
For the Respondent: Mr.Anil Kumar Jha, AOR Mr.Sunil Roy, AOR.
Table of Contents
2. A retrospective amendment to the definition of employee under the Payment of Gratuity Act was overlooked, resulting in a prima facie error in the previous judgment. (Para 2 , 3 , 4 )
3. A judgment based on a legal position superseded by a retrospective statutory amendment is prima facie erroneous and necessitates a stay and rehearing. (Para 4 )
4. Operation of the previous judgment is stayed, and the matter is directed to be listed for rehearing before an appropriate Bench. (Para 4 , 5 , 6 )
5. What is the effect of a retrospective statutory amendment on a judgment based on a superseded legal position?
A judgment based on a legal position that has been altered by a retrospective statutory amendment is considered prima facie erroneous, justifying a stay of the judgment's operation and a subsequent rehearing. (Para 2 , 3 , 4 )
6. Can a court suo motu stay its own judgment to correct a legal error?
Yes, a court may suo motu list a matter and stay the operation of its own judgment if it finds a prima facie error resulting from the failure to consider relevant statutory amendments. (Para 2 , 4 , 5 )
ORDER :
1. On 07.01.2019 this Court delivered the judgment allowing the appeal and setting aside the order of the High Court impugned therein.
2. 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.47 of 2009 with retrospective effect from 03.04.1997.
3. In other words, though the definition was amended in 2009 by Act No.47 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.
4. 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
5. The judgment dated 07.01.2019 shall not be given effect to till the matter is reheard finally by the appropriate Bench.
6. 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.
