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SUPREME COURT OF INDIA
Sanjiv Khanna, Bela M. Trivedi, JJ.
Independent Schools’ Federation of India (Regd.) – Appellant
Versus
Union of India and Another – Respondents
Civil Appeal No. 8162 of 2012, Civil Appeal No. 8684 of 2012, Civil Appeal No. 2229 of 2013, Civil Appeal No. 9406 of 2013, Civil Appeal Nos. 6316-6329 of 2017, Civil Appeal Nos. 6330-6331 of 2017, Civil Appeal No. 3870 of 2018, Civil Appeal No. 7457 of 2018, Civil Appeal No. 7458 of 2018, Civil Appeal No. 7459 of 2018, Civil Appeal No. 7460 of 2018, Civil Appeal No. 7461 of 2018, Civil Appeal No. 7462 of 2018, Civil Appeal No.......... of 2022 (Arising Out of Special Leave Petition (Civil) No. 12535 of 2014), Civil Appeal No............. of 2022 (Arising Out of Special Leave Petition (Civil) No. 15069 of 2015), Civil Appeal No............. of 2022 (Arising Out of Special Leave Petition (Civil) No. 19930 of 2017), Civil Appeal No. ............. of 2022 (Arising Out of Special Leave Petition (Civil) No. 3293 of 2019), Civil Appeal No. ............. of 2022 (Arising Out of Special Leave Petition (Civil) No. 2235 of 2020), Writ Petition (Civil) No. 44 of 2016, Writ Petition (Civil) No. 1158 of 2019 And Transfer Case (Civil) No. 104 of 2015
Decided On : 29-08-2022
(A) Payment of Gratuity Act, 1972 – Sections 2(e) and 13A – Constitutional validity of amendment to Section 2(e) and insertion of Section 13A to Payment of Gratuity Act, 1972, with retrospective effect from 3rd April 1997 vide Payment of Gratuity (Amendment) Act, 2009 – A legislation should intervene to grant benefit of gratuity to teachers – Legislation in question rectifies infirmities and defects pointed out by Court, and amended clause (e) to Section 2, defining word “employee” and newly inserted Section 13A with retrospective effect from 3rd April 1997, effectuate and catalyse object and purpose of Notification No. S-42013/1/95-SS.(II) – This power to legislate with retrospective effect which vests in every sovereign legislature, is not taken away by a court decision – However, a court decision cannot be overruled by legislature – Overruling assumes a decision based on same law – Where law has been amended and defects have been removed or cured, law changes and earlier interpretation is no longer applicable and becomes irrelevant – When legislature acts within its power to usher in a valid law and rectify a legal error, even after a court ruling, legislature exercises its constitutional power to enact law and does not overrule an earlier court decision – Legislature, vide Amendment Act, 2009, has given retrospective effect to amended provision of Section 2(e) and newly inserted Section 13A with effect from 3rd April 1997, which is also date of notification issued by Government under Section 1(3)(c), making PAG Act applicable to educational institutions with ten or more employees – Amendment enforces and gives effect to what was intended by notification, but could not be achieved on account of technical and legal defect – Marginal inconvenience in form of financial outgo or difficulty is of little weight, when curing of an inadvertent defect is made retrospectively in greater public interest, which consideration will overrule interest of one or some institutions. (Paras 13 and 14)
(B) Statute Law – Amendment of Statute – Power to amend, which includes power to amend statute with retrospective effect, is a constitutional power vested with legislature which is not confined and restricted to any particular type of statutes – When and which cases to exercise the power has to be left to legislature – In case constitutional validity of amendment act is challenged, court is entitled to examine relevant circumstances which prompted legislature to make retrospective amendment – Judicial review, when validity of an amendment act is challenged, is decided on grounds of lack of legislative competence, violation of fundamental rights or any other provisions of Constitution of India – In present case, amendment with retrospective effect is to make benevolent provisions equally applicable to teachers – Amendment seeks to bring equality and give fair treatment to teachers – It can hardly be categorised as an arbitrary and high-handed exercise. (Para 22)
(C) General Clauses Act, 1897 – Section 6A – Repeal of Act – Where Repealing Act states that enactment thereof shall not affect any act in which enactment has been applied, incorporated or referred to, means that there is an independent existence of the two Acts and even on death of Amending Act, its offspring survives in incorporating Act. (Para 24)
Facts of the case:
Present appeals as well as batch of writ petitions involve a common question – constitutional validity of amendment to Section 2(e) and insertion of Section 13A to Payment of Gratuity Act, 1972, with retrospective effect from 3rd April 1997 vide the Payment of Gratuity (Amendment) Act, 2009.
Findings of Court:
Private schools would make payment to employees/teachers along with the interest in accordance with provisions of the PAG Act within a period of 6 weeks from today and in case of default, the employees/teachers may move appropriate forum to enforce payment in accordance with the provisions of the PAG Act.
Result : Appeals, Transfer Case and Writ Petitions dismissed.
JUDGMENT :
SANJIV KHANNA, J.
Leave granted in the special leave petitions.
2. The civil appeals by way of special leave, which impugn the judgements of the High Court of Allahabad-Lucknow Bench1[City Montessori School and Another v. Union of India and Others., Miscellaneous Bench No. 3075/2015; and City Montessari School v. Appellate Authority, Misc. Single No. 4583/2017], the High Court of Gujarat2[Saraswati Vidya Mandal v. Ashaben Vinubhai Majmudar and Another, S.C.A. No. 17839/ 2011 and 11 other cases; Jain Citizens Education Society, Surendranagar and Another v. Union of India and Others, S.C.A. No. 9022/2011 and 1 other Case; and Nalanda Kelavani Mandal v. Shri Amrutbhai Nathudas Patel and Another, S.C.A. No. 18772/2015, and 5 other cases], the High Court of Delhi3[Independent Schools’ Federation of India (Regd.) v. Union of India & Anr., W.P. (C) No. 6168/2010; and Maharishi Shiksha Sansthan Registered Society v. Union of India and Another., W.P(C) 4696/2012], the High Court of Bombay- Aurangabad Bench4[Saint Xaviers High School v. Shailaja Vishnu Deshpande., Writ Petition No. 15344/2017; and Saint Xaviers High School v. Jayashree Shamal Ghosh, Writ Petition No. 15282/2019], the High Court of Punjab and Haryana5[The Sonipat Hindu Educational & Charitable Society v. Union of India and Another, C.W.P. No. 17643/2010 (O&M); Maharishi Dayanand Education Society and others v. Union of India and Others, C.W.P. 16884/2012; and Independent Schools Association, Chandigarh v. Union of India and Others, C.W.P. No. 23489/2011], the High Court of Chhattisgarh- Bilaspur Bench6[The Secretary, Board of Secondary Education and Others v. Union of India and Others, W.P.L. No. 138/2012 and 1 other case] and the High Court of Madhya Pradesh,-Indore Bench7[Bal Niketan Sangh through Smt. Meena Phadke v. State of Madhya Pradesh & Others., Writ Petition No. 5508/ 2014], as well as a batch of writ petitions under Article 32 of the Constitution of India, were heard together as they involve a common question – constitutional validity of the amendment to Section 2(e) and insertion of Section 13A to the Payment of Gratuity Act, 19728[For short, “PAG Act”], with retrospective effect from 3rd April 1997 vide the Payment of Gratuity (Amendment) Act, 20099[For short, “Amendment Act, 2009”].
3. The PAG Act enacted and enforced with effect from 16th September 1972, requires payment of gratuity to an employee after he has rendered continuous service for not less than 5 years, on his superannuation, retirement or resignation or on his death or disablement due to accident or disease.10[Section 4 of the PAG Act] However, sub-section (3) to Section 1 of the PAG Act restricts its applicability to the following establishments :
“1. Short title, extent, application and commencement. –
xx xx xx
(3) It shall 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 establishments 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.”
In the present case, we are only concerned with clause (c) and not clauses (a) and (b) to sub-section (3) to Section 1 of the PAG Act. As per clause (c), the PAG Act applies to an establishment or a class of establishments in which ten or more employees are employed, as the Central Government may, by notification, specify on this behalf.11[Sub-section 3A to Section 1, inserted by the Payment of Gratuity (Second Amendment) Act, 1984 with effect from 18th May 1984, states that a shop or establishment to which the PAG Act applies, shall continue to be governed by the enactment, notwithstanding the number of persons em
(1) Amendment to Section 2(e) and insertion of Section 13A to Payment of Gratuity Act, 1972, with retrospective effect from 3rd April 1997 vide Payment of Gratuity (Amendment) Act, cannot be categori....
The main legal point established in the judgment is that the teacher was entitled to claim gratuity under The Payment of Gratuity Act, 1972, and the Repealing Act did not affect her right to do so.
The State of Chhattisgarh is not the employer of teachers in private aided educational institutions, and the liability for gratuity payments lies with the institutions, not the State.
The amendment to deny additional increments to teaching staff of private aided institutions is unconstitutional, violating principles of equality and the doctrine of separation of powers.
meaning of the said expression in Section 2 (d-2) of the 1972 Act inserted by the U.P. Act No.2 of 2018, would not be relevant for the purpose of 1978' Act.
Teachers who were in service as on 3rd April, 1997 and had rendered service of not less than 5 years were entitled to gratuity, even if they had retired or terminated their services prior to the amen....
The principle of uniformity in granting monetary benefits and prohibition of discrimination within the class.
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