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SUPREME COURT OF INDIA
PANKAJ MITHAL, S.V.N. BHATTI, JJ.
N. Manoharan – Appellant
Versus
The Administrative Officer and Another – Respondents
Civil Appeal Nos. 1513-1522 of 2026 [Special Leave Petition (Civil) Nos. 22628-22637 of 2024]
WITH
G. Arockiasamay – Appellant
Versus
The Administrative Officer and Another – Respondents
Civil Appeal No. 1523-1554 of 2026 [Special Leave Petition (Civil) Nos. 22638-22669 of 2024]
WITH
S. Alangar LR of (U. Sundara Raj) – Appellant
Versus
The Administrative Officer and Others – Respondents
Civil Appeal No. 1555 of 2026 [Special Leave Petition (Civil) No. 22670 of 2024]
Decided On : 11-02-2026
(A) Payment of Gratuity Act, 1972 – Sections 2(e), 5 and 14 – Scope and ambit – A person who is governed by any other Act, or governed by any Rules providing for payment of gratuity, does not come within the ambit of the definition of “employee” under the PG Act – For limited purpose of gratuity, larger and comprehensive establishment of atomic energy facilities by Central Government is not replaced with a very narrow construction of functional freedom given to Heavy Water Projects Board or individual Heavy Water Plants – Heavy Water Plant [HWP] is an adjunct or ancillary operating through Heavy Water Projects Board of DAE – HWP is an adjunct of Department of Atomic Energy – Employees fall within exclusionary clause of Section 2(e) of PG Act – Result of such exclusion is that Sections 5 and 14 are not attracted in deciding on applicability of PG Act to employees of HWP – Order impugned upheld. (Paras 12, 12.1, 13 and 14)
(B) Jurisdiction – Jurisdictional Fact – A jurisdictional fact is one on existence or non-existence of which depends jurisdiction of a court, a tribunal or an authority – It is the fact upon which an administrative agency’s power to act depends – If jurisdictional fact does not exist, court, authority or officer cannot act – If a court or authority wrongly assumes existence of such a fact, order can be questioned by a writ of Certiorari – Underlying principle is that by erroneously assuming existence of such a jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not possess – A decision is an authority for what it decides and not what can be logically deduced therefrom. (Paras 10 and 11)
Facts of the case:
The point for consideration in subject Civil Appeals is whether employees of Heavy Water Plant, Department of Atomic Energy, Government of India, Tuticorin are covered by provisions of Payment of Gratuity Act, 1972.
Findings of Court:
Since its inception, a board has been constituted to manage the HWPs of the DAE. The retired employees admit that HWP is not incorporated under the Companies Act, is not recognised as a PSU, or functions as a Government Company. In other words, the other attributes of a separate legal entity, incorporated association, artificial person, limited liability, common seal, perpetual succession, and transferability of shares are not present.
Result : Civil Appeals dismissed.
The legal issue in this case revolves around whether the employees of the Heavy Water Plant (HWP) under the Department of Atomic Energy (DAE) are covered by the provisions of the Payment of Gratuity Act, 1972 (PG Act). The core legal question pertains to the interpretation of the definition of "employee" under Section 2(e) of the PG Act and whether the specific nature and establishment of HWP fall within the scope of the Act.
The Court examined the statutory language and the scope of the PG Act, particularly focusing on the exclusionary clause that states persons holding posts under the Central Government or a State Government and governed by other Acts or rules providing for gratuity are not included within the definition of "employee." The Court noted that the employees of HWP were appointed under orders that explicitly stated they were governed by Civil Services Rules, and HWP itself is not incorporated under the Companies Act, recognized as a PSU, or functioning as a separate legal entity or Government Company. Instead, it functions as an adjunct or ancillary of the DAE, which is a comprehensive establishment of atomic energy facilities managed directly by the Central Government.
The Court emphasized that the establishment’s character as an adjunct of the DAE, rather than a separate legal entity, is a significant jurisdictional fact that influences the applicability of the PG Act. Since the employees are deemed to be Central Government servants, they fall within the exclusionary clause of Section 2(e). Consequently, the provisions of the PG Act, including Sections 5 and 14, do not apply to these employees.
Further, the Court upheld the principle that benefits already received under specific rules applicable to government servants, such as the CCS (Pension) Rules, 1972, cannot be claimed simultaneously under the PG Act, as this would amount to claiming benefits under two statutes for the same purpose, which is not permissible.
In conclusion, the Court dismissed the civil appeals, affirming that the employees of HWP are not covered under the PG Act due to their status as Central Government employees and the establishment’s character as an adjunct of the DAE. This legal reasoning hinges on the interpretation of statutory definitions, the nature of the establishment, and the jurisdictional facts that determine the applicability of the law.
JUDGMENT :
S.V.N. BHATTI, J.
1. Leave granted.
2. The point for consideration in the subject Civil Appeals is whether the employees of Heavy Water Plant, Department of Atomic Energy, Government of India, Tuticorin (“HWP”) are covered by the provisions of the Payment of Gratuity Act, 1972 (“PG Act”).
3. The Civil Appeals arise from a common Judgment dated 21.06.2023 in Writ Appeal No. 1687 of 2021, Writ Petition No. 19117 and batch. The impugned Judgment held and declared that the employees of HWP are not covered by the definition of Section 2(e) of the PG Act. Hence, the Civil Appeals are at the instance of the retired employees of HWP. The circumstances leading to the dispute between the parties are admitted and fall within a narrow compass.
4. The Atomic Energy Act, 1962 (“AE Act”), was enacted by the Parliament and is effective from 15.09.1962. The objective of the AE Act is to provide for the development, control and use of atomic energy for the welfare of the people of India and for other peaceful purposes. Section 3 of the AE Act deals with ‘General Powers of the Central Government’ to produce, develop, use and dispose of atomic energy, either by itself or through any Authority or Corporation established by it, or a Government Company; and carry out research into any materials connected therewith. Section 3 of the AE Act is comprehensive and encompasses all primary and ancillary activities undertaken by the Central Government relating to atomic energy. The Department of Atomic Energy, Government of India (“DAE”), is the Department through which the Central Government discharges the functions, duties, and responsibilities assigned to it under the AE Act. The parties admit the following hierarchy of departments vis-a-vis atomic energy:
5. On 01.05.1969, the Government of India/DAE issued Office Memorandum No. 12/7/69-(P) for the constitution of a Board to administer the Heavy Water Production Projects of the DAE. The operative portion of the Office Memorandum reads as follows:
6. The HWP in Tuticorin is one of the Heavy Water Boards established by the DAE. The circumstance precipitating a dispute between the retired employees and HWP can be traced to one of the pension payment orders issued by HWP. On 25.07.2014, the pension payment order in favour of retired employee, N. Manoharan, was issued under the CCS (Pension) Rules, 1972. The CCS (Pension) Rules, 1972 deal with comprehensively the retirement benefits to which a retired employee is entitled, including gratuity. The sum payable as gratuity under the PG Act and CCS (Pension) Rules, 1972, is less than the sum payable under the PG Act. This led to an employee of HWP filing an application before the Controlling Authority under the PG Act. The Controlling Authority held that the provisions of the PG Act are attracted to the employees of HWP, and a direction was ordered to pay the difference between the PG Act and CCS (Pensions) Rules, 1972. The Controlling Authority, on jurisdictional fact and the applicability of the PG Act, held that HWP, constitutes an industry under the Industrial Disputes Act, 1947, making the applicant-employee eligible for coverage under Section 1(3)(b) of the PG Act. The Controlling Authority also relied on the Order dated 29.01.2016 of the High Court of Madras in WP Nos. 23577 to 23579 of 2015 and batch. HWP, Tuticorin, challenging the Order of the Controlling Authority, filed an appeal before the Deputy Chief Labour Commissioner, and the appeal filed was dismissed. The primacy of consideration of the appellate authority as well proceeds on the fact that HWP is an industry under the Industrial Disputes Act, 1947, and the employees are industrial employees covered by the first limb of Section 2(e) of the PG Act.
7. HWP assailed the orders before the High Court in Writ Petition No. 23127 of 2015 and batch, which were dismissed on 31.03.2016, resulting in the filing of Writ Appeal No. 1687 of 2021. The record discloses that HWP filed Writ Petition No. 13346
Gratuity – Employees of Heavy Water Plant, Department of Atomic Energy, Government of India, Tuticorin are covered by provisions of Payment of Gratuity Act, 1972.
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