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2015 Supreme(Kar) 1285
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
S. Sujatha, J.
The State of Karnataka and Ors. – Appellants
Vs.
Sathya and Ors. – Respondents
Writ Petition No. 16197/2013(L-PG)
Decided On : 09-11-2015
Advocate Appeared:
For the Appellant : T.S. Mahanthesh, AGA
For the Respondents: K. Govindraj, Adv.
The State Government is a necessary party to the proceedings under Section 7(4) of the Payment of Gratuity Act, 1972.
Headnote:
Payment of Gratuity Act - Dismissal of Appeal - Section 7 - [EMPLOYER, PAYMENT OF GRATUITY] - [Section 2(f), Section 7(4), Section 7(7)] - The court discussed the definition of 'employer' as defined under Section 2(f) of the Act and the requirement to make the State a party to the proceedings under Section 7(4) of the Act. The court held that the State Government is a necessary party to the proceedings under Section 7(4) of the Act, based on previous judgments. The orders were set aside and the proceedings were remitted back for fresh consideration, with the direction to afford opportunity to both parties and reserve liberty to lead evidence.
Fact of the Case:
The petitioners challenged the dismissal of the appeal filed under Section 7 of the Payment of Gratuity Act, 1972, claiming that the State was not made a party to the proceedings before the jurisdictional authority.
Finding of the Court:
The court held that the State Government is a necessary party to the proceedings under Section 7(4) of the Act, based on previous judgments. The orders were set aside and the proceedings were remitted back for fresh consideration, with the direction to afford opportunity to both parties and reserve liberty to lead evidence.
Issues: Dismissal of appeal under Section 7 of the Payment of Gratuity Act, 1972, and the requirement to make the State a party to the proceedings under Section 7(4) of the Act.
Ratio Decidendi: The State Government is a necessary party to the proceedings under Section 7(4) of the Act, based on previous judgments.
Final Decision: The orders were set aside and the proceedings were remitted back for fresh consideration, with the direction to afford opportunity to both parties and reserve liberty to lead evidence.
S. Sujatha, J.
1. Petitioners have called in question the order passed by the 2nd respondent in case No. SaKaAaMy/PGA/CR-63/2008 dated 24.4.2010 (Annexure-A) and the order passed by the 3rd respondent in case No. UKaAa-2/PGA/CR-105 to 120/2010-11 dated 22.10.2011 (Annexure-B), whereby the appeal filed by the 2nd petitioner under Section 7 of the Payment of Gratuity Act, 1972 (hereinafter referred to as 'the Act') has been dismissed.
2. Heard learned counsel appearing for the parties.
3. The 1st respondent herein filed an application under Section 7(4) of the Act claiming that he joined the petitioners' department on 6.10.1956 as water boy and retired on 31.10.2000. He was drawing salary of Rs. 4,375/- p.m. and when he retired, he was entitled for gratuity amount of Rs. 1,11,057/-. The Controlling Authority i.e., the 2nd respondent, after adjudication of the claim, allowed the application and ordered that the 1st respondent is entitled for a total sum of Rs. 1,76,334/-. Aggrieved by the said order, the 2nd petitioner preferred an appeal in case No. UKaAa-2/PGA/CR-105 to 120/2010-11 before the Appellate Authority. The Appellate Authority dismissed the appeal on the ground that the appellant has not deposited the admitted payment of gratuity under Section 7(7) of the Act. It is these orders, which are impugned in this writ petition.
4. It is submitted by the learned AGA that this Hon'ble Court in identical circumstance in the case of ASSISTANT EXECUTIVE ENGINEER v. J. MAHADEVAIAH AND ANOTHER reported in ILR 2004 KAR 225 and in W.P. No. 43197/2011 in the case of THE STATE OF KARNATAKA AND ANOTHER v. SRI. R. PRAKASH BIN RANGAPPA has held that the definition of the term 'employer' as defined under section 2(f) of the Act mandates that the State was required to be made as party to the proceedings before the jurisdictional authority, so that the State would have got an opportunity to defend its claim. It is admitted fact that the State was not made a party before the 2nd respondent and as such, the State had no knowledge of the proceedings before the 2nd and 3rd respondents and accordingly, the said orders would not be binding on the State. It is submitted by the learned AGA that in view of the said judgments passed by this Court, this writ petition requires to be allowed. It is also contended by the learned AGA that the 1st petitioner has deposited the amount of Rs. 2,45,398/- before the 2nd respondent on 30.3.2014.
5. On the contrary, learned counsel for the respondents has vehemently contended that the 2nd petitioner, who was an appropriate party to deal with the payment of gratuity, was made as party and the 1st petitioner State is not a necessary or proper party to the proceedings to be impleaded in the proceedings. He has further contended that the judgment of the Division Bench of this Court in J. Mahadevaiah's case (supra) and more particularly, the judgment of the learned Single Judge of this Court in Prakash Bin Rangappa's case (Supra) is not applicable to the facts of this case.
6. Having heard the learned Counsel for the parties and perusing the materials placed on record, it is noticed that the Division Bench of this Court in case of J. Mahadevaiah's case (Supra) has categorically held thus:
(51) "If the 'employer' as defined is not impleaded and only a subordinate who is not authorized to represent the State/Local Authority will be entitled to challenge the award as not binding on them as they did not have an effective opportunity to defend the claim, and in some cases, they may also contend that the Award is not executable against them. In that event the Union or the workmen concerned may have to establish that the concerned authority authorized to represent the State/ Local Authority had notice and knowledge of the proceedings and had in fact contested the matter before the Labour Court through the person impleaded as party".
The Co-ordinate Bench of this Court in Sri.R. Prakash Bin Rangappa case (Supra) has held thus:
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