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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ASHOK B. HINCHIGERI, J.
Sarvodaya Education Trust & Ors. - Petitioners
Vs.
The Union of India, Represented by its Secretary, Department of Ministry of Law & Justice & Ors. - Respondents
Writ Petition No. 39434 of 2013 (L-PG) C/W W.P. Nos. 14083, 29691-29694, 44827-44830 of 2011; 1163, 51033, 51034, 51035 of 2012; 2145, 37434, 49523 of 2013; 10429-10436, 38497 of 2014; 43321 & 43322 of 2015
Decided On : 03-08-2017
Further, (a) Rule 7 of the Payment of Gratuity (Central) Rules, 1972 ('the Rules') states that the employee shall ordinarily make the application within 30 days to his employer for the payment of gratuity. In respect of the legal heir of the employee, the period prescribed is one year as per Rule 7(3) of the Rules. Further, Rule 7(5) of the Rules states that the claim for payment of gratuity shall be entertained even after the expiry of the specified periods, provided sufficient cause is shown for the delay in preferring his claim. If the employee is not satisfied with the decision of the employer, the employee can make an application to the Controlling Authority within 90 days from the date of occurrence of the cause of action, invoking Rule 10 of the Rules.
(b) As per the scheme of the Statute and the Rules framed thereunder, the interest cannot be awarded without holding the enquiry as to who, the employee or employer, is responsible for the delay in the payment of gratuity and whether the Controlling Authority's permission is obtained by the employer for not paying the gratuity. In an employee has not made an application/s for the payment of gratuity before the employer/Controlling Authority, or if he has not produced the documents in support of his claims, the proviso to Section 7(3-A) is attracted. In the instant cases, for softening the rigors of transition from one legal regime to another legal regime, the period for making the applications for preferring the claims can be reckoned from the date of the commencement of Act 47 of 2009.
PAYMENT OF GRATUITY ACT, 1972 – Section 13-A & (2)(e) – Challenge is mainly to the retrospective operation making it enforceable with effect from 03.04.1997 – Invalidation of a statutory provision on the ground of its retrospective operation – Held, (a) There is always a presumption in favour of the constitutionality of an enactment and the burden is upon the petitioner, who attacks it, to show that there has been a clear transgression of the constitutional principles.
(b) An Act of Legislature can be stuck down only on two grounds – (i) lack of legislative competence and (ii) violation of fundamental rights or any other provisions of the Constitution. No third ground exists for invalidating the legislation.
Further, (a) The power of the Parliament and State Legislatures to make laws is conferred by Articles 245, 246 and 248 of Constitution of India. There is nothing in the said Articles to suggest that the Indian Legislatures do not possess the power to make retrospective legislations, which every sovereign legislature possess. The Legislature has the power to amend, delete or obliterate the statute or to enact a statute or to enact a statute prospectively or retrospectively. Unless limited by the Constitution, the Legislatures in India have the power to legislate retrospectively and also to validate the invalid laws or invalid executive acts and notifications. The Courts, except under extraordinary circumstances, would be reluctant to override the legislative judgment as to the need for and wisdom of the retrospective legislation.
(b) What is substituted in Section 2€ and what is inserted by Section 13-A of the Payment of Gratuity Act, 1972 by Amendment Act of 2009 are neither violative of Article 14 nor violative of Article 19(1)(g) of the Constitution, as no substantive right was earlier created in favour of the schools nor any such substantive right has been taken away. The legislative power conferred on the Legislature includes the subsidiary or the ancillary power to validate laws, which have been struck down by the Courts as invalid for one or the other infirmity, thereby to cure the infirmity and pass the validating law so as to make the provision of the earlier law effective from the date when it was passed.
(c) The Court may take into account the surrounding circumstances, which existed at the time of bringing about an amendment. The antecedent state of affairs which lead to the initiation of the amendment bill cannot be glossed over. The recommendations concerning the status of teachers, which emanated from United Nations Educational, Scientific and Cultural Organization (UNESCO) and International Labour Organization (ILO) are accepted by the Special Intergovernmental Conference on 05.10.1966. The recommendation is for taking the social security measures to protect the interests of the teachers. Payment of gratuity is one such measure recommended by International Organizations and incorporated in our domestic/municipal law. On the grounds that the educational institutions have not collected the amounts from the students for the payment of gratuity to its teachers, that the payment of the gratuity makes the working of the educational institutions unviable, etc., the Court's interference is not warranted. The newly substituted Section 2(e) and the newly inserted Section 13-A of the Act cannot be struck down as unconstitutional on the ground of their retrospective operation.
The petitioners’ grievance is over the newly substituted Section 2(e) and the newly inserted Section 13-A of the Payment of Gratuity Act, 1972 (‘the said Act’ for short). The amendments in question are brought about by Act 47 of 2009. The challenge is mainly to the retrospective operation making it enforceable with effect from 3.4.1997. Some of the petitioners have also challenged the orders passed by the Controlling Authority under the said Act directing the payment of gratuity to the teachers. Some of them have approached this Court on receiving the notice, issued by the Controlling Authority, pursuant to the claims preferred by the employees.
2. Sri K.V. Dhananjay, the learned counsel for the petitioner in W.P.No.14083/2011 submits that the Payment of Gratuity (Amendment) Act, 2009 cannot traverse backward in time for a period of 12 years. It cannot confer gratuity upon the teachers, who have retired prior to the coming into force of the said amendment, dated 31.12.2009.
3. He submits that the insertion of Section 13-A is only for validating the payment of gratuity already paid by an employer under the mistaken impression of the legal requirement. But it cannot be understood that a teacher, who has already retired as on the date of the commencement of the Amendment Act should be recalled and be rendered eligible and entitled to receive the gratuity.
4. He submits that the Amendment Act in question overreaches the judicial powers of the Court. It defeats a series of binding judgments of the Hon’ble Supreme Court on how the definition of an employee does not cover the services of a teacher. He submits that the teachers employed in a school are not held to be employees under the Minimum Wages Act, 1948, as per the decision of the Apex Court in the case of Haryana Unrecognised Schools’ Association Vs. State of Haryana reported in (1996) 4 SCC 225. He submits that the Apex Court in the case of Miss A. Sundarambal Vs. Government of Goa, Daman & Diu & Ors. reported in (1988) 4 SCC 42, has expressed the view that the teachers employed by educational institutions cannot be called as ‘workmen’ within the meaning of Section 2(s) of the Industrial Disputes Act, 1947.
5. He submits that the members of the petitioner are private unaided schools; they do not receive any aid or assistance of any kind from the Government, State or Central. Their fundamental right to establish and administer the educational institutions of their choice is being affected adversely on account of imposition of excessively harsh and unreasonable liability upon them. The fundamental right guaranteed under Article 19(1)(g) of the Constitution of India is required to be protected by invalidating the impugned legislation. A retrospective law is not immune from the judicial challenge. The learned counsel clarifies that the challenge in this case is not to the power of Parliament to legislate retrospectively; rather the challenge is to the jurisdiction of Parliament to legislate retrospectively in the special circumstances of this case.
6. Relying on the Hon’ble Supreme Court’s judgment in the case of Jawaharmal Vs. State of Rajasthan & Ors. reported in AIR 1966 SC 764, he would contend that when the liability is introduced retrospectively, its reasonableness has to be examined by the higher judiciary. Drawing support from the Apex Court’s judgment in the case of National Agricultural Cooperative Marketing Federation of India Ltd. & Anr. Vs. Union of India & Ors. reported in (2003) 5 SCC 23, he would contend that the excessive harshness or unreasonableness would be a valid ground to strike down a retrospective legislation. He submits that if the retrospectivity is harsh, it runs the risk of being struck down as unconstitutional.
7. He submits that without ascertaining whether there are atleast 10 employees in the establishment of educational institutions and without ascertaining as to whether the teacher has taught for five years, the applicant-teacher cannot be gran
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