1997 Supreme(Bom) 633

IN THE HIGH COURT OF BOMBAY
F.I. Rebello, J.
Shri Birju Batran ..... Petitioner.
Versus
M/s. Phoenix Mills Ltd. others ..... Respondents.
Writ Petition No. 1111 of 1997, decided on 25-11-1997.
Advocates appeared :
R.C. Shah, for the petitioner.
Kiran Bapat, for the respondent No. 1.

Headnote:Payment of Gratuity Act, 1972

       Section 2-A-How to calculate continuation of service-Entitlement for gratuity-Once the services of petitioner broken-Restarted after four years-Gratuity claimed after superannuation-Held-Service did not continue as per requirement, cannot entitle for gratuity.- The only interference in the case would be in the matter of interest for the delayed payment of the first gratuity amount. In the present case 10% simple interest has been awarded whereas in the case from which Writ Petition No. 1036 of 1997 has arisen 12% was awarded by the Appellate Authority. The petitioner herein would also be entitled to 12% simple interest.

       Sections 2-A and 4(6)-Service-Gratuity-Service terminated Taken back in service after 1-1/2 years -Continuous service-held-Where the services of workman terminated and not set aside and taken back in service-He is freshly appointed-Not entitled to gratuity as he was not in continuous service.- The petitioner was employed with the respondent No. 1. There was a general strike in the mills which includes the respondent No.1 mill. The said strike was declared as illegal strike by the Court under the Bombay Industrial Relations Act by its order, dated 10th February, 1992. The petitioners services came to be terminated on 28th February, 1982. The petitioner was taken back in service on 6th June, 1983. No fresh letter of appointment was issued to the petitioner. His number under the PPF and ESI Scheme remained the same. The Government of Maharashtra was pleased to make a reference in respect of dismissed workman of the respondent No. 1. The said reference came to be numbered as reference No. IT/21/86. The petitioner filed a pursis in the said reference setting out therein that his name be dropped from the reference as he has settled the matter with the respondent No. 1. The Industrial Court by Part-I Award, dated 10th July, 1990 was pleased to exclude the name of the petitioner from the reference. In the pursis it was set out that the petitioner had compromised with the respondent No. 1 directly outside the Court and had brought the dispute to an end. It is further pointed out that no further dues were payable to the petitioner except gratuity and leave pay and there was no other claim of whatsoever kind against the company. Subsequently, gratuity was paid to the petitioner for the period upto 28th February, 1982. Petitioner thereafter, has also been paid gratuity for the period from 6th June, 1983 till his superannuation. The service record of the petitioner which was produced and relied upon also shows that he was shown to be reemployed on 6th June, 1983.

       With this background the provisions of Section 2-A of the Payment of Gratuity Act is being viewed. Section 2-A contemplates that an employee is entitled to gratuity if, he has been in uninterrupted service including services which may be interrupted as set out in the said section. This includes interruption due to absence of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of the Act. A literal reading of the definition would therefore, indicate that as long as the employee is in service and his service has not been terminated, then mere absence or not reporting for duty or ceasing to work for no fault of the employee, the employee is deemed to be in service. Sub-section (6) of Section 4 is also relevant. The said sub-section reads as under :-

       Notwithstanding anything contained in sub-section (1)-

       (a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage of loss so caused,

       (b) the gratuity payable to an employee may be wholly or partially for feited,-

       (i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or

       (ii) if, the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of the his employment.

       On perusal of the above, sub-section it is seen that if, the services of an employee had been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, gratuity shall be forfeited to the extent of the damage or loss so caused. In so far as sub-section (b) of sub-section (6) of Section4 is concerned, gratuity can be wholly or partially forfeited if, his services have been terminated for any riotous or disorderly conduct or any other act of violence on his part. Similarly, if, the services terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment.

       Section 2-A of the Payment of Gratuity Act speaks of what is continuous service. In the event there is strike or lock-out which is not on account of the fault of employee such interruption would not be considered for the purpose of holding that the workman was in continuous employment. However, what is material to note is that there, should not be a cessation of relationship of employer and employee, Section 2-A of the Payment of Gratuity Act does not take into consideration a case where the services of the workmen were terminated for whatsoever reason and the said termination has not been set aside or withdrawn. In the instant case, it is sought to be pointed out that the workman was taken back in service on 6th June, 1983 and if, that be the case there has been no termination. However, there is an order of dismissal, dated 28th February, 1982. Whether the same was communicated to the employee will make no difference as subsequent events will show that the services of the employee were in fact terminated. The petitioner was one of those employees whose case was referred to the Industrial Court by the order of reference. The petitioner before the Industrial Court had moved an application admitting that he had been reemployed on 6th June, 1983 and that the company had agreed to pay him gratuity for the earlier part of the services put in by him. He in fact has availed of and received the gratuity paid to him without demur or protest. From the date on which he received the gratuity till the subsequent application there is no material to show that the workman protested and agreed to return the amount so paid on the ground that his services were never terminated.

       Even otherwise from the application moved before the Industrial Court to exclude his name from the reference it is mentioned that he had compromised the matter with the company and that the company has agreed to pay him gratuity and some other incidental benefits. This is important bearing in mind the language of Section 4 of the Payment of Gratuity Act. As pointed out earlier sub-section (6) of Section 4 of the Payment of Gratuity Act visualises a situation where the amount of gratuity can be deducted for reasons set out therein. In this case, the services of the workman were terminated for misconduct. If, the same fell within the sub-clause (6) then gratuity to that extent could have been forfeited. It is in the light of this that the compromise between the workman and the respondent mill has to be understood. If, this is taken into consideration, then clearly there has been termination of the services of the workman with effect from 28th February, 1982 and he had been freshly employed on 6th June, 1983. No material has also come on record to show that the petitioner had been taken back into service within the time stipulated on a compromise arrived at between the mill management and the recognised Union whereby if, the workman had resumed work on or before 31st May, 1983 in which case, the question whether there was in fact a dismissal would have arisen. On the facts of the case this material is not available not has it been so pleaded by the petitioner. Hence, the need of going into that question also does not arise.