AN INTERRUPTED SERVICE ON ACCOUNT OF STRIKE OR LOCK-OUT WITHOUT ANY FAULT OF THE EMPLOYEE IS NOT TREATED AS BREAK IN SERVICE AND THE EMPLOYEE IS DEEMED TO BE IN CONTINUOUS SERVICE EVEN IF THERE WAS INTERRUPTION IN THE SERVICE DUE TO THE CIRCUMSTANCES MENTIONED IN SECTION 2(A) OF THE PAYMENT OF GRATUITY ACT, 1972.

JUDGMENT :

R.M. LODHA, J.

The order dated 22.6.1994 passed by the appellate authority under the Payment of Gratuity Act, 1972 is subject matter of challenge in this writ petition filed at the instance of the petitioner. By the said order dated 2.6.1994 the appellate authority set aside the order passed by the 5th Labour Court on the application under Section 4 of the Payment of Gratuity Act, 1972 made by the petitioner. The appellate authority held that the petitioner is not entitled to difference of gratuity amount and is only entitled for interest at the rate of 12% per annum on the amount of Rs. 10,044/- from 17.1.1982 to 27.10.90.

2. The petitioner Shri Ramchandra Ganpat Dalvi (for short “employee”) made an application under Section 4 of the Payment of Gratuity Act, 1972 (for short “Act of 1972”) against the respondent M/s. Phoenix Mills Ltd. (for short “employer”). The case of the employee was that he was working with the employer in Winding Department since 24.2.1958. On 17.1.1982 there was strike in textile industry and as a result whereof he continued with the employer upto that date. On 3.3.1985 he was employed again with continuity of service and worked with the employer till 31.5.1992 when he resigned from his service. According to the employee he was paid gratuity amounting to Rs. 10,044/- by the employer though he was entitled to a further amount of gratuity of Rs. 28,992.50 as difference. The claim of the employee was contested by the employer by filing reply to the application and it was averred that the employee was first engaged in Roto Winding Department as substitute and made permanent on 1.8.1961 and, since then he worked continuously with the employer till 17.1.1982. The employer participated in illegal strike from 18.1.1982.

3. The case of the employer is that the employee did not report for work despite various appeals published in the newspapers and he was dismissed from service on 7.8.1982. It is the further case of the employer that the employee was re-employed at his request on 30.8.1985 as fresh employee and he accepted the said position and continued to work till 31.5.1992 when he resigned. According to the employer, the difference of Rs. 28,992.50 claimed by the employee was misconceived and untenable. In support of his case the employee examined himself and produced documents. It appears that no oral evidence was led by the employer. The controlling authority after recording the evidence and hearing the parties allowed the application made by the employee and held that he is entitled to Rs. 28,992.50 towards the difference in gratuity and is also entitled to simple interest at the rate of 12% per annum on the amount of gratuity from 18.7.1992 till payment was actually made. The order passed by the controlling authority on 24.1.1994 was challenged in appeal by the employer before the appellate authority. The appellate authority allowed the appeal, set aside the order passed by the Labour Court and it was held that the employee was not entitled to difference of gratuity amount as claimed. As observed above, the appellate authority, however, held that the employee was entitled for interest at the rate of 12% per annum on the amount of Rs. 10,044/- from 17.1.1982 to 27.10.1990.

4. The principal ground on which the appellate authority interfered with the order of the controlling authority was that the employee was out of service from 1982 to 1985 and thus there was break in service. On that basis the claim of the employee accepted by the controlling authority was set aside by the appellate authority.

5. There is no dispute that from 18.1.1982 there was a strike in the textile industry including the employer mill. The said strike was declared illegal by the Labour Court subsequently and the case of the employer is that despite the notices when the employee did not report to the duty, his services were terminated. There is no dispute that the employee was employed on 3.3.1985 by the employer. Though in reply