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IN THE HIGH COURT OF PATNA, RANCHI BENCH
B. K. Roy and R.N. Pd., JJ.).
Employers in relation to the Management of Kargali Colliery of Central Coalfields Limited. - Petitioner
Employers in relation to the Management of Bokaro Colliery of Central Coalfields Ltd. - Petitioner
Employers in relation to the Management of Kathara Area and Jarangdih Colliery of Central Coalfields Ltd. - Petitioner
Employers in relation to the Management of Dhori Area of Central Coalfields Ltd. - Petitioner
Versus
The Regional Labour Commissioner (Central) Dhanbad and others. - Respondents in all the above cases.
Civil Writ Jurisdiction Case No. 1942 of 1992 (R) with Civil Writ Jurisdiction Case No. 1941 of 1992 (R) with Civil Writ Jurisdiction Case No. 2286 of 1992 (R) with Civil Writ Jurisdiction Case No. 2287 of 1992 (R)
Decided on : 30.6.1993
PAYMENT OF GRATUITY ACT, 1972 - APPLICABILITY - EMPLOYEES OF CENTRAL COALFIELDS LIMITED - OPTION TO CONTINUE SERVICE UNDER CORPORATION - ENTITLEMENT TO GRATUITY UNDER THE ACT - WAGES EXCEEDING CEILING LIMIT - RELAXATION OF CEILING LIMIT BY CIRCULAR AND AGREEMENT - EMPLOYEES ENTITLED TO GRATUITY UNDER THE ACT ON THE BASIS OF EXISTING LAW, CIRCULAR AND AGREEMENTS AT THE TIME OF SUPERANNUATION.
Fact of the Case:
Employees of Central Coalfields Limited, who were initially employed in State Collieries and opted to continue service under the Corporation on the same terms and conditions as applicable to Central Government employees, claimed gratuity under the Payment of Gratuity Act, 1972. The management of the collieries challenged the applicability of the Act to the employees and their entitlement to gratuity, arguing that they were Central Government employees and had exercised an option to be governed by Central Government service conditions.
Finding of the Court:
The court held that the employees were entitled to gratuity under the Payment of Gratuity Act, 1972. The court found that the employees had become employees of the Corporation with effect from 1.10.1956 and their past services under the Central Government were treated as continuous with the service under the Corporation. The court also found that the option exercised by the employees did not restrict them from obtaining gratuity under the Act. The court further held that the ceiling limit on wages prescribed under Section 2(e) of the Act had been relaxed by circulars and agreements, and therefore the employees were entitled to gratuity under the Act on the basis of the existing law, circulars, and agreements at the time of their superannuation.
Issues: 1. Whether the Payment of Gratuity Act, 1972 is applicable to employees of Central Coalfields Limited who opted to continue service under the Corporation on the same terms and conditions as applicable to Central Government employees? 2. Whether the employees are entitled to gratuity under the Act despite their wages exceeding the ceiling limit prescribed under Section 2(e) of the Act?
Ratio Decidendi: 1. The court held that the Payment of Gratuity Act, 1972 is applicable to employees of Central Coalfields Limited who opted to continue service under the Corporation on the same terms and conditions as applicable to Central Government employees. The court found that the employees had become employees of the Corporation with effect from 1.10.1956 and their past services under the Central Government were treated as continuous with the service under the Corporation. The court also found that the option exercised by the employees did not restrict them from obtaining gratuity under the Act. 2. The court held that the ceiling limit on wages prescribed under Section 2(e) of the Act had been relaxed by circulars and agreements, and therefore the employees were entitled to gratuity under the Act on the basis of the existing law, circulars, and agreements at the time of their superannuation.
Final Decision: The court dismissed the writ petitions filed by the management of the collieries, challenging the applicability of the Payment of Gratuity Act, 1972 to the employees and their entitlement to gratuity under the Act.
R. N. Prasad, J. - As common question of facts and law are involved in these cases, they were heard together and arc being disposed of by this common judgment.
2. In all the writ applications, the management of different collieries, namely, the Management of Kargali Colliery of Central Coalfields Limited; the Management of Bokaro Colliery of Central Coalfields Limited; the Management of Kathara Central Coalfields Limited; and the Management of Dhori Area of Central Coalfields Limited respectively are the petitioners and the respondents are their employees.
2. The petitioners in the aforesaid writ applications have prayed for quashing the order dated 18.6.1991 contained in Annexure 16 to the writ applications passed by the Assistant Labour Commissioner (Central Hazaribagh), respondent no. 2, the controlling authority, allowing the applications filed on behalf of the respondent-employees for payment• of additional amount of gratuity under the provisions of Payment of Gratuity Act, 1972 and the order dated 13.3.1992, 14.3.1992, 13.3.1992 and 12.3.1992 respectively contained in Annexure 18 to the writ applications passed by the Regional Labour Commissioner (Central), the appellate authority, respondent no. 1, confirming the order of the controlling authority.
3. The facts of the case are not in dispute. The respondent-employees were initially appointed in different collieries which were State Collieries belonged to the Government of India. The Government of India was the owner of those collieries and were managed departmentally. Actually those collieries belonged to British Railway Companies which were privately managed and were nationalised by the Government of India in the year 1930. The collieries were placed under the Ministry of Railway/Railway Board up to 31.5.1944 and thereafter under the department of Supply for some time and later under the department of Production, Government of India' up to 30.9.1956 for administration and management. Government of India established a Government company, namely, National Coal Development Corporation Limited, with effect from 1.10.1956. The State collieries and their various units were transferred to the said National Coal Development Corporation Limited with effect from 1.10.1956. Subsequently, the National Coal Development Corporation Limited was renamed as Central Coalfield Limited with effect from 1.11.1976. When the transfer of the State Collieries took place to National Coal Development Corporation Limited, the respondent-employees were given option vide Annexure 1 to the writ applications as to whether they would serve the Corporation on the same tenure, the same remuneration, the same seniority, the same terms and conditions and the same rights and privileges as to pension, leave, gratuity, provident fund and other matter, as would have been admissible to them and they continued to be in Government service. The respondent employees opted the option as mentioned above. The respondent-employees thereafter continued to work under the Corporation 'which was later on named as Central Coalfield Limited till their superannuation. They were paid all their post retirement benefits as per the Central Government rules. The respondent - employees after their superannuation filed an application under the provisions of the Payment of Gratuity Act, 1972, hereinafter referred to as 'the Act', claiming therein that they are entitled to higher amount of gratuity under the provisions of the Act.
4. The stand of the petitioner before the Controlling Authority, respondent no. 2, was that as the respondent-employees were Central Government employees and had opted to be governed by the service conditions as applicable to the Central Government employees and they have been paid whatever amount was due under the said service conditions, they cannot claim any further amount of gratuity under the provisions of the Act, and also that they were not employees within the meaning of the provisions of the
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