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2007 Supreme(Cal) 573

MR. JUSTICE PRANAB KUMAR CHATTOPADHYAY AND MR. JUSTICE ARUNABHA BASU
F.C.I. And Anr. - Appellant
Versus
Assistant Labour Commissioner (Central) And Ors. - Respondent
M.A.T. Nos. 880 of 2007
Decided on : 30-7-2007

ALC has jurisdiction to decide claims for payment of gratuity by counting prior service under Explanation 4 to Regulation 4(3) of the Regulations, as a claim for better terms under a contract protected under Section 4(5) of the Act.

Headnote:

PAYMENT OF GRATUITY ACT - SECTION 4(5) - EMPLOYEES' ENTITLEMENT TO BETTER GRATUITY TERMS UNDER CONTRACT PROTECTED - ALC JURISDICTION TO DECIDE CLAIM - DCRG REGULATIONS REDUNDANT - CIRCULAR DATED 21ST NOVEMBER, 1996 VALID - NO OPTION TO CHOOSE BENEFITS UNDER ACT AND REGULATIONS - REFUND OF GRATUITY RECEIVED FROM STATE GOVERNMENT NOT MANDATORY.

Fact of the Case:

Deputationists sent to FCI on option, entitled to gratuity under FCI (Death-cum-Retirement Gratuity) Regulations, 1967. FCI authorities paid gratuity for service with FCI, but deputationists claimed additional gratuity by clubbing State service, approached Assistant Labour Commissioner (Central) (ALC). ALC granted relief, FCI challenged in writ petitions, dismissed by Single Judge, appeals filed.

Finding of the Court:

ALC has jurisdiction to decide claim for payment of gratuity by counting prior service under Explanation 4 to Regulation 4(3) of the Regulations, as a claim for better terms under a contract protected under Section 4(5) of the Payment of Gratuity Act, 1972 (Act). DCRG Regulations became redundant after the 1994 Amendment of the Act, only better terms protected under Section 4(5) continue. Circular dated 21st November, 1996, issued by FCI authorities recognizing continued existence of favorable benefits including counting of prior service, is valid. No concept of two packages, option to choose either Act or Regulations benefits does not exist. Refund of gratuity received from State Government not a mandatory requirement.

Issues: Maintainability of writ petitions challenging ALC orders on ground of alternative remedy. Jurisdiction of ALC to decide claims for payment of gratuity by counting prior service under Explanation 4 to Regulation 4(3) of the Regulations. Validity of circular dated 21st November, 1996, issued by FCI authorities recognizing continued existence of favorable benefits including counting of prior service. Whether employees can choose benefits under both the Act and the Regulations.

Ratio Decidendi: ALC has jurisdiction to decide claims for payment of gratuity by counting prior service under Explanation 4 to Regulation 4(3) of the Regulations, as a claim for better terms under a contract protected under Section 4(5) of the Act. DCRG Regulations became redundant after the 1994 Amendment of the Act, only better terms protected under Section 4(5) continue. Circular dated 21st November, 1996, issued by FCI authorities recognizing continued existence of favorable benefits including counting of prior service, is valid. No concept of two packages, option to choose either Act or Regulations benefits does not exist. Refund of gratuity received from State Government not a mandatory requirement.

Final Decision: Appeals dismissed.

JUDGMENT

Pranab Kumar Chattopadhyay, J.

1. All these appeals were heard analogously as the facts are similar and th issues involved are also identical. The judgment under appeal has, in fact, been

passed by the learned Single Judge in W.P. No. 5354 (W) of 2005 whereby and

whereunder the learned Single Judge was pleased to dismiss the writ petition and

the appeal preferred from the said judgment under appeal dated March 2, 2007 has

been numbered as M.A.T. No. 812 of 2007.


2. Following the aforesaid judgment under appeal dated March 2, 2007 passed by the learned Single Judge in W. P. No. 5354 (W) of 2005 various other writ

petitions filed on identical grounds under similar facts were also disposed of

by the said learned Single Judge wherefrom several appeals have also been

preferred out of which these appeals were listed before this Bench and heard

analogously. Now, we dispose of all these appeals by this common judgment.


3. The writ petition bearing W.P. No. 5354 (W) of 2005 was filed challenging the order dated December 31, 2004 passed by the Assistant Labour Commissioner-

II(C), inter alia, contending that the said Assistant Labour Commissioner in the

context of the facts and provisions of law was not competent to embark upon

adjudication of the claim application of the employee concerned. It was further

contended in the said writ petition that the Assistant Labour Commissioner-

II(C) proceeded on an erroneous appreciation of facts and law.


4. On behalf of the respondent/employee, however, a preliminary objection was raised before the learned Single Judge regarding maintainability of the writ

petition on the ground of availability of alternative remedy and accordingly,

the learned Single Judge heard the concerned parties on the aforesaid issue

relating to the preliminary objection as to the maintainability of the writ

petition.


5. The facts mentioned in all these appeals in brief are as follows: The respondent/employees concerned were sent on deputation to the office of

the appellant/Food Corporation of India Authorities.

6. By a Circular No. 21 of 1984 the concerned deputationists if they so desired, were asked to give an option in terms of the said Circular. In para 3

of the said Circular it was clearly mentioned that the F.C.I, will not bear any

liability in respect of the service rendered prior to the date of permanent

absorption in the service of the Corporation. In para 2(i) it was also mentioned

that the employees who opt for absorption will be treated as direct recruits.


7. The concerned deputationists duly consented to and endorsed on the said option accepting the terms of the said Circular 21 of 1984 and were absorbed

with the appellant authority with effect from 1st July, 1984.


8. According to the appellants, after absorption the concerned employees were covered by the F.C.I. (Death-cum-Retirement Gratuity) Regulations, 1967 but

Regulation 2 of the said Regulations clearly stipulated that the Regulations

shall not apply to the employees who are covered by the provisions of the

Payment of Gratuity Act, 1972.


9. It has been submitted on behalf of the appellants that Regulation 4(3)Explanation 4 provided that Qualifying service shall include service rendered in

the Govermnent provided that the amount of death-cum-retirement gratuity

received by him from the Government is deposited with the Corporation immediately on receipt of such gratuity after his absorption in F.C.I.


10. It has, also, been submitted on behalf of the appellants/ F.C.I. Authorities that the concerned deputationists were duly paid gratuity for the

period of service rendered by them with the Food Corporation of India with

effect from the date of absorption of the said deputationists that is with

effect from lst July, 1984 till the date of superannuation.


11. On behalf of the FCI Authorities it has been urged before this Court that the concerned deputationists purported to claim gratuity clubbing the period of

service rendered by them with the State of West Bengal and approached the

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