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2006 Supreme(Cal) 652
High Court Of Calcutta
Tapan Kumar Dutt, J.
INDIAN OIL PETRONAS PVT.LTD. - Appellant
Versus
REGIONAL LABOUR COMMISSIONER (CENTRAL) - Respondent
W. P. 7074 (W) Of 2005
Decided On : 09/27/2006
A.CHAUDHARY, A.GHOSH, D.PAL, R.TALUKDAR, S.SIL, U.P.Mukherji
The appropriate Government in relation to an establishment under the Payment of Gratuity Act, 1972 is the State Government, unless the establishment has branches in more than one State, in which case the Central Government is the appropriate Government.
Headnote:
PAYMENT OF GRATUITY ACT - APPROPRIATE GOVERNMENT - SECTION 2(A)(I) - BRANCHES IN MORE THAN ONE STATE - OILFIELD ESTABLISHMENT - Whether the petitioner company can be described to be an establishment having branches in more than one State and whether the petitioner company can be said to have an establishment of an oilfield. Held, no.
Fact of the Case:
The petitioner, a private limited company incorporated under the Companies Act, 1956, with its corporate office at Calcutta, challenged a notice issued by the Enforcement Officer (Central), Calcutta - II, alleging irregularities under the Payment of Gratuity Act, 1972 and Payment of Gratuity (Central) Rules, 1972. The petitioner contended that the notice was not issued by the competent authority as the State Government was the appropriate authority for the implementation of the Act.
Finding of the Court:
The court held that the petitioner's head office/corporate office at Kolkata and the unit at Haldia were separate establishments and that the State Government was the appropriate Government in relation to such establishments. The court further held that the petitioner did not have any establishment of an oilfield and that section 2(a)(i)(d) of the Act was not applicable to the facts and circumstances of the case.
Issues: 1. Whether the petitioner company can be described to be an establishment having branches in more than one State? 2. Whether the petitioner company can be said to have an establishment of an oilfield?
Ratio Decidendi: 1. The court held that the word "branch" has not been defined in the Payment of Gratuity Act, 1972, and that the dictionary meaning of the word cannot be interpreted to mean that either the corporate/head office at Calcutta or the unit at Haldia is a branch of the registered office at Delhi. 2. The court held that the word "establishment" has also not been defined in the Act and that the dictionary meaning of the word simply means a place where business is transacted. 3. The court held that the petitioner's head office/corporate office at Kolkata is an establishment by itself and that the appropriate Government in relation to such establishment is the State Government. 4. The court held that the petitioner does not have any establishment of an oilfield as defined in the Oilfields (Regulation and Development) Act, 1948, and that section 2(a)(i)(d) of the Payment of Gratuity Act, 1972 is not applicable to the facts and circumstances of the case.
Final Decision: The court set aside the notice dated 04.10.2004 and the order dated 01.03.2005, and held that the State Government was the appropriate Government for all purposes under the Payment of Gratuity Act, 1972 in respect of the petitioner's head office/corporate office at Kolkata and the unit at Haldia.
( 1 ) HEARD the learned Advocates for the parties.
( 2 ) THE writ petitioner's case is that the writ petitioner is a private limited company incorporated under the Cbmpanies Act, 1956 and the shareholders of the writ petitioner are M/s. Indian Oil Corporation Ltd. , a Government company, and M/s. Petroleum Nasional Berhad, Malaysia, a Malaysian government owned company and that such shareholders hold equity shares in the petitioner-company in equal proportion. The corporate office of the petitioner which is also its Head Office, is at Calcutta and the said corporate office does not have any branch in West Bengal or in any other State and the number of persons employed at the said corporate office has always been less than 10. The said corporate office/ head office is registered as an establishment under the provisions of West Bengal Shops and Establishments Act, 1963.
( 3 ) NOTICE dated 04. 10. 2004 was issued by the Enforcement Officer (Central), Calcutta - II against the petitioner alleging that certain irregularities were noted during an inspection of the petitioner's establishment at Kolkata under the Payment of Gratuity Act, 1972 and payment of Gratuity (Central) Rules, 1972 and the petitioner was asked to rectify the irregularities and report compliance and the petitioner was also asked to show cause to the Regional Labour Commissioner (Central) at kolkata as to why legal action should not be taken against the petitioner.
( 4 ) THAT challenging such notice dated 04. 10. 2004 the petitioner came up to this Hon'ble Court alleging that the said notice dated 04. 10. 2004 was not issued by the competent authority under the Payment of Gratuity Act, 1972. The petitioner's stand was that the "state Government" is the appropriate authority insofar as the implementation of the Payment of Gratuity Act is concerned. It appears that by order dated 05. 11. 2004 an Hon'ble Single Judge of this Court was pleased to observe that since it was a question of jurisdiction it should be initially decided by the respondent No. 3 (in the earlier writ petition) upon hearing the petitioner and a reasoned decision should be communicated to the petitioner. Thereafter, by an order dated 01. 03. 2005 the respondent No. l has held that the Central Government is the appropriate government under the said Act of 1972. Such order dated 01. 03. 2005 has been challenged in the present writ petition.
( 5 ) THE respondent No. l, it appears from the said order dated 01. 03. 2005, came to the conclusion that the Central Government is the appropriate government. The respondent No. l factually found that the company has its registered office at New Delhi, corporate office at Kolkata and also one factory at Haldia. The said respondent observed that the term
"establishment" has not been defined in the said Act of 1972 and as such he relied upon the Webster's Dictionary where, according to him, it has been defined as a place where a person is settled for residence or for transacting business and in the instant case the term "establishment" would mean the place for transacting any business, trade or profession or work connected with or incidental or ancillary thereto of the petitioner. The said respondent also considered section l (3) (b) of the said Act of 1972. The said respondent observed that the appropriate Government in relation to an establishment having branches in more than one State is the Central Government and that in the writ petitioner's case the petitioner is one legal entity and it has three locations-one in Delhi and the other two in West Bengal and for the purpose of calculation of the total strength of the establishment, employees' strength at all the three locations comes to 38. According to the said respondent "since the company is having different establishment in two different States i. e. (more than one State) it has to be treated as an establishment having branches in more than one State and automatically, it falls wi
