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2019 Supreme(Del) 2389
IN THE HIGH COURT OF DELHI AT NEW DELHI
A.K. CHAWLA, J.
National Bal Bhawan - Petitioner
Versus
Vandana - Respondent
W.P.(C) 10027, 10050, 10056, 10058, 10059, 10060, 10066 of 2019 & CM APPL. 41509, 41579, 41590, 41594, 41597, 41600, 41612 of 2019
Decided On : 27-11-2019
For the Petitioner:Mr. S. Rajappa, Advocate with Mr. Ram Gupta and Mr.R. Gowrishankar, Advocates
The court emphasized the broad definition of 'employee' under the Act, 1972 and the statutory liability of gratuity, rejecting the petitioner's argument of exclusion based on funding and control.
Headnote:
Gratuity - Applicability of the Payment of Gratuity Act, 1972 - Section 7 (3A) - Section 2(e) - Section 2(s)
Fact of the Case:
The petitioner, National Bal Bhawan, challenged the order granting gratuity to its employees. The petitioner argued that the employees were excluded from the Act, 1972 as they were deemed to hold a post under the Central Government. The court rejected this argument and emphasized the relationship of employer and employee between the petitioner and the respondents.
Finding of the Court:
The court dismissed the writ petitions and ordered the petitioner to pay costs. It extended the time to release the gratuity for two weeks.
Issues: Applicability of the Act, 1972 to the employees of National Bal Bhawan and the denial of gratuity to long-serving employees.
Ratio Decidendi: The court held that the employees were covered within the purview of the Act, 1972 as there was an employer-employee relationship and the Act did not exclude specific categories of employees. The court also emphasized the statutory liability of gratuity under the Act, 1972.
Final Decision: The writ petitions were dismissed, and the petitioner was ordered to pay costs. The time to release the gratuity was extended for two weeks.
JUDGMENT :
A.K. CHAWLA, J.
The instant seven (07) writ petitions have come to be preferred by the petitioner–National Bal Bhawan assailing the order dated 11.02.2019 passed by the Assistant Labour Commissioner (Central), Delhi, whereby, the petitioners have been granted gratuity of Rs.2,21,538/-, Rs.1,84,038/-, Rs.8,827/-, Rs.2,35,386/-, Rs.1,90,385/-, Rs.2,28,462/-& Rs.2,35,385/-respectively, along with simple interest @ 10% p.a. as provided for under Section 7 (3A) of the Payment of Gratuity Act, 1972 in short, 'the Act, 1972'.
2. In view of the fact that a common question of law as regards the applicability of the Act, 1972 is agitated, all the petitions are taken up for hearing together.
3. In the submissions of Mr. Rajappa, ld. counsel for the petitioner, the petitioner is entirely funded by the Ministry of Human Resource and Development and therefore, it falls within the definition of State as enshrined under Article 12 of the Constitution. It is thus contended that the respondents are deemed to hold a post under the Central Government and thereby, excluded from the category of the employees to whom the Act, 1972 applies. The thrust of his submissions is founded on the definition of employee as provided for under Sub-Section (e) of Section 2 of the Act, 1972.
4. Sub-Section (e) of Section 2 of the Act, 1972 reads as follows:
“2(e) “employee” means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.”
(emphasis supplied)
5. When Mr.Rajappa adverts to the foregoing definition of employee as provided for under the Act, 1972, on being queried during the course of hearing, he is at pains to explain the context in which the post held by the respondents can be construed to be a post under the Central Government. More so, when, undisputedly, the petitioner is a society registered under the Societies Registration Act, 1860 and an autonomous body. Mere funding or assuming, entire funding for running the affairs of such society, cannot change the character or identity of the Society being an independent autonomous body. How come then, rendering of services to such autonomous body by the respondents be construed to be a post under the Central Government, Mr.Rajappa, ld. counsel for the petitioner, is at pains to explain. In plain words, the respondents cannot be said to be holding a post under the Central Government. They are also not shown to be governed by any other Act or by any Rules providing for payment of gratuity. In the given factual conspectus, how can the respondents be said to be excluded from the applicability of the Act, 1972 adverting to the definition of 'employee' as defined in Sub-Section (e) of Section 2 of the Act, 1972, cannot be understood. It does not appear that Mr. Rajappa did not understand such simple way of looking at the given provision. He seems to be constrained by the instructions to have a decision on merits by the Court. His difficulty can be understood being a counsel with a limited brief. I am constraint to observe so, in view of the fact that at the threshold of the matter coming up for hearing, the Court had expected the petitioner to look into the given context and reconsider.
6. In the written submissions filed on behalf of the petitioner, the reliance is placed upon the observations made in ‘Ajay Hasia etc. vs. Khalid Mujib Sehravardi & Ors.’ to contend that when the Central Government has control on the working of the society, it is merely a projection of the Government inasmuch as i
