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IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
Union Of India - Appellant
Versus
Ramesh Chand - Respondent
W.P. (C) No. 6115 of 2021, 6130 of 2021, 6128 of 2021, 6123 of 2021, 6122 of 2021
Decided On : 06-07-2021
Payment of Gratuity Act - Challenge to Appellate Authority's order - Sections 2, 3, 4 - The court remanded the matters back to the Appellate Authority under the Payment of Gratuity Act, 1972, to adjudicate the issue of jurisdiction raised by the Union of India considering the legal position as held in Union of India v. Manik Lal Banerjee (supra). The recovery notice was stayed, subject to the workmen being paid the admitted amount of 50% of the muster roll period, in terms of the CCS (Pension) Rules, 1972. The Appellate Authority was directed to adjudicate the matter on or before 31st October, 2021.
Fact of the Case:
The case involved a batch of five writ petitions challenging the order passed by the Appellate Authority under the Payment of Gratuity Act, 1972. The employees claimed entitlement to 100% gratuity amount even during the time they were temporarily appointed, while the Union of India argued for only 50% of the muster roll period, in terms of the CCS (Pension) Rules, 1972.
Finding of the Court:
The court remanded the matters back to the Appellate Authority to adjudicate the issue of jurisdiction raised by the Union of India and directed the stay of the recovery notice, subject to the workmen being paid the admitted amount of 50% of the muster roll period, in terms of the CCS (Pension) Rules, 1972. The Appellate Authority was directed to adjudicate the matter on or before 31st October, 2021.
Issues: The issues included the applicability of the Payment of Gratuity Act, 1972 to Central Government employees and the entitlement of the employees to gratuity amount during their temporary appointment.
Ratio Decidendi: The court held that the issue of jurisdiction deserved to be considered by the Appellate Authority as it goes to the root of the matter itself. The court also emphasized the need for the Appellate Authority to adjudicate the matter on or before 31st October, 2021.
Final Decision: The court remanded the matters back to the Appellate Authority under the Payment of Gratuity Act, 1972, and directed the stay of the recovery notice, subject to the workmen being paid the admitted amount of 50% of the muster roll period, in terms of the CCS (Pension) Rules, 1972. The Appellate Authority was directed to adjudicate the matter on or before 31st October, 2021.
JUDGMENT
Prathiba M. Singh, J. - This hearing has been done through video conferencing.
CM APPL. 19382/2021 (for exemption) in WP(C) 6115/2021
CM APPL. 19394/2021 (for exemption) in WP(C) 6122/2021
CM APPL. 19397/2021 (for exemption) in WP(C) 6123/2021
CM APPL. 19407/2021 (for exemption) in WP(C) 6128/2021
CM APPL. 19411/2021 (for exemption) in WP(C) 6130/2021
2. Allowed, subject to all just exceptions. Applications are disposed of.
WP(C) 6115/2021 & CM APPLs. 19381/2021 & 19383/2021
WP(C) 6122/2021 & CM APPLs. 19393/2021 & 19395/2021
WP(C) 6123/2021 & CM APPLs. 19396/2021 & 19398/2021
WP(C) 6128/2021 & CM APPLs. 19406/2021 & 19408/2021
WP(C) 6130/2021 & CM APPLs. 19410/2021 & 19412/2021
3. These are a batch of five writ petitions which have been filed challenging the order passed by the Appellate Authority under the Payment of Gratuity Act, 1972.
4. The brief background is that the Respondents were employees who were initially appointed by the Petitioner in a temporary capacity but were thereafter regularised. All the employees are stated to have superannuated.
5. According to the employees, they are entitled to payment of 100% gratuity amount even during the time they were temporarily appointed. However, the case of the Union of India is that the employees are entitled to only 50% of the muster roll period, in terms of the CCS (Pension) Rules, 1972.
6. According to the Union of India, the entire pensionary benefits have already been paid to the employees. However, the employees have approached the Controlling Authority seeking payment of the gratuity amounts beyond what they are entitled to. The authority under the Payment of Gratuity Act, 1972, namely, the Assistant Labour Commissioner, Delhi has granted 100% amount of balance gratuity to the employees, even though they are not entitled to the same.
7. The order of the Controlling Authority dated 15th July, 2019 was challenged before the Appellate Authority, which has dismissed the same vide order dated 21st October, 2020, on the ground that the same was barred by limitation. This order is under challenge in these petitions.
8. The submission of Mr. Harish Kumar Garg, ld. counsel is that Central Government employees are not covered under the Payment of Gratuity Act, 1972, which is clear from a reading of Section 2(e) read with Sections 3 and 4 of the Act. He submits that Central Government employees would only be covered by the CCS (Pension) Rules, 1972 and not by the provisions of the Payment of Gratuity Act, 1972. Ld. Counsel further submits that the recovery notice in terms of the Controlling Authority's order has already been issued.
9. The issue relating to non-applicability of the provisions of the Payment of Gratuity Act, 1972 and the applicability of CCS Rules to the Respondents, has not been considered either by the Controlling Authority or the Appellate Authority. The Appellate Authority has simply rejected the appeal as being barred by limitation. A perusal of the Appeal filed shows that there is a specific ground that the Respondent is governed by the CCS Rules. The relevant provision of the Payment of Gratuity Act, 1972 is extracted below:
"Section 2. Definitions.
In this Act, unless the context otherwise requires, -
...
(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."
10. The Supreme Court in Union of India v. Manik Lal Banerjee, (2006) 9 SCC 643, in a case concerning an employee of the Railways, considered the applicability of Section 2(
The main legal point established in the judgment is the need for the Appellate Authority to adjudicate the issue of jurisdiction raised by the Union of India and the stay of the recovery notice, subj....
Point of Law : Section 2(e) of the Act reads as “employee” means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are expressed or implied, in any....
The appellate remedy under the Payment of Gratuity Act should be pursued, and the Act's applicability to an employee should be determined by the Appellate Authority.
Railway employees are exempt from the Payment of Gratuity Act, 1972, as per amendments and judicial interpretations, affirming that Railway Service (Pension) Rules govern their gratuity rights.
The Payment of Gratuity Act mandates that claims for gratuity be addressed first to the Controlling Authority, as it constitutes a complete code for such disputes.
The court affirmed the applicability of revised gratuity limits as per the Central Government notification and ruled that financial constraints do not exempt employers from timely payment of gratuity....
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