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2016 Supreme(Guj) 1567

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
C.L. Soni, J.
Baroda Rayon Corporation Ltd. and Ors. - Appellants
Vs.
Shantilal Prabhubhai Patel and Ors. - Respondent
Special Civil Application Nos. 1833, 4621 of 2014, 11179 to 11229 of 2016 and 4667 to 4700 of 2008
Decided On : 08-08-2016

Advocates Appeared:
For Appellant :Mohir Joshi, Senior Advocate and K.B. Naik, Advocate for Trivedi & Gupta, Advocate
For Respondents:Prabhakar Upadyay, Advocate

Vigilance and timely action are crucial in seeking legal remedies, and a party's conduct in asserting its rights can impact its ability to invoke the jurisdiction of the Court under Article 226 of the Constitution.

Headnote:

Gratuity - Payment of Gratuity - Act, 1972 - Summary of Acts and Sections

Fact of the Case:

The Company filed petitions challenging orders for payment of gratuity to its employees under the Payment of Gratuity Act, 1972. The petitions were grouped into three categories based on the stage of the proceedings and the nature of the orders challenged.

Finding of the Court:

The Court found that the Company had not availed the statutory remedy of appeal within the prescribed time limit and had delayed challenging the orders of the controlling authority for 7 to 9 years. The Court held that the Company's conduct did not justify invoking the jurisdiction under Article 226 of the Constitution directly against the orders of the controlling authority.

Issues: The Court considered whether the Company could challenge the orders of the controlling authority after long delay and whether the extraordinary circumstances pointed out by the Company justified invoking the jurisdiction under Article 226 of the Constitution.

Ratio Decidendi: The Court held that a party who is not vigilant in asserting its rights cannot be permitted to invoke the jurisdiction of the Court under Article 226 of the Constitution. The Court also emphasized the importance of timely action and vigilance in seeking legal remedies.

Final Decision: The Court rejected the petitions challenging the orders of the controlling authority and disposed of the remaining petitions, partly allowing them and remitting the matters to the appellate authority for fresh consideration.

JUDGMENT :

C.L. Soni, J.

1. All these petitions are filed by one employer - the Company questioning the orders made for payment of gratuity to its employees - private respondent in each matter under the Payment of Gratuity Act, 1972 ("the Act").

2. For the sake of convenience, the petitions could be considered in three groups. Special Civil Application NO. 1833/2014 and Special Civil Application No. 4261 of 2014 will make first group. Special Civil Application No. 11179 of 2016 to 11229 of 2016 will be referred to as second group and Special Civil Application No. 4661 of 2008 to Special Civil Application No. 4770 of 2008 will be referred as third group. The matters of the first group are at the notice stage. The matters in second group are fresh one page petitions. The matters of the third group were admitted long back and placed for final hearing. Final arguments were heard in all matters as they were listed on the same day.

3. In third group of the matters, the orders passed by the appellate authority under the Act for payment of gratuity are challenged. However, in first and second group of the matters, the orders of the controlling authority under the Act are straightway challenged without first availing the remedy of statutory appeal before the appellate authority under the Act. Therefore, in these groups of matters, the Court may require to consider whether the Company could be permitted to straightway challenge the orders of the controlling authority after long delay of 7 years and 9 years respectively.

4. Since it is pointed out that the foundation of the orders passed by the controlling authority which are impugned in the first and second group of the matters, is the decision of the appellate authority impugned in the third group of matters, the matters in the third group are first considered.

The Third Group of petitions - Special Civil Application No. 4667 of 2008 to Special Civil Application No. 4700 of 2008:

5. From amongst the matters of this group, learned Senior Advocate Mr. Mihir Joshi appearing with learned Advocate Mr. Naik for M/s. Trivedi & Gupta, Advocate for the petitioners states that since settlement is reached in Special Civil Application Nos. 4668/08, 4670/08, 4672/08, 4673/08, 4674/08, 4676/08, 4677/08, 4678/08, 4682/08, 4689/08, 4695/08, 4698/08 and 4699/08, he does not press for these petitions. They are, therefore, required to be disposed of as not pressed.

6. In each petition of this group, the order passed by the appellate authority in appeal preferred by the respondent against the order of the Controlling Authority under the Act for payment of gratuity is challenged. Dealing with the individual application, the Controlling Authority passed separate orders for payment of the gratuity to the respondent by holding that the gratuity amount as per the settlement with the union is more beneficial for the respondent under section 4(5) of the Act. The appellate authority, however, did not agree with the controlling authority and held that the petitioner shall be required to pay gratuity to the respondent within the ceiling limit of Rs. 3.5 lac instead of considering the ceiling of 20 months' wages as per clause 9.2(a) of the settlement of 1982. The appellate authority also held that for the services rendered prior to 31.12.2003, the gratuity shall be calculated by taking 100% wages and for the services rendered after 1.1.2004, 60% of the lastly paid wages shall be converted into 100% as per the settlement dated 27.10.2003.

7. Learned Senior Advocate Mr. Mihir Joshi submitted that the settlement for various demands including the demand for revising gratuity was arrived at between the union and the Baroda Rayon Corporation Ltd. (referred as "the employer-company") under section 18of the Industrial Disputes Act, 1947 ("the Act") and as per the said settlement, the petitioner agreed to provide more benefits of gratuity to its employees and such settlement was accepted and acted upon and many employees got benefits









































































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