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2023 Supreme(Guj) 1275

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Mauna M. Bhatt, J.
Milton Industries Limited - Appellant
Vs.
Sajjankumar Natwarlal Rao - Respondent
Special Civil Application No.1427 of 2022
Decided On : 22-12-2023

Advocates:
Advocate Appeared:
For the Appellant : Mr. Dipak R Dave
For the Respondent: Ms Megha Chitalia Asst. Government Pleader, Mr. UT Mishra

Reinstated employees are entitled to gratuity for the entire period of service, including any intervening employment, recognizing continuity of service as affirmed by judicial precedents.

Headnote:(A) Payment of Gratuity Act, 1972 - Sections relating to eligibility for gratuity and continuity of service - Workman entitled to gratuity for entire period of service after reinstatement despite previous employment elsewhere; reinstatement recognized continuity of service - Dismissal of Letters Patent Appeal on non-prosecution irrelevant to reinstatement. (Paras 6, 7, and 8)

(B) Employment Law - Issues concerning termination and unauthorized cessation of work - Service counted from date of appointment to resignation, including the period of reinstatement - Previous claims for back wages did not negate gratuity entitlement. (Para 7)

Facts of the case:
Petitioner, a limited company, retrenched respondent workman due to department closure after working from 1991; workman challenged termination, and after court directives, was reinstated in 2014. Gratuity claimed for 28 years calculated on basis of last drawn salary leading to contested decisions by controlling and appellate authorities to validate gratuity.

Findings of Court:
Court affirmed continuous service from 28.11.1991 to 01.07.2019 for gratuity calculation, dismissing petition against controlling authority's decision as lawful.

Issues: Whether workman entitled to gratuity for entire service counting from 1991 to 2019, implications of previous employment, and effect of non-prosecution of appeal on reinstatement orders.

Ratio Decidendi: Court ruled that reinstatement granted by the Labour Court warranted continuity of service and upheld the decision of the controlling authority to grant gratuity; case law supported position that reinstated employees retain service continuity.

Result: Petition dismissed, with petitioner ordered to pay gratuity as directed.

Table of Content
1. factual background of employment and legal disputes (Para 2 , 3)
2. arguments from both sides regarding entitlement to gratuity. (Para 4)
3. arguments of the petitioner regarding gratuity entitlement (Para 5)
4. respondent's arguments supporting entitlement of gratuity (Para 6)
5. court's analysis on continuous service and entitlement (Para 7)
6. decision to dismiss petition and direct payment of gratuity (Para 8 , 9)

JUDGMENT :

1. Rule returnable forthwith. Mr.U.T.Mishra, learned Megha Chitalia, learned Asst. Government Pleader waives service of rule on behalf of respondent Nos.2 and 3.

2. This petition is filed challenging the order dated 07.09.2020, of Controlling Authority (respondent No.2) in Gratuity Case No.55 of 2019 and the order dated 29.06.2021 of the Appellate Authority (respondent No.3) in Appeal No.126 of 2020.

3. The facts in brief as stated in the petition are as under:

    (i) Petitioner is a Limited Company. Respondent No.1 – workman was working with the Company as a Maintenance Supervisor in Craft Department from 28.11.1991. It is case of the petitioner that since the Craft Department was closed and the work of supervisor was not required, the workman was retrenched after following due procedure w.e.f.15.04.1999.

    (ii) The workman raised Industrial Dispute before the Labour Court, Kalol which was registered as Reference (LCK) No.276 of 1999. Upon adjudication, the Labour Court by award dated 26.04.2004 directed the petitioner to reinstate the workman in service with 45% backwages.

    (iii) The award dated 26.04.2004, was challenged by the petitioner company by filing Special Civil Application No. 864 of 2005. This Court by decision dated 27.12.2012 in Special Civil Application No. 864 of 2005, modified the award and confirmed the order of reinstatement and quashed the direction of backwages. This Court further directed the petitioner to reinstate workman on the same or equivalent post within a period of one month.

    (iv) The workman was reinstated w.e.f. 24.02.2014.

    (v) Against the order of learned Single Judge, quashing grant of back wages, the workman preferred Letters Patent Appeal No.1146 of 2014 wherein this Court by order dated 29.01.2015 partly allowed the appeal and directed that the workman would be entitled to backwages by protection of his pay from 25.01.2013 till the actual reinstatement on 24.02.2014. The said amount was directed to be disbursed within a period of four weeks from the date of receipt of the order. Thus, the Letters Patent Appeal, was partly allowed.

    (vi) It was case of the petitioner that the workman was gainfully employed with Sadbhav Engineering Limited from 21.12.2006 and therefore preferred application seeking review/recall of the order dated 29.01.2015 in Letters Patent Appeal No.1146 of 2014 on the ground that incorrect statement on oath was made by the workman that he was not gainfully employed.

    (vii) Considering the averment in the application, by order dated 29.01.2015 the recall application was allowed, restoring Letters Patent Appeal to its original file. Upon restoration, the workman chose not to appear and Letters Patent Appeal was dismissed on the ground of non-prosecution by order dated 25.09.2018.

    (viii) The respondent workman after reinstatement tendered his resignation w.e.f 01.06.2019. Said resignation was accepted and he was relieved from service w.e.f. 14.06.2019. Upon resignation, he preferred application for payment of gratuity.

    (ix) The workman filed Form No. N claiming gratuity for a period of 28 years. His last drawn salary was Rs.6750/-. Thus, the total amount of gratuity came to Rs. 1,09,200/-. The petitioner appeared and filed their reply. The controlling authority directed the petitioner to pay the respondent workman gratuity of Rs.1,09,038/- along with interest @10% by order dated 07.09.2020.

    (x) Against the order dated 07.09.2020, the petitioner preferred appeal before the appellate authority and the appellate authority by order dated 29.06.2021 confirmed th

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