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1994 Supreme(Mad) 591
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE RAJU
M. S. N. Sundarampillai and Company - Appellant
Versus
N. Palaniswamy and Others - Respondents
W.P. Nos. 6964 of 1993, 96-101 and 182-187 of 1991
Decided On : 02 August 1994
The Payment of Gratuity Act, 1972 applies to beedi and cigar workers, even though their conditions of employment are governed by the Beedi and Cigar Workers (Conditions of Employment) Act, 1966.
Headnote:
PAYMENT OF GRATUITY ACT - APPLICABILITY TO BEEDI AND CIGAR WORKERS - SECTION 1(3)(B) - INTERPRETATION - SCOPE OF THE ACT - RELATIONSHIP WITH BEEDI AND CIGAR WORKERS (CONDITIONS OF EMPLOYMENT) ACT, 1966 - SECTION 38(2) - CONSTRUCTION.
Fact of the Case:
The petitioner, a beedi manufacturing company, challenged the applicability of the Payment of Gratuity Act, 1972 (Gratuity Act) to its establishment, claiming that it was not covered under any of the categories specified in Section 1(3) of the Act and that the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 (Beedi and Cigar Workers Act) exclusively governed the conditions of employment of its workers. The workers, on the other hand, contended that the Gratuity Act applied to the establishment based on the definition of "establishment" under the Tamil Nadu Shops and Establishments Act, 1947, and that Section 38(2) of the Beedi and Cigar Workers Act did not exclude the application of the Gratuity Act.
Finding of the Court:
The court held that the Gratuity Act applied to the petitioner's establishment, even though it was governed by the Beedi and Cigar Workers Act. The court interpreted Section 1(3)(b) of the Gratuity Act broadly, holding that it included any law in force in the state relating to shops and establishments, whether enacted by the state legislature or the central government. The court also held that Section 38(2) of the Beedi and Cigar Workers Act did not exclude the application of the Gratuity Act, as the Gratuity Act was not a law relating to the conditions of work of workers in shops or commercial establishments.
Issues: 1. Whether the Payment of Gratuity Act, 1972 applies to beedi and cigar workers? 2. Whether Section 1(3)(b) of the Gratuity Act includes laws enacted by the central government? 3. Whether Section 38(2) of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 excludes the application of the Gratuity Act?
Ratio Decidendi: 1. The court held that the Gratuity Act applies to beedi and cigar workers based on the following reasoning: - Section 1(3)(b) of the Gratuity Act refers to "any law for the time being in force in relation to shops and establishments in a State," which includes the Tamil Nadu Shops and Establishments Act, 1947. - The definition of "establishment" under the Tamil Nadu Shops and Establishments Act includes the petitioner's establishment. - Section 38(2) of the Beedi and Cigar Workers Act does not exclude the application of the Gratuity Act, as the Gratuity Act is not a law relating to the conditions of work of workers in shops or commercial establishments. 2. The court held that Section 1(3)(b) of the Gratuity Act includes laws enacted by the central government, as the provision does not distinguish between state and central laws.
Final Decision: The court dismissed the writ petitions filed by the petitioner, holding that the provisions of the Gratuity Act applied to the petitioner's establishment and that the workers were entitled to invoke the jurisdiction of the Controlling Authority under the Gratuity Act to seek relief.
D. Raju, J
1. This batch of writ petitions involves identical questions of law and the learned counsel on either side also made submissions in common, and therefore, requires to be considered together.
2. To appreciate the issues raised, the relevant facts in one of the writ petitions should be referred to W. P. No. 6964 of 1993 has been filed praying for the issue of a writ of mandamus forbearing the second respondent from proceeding further in PGIA No. 10 of 1993, the application filed by the first respondent claiming benefits under the provisions of the Payment of Gratuity Act, 1972 and the rules made thereunder.
3. The writ petitioner-Company claims that it is carrying on business in the manufacture and sales of beedies, that the beedi and cigar workers are governed by the Beedi and Cigar (Conditions of Employment) Act, 1966 and that the conditions of employment of beedi workers are of various types and most of them are home workers.It is also claimed that the Payment of Gratuity Act, 1972, was not made applicable to beedi and cigar workers till date and that as the definition of "establishment" stands, the provisions of the Payment of Gratuity Act (for short "Gratuity Act") will have no application.
4. In support of the claim made by the petitioner, that the first respondent is not entitled to invoke the jurisdiction of the second respondent - Assistant Commissioner of Labour, under the provisions of the Gratuity Act, it is stated in the affidavit as hereunder :
(a) The petitioner-Establishment cannot fall within any of the categories of establishments referred to in sub-clauses (a) and (b) of sub-section(3) of Section1 of the Gratuity Act. It is also contended that no such notification as contemplated under sub-clause (c) of sub-section(3) of Section1 of the Act has also been issued so far and consequently, on the terms of the very provisions contained in the Gratuity Act, the said Act will have no application to the beedi manufacturing establishment;(b) The establishment in question cannot be said to satisfy the requirements of sub-clause (b) of sub-section(3) of Section1 of the Gratuity Act, in that, according to the petitioner, the establishment in question will not fall within the meaning of "establishment" or "shop" within the meaning of any law for the time being in force with reference to shops and establishments in a State, and
(c) The provisions of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 alone applies to the establishment in question and having regard to Section38(2) of the said Act, nothing contained in any law relating to regulation of the conditions of employment of workers in shops or commercial establishments will apply to the establishments to which the said Act applies;
5. Learned counsel for the petitioner, L. Rajasekhar, has reiterated the above grounds urged in the affidavit filed in support of the writ petition and relied on some of the provisions of the Gratuity Act as also certain judgments rendered on the subject by different courts, to which reference will be made later.
6. Mr. R. Ganesan, learned counsel appearing for the workers concerned, contended that the subject matter is no longer res integra and that the matter is by now well settled by more than one decision of Bombay High Court and Andhra Pradesh High Court and that those decisions, which, according to the learned counsel for the workers, lay down the correct position of law require to be applied to the cases on hand.
7. Section1(3) of the Gratuity Act reads as hereunder :
"It shall apply to -
(a) every factory, mine, oilfield, plantation, port and railway company;
(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;(c) such other establishments or class of establishments, in which ten or more employees are employed, or wer
