The main legal point established in the judgment is the interpretation of the appropriate government under the Payment of Gratuity Act and the limitations on deductions from gratuity.

1. All the three writ petitions are filed by the same petitioner company, i.e. Cannannore Spinning and Weaving Mills, a unit of NTC (APKK&M) Ltd., at Palloor (Mahe) represented by its Manager (Personnel).

2. In the first writ petition, the petitioner management challenged an order of the Controlling Authority under the Payment of Gratuity Act, i.e. Labour Officer, Karaikal made in P.G.A.No.9/2007. By the impugned order, dated 7.5.2008, the first respondent Controlling Authority had rejected the preliminary objection raised by the management and directed them to appear for a further enquiry. Hence the petitioner has filed the writ petition. In the writ petition, initially notice of motion was ordered on 12.6.2008 and an interim stay was granted. Subsequently, it was admitted on 3.12.2008.

3. Thereafter, the same mill has filed two other writ petitions, challenging the order of the appellate authority under the Payment of Gratuity Act made in Appeal No.1 of 2006 and Appeal No.2 of 2006, dated 30.12.2008 confirming the order of the Controlling Authority made in P.G. Application No.3 of 2005 and P.G. Application No.4 of 2005, dated 15.12.2005. The contesting respondents in those two writ petitions, who are employees of the petitioner mill filed an application before the controlling authority for payment of gratuity on account of their retirement on superannuation from the mill. Apart from raising the very same preliminary objection regarding maintainability, even on merits, evidence was let in. The authority held that the delay in filing the application was reasonable and there was no jurisdiction on the part of the mill to effect various deductions including festival advance, attendance incentive advance, bonus advance, Cooperative Stores due and tour advance from the employee. The Act did not provide for any such deductions on gratuity especially in the light of Sections 13 and 14 of the Payment of Gratuity Act. As against the said order, appeals have been filed under Section 7(7) of the Payment of Gratuity Act before the appellate authority. An additional issue was raised, i.e. the mill was taken over by the Sick Textile Undertakings (Nationalisation) Act, 1974 and further transferred to NTC with effect from 1.4.1974. As per Section 6 of the Nationalisation Act, the present NTC owned Subsidiary Textile Corporation, i.e. NTC (APKK&M) Ltd., having its registered office is at Bangalore. They are located in Andhra Pradesh, Karnataka, Kerala and Mahe. The mill is wholly owned and controlled by the NTC limited which is the Central Government Company. Therefore, the appropriate Government in respect of the petitioner mill is the Central Government. Hence, the Union Territory of Puducherry has no jurisdiction to deal with the same.

4. Before the appellate authority, objections raised were twofold. The first was that under Section 2(a)(i), the appropriate Government means in relation to an establishment belonging to or under the control of the Central Government, it is the Central Government which is the appropriate authority and in any other case, it is the State Government. The first submission was that the NTC (APKK&M) Ltd. is an establishment belonging to or under the control of the Central Government. Therefore, the official respondent constituted by the Administrator of the Union Territory cannot be the authority.

5. The second argument was that even if it is not an establishment belonging to or under the control of the Central Government and in such case, it is only the State Government which can notify the authorities under the Act. But Union Territory of Puducherry cannot be considered to be the State Government. Reliance was placed upon a judgment of the Supreme Court in Goa Sampling Employees' Assn. v. General Superintendence Co., reported in AIR 1985 SC 35. The authority had rejected the said condition and held that under Article 239A read with Section 3(8) of the General Clausea Act, the Administrator of the Union