2010 Supreme(Mad) 4104
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE T.S. SIVAGNANAM
S.P. Ganesan
Versus
The Management of Ashok Leyland & Another
W.P. Nos. 11157 & 11158 of 2003
Decided On : 16-09-2010
For the Petitioner:K. Shanmugakani, Advocate.
For the Respondents:R1 - R. Sanjay Mohan for M/s S. Ramasubramanian Associates, Advocates, R2 – Mrs. M. Sneha, G.A.
Headnote:
Payment of Gratuity Act - Calculation of Gratuity - 2(a) of the Payment of Gratuity Act - S.ARUNACHALAM Vs. THE MANAGING DIRECTOR, SOUTHERN STRUCTURALS, PATTABIRAM, MADRAS - AIR 1980 SCC 1944 [D.W.MILLS LTD., Vs. M.P.BUCH] - 1981 (1) LLJ page 86 - [KEYWORD] - Calculation of Gratuity - 2(a) of the Payment of Gratuity Act, S.ARUNACHALAM Vs. THE MANAGING DIRECTOR, SOUTHERN STRUCTURALS, PATTABIRAM, MADRAS, AIR 1980 SCC 1944 [D.W.MILLS LTD., Vs. M.P.BUCH] - 1981 (1) LLJ page 86 - The court discussed the computation of gratuity, the period of service, and the quantum of wage to be taken for the computation of gratuity. It interpreted section 2(a) of the Payment of Gratuity Act and considered relevant case law to determine the total length of service and the wage to be used for the gratuity calculation. The court emphasized the importance of considering the entire period of service and the need to adopt a reasonable and pragmatic approach in interpreting labor welfare legislation. The court also highlighted the duty to interpret statutes with social welfare benefits in a way that furthers the statutory goal and protects the rights of the weaker sections of society.
Fact of the Case:
The petitioner sought to quash an order related to the calculation of gratuity under the Payment of Gratuity Act, 1972. The petitioner argued that the total length of service and the wage used for the gratuity calculation were incorrectly determined. The petitioner contended that the period of service should be calculated from the date of the first appointment and that the last drawn wage was not properly considered. The first respondent Management disputed the petitioner's claims.
Finding of the Court:
The court found that the total length of service should be counted from the date the petitioner joined the employment, resulting in a total of 33 years of service. The court also determined that the wage bill produced by the petitioner should have been considered, and the wage for the computation of gratuity should be Rs.8,077 per month. The court emphasized that the claim for gratuity should not be thwarted on technical grounds and highlighted the duty to interpret statutes with social welfare benefits in a way that protects the rights of the weaker sections of society.
Issues: The issues involved the calculation of the total length of service and the quantum of wage to be used for the computation of gratuity.
Ratio Decidendi: The court held that the total length of service should be counted from the date the petitioner joined the employment, resulting in a total of 33 years of service. The court also determined that the wage bill produced by the petitioner should have been considered, and the wage for the computation of gratuity should be Rs.8,077 per month. The court emphasized the duty to interpret statutes with social welfare benefits in a way that protects the rights of the weaker sections of society.
Final Decision: The Writ Petition was allowed, the order passed by the second respondent was set aside, and the respondents were directed to re-compute the gratuity payable to the petitioner by calculating the daily wage by taking the monthly wage as Rs.8,077 and the total length of service as 33 years.
1. The prayer in the Writ Petitions are for issuance of a writ of certiorari to quash the order passed by the second respondent in P.G. Appeal Nos.53 & 29 of 2002 dated 31.1.2003. The matter arises under the Payment of Gratuity Act, 1972.
2. The case of the petitioner is that he joined the services of the first respondent company on 23.6.1965 as Trade Trainee and his services were regularised on 1.11.1996 and he attained the age of supper annuation on 30.4.1998 in the post of highly skilled road Tester and his last drawn wage was Rs.8,899/- per month. The first respondent Company calculated the total number of years of service as 31 years and it is the case of the petitioner that the total length of service rendered by him is 32 years and 10 months which is to be rounded off to 33 years and therefore his wages were not properly calculated. If the total length of service is taken as 33 years and taking into consideration his last drawn wage as 8,899/-, the petitioner would get higher amount of gratuity in terms of the following calculation:
8899 z 342 x 15 x 33= Rs.1,69,290.00
Paid= Rs.1,32,279.00
Rs. 37,011.00
3. The petitioner is stated to have made representation for payment of the shortfall in gratuity and since no favourable orders were passed, he submitted a Claim Petition before the Payment of Gratuity Authority. The authority by its order dated 26.12.2001 partly allowed the petitioners Application and directed that the total length of service should be taken as 32 years. Against such order, the petitioner filed an appeal before the second respondent. The first respondent Management also filed an appeal to the second respondent against the order of the original authority. Both the appeals were heard and the second respondent dismissed the appeal by an order dated 31.1.2003. Aggrieved by such order, the petitioner is before this Court by way of the present Writ Petition.
4. The learned counsel for the petitioner would contend that the petitioners total length of service ought to have been calculated from the date of the first appointment i.e. 23.6.1965 and if the same is taken, the total length of service will be 33 years. The Payment of Gratuity Authority though partly accepted the plea, failed to give the full benefit of 33 years, but, erroneously concluded that the total length of service is only 32 years. Further, the learned counsel would submit that the petitioner had produced the pay slip for the month of April 1998 before the authority and without considering the said document, the wage calculation was made and therefore the order of the authority is erroneous.
5. It is further contended by the learned counsel that while filing an appeal before the second respondent a specific ground was raised stating that the petitioner had produced the last drawn wage bill, but the authority had given a finding as if no document was produced. Therefore, the learned counsel would submit that the second respondent ought to have been addressed the specific question raised by the petitioner as regards the computation of the wages paid to the petitioner.
6. The learned counsel would submit that the period of service rendered as Trade Trainee cannot be ignored by the authorities while computing the gratuity and in support of his contention, the learned counsel relied on the decision of this Court in (2001) 3 MLJ 382 [S.ARUNACHALAM Vs. THE MANAGING DIRECTOR, SOUTHERN STRUCTURALS, PATTABIRAM, MADRAS]. Further, the learned counsel by placing reliance on the decision of the Honble Supreme Court in AIR 1980 SCC 1944 [D.W.MILLS LTD., Vs. M.P.BUCH] would submit that wages for 26 working days has to be treated as monthly wages and this decision of the Honble Supreme Court has also been followed by this court in the decision reported in 1981 (1) LLJ page 86. Therefore, the learned counsel submits that the order passed by the second respondent calls for interference.
7. The learned counsel appearing for the first respondent Mana