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In the High Court of Madras
Elipe Dharma Rao, D. Murugesan and M. Venugopal, JJ.
E. Gopal - Appellant;
Versus
Arulmigu Dhandayuthapaniswamy Temple, Palani. - Respondents.
AND
D. Renganathan - Appellants;
Versus
The Commissioner, H.R. & C.E. Administration and 2 others - Respondents.
AND
Arulmighu Sankaranarayanaswamy Devasthanam, Sankarankovil - Appellant;
Versus
S. Srinivasan, Legal Heir of S. Alamelu Ammal. - Respondents.
W.A. Nos. 3825 of 2003, 993, 994 & 2040 of 2004 and W.P. No. 15497 of 2002 and connected M.Ps.
Decided On : September 17, 2012
Payment of Gratuity Act - Applicability to Religious Institutions - Section 1(3)(b) - Summary of Acts and Sections: The court considered the applicability of the Payment of Gratuity Act to a Religious Institution/Temple in light of the law laid down by the Honourable Supreme Court in State of Punjab v. Labour Court, Jullundur, 1980 (1) SCC 4 : 1981 (1) LLJ 354. The court examined the relevant statutory provisions contained in the Payment of Gratuity Act, 1972, and the Tamil Nadu Hindu Religious Institutions (Officers and Servants) Service Rules, 1964. The court also analyzed various decisions and observed that the term "establishment" under Section 1(3)(b) of the Payment of Gratuity Act would apply to non-commercial establishments, including Religious Institutions. The court further held that the Rules framed under the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959 were repugnant to the Central Act to the extent that they restricted the employees from enjoying the benefits of the Payment of Gratuity Act. The court also addressed the issue of entitlement to Gratuity when employees are paid Pension, citing relevant pronouncements of the Honourable Supreme Court. The court concluded that the employees would be entitled to the Payment of Gratuity under the Payment of Gratuity Act, notwithstanding the provisions of the Pension Rules. The court further noted the introduction of the Employees Provident Fund in the temples by the State Government and clarified that the issuance of the Government Order would not affect the entitlement of retired employees to Gratuity. The court resolved the doubts raised by the Division Bench and directed the matter to be listed for disposal.
Fact of the Case:
The court considered the applicability of the Payment of Gratuity Act to a Religious Institution/Temple in light of the law laid down by the Honourable Supreme Court in State of Punjab v. Labour Court, Jullundur, 1980 (1) SCC 4 : 1981 (1) LLJ 354. The court examined the relevant statutory provisions contained in the Payment of Gratuity Act, 1972, and the Tamil Nadu Hindu Religious Institutions (Officers and Servants) Service Rules, 1964. The court also analyzed various decisions and observed that the term "establishment" under Section 1(3)(b) of the Payment of Gratuity Act would apply to non-commercial establishments, including Religious Institutions. The court further held that the Rules framed under the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959 were repugnant to the Central Act to the extent that they restricted the employees from enjoying the benefits of the Payment of Gratuity Act. The court also addressed the issue of entitlement to Gratuity when employees are paid Pension, citing relevant pronouncements of the Honourable Supreme Court. The court concluded that the employees would be entitled to the Payment of Gratuity under the Payment of Gratuity Act, notwithstanding the provisions of the Pension Rules. The court further noted the introduction of the Employees Provident Fund in the temples by the State Government and clarified that the issuance of the Government Order would not affect the entitlement of retired employees to Gratuity. The court resolved the doubts raised by the Division Bench and directed the matter to be listed for disposal.
Finding of the Court:
The court found that the term "establishment" under Section 1(3)(b) of the Payment of Gratuity Act would apply to non-commercial establishments, including Religious Institutions. The court further held that the Rules framed under the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959 were repugnant to the Central Act to the extent that they restricted the employees from enjoying the benefits of the Payment of Gratuity Act. The court also addressed the issue of entitlement to Gratuity when employees are paid Pension, citing relevant pronouncements of the Honourable Supreme Court. The court concluded that the employees would be entitled to the Payment of Gratuity under the Payment of Gratuity Act, notwithstanding the provisions of the Pension Rules. The court further noted the introduction of the Employees Provident Fund in the temples by the State Government and clarified that the issuance of the Government Order would not affect the entitlement of retired employees to Gratuity.
Ratio Decidendi: The court held that the term "establishment" under Section 1(3)(b) of the Payment of Gratuity Act would apply to non-commercial establishments, including Religious Institutions. The court further held that the Rules framed under the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959 were repugnant to the Central Act to the extent that they restricted the employees from enjoying the benefits of the Payment of Gratuity Act. The court also concluded that the employees would be entitled to the Payment of Gratuity under the Payment of Gratuity Act, notwithstanding the provisions of the Pension Rules. The court resolved the doubts raised by the Division Bench and directed the matter to be listed for disposal.
Final Decision: The court directed the matter to be listed for disposal, having resolved the doubts raised by the Division Bench and clarified the applicability of the Payment of Gratuity Act to Religious Institutions, the entitlement of employees to Gratuity when paid Pension, and the potential conflict between the Rules framed under the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959 and the Central Act.
Elipe Dharma Rao, J.
Learned Division Bench has raised some doubt regarding the applicability of the ratio of a Division Bench decision of the Madras High Court in Tiruchendur Arulmigu Subramaniasamy Kovil Oivupetra Paniyalargal Sangam v. Executive Officer, Arulmigu Subramaniasamy Devasthanam, Tiruchendur, W.A. No. 2626 of 2002, dated 2.9.2008, in the light of the law laid down by the Honourable Supreme Court in State of Punjab v. Labour Court, Jullundur, 1980 (1) SCC 4 : 1981 (1) LLJ 354, which was followed by the earlier Division Bench in The Management of the SIET Women's College v. Mohamed Ibrahim, 1992 WLR 155, and referred the matter to a Larger Bench by observing as follows:
“20. The decision in W.A. No. 2626 of 2002 (supra) may have to be reconsidered afresh with regard to the construction of Section 1(3)(b) of the Act in the light of the law laid down in 1981 (1) LLJ 354 (supra) which has been followed by the earlier Division Bench in 1992 WLR 155 (supra). We are of the opinion that the matter should be heard and decided by a Larger Bench. Thereafter, the present Full Bench has been constituted by the Honourable the Chief Justice.”
2. The precise question to be answered is whether a “Religious Institution/Temple” will come within the purview of Section 1(3) of the Payment of Gratuity Act in the light of the law laid down by the Honourable Supreme Court in State of Punjab v. Labour Court, Jullundur, 1980 (1) SCC 4 : 1981 (1) LLJ 354. If this question is decided, the other related questions relating to applicability of Article 254(2) of the Constitution and whether the provisions of the Tamil Nadu Hindu Religious Institutions (Officers and Servants) Service Rules, 1964 in respect of payment of gratuity is repugnant to the provisions of the Payment of Gratuity Act, 1972, can be answered.
3. Before considering the aforesaid question, it would be appropriate to notice the relevant statutory provisions contained in the Payment of Gratuity Act, 1972, and the Tamil Nadu Hindu Religious Institutions (Officers and Servants) Service Rules, 1964.
3.1. The Payment of Gratuity Act, 1972 (39 of 1972) came into force on 16th September, 1972. In order to ensure uniform pattern of Payment of Gratuity to the employees throughout the country and to avoid different treatment to the employees of establishments, the Legislature thought it fit to enact a Central Law on the subject and that is how the Payment of Gratuity Act, 1972 came into existence.
3.2. The Statement of Objects and Reasons for enacting the Act was to provide for a Scheme for the Payment of Gratuity to employees engaged in factories, mines, oilfields, plantations, ports, Railway Companies, shops or other establishments and for matters connected therewith or incidental thereto. The Payment of Gratuity is a kind of retiral benefit like pension, provident fund, etc., and it is a gift, especially for services rendered or return for favours received. One should not forget that for the wage-earning population, when the worker becomes old or infirm, as security of income, the Payment of Gratuity assumes great importance. It is a gratuitous payment given to an employee on discharge, superannuation or death.
3.3. As per Section 1(3)(a), the Act shall apply to every factory, mine, oilfield, plantation, port and Railway Company. According to Section 1(3)(b), the Act shall apply to 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.
3.4. Section 2(e) defines “employee” means any person (other than an apprentice), who is employed for wages, whether the terms of such employment are express or implied, in any kind of work, manual of otherwise, in or in connection with the work of a factory, mine oilfield, plantation, port, Railway, Company, shop or other establishment, to which this Act applies,
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