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High Court Of Madhya Pradesh
C. K. PRASAD
SECRETARY, BOARD OF SECONDARY EDUCATION AND TEACHERS TRAINING - Appellant
Versus
SUNIL KUMARLAL - Respondents
W. P. 3404 Of 1996
Decided On : 08/31/1999
PAYMENT OF GRATUITY ACT - SECTION 1(3)(B), 2(4)(A), 2(8) - M.P. SHOPS AND ESTABLISHMENTS ACT - SECTION 2(4)(A), 2(8) - M.P. SOCIETIES REGISTRATION ACT - SECTION 3(A) - Whether the provisions of the Payment of Gratuity Act apply to a Society registered under the M.P. Societies Registration Act, 1973.
Fact of the Case:
Petitioners, Societies registered under the M.P. Societies Registration Act, 1973, run schools in which respondents are employed. After superannuation, respondents were not paid gratuity. They filed applications under the Payment of Gratuity Act, 1972, and the Controlling Authority directed payment of gratuity. Petitioners challenged this order, arguing that the provisions of the Act do not apply to them as they are not registered under the M.P. Societies Registration Act, 1959.
Finding of the Court:
The Court held that the reference to the M.P. Societies Registration Act, 1959 in Section 2(4)(a) of the M.P. Shops and Establishments Act, 1958 should be read to mean the M.P. Societies Registration Act, 1973, which repealed the 1959 Act. Therefore, the petitioners' Society, being registered under the 1973 Act, is a 'commercial establishment' within the meaning of Section 2(4) of the M.P. Shops and Establishments Act and, hence, an 'establishment' under Section 2(8) of the Act. Consequently, the provisions of the Payment of Gratuity Act apply to the petitioners.
Issues: Whether the provisions of the Payment of Gratuity Act apply to a Society registered under the M.P. Societies Registration Act, 1973.
Ratio Decidendi: The Court interpreted Section 1(3)(b) of the Payment of Gratuity Act, Section 2(4)(a) and 2(8) of the M.P. Shops and Establishments Act, and Section 3(A) of the M.P. Societies Registration Act. It held that the reference to the M.P. Societies Registration Act, 1959 in Section 2(4)(a) of the M.P. Shops and Establishments Act should be read to mean the M.P. Societies Registration Act, 1973, which repealed the 1959 Act. Therefore, the petitioners' Society, being registered under the 1973 Act, is a 'commercial establishment' within the meaning of Section 2(4) of the M.P. Shops and Establishments Act and, hence, an 'establishment' under Section 2(8) of the Act. Consequently, the provisions of the Payment of Gratuity Act apply to the petitioners.
Final Decision: The Court dismissed the writ petitions, holding that the provisions of the Payment of Gratuity Act apply to the petitioners and their employees are entitled to payment of gratuity under the Act.
( 1 ) ALL these writ petitions have been directed to be heard together. In all the writ petitions filed under Art. 227 of the Constitution of india, petitioners pray for quashing of the order of the Controlling Authority under the Payment of Gratuity Act, 1972 whereby it has held that the provisions of the Payment of Gratuity Act apply to the petitioners and their employees are entitled to payment of gratuity under the said act.
( 2 ) ALTHOUGH various points have been raised in the writ petitions, but at the time of hearing Mr. Gupta appearing on behalf of the petitioners raises only one point i. e. the petitioners-Society being registered as Society under the M. P. Societies Registration Act, 1973 and not under the M. P. Societies registration Act, 1959, the provisions of the payment of Gratuity Act is not attracted. Hence, petitioners are not liable to make payment of the gratuity amount, nor the respondents are entitled to the same.
( 3 ) IN view of the aforesaid submission, it is inexpedient to give in detail the facts of the case. Petitioners are Societies registered under the M. P. Societies Registration Act, 1973. They run schools in which respondents are employed. After they superannuated from service, they were not paid the gratuity amount. They filed application for grant of gratuity before the Controlling Authority under the payment of Gratuity Act, 1972. Controlling authority under the Payment of Gratuity Act, acceded to the prayer of employees and directed for payment of gratuity amount as also interest thereon. Petitioners aggrieved by the same, have preferred these writ petitions under art. 227 of the Constitution.
( 4 ) SHRI Gupta appearing on behalf of the petitioners submits that the provisions of payment of Gratuity Act, 1972 are to 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. He submits that in the State of Madhya Pradesh, law in relation to shops and establishments is the M. P. Shops and Establishments Act, 1958. According to Mr. Gupta Sec. 2 (8) of the M. P. Shops and Establishments Act defines establishment which means commercial establishments, shops etc. The expression "commercial establishment" has been defined under Sec. 2 (4) of the M. P. Shops and establishments Act to mean an establishment which carries on any business, trade or profession and includes a Society registered or deemed to have been registered under the madhya Pradesh Societies Registration Act, 1959. Accordingly, it is the stand of Shri Gupta that as the petitioners' Society is not registered under the M. P. Societies Registration Act, 1959, but under the M. P. Societies Registration act, 1973, it is not a commercial establishment and once it is held so, the provision of Sec. 1 (3) (b) of the Payment of Gratuity Act shall not be attracted. He further submits that the petitioners' Establishment could have been brought under the purview of Payment of gratuity Act, by issuance of notification, by the central Government as required under Sec. 1 (3) (c) of the Payment of Gratuity Act.
( 5 ) SHRI H. N. Vyas, however, appearing on behalf of the respondent-employees submits that reference of M. P. Societies Registration act, 1959 in Sec. 2 (4) (a) of the M. P. Shops and Establishments Act, 1958 will mean M. P. Societies Registration Act, 1973 which has repealed M. P. Societies Registration Act, 1959. According to his submissions, reference of M. P. Societies Registration Act, 1959 in sec. 2 (4) (a) in M. P. Shops and Establishments act has to be read to mean Madhya Pradesh societies Registration Act, 1973 as it has repealed M. P. Societies Registration Act, 1959.
( 6 ) IN view of the rival submission it is apt to reproduce the relevant provisions of law. Section 1 (3) (b) and (c) of the Payment of gratuity Act, 1972 read as follows: sec. 1. "short title, extent, application and commencement, (1) and (2) (3) It shall apply to
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