Back
2023 Supreme(Online)(MP) 1207
HIGH COURT OF MADHYA PRADESH
Vivek Agarwal, J
Little World Higher Secondary School – Appellant
Versus
State of Madhya Pradesh – Respondent
WRIT PETITION No. 28813 of 2021 | WRIT PETITION No. 28809 of 2021 | WRIT PETITION No. 28814 of 2021 | WRIT PETITION No. 28817 of 2021 | WRIT PETITION No. 28819 of 2021 | WRIT PETITION No. 28820 of 2021 | WRIT PETITION No. 28821 of 2021 | WRIT PETITION No. 28823 of 2021 | WRIT PETITION No. 28826 of 2021 | WRIT PETITION No. 28831 of 2021
For the Appellants/Petitioners: Kishore Shrivastava, Sanjay Ram Tamrakar
For the Respondents: Aditya Ahiwasi
Educational institutions are covered under the Payment of Gratuity Act, 1972, following the 2009 retrospective amendment. Gratuity is a statutory retiral benefit, not a bounty, and claims cannot be rejected solely on the ground of delay in filing if the employee shows sufficient cause.
Headnote:(A) Payment of Gratuity Act, 1972 - Sections 2(e), 2(f) and 7(3A) - Payment of Gratuity (Madhya Pradesh) Rules, 1973 - Rules 7 and 10 - Eligibility of teachers for gratuity - Educational institutions fall under the ambit of the Act following the 2009 amendment effective from 03.04.1997 - Gratuity is a statutory retiral benefit and not a bounty or discretionary payment - Delay in filing applications for gratuity does not automatically invalidate a claim - Employer is liable for interest on delayed payment.
Facts of the case:
The petitioner, a private school, challenged the orders of the Controlling Authority directing payment of gratuity to its former employees. The petitioner argued that the Act of 1972 is inapplicable to educational institutions, that the claims were time-barred under the relevant Rules, and that the petitioner did not fall under the definition of an 'employer'.
Findings of Court:
The court held that educational institutions are covered under the Act following the 2009 amendment. It rejected the plea regarding the statute of limitations, noting that failure to present an application within the specified period does not invalidate the claim. The court emphasized that gratuity is a statutory right.
Issues: Whether educational institutions are covered under the Payment of Gratuity Act and whether the claims for gratuity were time-barred.
Ratio Decidendi: Gratuity is a form of deferred salary; once the Act is applicable (including to teachers via retrospective amendment), the employer cannot withhold payment or interest on technical grounds such as minor delays in filing the application.
Result: Writ petitions dismissed.
| Table of Content |
|---|
| 1. overview of the writ petitions and the impugned order regarding gratuity payment. (Para 1 , 2) |
| 2. arguments concerning limitation, non-applicability of the act, and maintainability of writ petitions. (Para 3 , 4 , 5 , 6) |
| 3. applicability of the gratuity act to educational institutions and definition of employer. (Para 7 , 8) |
| 4. gratuity is a statutory right and deferred salary, not a bounty, warranting mandatory interest upon delay. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16) |
These petitions coming on for orders this day, the court passed the following:
ORDER
This bunch of writ petitions are filed by the employer Little World Higher Secondary School being aggrieved of order dated 11.10.2021 passed by the Controlling authority under the Payment of Gratuity Act, 1972 and Assistant Labour Commissioner, Jabalpur Division, Jabalpur, directing the employer to make payment of the amount of gratuity along with interest at the rate of 10% for a period of one year.
2. Shri Kishore Shrivastava, learned Senior Counsel appearing for the petitioner submits that respondents were appointed on different dates with the petitioner institution. After having worked for different periods, either they resigned or attained the age of superannuation. It is submitted that some of the petitioners were deployed on contract basis for some time. These employees approached the Controlling authority seeking payment of gratuity but without considering various objections with regard to the applicability of the Payment of Gratuity Act, 1972 (hereinafter referred as to the "Act of 1972") and maintainability of the applications after a long gap, arbitrarily the learned Controlling authority under the Payment of Gratuity Act passed by the impugned order directing the petitioner to pay gratuity to the respondents with interest though there was delay in filing applications for payment of gratuity.
3. It is submitted that as per Rule 10 of the Payment of Gratuity (Madhya Pradesh) Rules, 1973 (hereinafter referred to as the "Rules of 1973"), approach of the learned Controlling authority is inappropriate, inasmuch as, it entertained time barred claims. Claimants-employees did not explain delay in approaching the learned Controlling authority for payment of gratuity and since no application for condonation of delay was filed, no order could have been passed without condoning the delay.
4. It is further submitted that provisions of the Payment of Gratuity Act, 1972 are not applicable to the institution of the petitioner though the definition of the 'employee' was given a wider scope w.e.f. 2009 but the petitioner institution does not fall within the ambit of employer as defined in the Act of 1972 and, therefore, the Act of 1972 has no application.
5. It is also submitted that availability of alternative remedy of filing appeal is no bar in exercise of writ jurisdiction under Article 226 of the Constitution of India especially when the petitioner is challenging the fact that it does not fall within the definition of 'employer' as defined in the Act of 1972 and, therefore, reliance is placed on the judgment of the Supreme Court in case of M/s Godrej Sara Lee Ltd. Vs. The Excise and Taxation Officer-Cum-Assessing Authority and others , 2023 0 Supreme (SC) 85.
6. Keeping in view the ratio of law laid down by the Supreme Court in M/s Godrej Sara Lee Ltd. (supra), despite objections by the respondents as to maintainability of the writ petitions in view of availability of alternate remedy, petitioner is not relegated to avail the said alternative remedy and this bunch of petitions is directly entertained, inasmuch as, petitioner has raised some vital issues as to the maintainability, etc. which needs to be answered herein under.
7. Shri Aditya Ahiwasi, learned counsel for the respondents, in his turn, submits that plea of petitioner being not covered under the definition of 'employer' is a bogey, inasmuch as, Supreme Court in case of Ahmadabad Pvt. Primary Tea
