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IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR
VIVEK JAIN, J.
Cement Corporation Of India - Petitioner
Versus
Shri Shankar Das Bairagi And Others – Respondents
MISC. Petition No. 3996 of 2025 with MISC. Petition No. 3998 of 2025, MISC. Petition No. 4001 of 2025, MISC. Petition No. 4005 of 2025
Decided On : 06-01-2026
(1) Payment of Gratuity Act, 1972 -- S. 7(3) -- Payment of Gratuity (Central) Rules, 1972 -- R. 7(2) -- depriving employee from right of gratuity on ground of delay -- there is no limitation in Act -- limitation set up in Rules would not defeat substantive right of employee conferred upon him by Act -- claim of respondent workman could not have been defeated on ground of delay. Little World Higher Secondary School Writ Appeal No. 563 of 2023 relied on. [Paras 9 & 10]
(2) Payment of Gratuity Act, 1972 -- S. 7(3) -- Contract Labour (Regulation and Abolition) Act, 1970 -- S. 21(4) -- Payment of Wages Act, 1936 -- S. 2(vi) -- contractor not made party -- effect -- liability to pay gratuity cast upon contractor in contract between contractor agency and respondent employees -- contractor agency routinely replaced after every one or two years whereas respondents continued for more than 20 years -- gives rise to only one inference, that respondents were in fact working with petitioner and contract was only a camouflage -- contractor has not paid gratuity to respondents -- petitioner being principal employer under Act of 1970, cannot raise objection that in absence of impleading contractor, no order can be passed -- otherwise also, petitioner has right to recover payment of gratuity from contractor under Act of 1970 -- even if it is inferred that liability to pay gratuity fell on contractor, workmen cannot be non-suited for not impleading contractor -- provisions of labour laws are beneficial in nature and for that purpose, definition of wages under Act of 1936 is larger than mere salary and includes retiral benefits -- therefore, petitioner being principal employer under Act of 1970, was liable to pay “wages”, which included not only salary, but also retiral benefits. 2012 SCC Online Mad 5357 relied on. [Paras 13 to 15 & 20]
(3) Contract Labour (Regulation and Abolition) Act, 1970 -- Ss. 2(h) and 21(4) -- Payment of Wages Act, 1936 -- S. 2(vi) -- “wages” -- are not “salary” -- definition u/s. 2(vi) of Act of 1936 is very wide -- includes not only salary, but all remuneration, additional remuneration as well as any sum which becomes payable by reason of termination of employment under any law, contract, instrument, etc. -- dues of gratuity being dues which become payable on termination of employment, are covered within larger definition of “wages” as per S. 2(vi)(d) of Act of 1936. [Paras 16 to 18]
(4) Payment of Gratuity Act, 1972 -- S. 7(3A) -- interest -- it is mandatory for employer to pay interest on amount of gratuity from the date it becomes payable -- gratuity becomes payable from date of exit from employment and has to be paid within 30 days -- Controlling Authority has not erred in awarding interest from date of exit from employment till actual date of payment/deposit of gratuity. [Para 22]
¼1½ minku lank; vf/kfu;e] 1972 & /kkjk 7¼3½ & minku lank; ¼dsUæh;½ fu;e] 1972 & fu- 7¼2½ & foyac ds vk/kkj ij deZpkjh dks minku ds vf/kdkj ls oafpr djuk & vf/kfu;e esa dksbZ ifjlhek ugha & fu;eksa esa cukbZ xbZ ifjlhek ls vf/kfu;e }kjk deZpkjh dks çnÙk ewy vf/kdkj foQy ugha gksxk & çR;FkhZ deZdkj dk nkok foyac ds vk/kkj ij foQy ugha fd;k tk ldrk FkkA fjV vihy Øekad 563 lu~ 2023 voyafcrA ¼iSjk 9 ,oa 10½
¼2½ minku lank; vf/kfu;e] 1972 & /kkjk 7¼3½ & lafonk Je ¼fofu;eu vkSj mUewyu½ vf/kfu;e] 1970 & /kkjk 21¼4½ & etnwjh lank; vf/kfu;e] 1936 & /kkjk 2¼N%½ & Bsdsnkj dks i{kdkj ugha cuk;k & çHkko & Bsdsnkj vfHkdj.k vkSj çR;FkhZ deZpkjhx.k ds e/; lafonk esa minku ds lank; dk nkf;Ro Bsdsnkj ij Mkyk x;k & Bsdsnkj vfHkdj.k çR;sd ,d ;k nks o"kksZ esa uSfefÙkd :i ls çfjLFkkfir fd;k x;k tcfd çR;FkhZx.k 20 o"kZ ls vf/kd le; rd jgs & ,d gh fu"d"kZ fudyrk gS] fd çR;FkhZx.k okLro esa ;kph ds ikl dk;Zjr Fks rFkk lafonk Nn~ekoj.k ek= Fkh & Bsdsnkj us çR;FkhZx.k dks minku dk lank; ugha fd;k & lu~ 1970 ds vf/kfu;e ds v/khu ç/kku fu;kstd gksus ds dkj.k ;kph ;g vkifÙk ugha dj ldrk fd Bsdsnkj dks i{kdkj cuk, tkus ds vHkko esa] dksbZ vkns'k ikfjr ugha fd;k tk ldrk & vU;Fkk Hkh] ;kph dks lu~ 1970 ds vf/kfu;e ds v/khu Bsdsnkj ls minku ds lank; dh olwyh djus dk vf/kdkj gS & ;g fu"d"kZ fudky Hkh fy;k tk, fd minku ds lank; dk nkf;Ro Bsdsnkj dk Fkk] rc Hkh Bsdsnkj dks i{kdkj ugha cukus ds dkj.k deZdkjksa dk nkok [kkfjt ugha fd;k tk ldrk & Je fof/k ds mica/k Qk;nkçn ç—fr ds gSa rFkk bl ç;kstukFkZ lu~ 1936 ds vfèkfu;e ds v/khu etnwjh dh ifjHkk"kk osru ek= ls c`gÙkj gS vkSj mlesa lsokfuo`fÙk Qk;ns lfEefyr gSa & vr% lu~ 1970 ds vf/kfu;e ds v/khu ç/kku fu;kstd gksus ds dkj.k ;kph ^^etnwjh** lanÙk djus ds nkf;Rok/khu Fkk] ftlesa osru gh ugha vfirq lsokfuo`fÙk Qk;ns Hkh lfEefyr FksA 2012 ,llhlh v‚uykbu eækl 5357 voyafcrA ¼iSjk 13 ls 15 ,oa 20½
¼3½ lafonk Je ¼fofu;eu vkSj mUewyu½ vf/kfu;e] 1970 & /kkjk 2¼t½ rFkk 21¼4½ & etnwjh lank; vf/kfu;e] 1936 & /kkjk 2¼N%½ & ^^etnwjh** ^^osru** ugha & lu~ 1936 ds vf/kfu;e dh /kkjk 2¼N%½ ds v/khu ifjHkk"kk vR;f/kd foLr`r gS & osru gh ugha vfirq leLr ikfjJfed vfrfjä ikfjJfed ds lkFk gh ,slh dksbZ Hkh jkf'k lfEefyr gS tks fu;kstu ds i;Zoflr gks tkus ds dkj.k fdlh fofèk&lafonk] fy[kr vkfn ds v/khu lans; gksrh gS & minku ds ns;] fu;kstu ds i;Zoflr gks tkus ij lans; gksus okys ns; gksus ds dkj.k] lu~ 1936 ds vf/kfu;e dh /kkjk 2¼N%½¼?k½ ds vuqlkj ^^etnwjh** dh c`gÙkj ifjHkk"kk ls vkPNkfnr gSaA ¼iSjk 16 ls 18½
¼4½ minku lank; vf/kfu;e] 1972 & /kkjk 7¼3d½ & C;kt & minku lans; gksus ds fnukad ls mldh jde ij C;kt lanÙk djuk fu;kstd ds fy, vkKkid gS & minku fu;kstu ls fudkl ds fnukad ls lans; gks tkrk gS rFkk 30 fnol ds Hkhrj lanÙk fd;k tkuk gksrk gS & fu;a=d çkf/kdkjh us fu;kstu ls fudkl ds fnukad ls lank;@minku ds lnk; ds okLrfod fnukad rd C;kt vfèkfu.khZr dj xyrh ugha dhA ¼iSjk 22½
ORDER :
VIVEK JAIN, J.
The present petitions are filed by the same employer against different employees involving same legal issue and therefore, they are being heard and decided by this common order. For the sake of convenience, facts shall be taken from M.P. 3996/2025.
2. The employees in all these cases except in M.P. No.3996/2025 were appointed in the year 1999, whereas the employee in M.P. No.3996/2025 was appointed on 01.02.1997. The employee in M.P. No.3996/2000 has retired on 30.11.2019, employee in M.P. No.3998/2025 has retired on 30.09.2021, employee in M.P. No.4001/2025 has retired on 01.01.2019 and that in M.P. No.4005/2025 has retired on 31.12.2018. All these employees filed applications before the Controlling Authority seeking gratuity in the year 2021 or 2022, which is admittedly 2 to 3 years after their retirement.
3. It is contended by learned counsel for the petitioner that the Controlling Authority as well as the Appellate Authority under Payment of Gratuity Act, 1972 (for short referred to as Act of 1972) have erred in passing the impugned orders and allowing the applications for payment of Gratuity filed by the respondent employees. It is argued that the impugned orders cannot be allowed to sustain, because the respondent employees were not the employees of the petitioner-Cement Corporation of India, but they were employed through contractors and they were outsourced employees. It is argued that application for Gratuity is not maintainable against the present petitioner, which is a Public Sector Undertaking of Government of India, because the petitioner company never employed the respondent employees directly and these employees had been engaged through a contractor and were contractors' employees. It is argued that as per Clause 21 of the contract executed between the petitioner company and the contractors, the responsibility of payment of gratuity and terminal benefits fell on the contractor. A copy of the contract, though is not part of the record of these petitions, but was produced at the time of hearing of the present petitioner before this Court, for perusal of the Court.
4. It is further argued that in absence of impleading the contractor, no application for payment of Gratuity could be filed against the petitioner company. It is further argued that the employees had filed applications before the Controlling Authority with delays, because as per the provisions of Rule 7(2) of Payment of Gratuity Central Rules 1972, application for gratuity has to be made within 30 days of the date from which the gratuity falls due and as per Rule 7(3), even legal heir of a deceased employee has to make application within one year from the date on which gratuity falls due. However, in the present case, the applications were filed in the year 2021-2022, which is almost 2 to 3 years after retirement of the concerned respondents and therefore, the authority could not have directed payment of gratuity, because the application before the controlling authority had become barred by time.
5. It is further argued that interest has been granted from the date of superannuation, but it should have been granted from the date of application in place of date of superannuation.
6. Per contra, it is vehemently argued by learned counsel for the respondent employees that the controlling authority has not erred in directing payment of gratuity to the respondent employees, because the contract being executed with contractor was only a camouflage, because the respondents have been working continuously from 1998-1999 and had worked of almost 20 years or even more till the date of their retirement in the year 2019 to 2021 after having been appointed in the year 1997 to 1999. It is argued that the contractors kept on changing every year, but the respondent-employees continued to work, because whoever was the new contractor, the respondents were always engaged for the same work which they were doing till their superannuation or resignation, whichev
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