High Court of Punjab and HaryanaCWP/19196/2023dismissed

Punjab Water Resources Management And Development Corporation Ltd. v. The Controlling Authority Under The Payment Of Gratuity Act, 1972, Chandigarh And Others

2023-12-12Mr. Justice Harsh Bunger14 pages

IN THE HIGH COURT OF PUNJAB AND HARYANA AT

CHANDIGARH CWP-19196-2023 (O&M) Date of decision :12.12.2023 PUNJAB WATER RESOURCES MANAGEMENT AND DEVELOPMENT CORPORATION LIMITED THROUGH ITS MANAGING DIRECTOR.

...Petitioner

Versus

THE CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT, 1972, CHANDIGARH AND OTHERS

...Respondents

CORAM: HON'BLE MR. JUSTICE HARSH BUNGER Present :

Mr. Rahul Verma, Advocate for the petitioner.

HARSH BUNGER, J. (ORAL)

!!"#!!$ %

'()'!)!'!( * +"

, , , - , . /0$! 1 /0$! 2 3 ,. , 4)(. 5 6

, /0$!

+ 7 ,

'/)'8)!'!( * +$ , , /0$! .

,. , + * +"

, ,.

) !) 9 ,. 4)(. /0$! . ,

6 '")'()/0$8 , +

(')//)!'/8) )(

. , ):(.':"#+ )) , )/!.:;.0$8#+3 . +

, , ,)/'.''.'''#+

) < . 4)( ,

+ ,

, )!.:;.0$8#+ , /0$! ) () <

+ 4)( , + 3 . ,

+ 7-= 7.

, -

, , , )) ,. ) ,)>. +

,4)( ) ;) ? . ,

:) < ) ") < ,. '()'!)!'!( * +"

4)(. ,

% %&%'% (

)

# * + ,

(-!

)

# !

(%&% / +#!

0 !

# ) )

) !

(-/$

) !

%&%'% (

+#!

0 *+ ,

(- )

! 1'

(-/$

(4 % % % (

5 !

% % % ( %%'% ( #

* + ,

(-!

0 #) #

! 1'

(-/$ ) (4

% % % ( 5

% % % ( %%'% ( )

)

# )

4 !!

$) 9

. + , /0$! 3 . '/)'8)!'!( * +$ , @+ !

, #

)

7 , %6!%&!

(-/ ) ,

8 &%!

!% / #

) ) !1& %16$

% %&!%'!% (!

) 9 8

(-/$

! 1'

(-/$ !

! 1'

(-/$ )

%&!%!%&!

0 ,

8 (!%&!% /

+#!

0 # ) +

% %

+#!

; "

&!%(!% ( # )

+ ))!

8 ,

) = !

% 9!

) ? ,

8 ,!

(!%&!% / ) 8

+#!

% 9 % 9

(!%&!% /

) @ $!

" ) ?

8 ,!

(!%&!% / 8

+#!

)

&!%(!% ( +#!

; "

# # #

(!%&!% /!

A# )

&!%(!% ( +#!

; "

)

2!!

) +

)

+ , + ,

, 8!

# )

* + ,

(-!

+ !

% 9

* +

)

? !

* ?

, 8 8 ,

) 8

, ) )

&!%-!%

)

# )

8 , :

) #

&%!

!% /

, 8

8 !

)

: 8!

8 . # 8

, 8

8 ,

4 )

) # ,!

) 8 ,

) ! 1'

(-/$ (4

% !% !% ( 5!

8 ,

% !% !% ( %!%'!% ( &%

)

# , 8

, ) ) )

4 )

8 , ) #

0 #) #

8 , :

0 #) #

, 8

<)#

8) %

+ . +

)

) %

!0)'()!'/8 +

, ,) %

, , 4)( +

3 . ,

, +

4)(

/0$!

, )/'.''.'''#+ ,

+ ) /')

. ,

) //) %

+ 7

) /!) In Allahabad Bank v. All India Allahabad Bank Retired Emps. Assn., 2010(1) SCT 531, Hon'ble Supreme Court while considering the provisions of the Payment of Gratuity Act, 1972; has held as under:- (a) There is no escape from payment of gratuity under the provisions of the Act unless the establishment is granted exemption from the operation of the provisions of the Act by the appropriate Government.

(b) Gratuity payable to an employee on the termination of his employment after rendering continuous service for

not less than 5 years and on superannuation or retirement or resignation etc. being a statutory right cannot be taken away except in accordance with the provisions of the Act whereunder an exemption from such payment may be granted only by the appropriate Government under Section 5 of the Act which itself is a conditional power. No exemption could be granted by any Government unless it is established that the employees are in receipt of gratuity or pension benefits which are more favourable than the benefits conferred under the Act.

(c) In view of the overriding provisions contained in Section 14 of the Payment of Gratuity Act, the provision for gratuity under the Pension Rules will have no effect. Possibly for this reason, Section 5 of the Payment of Gratuity Act has conferred authority on the appropriate Government to exempt any establishment from the operation of the provisions of the Act, if in its opinion the employees of such establishment are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

[Municipal Corporation Delhi v. Dharam Prakash Sharma & Ors., 1999(2) SCT 297] (d) An establishment is under the statutory obligation to pay gratuity as provided for under Section 4 of the Act which is required to be read along with Section 14 of the Act which says that the provisions of the Act shall have effect notwithstanding anything inconsistent therein contained in any enactment or in any instrument or contract having effect by virtue of any enactment other than this Act. (e) The provisions of the Act prevail over all other enactment or instrument or contract so far as the payment of gratuity is concerned. The right to receive gratuity under the provisions of the Act cannot be defeated by any instrument or contract.

(f) In Hindustan Lever and Anr. v. State of Maharashtra & Anr., (2004)9 SCC 438 relying upon the decision in Purshottam H. Judye v. V.B. Poddar, (1966)2 SCR 353, it was held that the word 'instrument' would include award made by the Industrial Tribunal.

(g) Section 2(d) of the Act defines Controlling Authority as an authority appointed by the appropriate Government under Section 3 of the Act. Under Section 3 the Controlling Authority is made responsible for the administration of the Act and it further provides for appointment of different authorities for different areas. Section 7 deals with for determination of the amount of gratuity. Every person who is eligible for payment of gratuity under the Act is required to send a written application to the employer in the prescribed form for payment of such gratuity.

Sub-section (2) of Section 7 provides once the gratuity becomes payable, the employer shall, whether an application has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the Controlling Authority specifying the amount of gratuity so determined and arrange to pay the amount of gratuity to the person to whom the gratuity is payable. The Scheme envisaged under Section 7 of the Act, is that in case of any dispute to the amount of gratuity payable to an employee under the Act or as to the admissibility of any claim of, or in relation to, an employee payable to gratuity etc. the employer is required to deposit with the Controlling Authority the admitted amount payable as gratuity.

inquiry any amount is found to be payable to the employee, the Controlling Authority shall direct the employer to pay such amount to the employee. Subsection (7) of Section 7, provides for an appeal against the order of the Controlling Authority. The Act, nowhere confers any jurisdiction upon the Controlling Authority to deal with any issue under sub-section (5) of Section 4 as to whether the terms of gratuity payable under any Award or agreement or contract is more beneficial to employees than the one provided for payment of gratuity under the Act. This Court's order could not have conferred any such jurisdiction upon the Controlling Authority to decide any matter under sub-section (5) of Section 4, since the Parliament in its wisdom had chosen to confer such jurisdiction only upon the appropriate Government and that too for the purposes of considering to grant exemption from the operation of the provisions of the Act. 13.

Coming to the case in hand, there is no dispute about the fact that the respondent No. 3 (Jaswant Singh Rawat) has remained in continuous employment of petitioner-Corporation w.e.f. 06.03.1978 upto 30.11.2018, when he retired upon attaining the age of superannuation. The applicability of 1972 Act upon the petitioner-corporation also stands admitted by the petitioner's witnesses appearing before the controlling authority. 14.

Sub-section (1) of Section 4 of 1972 Act provides that the gratuity shall be payable to an employee on termination of his employment after he has rendered continuous service for not less than five years, on his superannuation or retirement or resignation or death or disablement due to accident or disease.

Sub-section (2) of Section 4 provides that for every completed year of service or part thereof in excess of six months the employer shall pay

gratuity to an employee at the rate of 15 (fifteen) days wages based on the rate of wages last drawn by the concerned employee. Sub-section (3) of Section 4 which is of importance reads as under:

"(3) The amount of gratuity payable to an employee shall not exceed such amount as may be notified by the Central Government from time to time."

As per above extracted provision, the amount of gratuity payable to an employee would not exceed such amount as may be notified by the Central Government from time to time. Thus, the ceiling limit for payment of gratuity is provided in sub-section (3) of Section 4. 15.

In exercise of such delegated powers of legislation, the Central Government has issued a notification dated 29.03.2018 which reads as under:

"S.O. 1420 (E).-In exercise of the powers conferred by sub-section (3) of section 4 of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specifies that the amount of gratuity payable to an employee under the said Act shall not exceed twenty lakh rupees."

It is thus evident that this revised ceiling would apply to all establishments irrespective of whether they are controlled or governed by the State or the Central Government.

16.

In the light of the legal position indicated in foregoing paras that the provisions of 1972 Act prevail over all other enactment or instrument or contract so far as the payment of gratuity is concerned and also in terms of express provisions contained in sub-section (3) of Section 4 of 1972 Act, there is no force in the contention of the petitioner that the Notification dated 29.03.2018 issued by the Central Government has no

applicability to the petitioner-corporation or that the Punjab Government has issued a letter whereby enhancement of payment of gratuity has been withdrawn.

17.

As regards the contention of the petitioner that the Authorities under the 1972 Act have wrongly assumed jurisdiction as the PetitionerCorporation has its office at Mohali, it is observed that the said contention was duly considered and rejected by the Appellate Authority below by holding that at the time of retirement of petitioner from service on 30.11.2018, the Petitioner-Corporation had its office at Chandigarh itself, thus the cause of action regarding non-payment of gratuity arose within the jurisdiction of Chandigarh and merely because subsequently the PetitionerCorporation has shifted its office to Mohali, would not divest the Controlling Authority at Chandigarh to entertain the application filed by respondent No. 3 (Jaswant Singh Rawat). I am in full agreement with the aforesaid finding returned by the Appellate Authority below.

In terms of Section 7(2) of 1972 Act, as soon as gratuity becomes payable, the employer, whether any application has been made or not, is obliged to determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of gratuity. Under Section 7(3) of 1972 Act, the employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable.

It is not disputed that the day when the petitioner retired from service, the office of the Petitioner-Corporation was at Chandigarh itself, thus the cause of action regarding non-payment of gratuity arose within the jurisdiction of Chandigarh. Therefore, no fault can be found with the

impugned orders on the ground of jurisdiction, as contended on behalf of Petitioner-Corporation.

18.

No other argument has been raised.

19.

Considering the totality of circumstances, there is no scope for any interference in the impugned order dated 03.02.2023 (Annexure P-6) and order dated 01.08.2023 (Annexure P-7), resultantly, the instant petition fails and the same is accordingly dismissed.

20.

All pending applications (if any) shall stand disposed of. December 12, 2023 (HARSH BUNGER) gurpreet JUDGE Whether speaking/reasoned:

Yes/No Whether reportable:

Yes/No