State Of U.P. And 3 Others vs Yogendra Nath Singh
2015 Latest Caselaw 1027 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Chief Justice's Court							   AFR
 

 
Case :- SPECIAL APPEAL DEFECTIVE No. - 456 of 2015
 

 
Appellant :- State Of U.P. And 3 Others
 
Respondent :- Yogendra Nath Singh
 
Counsel for Appellants :- C B Yadav, Addl Adv. General, Shashank Shekhar Singh, Addl C.S.C. And  Ramanand Pandey, S.C.
 
Counsel for Respondent :- A.B. Singh
 

 
Hon'ble Dr. Dhananjaya Yeshwant Chandrachud,Chief Justice
 
Hon'ble Yashwant Varma,J.

This special appeal has arisen from a judgment and order of the learned Single Judge dated 12 February 2015. By the judgment in appeal, the learned Single Judge issued a mandamus to the appellants for the payment of gratuity to the original petitioner, the respondent to the special appeal, in terms of a notification dated 6 September 1997 under which employees of registered societies have been notified to be entitled to gratuity under the Payment of Gratuity Act 19721.

The respondent was appointed as a junior clerk and retired from service on 30 January 2009. By his writ petition, he sought a mandamus for the payment of gratuity and post retiral benefits within a specified period and sought to challenge an order passed by the Commissioner, Rural Development on 13 January 2010. The Commissioner, Rural Development held that employees of the District Rural Development Agency2 are not governed by the rules framed under Article 309 of the Constitution and are not employees of the State and consequently would not be entitled to the payment of gratuity. Before this Court, there is no dispute about the entitlement of the respondent to the payment of gratuity in terms of the notification dated 6 September 1997 issued by the Central Government under Section 1(3)(c) of the Act of 1972. The notification was taken note of in a judgment dated 14 March 2012 of a learned Single Judge of this Court in Matadeen Yadav vs. State of U.P. and others3. The learned Single Judge, in our view, correctly held that in order to entitle an employee to the payment of gratuity, it is not necessary that the employee must be employed by the State or by the Central Government. Admittedly, DRDA is a society registered under the Societies Registration Act 18604. The manner in which the society was constituted was taken due note of in a judgment of the Division Bench of this Court in State of U.P. & Ors. vs. Pitamber5 decided on 19 August 2010. The Division Bench observed as follows:

"...The respondent herein is working in the DRDA, which was earlier created in each district of the State under the directions of the Government of India for ensuring effective implementation of rural development programmes. Formal creation of DRDA was contemplated under the Office Memorandum of the Government of India dated 24.10.1980, which provided that DRDA will be created as a Society in each district. The State Government, vide Government Order dated 24.11.1980, created DRDAs in each district. The Central Government issued an Office Memorandum dated 10.03.1981 pursuant to which all DRDAs prepared almost identical Bye-laws. As regards the structure of DRDAs, District Magistrates are the Head of each DRDA and total funding is being done by the Central Government and State Government in the ratio of 70 - 30. Applying the test of funding and pervasive control which the State have over the DRDAs, there can be no dispute that the DRDA is a State within the meaning of Article 12 of the Constitution of India..."

The submission which has been urged on behalf of the State by the learned Additional Advocate General is that DRDA, as an agency, was constituted by the State Government under the directions of the Government of India and in terms of an office memorandum dated 24 October 1980 which contemplated that such an agency would be created as a society in each district. The State Government issued a Government Order on 24 November 1980 for the creation of DRDAs in every district. The grievance of the State Government is that though the funds required by the DRDAs were to be shared in the proportion of 70:30 between the Union and the State Governments, the Union Government has not been meeting its obligation. In this regard, on 6 November 2011, the Union Government in the Ministry of Rural Development clarified that the DRDAs should manage the expenditure on gratuity etc. from the overall funds available with them.

The learned Additional Advocate General drew the attention of the Court to the communications addressed by the State Government to the Union Government, among them, a letter dated 1 April 2015 addressed by the Chief Minister to the Prime Minister regarding a request for the disbursement of an amount of Rs.26.69 crores and to a letter dated 13 May 2015 of the Principal Secretary in the department of Rural Development to the Secretary in the Union Ministry of Rural Development seeking release of a shortfall of Rs.32.42 crores for 2014-15 and the release of the first installment for 2015-16 in the amount of Rs.103.26 crores. The submission is that DRDAs in every district are headed by District Magistrates and though the relationship of employer and employee is between each employee and the DRDA, ultimately the District Magistrates would look to the State Government for being placed with funds for disbursing the liability if any. Consequently, it was submitted that unless the Central Government bears its part of the financial expenditure as claimed by the State, there is no reason or justification to fasten the liability on the State Government alone.

The issue before the Court is as to whether the dispute in regard to the funding requirement of the DRDA, can in any manner, affect the entitlement of an employee to the payment of gratuity. The entitlement of an employee to receive gratuity is not in dispute. As an employee of a registered society, and as held in the judgment of the learned Single Judge in Matadeen Yadav's case, the respondent was entitled to the payment of gratuity under the Act of 1972. The relationship of employer and employee is between the respondent and the DRDA which is a society registered under the Act of 1860. Hence, the mandamus which has been issued by the learned Single Judge would operate against the society with whom there is a relationship of employer and employee. The purported difficulty which the State Government faces in regard to receiving the share of the Union Government towards the expenditure cannot, in our view, affect the entitlement of an employee or his right to receive the payment of gratuity from his employer once the entitlement is not in dispute. Any dispute or difficulty as between the State and the Union Governments has to be resolved at the governmental level and cannot be a ground to deny the payment of gratuity. All that we need to clarify is that the mandamus which has been issued by the learned Single Judge will operate against the DRDA of which the respondent is an employee and which is a society under the Act of 1860.

The special appeal is, accordingly, disposed of. There shall be no order as to costs.

Order Date :- 7.7.2015                                     (Dr D Y Chandrachud, CJ)
 
RK
 

 
							       (Yashwant Varma, J)
 

 

 

 

 
C.M. Delay Condonation Application No. 205155 of 2015
 
Case :- SPECIAL APPEAL DEFECTIVE No. - 456 of 2015
 
                                       ****
 
Hon'ble Dr. Dhananjaya Yeshwant Chandrachud,Chief Justice
 
Hon'ble Yashwant Varma,J.
 

 
	The delay of 62 days in filing the special appeal is condoned since sufficient cause has been shown in the affidavit filed in support.
 
	The delay condonation application is, accordingly, disposed of.
 

 
Order Date :- 7.7.2015                           (Dr D Y Chandrachud, CJ)
 
RK
 

 
					          (Yashwant Varma, J)