Limited vs Sukchand Sarkar & Ors
2022 Latest Caselaw 7162 Cal

29.09.2022.
Item No.10
Court No.550
   S.D.
                                  W.P.A. 10512 of 2022

                FIS Payment Solutions and Services India Private
                                   Limited
                                    Versus
                           Sukchand Sarkar & Ors.

                      Mr. Soumya Mazumder
                      Mr. S. Ghose
                      Mr. Jeevan Ballav Pande
                      Mr. Rishav Dutt
                      Mr. Soumalya Ganguli
                      Ms. Tiana Bhattacharya
                                                ... For the petitioner
                      Mr. Avinash Kankani
                                     ...For the respondent nos. 2 & 3

Affidavit of service filed in Court today is kept with

the record.

Despite service none appears for the respondent nos.

1, 4 and 5.

The present writ application has been filed, inter

alia, challenging an order dated 21st April 2022 passed by

the respondent no.2 in a proceeding under Section 7 of the

Payment of Gratuity Act, 1972 (hereinafter referred to as

the 'said Act').

Mr. Majumder, learned advocate appearing in

support of the aforesaid writ application submits that the

petitioner had been engaged by respondent no.5 for

providing caretaker services and supply of Automated

Teller Machines (ATMs) in relation to the ATMs of the

respondent-bank. In this context, an agreement dated 16th

June 2015 is relied on. It is submitted that the said

agreement was valid up to 30st August 2017. During the

subsistence of the aforesaid agreement, the petitioner, with

the concurrence of respondent no.5, had out-sourced the

aforesaid work and /or had engaged respondent no. 4 as

sub-contractor. Drawing the attention of this Court to

clause 2(c) of the agreement dated 18th January 2016,

executed between the petitioner and the respondent no.4, it

is submitted that it was the responsibility of the respondent

no.4 to adhere and comply with the statutory liabilities,

inter alia, including mandatory deductions, payments,

incentives, contributions, fees and the like. The respondent

no.4 was also responsible for payment of gratuity as also

for compliance other statutory formalities. Mr. Majumder

submits that the respondent no.1, who had been engaged

by the respondent no.4 had initiated a proceedings under

Section 7 of the said Act by filing an application in form 'N'

before the controlling authority. In such proceedings, the

petitioner was arrayed as opposite party no.1 and was

referred to as the main contractor, while the employer of

the respondent no.1, who is the respondent no.4 was

arrayed as opposite party no.2.

Drawing the attention of this Court to a daily order

sheet dated 12th April 2022, which is at page 83 of the writ

application, it is submitted that the petitioner had

questioned the jurisdiction and authority of the controlling

authority to adjudicate upon the disputes, inter se,

between the petitioner and the respondent no.1. The

petitioner says that the petitioner has also relied on a

judgment delivered by this Court in the case of Sailen

Seth -vs- Deputy Labour Commissioner & Ors. reported

in 2010 (3) CHN (CAL) 899. By an order dated 21st April

2022, the controlling authority has not only determined the

amount of gratuity payable to the respondent no.1, but has

also saddled the petitioner with such liability. It is

submitted that the controlling authority, while fastening

the liability on the petitioner, was aware of the fact that

there was no subsisting employee-employer relationship

between the petitioner on one hand and the respondent

no.1 on the other. It is submitted on behalf of the petitioner

that the controlling authority, while fastening liability on

the petitioner, took aid of the Contract Labour (Regulation

& Abolition) Act, 1970 and termed the petitioner as the

principal employer and held the petitioner, to be liable for

payment of gratuity.

Mr. Majumder submits that the said Act is a self-

contained code. He places reliance on Sections 2(e) and 2(f)

of the said Act and submits that existence of employee-

employer relationship is the basic foundation for initiating

proceedings under the said Act. It is the contention of the

petitioner that the said Act, despite being a beneficial piece

of legislation, does not provide for fastening of liability on

the principal employer. Mr. Majumder submits that the

petitioner cannot be made liable for payment of gratuity in

respect of the respondent no.1 for the simple reason, the

petitioner did not have any subsisting contract for

employment implied or otherwise with respondent no.1.

Drawing the attention of this Court to the provisions

of Section 4 of the said Act, it is submitted that gratuity is

payable to an employee and/or in case of his death to

his/her nominee or other legal heirs as the case may be.

Since, the petitioner has no contractual relationship for

employment with the respondent no.1, the respondent no.1

does not become an employee of the petitioner. By placing

further reliance on Section 7 of the said Act, Mr. Majumder

submits that it is for the employer to make payment of the

gratuity amount to its employees. By drawing the attention

of this Court to Sub-Section 4(a) of Section 7 of the said

Act, it is submitted that the word 'dispute' as referred to in

the said Sub-Section is in relation to payment of gratuity to

an employee by an employer including admissibility of such

claim and/or entitlement to receive the same. As such,

unless an employee-employer relationship is established

and a finding is returned by the controlling authority, the

petitioner cannot be saddled with any liability on account

of payment of gratuity. Mr. Majumder submits that the

order passed by the controlling authority is an irregular

order. The controlling authority has no jurisdiction to direct

payment of gratuity by a third party who is not the

employer of respondent no.1.

Mr. Majumder further submits that the controlling

authority had no justification and it was improper on his

part to construe the provisions of the said act with

reference to the provisions of Contract Labour (Regulation

and Abolition) Act, 1970. Objectively the aforesaid two acts

are different. In support of the aforesaid contention, Mr.

Majumder places reliance in the case of Sailen Seth

(Supra).

Mr. Majumder submits that the petitioner has no

efficacious alternate remedy available. Although, the said

Act provides for a provision of appeal under sub-Section (7)

of Section 7 of the said Act, however, a scrutiny of the

provision of sub-Section (4)(a) of Section 7 of the said Act

and sub-Section (7) of Section 7 of the said Act would make

it clear that right to prefer an appeal by a person aggrieved

would mean and include either the employee or its heirs or

nominees and the employer and not by any third party.

There was no contractual relationship between the

petitioner and the respondent no.1 and as such, the

controlling authority had no jurisdiction to decide and/or

determine the gratuity payable by the petitioner to the

respondent no.1. The provisions for appeal are

inconsequential and otiose.

Relying on a show cause dated 1.9.2022, it is

submitted that the aforesaid show cause has been issued

during the pendency of the present writ petition.

As such the same could not be included in the writ

petition. Mr. Majumder submits that the respondents have

already initiated recovery proceedings and have called upon

the petitioner to respond the aforesaid show cause. He

therefore, prays for an interim order restraining the

respondents from giving effect and/or further effect to the

order dated 21.4.2022 and the show cause notice dated

1.9.2022.

Let a copy of the aforesaid show cause notice be kept

with the record.

Per contra, Mr. Kankani, learned advocate appearing

for the respondent nos. 2 and 3 submits that the aforesaid

order which forms the subject matter of challenge in this

writ application is an appealable order. Since, there is an

appellate authority, the issue should be decided by the

appellate authority. According to him, no case of violation

of the principles of natural justice had been made out. No

case of violation of fundamental rights had also been made

out. By placing reliance on sub-Section(7) of Section 7 of

the said Act, Mr. Kankani submits that the words 'any

person aggrieved by an order under sub-section (4)" in Sub-

Section 7 of Section 7 of the said Act can mean and include

even a third party. The same cannot be restricted to the

employee or the employer nor can a restrictive meaning be

given to the same. In any event, it is submitted that the

petitioner is not a third party as the petitioner has been

arrayed as a party in the proceedings before the controlling

authority. As such, the petitioner has the right and remedy

to prefer an appeal. Further, it is submitted that the order

passed by the controlling authority is a reasoned order and

the same has been passed after taking into consideration

all aspects of the matter. This Court, in exercise of its

extra-ordinary jurisdiction, ought not to entertain the

present application and the present application should be

dismissed at the threshold.

I have heard the advocates appearing for the

respective parties and have considered the materials on

record. I find from the provisions of the said Act that there

must be a relationship between the employee and the

employer which may be expressed or may implied for the

provisions of the said Act to apply. Determination of

gratuity, thus, cannot be divorced from the employee-

employer relationship. I find that the controlling authority,

by the aforesaid order, while determining liability, did not

conclude that the petitioner had any employee-employer

relationship implied or otherwise with the respondent no.1.

On the contrary, despite arriving at a specific finding that

the respondent no.1 was under the direct employment of

respondent no.4, has fastened such liability on the

petitioner. The aforesaid application raises several

jurisdictional issues, inter alia, including the right of the

controlling authority to determine the liability of the

petitioner, who has no direct employee-employer

relationship, on the basis of the factual finding rendered by

the controlling authority, with the respondent no. 1.

In the aforesaid background, as to whether or not,

the petitioner has a right to prefer an appeal under sub-

Section (7) of Section 7 of the said Act also requires serious

consideration. In the circumstances, I am of the view that

the present writ application requires to be heard out.

Considering the threat of recovery by issuance of the

notice dated 1.9.2022, there shall be an unconditional

interim order restraining the respondents from proceeding

with the recovery notice dated 1.9.2022 and/or from

initiating recovery proceedings against the petitioner till

7.9.2022.

The petitioner is directed to deposit the entire

amount of gratuity as determined by the Controlling

Authority by its order dated 21.4.2022 with the learned

Registrar General of this Court on or before 7.9.2022.

In the event, the deposit as aforesaid is made, the

same shall be invested by the Learned Registrar General in

any interest bearing Fixed Deposit account of his/her

choice in any nationalized bank and shall keep renewing

the same from time to time until further order of this Court.

In the event of deposit of the aforesaid amount as

directed, the interim order passed hereinabove, shall

continue till disposal of the present writ application or until

further orders whichever is earlier.

As prayed for the respondents are at liberty to file

their affidavit-in-opposition to the present writ application

within 3 weeks after puja vacation. Reply, if any, be filed 1

week thereafter.

Let this matter appear under the heading "for

hearing" in the monthly list of December 2022.

(Raja Basu Chowdhury, J.)