Rifle Factory Ishapore vs The Asst. Labour Commissioner ...
2023 Latest Caselaw 1076 Cal

   18
09.02.2023
    sb
 Ct.550
                      IN THE HIGH COURT AT CALCUTTA
                     CONSTITUTIONAL WRIT JURISDICTION
                             APPELLATE SIDE

                                  W.P.A. 66 of 2023

                Executive Director, (Erstwhile General Manager),
                             Rifle Factory Ishapore
                                     Versus
                  The Asst. Labour Commissioner (Central) &
                          Controlling Authority & Anr.

                   Mr. Souvik Nandy
                   Mr. Somnath Ghosal
                                                    ... For the petitioner.

                   Mr. Siva Prosad Ghosh
                                       ...For the respondent no. 2.

At the very outset Mr. Nandy, learned advocate

appearing on behalf of the petitioner prays for leave to

add six contractors, whose names and particulars are

set out in paragraph 9 of the writ application.

Mr. Nandy submits, due to inadvertence, the

aforesaid contractors had not been added as parties,

although the details and particulars of such

contractors have been disclosed in the writ

application. He says that the aforesaid contractors are

necessary parties and leave should be granted to the

petitioner to add them as parties.

After considering the submissions made by Mr.

Nandy, leave is granted to add the aforesaid six

contractors as party respondents in the present writ

application. The petitioner is directed to cause service

of the writ application on the added respondent.

In view of the urgency involved in the matter the

present writ application is taken up for consideration.

The present writ application has been filed inter

alia challenging the order dated 27th May, 2022

passed by the Assistant Labour Commissioner

(Central), Kolkata, and the Controlling Authority

under the Payment of Gratuity Act, 1972 (hereinafter

referred to as the said Act).

It is the petitioner's case that the respondent

no.2 is a contract labour and has been employed by

the aforesaid six contractors from time to time. There

is, however, no subsisting direct employee-employer

relationship between the petitioner and the

respondent no.2. The petitioner, at all material point

of time, had employed the respondent nos. 3 to 8 for

the purpose of providing contract labourers to

carryout shifting, segregation work within the factory

premises of the petitioner. Notwithstanding there

being no employee-employer relationship, a

proceedings was initiated, at the instance of the

respondent no.2, by filing an application in Form "N"

before the Controlling Authority under the said Act.

The petitioner duly participated in such proceedings

and had brought to the notice of the Controlling

Authority that since there was no employee-employer

relationship, the petitioner is not liable to make

payment of gratuity to the respondent no.2.

Notwithstanding the aforesaid objection, the

Controlling Authority by placing reliance on the

judgment delivered by the Hon'ble Supreme Court in

the case of Mangalore Ganesh Beedi Works etc. vs.

Union of India etc., reported in AIR 1974 SC 1832,

had not only determined the amount of gratuity but

also fastened such liability on the petitioner.

Challenging the aforesaid order, the present writ

application has been filed.

Mr. Nandy, learned advocate representing the

petitioner submits that in order to be entitled to

payment of gratuity there has to be employee-

employer relationship. By referring to Section 2(e) and

2(f) of the said Act, it is submitted that unless the

respondent no.2 comes within the meaning of the

definition, employee as defined in Section 2(e) of the

said Act and unless the petitioner comes within the

meaning of the definition, employer as defined in

Section 2(f) of the said Act, the petitioner cannot be

fastened with any liability for payment of gratuity to

the respondent no.2. By referring to Section 4 of the

said Act, he says that ordinarily gratuity shall be

payable to an employee on the termination of his

employment after he has rendered continuous service

for not less than five years-

(a) on his superannuation

(b) on his retirement or resignation, or

(c) on the death or disablement due to accident

or disease.

He says that the respondent no.2 does not

qualify to be entitled to gratuity.

By drawing 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 the

said sub-section is in relation to payment of gratuity

to an employee by an employer, including

admissibility of such claim and entitlement to receive

the same, as such, unless the employee-employer

relationship is established and a finding is returned by

the Controlling Authority, neither can any

determination be made by the Controlling Authority

nor the petitioner can be saddled with any liability on

account of payment of gratuity. It is still further

submitted that the Controlling Authority had no

jurisdiction 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.

He says that the Controlling Authority had

incorrectly interpreted the judgment delivered by the

Hon'ble Supreme Court in the case of Mangalore

Ganesh Beedi Works etc. (supra) and purported to

fasten liability on the petitioner. By referring to

paragraphs 42 and 43 of the said judgment he says

that the Hon'ble Supreme Court in such case was

concerned with Beedi and Cigar Workers (Condition of

Employment) Act, 1966 (hereinafter referred to as the

Beedi Act).

He says that the said judgment cannot be relied

on for the purpose of either determining the gratuity

or for fastening such liability on the petitioner, with

whom there is no employee-employer relationship.

He says that the Controlling Authority has

already issued a notice in Form 'R' calling upon the

petitioner to make payment. He says that since the

Controlling Authority had exceeded his jurisdiction in

arriving at a finding and determining liability of the

petitioner, the aforesaid order cannot be sustained

and should be set aside. He says that although there

is an Appellate Authority, however, since the petitioner

has questioned the very jurisdiction of the Controlling

Authority to admit the present claim filed by the

respondent no.2, the present writ application has been

filed before this Hon'ble Court. He says that this

Hon'ble Court may be pleased to stay the operation of

the impugned determination made by the Controlling

Authority.

Per contra, Mr. Ghosh, learned advocate

representing the respondent no.2 submits that the

respondent no.2, had all been working for and at the

instance of the petitioner. The respondent no.2 had

been engaged by the contractors, all of whom, in turn,

have been engaged by the petitioner. As such, the

petitioner cannot avoid liability and cannot claim

immunity. He says in the event, the petitioner makes

payment of gratuity, the petitioner shall be entitled to

recover the same from the contractors employed by

the petitioner in terms of Section 21 of the Contract

Labour (Regulation and Abolition) Act, 1970. He also

submits that there is an Appellate Forum and the writ

application should not be entertained.

I have heard the learned advocates appearing for

the respective parties and have considered the

materials on record. From a perusal of the provisions

of the said Act, it appears that there must be a

employee employer relationship, which may be either

expressed or implied, for the provisions of the said Act

to apply. The 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.2. I still further find that the jurisdiction of the

Controlling Authority to determine dispute, under

sub-section (4)(a) of Section 7 of the said Act is in

relation to employee-employer. The relevant portion of

sub-section (4)(a) of Section 7 of the said Act is set out

hereunder.

"(4)(a) If there is any dispute as to the amount of

gratuity payable to an employee under this Act or

a to the admissibility of any claim of, or in

relation to, an employee for payment of gratuity,

or as to the person entitled to receive the gratuity,

the employer shall deposit with the controlling

authority such amount as he admits to be

payable by him as gratuity".

From the aforesaid it would be apparent, for the

Controlling Authority to assume jurisdiction for

determination of gratuity, there must be an employee-

employer relationship.

Insofar as the judgment delivered by the Hon'ble

Supreme Court in the case Mangalore Ganesh Beedi

Works etc. (supra) is concerned, in such case the

Hon'ble Supreme Court was concerned with the

validity of the Beedi Act. The observations made in

paragraphs 42 and 44 of the said Act are with specific

reference to the Beedi Act. As to whether the

provisions of the said Act can be construed with

reference to the Beedi Act and with reference to

Contract Labour (Regulation and Abolition) Act, 1970

also requires consideration, since objectively the

aforesaid Acts are different.

I also find that 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. 2.

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.

Considering the threat of recovery, there shall be

an unconditional interim order, restraining the

respondent no.2 from initiating any recovery

proceeding against the petitioner and from enforcing

the determination made by the Controlling Authority

till 27th February, 2023. The petitioner is directed to

deposit the entire amount of gratuity as determined by

the controlling authority by its order dated 27th May,

2022 with the learned Registrar General of this Court

on or before 27th February, 2023.

In the event, the aforesaid deposit 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 four weeks from date. Reply, if any,

be filed within two weeks thereafter.

Liberty to mention for inclusion in the list after

expiry of period for exchange of affidavits, as indicated

hereinabove.

(Raja Basu Chowdhury, J.)