M/S Texmaco Limiteds vs Shri Roshan Singh And Others
2001 Latest Caselaw 421 Del

ORDER

Dalveer Bhandari, J.

1. A large number of Letters Patent Appeals have been filed against the judgment of the learned Single Judge dated 22.2.1992 by which a large number of writ petitions were disposed of. The questions of law involved in these appeals are exactly identical, therefore, we propose to dispose of these appeals by one common judgment. The learned Single Judge also disposed of all the writ petitions by a common judgment.

2. The learned Single Judge has dealt with the facts of one writ petition. We also deem it appropriate to reiterate the facts of only LPA No. 58/1992 arising out of writ petition No.1110/89 in order to appreciate the controversy involved in the case.

3. Respondent No.1 joined the appellant company on 1st June, 1943. On 2.1.1964 he was allotted a residential quarter in the premises of the appellant mill. The respondent retired from service on 6.6.1983. The respondent was allotted a quarter on leave and license basis on the specific condition that he would vacate the accommodation within 4 days of cessation of the service by the management. Admittedly till date the respondent has not vacated the quarter which is the main grievance of the appellant before us. In other connected appeals also the respondents-workmen have not vacated the quarters though they have retired from the service of the appellant mill several years ago.

4. Initially because of the non-vacation of the quarters, respondent's dues, including the gratuity amount, were not released. The respondent applied to the Controlling Authority under the Act for the release of the gratuity amount along with interest. The application was moved along with an application for condensation of delay in filing the application for directions for payment of his gratuity. The Controlling Authority directed the appellant to pay the gratuity with 10% interest.

5. The appellant aggrieved by the order of the Controlling Authority filed an appeal under Section 7(7) of the Act. The appeal was dismissed and the finding of the Controlling Authority that the amount of the gratuity cannot be linked with the vacation of the quarter was confirmed by the Appellate Authority. The appellant still not satisfied with the order of the Appellate Authority approached the learned Single Judge by filing a writ petition under Article 226 of the Constitution of India. The learned Single Judge by a detailed judgment upheld the order of the Appellate Authority directing the appellant to pay the gratuity amount with 10% interest.

6. It may be pertinent to mention that during he pendency of the writ petition because of the direction of the court, the gratuity amount along with interest has been paid in this case and in all other connected cases. Now, the short question which falls for our consideration is whether the direction to the appellant for making the payment of gratuity to the respondents-workmen was illegal and this court should direct the workmen to refund the gratuity with interest because they did not vacate the residential quarters allotted to them while they were in the employment of the appellant? The appellant in these appeals has made the following submissions.

7. Mr. Harvinder Singh the learned counsel for the appellant submitted that the Controlling Authority erred in condoning the delay of the respondent in filing the application for directions to the appellant to release the gratuity along with interest. He further submitted that the Appellate Authority and the learned Single Judge were in error in not interfering with the judgment and order of the Controlling Authority.

8. Learned counsel for the appellant has placed reliance on UOI & Anr. vs. K.Balakrishna Nambiar . In this case their Lordship of the Supreme Court observed that interest could not be payable by the Union of India to the respondent on the gratuity amount of Rs.23,888.00 for the respondent was in unauthorised occupation of the government accommodation and the period of one month after his vacating the same.

9. The learned counsel for the appellant has also placed reliance on the judgment of the Division Bench of the Bombay High Court passed in Life Insurance Corporation of India vs. John Anton D'Souza and others reported in 1996 LCR 499. The Court observed that the employer is entitled to withhold his contribution to the provident fund till such time the employee surrenders vacant possession of the staff quarter.

10. The learned counsel for the appellant submitted that looking to the conduct of the respondent-workman of not vacating the quarter, the court's discretion ought not to have been exercised in favor of the respondent-workman by the Controlling Authority and the Appellate Authority as well as the learned Single Judge of this Court were clearly in error in not interfering with the impugned order.

11. Those employees who have voluntarily resigned were not entitled to gratuity but were given gratuity in view of the Supreme Court judgment by which the judgment of the Punjab and Haryana High Court in Darshan Engineering Works was over-ruled. Therefore, the appellant did not press the question of resignation in this appeal and in the connected appeals.

12. In the appeal it has been urged that the learned Single Judge though expressed strong displeasure at the attitude of those employees who had left the service of the company but continued to retain the company's quarters but was in error in not directing the respondents workmen to vacate the quarter.

13. The learned counsel for the appellant also submitted that the learned Single Judge was in error in not following the judgment of K.T.Lakshmanan of Bombay High Court in which the Court refused to exercise the discretion in favor of the employees who were wrongfully withholding the quarters and were not prepared to give undertaking to vacate the same.

14. The learned counsel for the appellant submitted that the learned Single Judge erred in not applying the case of Charan Singh vs. Birla Textiles which clearly stated that Payment of Gratuity Act in regard to the interest are only prospective.

15. During the course of arguments the principal submission of the learned counsel for the appellant has been that the respondents-workmen even after superannuating from the employment of the appellant several years ago have not vacated the quarters, and in view of the most unreasonable and unfair conduct of the respondent workman, the court was not justified in giving directions to the appellant to pay the gratuity Along with interest.

16. He submitted that this direction ought not to have been given and the appellant is entitled to the refund of the amount paid to the workmen. In the alternative the Court must give direction to the respondent workmen to vacate the appellant's quarter without further loss of time. In order to appreciate the rival contentions of the parties, we deem it appropriate to deal with the Objects and Reasons of Payment of Gratuity Act.

17. In Indian Hume Pipe Company v. The Workmen their Lordship of the Supreme Court observed that gratuity paid to workmen is intended to help them after retirement whether the retirement is a result of rules of superannuation or physical disability. The general principle is that by their length of service the workmen are entitled to claim a certain amount as a retiral benefit.

18. The gratuity, as the term itself suggests, is a gratuitous payment given to an employee on discharge or retirement. The Act is not intended to do away with other retiral benefits already existing and available to the employees. By enacting, the legislation clearly intended to confer extra benefits on the employees. This is a social legislation which has been enacted to help the employees at the time of their retirement.

19. In Burhanpur Tapti Mills Ltd. vs. Burhanpur Tapti Mills Mazdoor Sangh their Lordship of Supreme Court tried to define the concept of gratuity. According to them the gratuity is a lump sum payment considered necessary for an "orderly and humane elimination" from industry of superannuated or disabled employees who but for such retiring benefits would continue in employment even though they function inefficiently. The voluntary retirement of an inefficient or old or worn out employee on the assurance that he is to get a retiral benefit leads to the avoidance of industrial disputes, promotes contentment among those who look for promotions, draws better kind of employees and improves the tone and morale of the industry. It is beneficial all round. It compensates the employee who, as he grows old knows that some compensation for the gradual destruction of his wage earning capacity is being built up.

20. In Ahmedabad Municipal Corporation v. Workmen reported in 6 Factory Journal Reports 453 the court observed that the fundamental principle in allowing gratuity is that it is a retirement benefit for long service as a provision for old age. Provident fund provides a certain measure of relief only and a portion of that consists of the employee's wages that he and his family would ultimately receive, and that this provision in the present day conditions is wholly insufficient relief and to retirement benefits, gratuity and provident fund, when the finances of the concern permit ought to be allowed.

21. In Workmen Employed under Powells Ltd. v. Powells Ltd. reported in 1952 LAC 334 the Court observed that the gratuity may not amount to too much but it is a kind of help which the workmen are in need on retirement. It is also in accordance with our present notions of social justice that those who have put in long service should on retirement have something to sustain them in their old age.

22. Section 13 of the Payment of Gratuity Act, 1972 clearly indicate the intention of the legislature that this amount shall not be liable to attachment in execution of any decree or order of any civil, revenue or criminal court. Section 13 reads as under:

13. Protection of gratuity- No gratuity payable under this Act [and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under Section 5] shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court.

23. The legislature in its wisdom has incorporated this Section to give sanctity to the amount of gratuity that this amount is reserved for long service of the employee given to him at the time of his retirement. This amount cannot be attached in execution of any decree or order of any civil, revenue or criminal court. This intention of the legislature has to be given true meaning and has to be respected.

24. In Bakshish Singh Vs Darshan Engineering Works and others; their Lordships of the Supreme Court have analysed a large number of cases dealing with the concept of gratuity. The Supreme Court observed that it would be apparent both from its object as well as from its provisions that the Act was placed on the statute book as a welfare measure to improve the service conditions of the employees. The Court further mentioned that the Payment of Gratuity Act is of the genre of Minimum Wages Act, the Payment of Bonus Act, the Provident Funds Act, Employees State Insurance Act and other like statutes. These statutes lay down the minimum relevant benefit which must be made available to the employees. Their Lordships of the Supreme Court further observed that "we have solemnly resolved to constitute this country, among others, into a socialist republic and to secure to all its citizens, which, of course, include workmen, social and economic justice". In this judgment, their Lordships referred to article 38 of the Constitution and mentioned that the requirement of the State to strive to promote the welfare of the people by securing and protecting as effectively as it may, a social order in which, among other things, social and economic justice shall inform all the institutions of the normal life".

25. Reference has also been made in the aforesaid case to the Articles 39 and 41 of the Constitution of India. The Court observed that "Article 39 states that the State shall, in particular, direct its policy towards securing among others, that the citizens have the right to an adequate means to livelihood and that the health and strength of workers are not abused. Article 41 of the Constitution directs the State to make effective provision, among others, for securing public assistance in old age and in other cases of undeserved want". Articles 41 and 43 of the Constitution require, the State to endeavor to secure by suitable legislation to all workers a living wage, conditions of work, ensuring a decent standard of life and full enjoyment of of leisure, social and cultural opportunities. Article 47 of the Constitution requires that the State shall regard the raising the level of nutrition and standard of living of its people and the improvement of public health as one of its primary duties. In the said case, Court further observed that there is a restriction placed on the exercise of the Fundamental Rights under Article 19(1)(g) by clause 6 of the said Article. Clause 6 states that nothing in sub-clause (g) of clause (1) shall affect the operation of any existing law or prevent the State from making any law imposing in the interests of general public reasonable restriction on the exercise of right conferred by that sub-clause. The Court observed that it cannot be disputed that the present Act is a welfare measure introduced in the interest of the general public to secure social and economic justice to workmen to assist them in their old age and to ensure them a decent standard of life on their retirement.

26. In Crown Aluminium Works Vs Workmen; the Supreme Court observed as under :

"There is, however, one principle which admits of no exceptions. No industry has a right to exist unless it is able to pay its workmen at least a bare minimum wage. It is quite likely that in under-developed countries, where unemployment prevails on a very large scale, unorganized labour may be available on starvation wages; but the employment of labour on starvation wages cannot be encouraged or favored in a modern democratic welfare. If an employer cannot maintain his enterprise without cutting down the wages of his employees below even a bare subsistence or minimum wage, he would have no right to enterprise on such terms."

27. A reference has been placed on State of Haryana and others Vs. K.N. Dutt; . In the peculiar facts and circumstances, the Supreme Court reversed the Division Bench judgment of the High Court by which the order of the learned Single Judge was set aside, and it was directed that the respondent State was competent to deduct the government dues from the gratuity and pension.

28. The learned counsel for the appellant in reply to the submissions of the learned counsel for the respondent placed reliance on a large number of cases. The learned counsel for the respondent in order to strengthen his submission to demonstrate that the gratuity is not dependent on vacating the government accommodation, he placed reliance on various judgments. In R. Kapur Vs Director of Inspection (Painting and Publication) Income Tax and another; (1194) 6 Supreme Court Cases 589. While relying on the judgment in 'State of Kerala Vs. M. Padmanabhan Nair; ' stated that "pension and gratuity are no longer any bounty to be distributed by the Govt. to its employees on their retirement out have become, under the decisions of this Court, valuable rights and property in their hands and any culpable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate, i.e. 18% till actual payment". The Court observed that gratuity is not dependent on vacating the government accommodation and not paying damages levied under relevant rules to other State.

29. Reliance has also been placed on Jarnail Singh Vs Secretary, Ministry of Home Affairs and Others; . In this case, their Lordships of the Supreme Court held that in Rule 3(1) (0) of the Central Civil Services (Pension) Rules, 1972, the term of 'pension' defines that "it includes gratuity except when the term 'pension' is used in contradistinction to gratuity in consonance with the basic concept for recovery of the government dues the amount of pension can be withheld".

30. In Anirudh Pandey Vs Bihar State Road Transport Corporation and another; AIR 1995 (SC) 1129 their Lordships of the Supreme Court has taken the view that the appellant had failed to vacate and surrender the house to the Corporation. In this case the Court directed the payment of interest at the rate of 15% and costs.

31. The counsel for the appellant placed reliance on Travancore Plywood Industries Ltd. Vs Regional Joint Labour Commissioner & Others; 1996 (2) LLJ 85. In this case the Kerala High Court has taken the view that the amount of gratuity due to an employee can be withheld only on any of the grounds mentioned in the Act and not otherwise and at any rate refusal of the employee to surrender the land in his occupation in violation of the directive issued by the petitioner-company-employer, even if it is assumed that the land belongs to the employer cannot be treated as failure to settle the account by the employee thereby forming a basis for withholding dispersal of arrears of gratuity.

32. There is no provision of law by which gratuity can be withheld. The Court in D.V.Kapoor Vs Union of India and others; observed that the order of withholding the gratuity as a measure of penalty is obviously illegal and is devoid of jurisdiction.

33. Reliance has been placed on the judgment of the Bombay High Court in Ramjilal Chimanlal Sharma Vs M/s Elphinstone Spinning and Weaving Mill Co. Ltd. and another; 1984 LAB I.C. 1703. It is observed that it is not permissible under the Payment of Gratuity Act to withhold the amount for any reason. Even though the conduct of the petitioner in holding back possession of the premises is not very praiseworthy still that is not a sufficient reason to deprive him of the right of gratuity.

34. In Swadeshi Cotton Mills Vs Asstt. Labour Commissioner (Central) & Controlling Authority under Payment of Gratuity Act, Allahabad and Others; 2000(1) Labour Law Journal 1221, the Court observed that non vacation of the quarter may not be a ground for withholding the payment of gratuity.

35. Similar view has been taken by Kerala High Court in H. Rajendra Pai Vs Canara Bank and another; (1998) 78 Factory and Labour Reports 650. In this case the Court observed that non-vacating the quarter of the Bank is not a ground for withholding the gratuity.

36. We have carefully considered the provisions of the Payment of Gratuity Act, its aims and objects and cases cited at bar. From the aims and objects of the Gratuity Act, it, is abundantly clear that the legislature did not want that the gratuity amount should be withheld for any reason except for the reasons specifically incorporated in the Act. The Courts have to translate the intention of the legislature. This Act has been enacted as a welfare legislation. There are some cases where the Courts have taken the view that the amount of gratuity can be withheld even for non-vacation of the quarter. But in view of the number of direct and categoric judgment of the Apex Court that the Payment of Gratuity Act is a welfare legislation, the amount of payment of gratuity cannot be withheld for non-vacation of the quarter. It may be pertinent to mention that the appellant has taken separate proceedings of eviction in this case and in other connected cases and those cases are pending in various courts.

37. The learned Single Judge has carefully considered all the relevant judgments of the Supreme Court. On consideration of totality of the facts and circumstances, in our considered view no interference is called for. These appeals and writ petitions filed by the appellant are accordingly dismissed but in the facts and circumstances of these cases, we direct the parties to bear their own costs.