B.S.E.S. Rajdhani Power Ltd. vs Govt. Of Nct Of Delhi And Anr.
2014 Latest Caselaw 3441 Del

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* IN THE HIGH COURT OF DELHI AT NEW DELHI

                                   Judgment delivered on: 31st July, 2014

+     W.P.(C) 3263/2012

      B.S.E.S. RAJDHANI POWER LTD.               ..... Petitioner
                     Represented by: Mr. Nikhil Singla, Advocate.

                         Versus

      GOVT. OF NCT OF DELHI AND ANR.            .....Respondents
                    Represented by: Mr.   S.B.S.       Vashistha,
                                    Advocate for R-2.

CORAM:
HON'BLE MR. JUSTICE SURESH KAIT


SURESH KAIT, J. (Oral)

1. Vide the present petition the petitioner seeks to set-aside the order dated 02.12.2011 passed by the Appellate Authority and order dated 19.01.2009 passed by the Controlling Authority under the Payment of Gratuity Act, 1972.

2. I have gone through the averments made in the writ petition. The relief sought in the instant petition is against respondent No.1. The present petition is entitled to be dismissed on this sole ground, however, in the interest of justice I consider the "respondent No.1" as "respondent No.2" while adjudicating the present petition.

3. Brief facts of the case are that the respondent No.2 was appointed by the DESU on 01.07.1980 and was working in the Najafgarh Zone as

MRI. He resigned from the services of DVB on 28.02.1997. Therefore, the respondent No.2 before his resignation has completed a total of 16 years and 8 months of service with DVB. The case of the petitioner herein is that the respondent No.2 is not entitled to gratuity as per Rule 26 of CCS Pension Rules as he has not completed 20 years of service, which is minimum eligibility for gratuity.

4. Learned counsel appearing on behalf of the petitioner submits that on 1st July, 2002 the DVB was unbundled and various new entities were incorporated as per the provisions of Delhi Electricity Reforms Act, 2000. One of these entities is the BSES Rajdhani Power Ltd., the petitioner herein.

5. Learned counsel further submits, the respondent No.2 filed a case, against Delhi Transco Ltd. giving them a notice for recovery of his gratuity, in the year 2005 i.e. after a period of more than 8 years.

6. Learned counsel submits that the respondent No.2 has never made any demand of his dues prior to the unbundling of erstwhile DBV. The petitioner filed written statement before the Controlling Authority and submitted that after the unbundling of erstwhile DVB, the relevant transferee shall stand substituted for all purposes, all rights, powers and obligations. It is also submitted that in the present case the BSES-RPL is the relevant transferee company. Consequently, the petitioner was impleaded as one of the parties in the present petition and the Delhi Transco Ltd. was deleted from the array of parties.

7. Learned counsel submits that the learned Controlling Authority and the Appellate Authority erred in holding that the petitioner is liable to pay

gratuity, since it is the Delhi Vidyut Board Employees Terminal Benefit Fund 2002 which is responsible to pay the terminal benefits to the employees of the erstwhile DVB. He further submitted that both the authorities mentioned above erred in concluding and interpreting the notification dated 18.01.2005 (amendment notification dated 09.11.2005) stating that "the employees of erstwhile DVB/ DESU who are/ were entitled to benefits and pension under Central Civil Service (Pension) Rules, 1972 are not entitled to gratuity under payment of Gratuity Act, 1972".

8. To strengthen his argument, learned counsel relied upon a case of D.T.C. vs. Sh. Richpal Singh & Anr., 2007 V AD (Delhi) 420 passed in W.P.(C) No.7396/2005 and 7517/2005 vide order dated 05.03.2007 wherein it was held as under: -

"11. A perusal of the impugned order, undoubtedly, reflects that the Controlling Authority has not passed any order or made any observation with respect to the application for condonation of delay filed by the respondent No.1, which apparently remained pending. Nor was the objection, as raised by the petitioner/ management with regard to the delay and latches in filing the aforesaid application, been dealt with by the Controlling Authority. It may be noted here that ignorance of law is no excuse and cannot be considered a just or sufficient cause for entertaining such an application and that too ten years after the respondent received the gratuity amount. This factor was completely overlooked while passing the impugned order."

9. On the other hand learned counsel appearing on behalf of the respondent No.2 submits that the grounds taken by the petitioner are

vague with no substance and contrary to the settled position of law as has been decided by the Division Bench of this court in the case of M.C.D. vs. Nand Kishore, in L.P.A. No.415/2002, in a similar situation, and held as under: -

"2. The respondent was employed as driver in the Health Department on 10th December, 1957. He retired from service on 30th June, 1998. The appellant paid a sum of Rs.1,09,098/- to the respondent as gratuity. The respondent not being satisfied with the amount of gratuity paid to him, filed an application before the Controlling Authority under the Payment of Gratuity Act, 1972. The Controlling Authority held the respondent entitled for an additional sum of Rs.47,301/- which was short paid to him by the appellant. The main grievance of the appellant is that the Controlling Authority did not take into consideration delay of the respondent in filing the application under the Payment of Gratuity Act, 1972 and the rules framed thereunder. The grievance of the appellant is misconceived as the non-payment of gratuity due to the respondent was a continuing wrong and there was no question of any delay in approaching the Controlling Authority. Accordingly, we do no see any reason to interfere with the order passed by the Controlling Authority or the impugned order passed by the learned Single Judge. In the circumstances, the appeal fails and is therefore dismissed."

10. I have heard learned counsel for the parties. Admittedly, the respondent No.2 was appointed on 01.07.1980 and resigned from the services on 28.02.1997, thus the total period of service rendered by the respondent No.2 was about 17 years. The last wages drawn by him was Rs.6,758/-. Initially the respondent No.2 made Delhi Transco Ltd. as opposite party. Consequently, the said respondent filed written statement wherein it was submitted that vide notification No.11(99)/2001-

power/2867 dated 20.11.2001 and in exercise of the power conferred by Sections 15, 16 and other provisions of the Delhi Electricity Reform Act, 2000 and vide notification No.F.11(99)/2001/POWER/215 dated 26.06.2002, Delhi Vidyut Board has ceased to exist and various new entities have come into existence w.e.f. 01.07.2002. Accordingly, the petitioner was made party.

11. The issue raised by the petitioner before the learned Controlling Authority has been dealt with in the case of M.C.D. vs. Nand Kishore (supra) by this Court, wherein it was held that "as the non-payment of gratuity is a continuing offence so no limitation applies". When the employer has benefited itself by the money belonging to employees he cannot resist a claim for gratuity on technical plea of limitation.

12. Being aggrieved, the petitioner assailed the order dated 19.01.2009 passed by the learned Controlling Authority under the Payment of Gratuity Act, 1972 before the Appellate Authority.

13. After considering the submissions of the learned counsel for the petitioner, the learned Appellate Authority observed as under: -

"6. In this case the notification clearly states that the employees who are entitled to the benefits of gratuity and pension under the C.C.S. Pension Rules, 1972 are given exemption and not those who are not entitled to benefits and pension under the C.C.S. Pension Rules, 1972. It is clear from the facts that applicant resigned from the service and is not entitled to the benefits of gratuity and Pension Rules, 1972 and is therefore, not covered by the aforementioned notification and has a right to claim gratuity under the payment of Gratuity Act, 1972.

7. A similar notification was also filed on behalf of Delhi Power Company Ltd. wherein similar exemption has been granted to Delhi Power Company Ltd. also and in that case also the applicant is entitled to get gratuity under the payment of Gratuity Act, 1972. The non applicant has also filed a photo copy of a notification wherein certain resolution made by M.C.D. in connection with the introduction of pension scheme in the Delhi Electric Supply undertaking (Delhi Municipal Corporation) for its employee was introduced and made application on the employees of the erstwhile Delhi Electric Supply Undertaking (D.M.C.) and were known as Delhi Electric Supply Undertaking Delhi Municipal Corporation services (Death Cum Retirement) Benefits regulation 1973 so far as these regulation are concerned they relates more or less for asking the employees for filing an option regarding conversion of their contributory provident fund scheme into that of under liberalised pension rules 1950 of the central Government as amended from time to time but this notification shows that the employees of erstwhile Delhi Electric Supply Undertaking were governed on equal footing as were the employees of Municipal Corporation of Delhi."

14. Accordingly, opined that the provisions contained in the transfer scheme clearly shows that the Trust is an entity for looking after the liabilities arising out of the superannuation/ retirement of an employee and does not deal with other liabilities including liabilities arising out of other service matter including resignation. Therefore, case of the respondent No.2 is not covered under the Trust so far BSES Rajdhani Power Ltd. is concerned, consequently, the petitioner is held responsible for payment of gratuity of respondent No.2.

15. Learned counsel for the petitioner has raised the issue of interest that the respondent No.2 resigned from DVB in the year 1997 and the

petitioner Company came into existence on 01.07.2002 and was made party in the year 2007 in this case, therefore, the petitioner is not liable to pay interest from the year 1997.

16. In this regard, it is to be noted that the petitioner has taken all the liability whatsoever of DVB. The liability of the gratuity is of continuing in nature and whatever claim the respondent No.2 could have made against DVB, the respondent No.2 is certainly entitled to claim the same from the petitioner. Therefore, on this issue I find no substance in the argument of the learned counsel for the petitioner.

17. Learned counsel for the petitioner has also raised the issue that the respondent No.2 was the employee of DVB and hence he was not covered under the definition of "employee" as per the Payment of Gratuity Act, 1972.

18. The Controlling Authority analysed the notification No.F.1/4/PGA/Lab/05/80 dated 04.04.2006 relevant portion of which is reproduced here "The Lt. Governor of the National Capital Territory of Delhi is pleased to exempt those employees of BSES Rajdhani Power Ltd., having its registered office at B.S.E.S. Bhawan, Nehru Place, New Delhi, who were entitled to the benefits of gratuity and pension under the Central Civil Services Pension Rules, 1972 from the operation of the provisions of the said Act with effect from 1st July, 2002. The employees who are not entitled to the benefits and pension under the Central Civil Services Pension Rules, 1972 but are entitled under the said Act will be entitled to gratuity under the said Act".

19. In view of the above notification the learned Controlling Authority

opined that the employees who are entitled to benefits of gratuity and pension under the CCS Pension Rules, 1972 are given exemption and not those who are not entitled to gratuity and pension under the CCS Pension Rules, 1972. It was further opined that the respondent No.2 resigned from the services and was not entitled to the benefit of gratuity and Pension Rules, 1972 and is, therefore, not covered by the aforesaid notification and has a right to claim gratuity under the Payment of Gratuity Act, 1972.

20. The law on this point is no longer res integra. The Apex Court in the case of Municipal Corporation of Delhi Vs. Dharam Prakash Sharma & Anr., AIR 1999 SC 297, has examined whether an employee of the MCD would be entitled to payment of gratuity under the Payment of Gratuity Act when the MCD itself has adopted the provisions of the CCS (Pension) Rules, 1972 and held that the employees of the MCD would be entitled to the payment of gratuity under the Payment of Gratuity Act notwithstanding the fact that the provisions of the Pension Rules have been made applicable to them for the purpose of determining the pension.

21. Following the dictum of Municipal Corporation of Delhi Vs. Dharam Prakash Sharma & Anr. (supra), the Kerala High Court in the case bearing W.A.No. 1062 of 2003 & W.A.No. 1938 of 2004, titled as „Kerala State Electricity Board Vs. R. Mohankumar', decided on 08.01.2008, held as under:-

"4. The learned Single Judge, has relied upon the dicta of the Apex Court in the case of Municipal Corporation of Delhi v. Dharam Prakash Sharma and Anr. (1998) 7 S.C.C. 221

wherein it is stated, We have examined carefully the provisions of the Pension Rules as well as the provisions of the Payment of Gratuity Act. The Payment of Gratuity Act being a special provision for payment of gratuity unless there is any provision therein which excludes its applicability to an employee who is otherwise governed by the provision of the Pension Rules it is not possible for us to hold that the Respondent is not entitled to the gratuity under the Payment of Gratuity Act. The mere fact that the gratuity is provided for under the Pension Rules will not disentitle him to get the payment of gratuity under the Payment of Gratuity Act. In view of the overriding provisions contained in Section 14 of the Payment of Gratuity Act, the provision for gratuity under Pension Rules will have no effect...In the aforesaid premises we are of the considered opinion that the employees of the MCD would be entitled to the payment of gratuity under the Payment of Gratuity Act not with standing the fact that the provisions of Pension Rules have been made applicable to them for the purpose of determining the pension. Needless to mention that the employees cannot claim gratuity available under Pension Rules.

5. Following the dicta of the Apex Court, the learned Single Judge has allowed the writ petition and has declared that Exts. P-3 and P-5 will not in any way affect the right of the Petitioner to get the gratuity under the provisions of Act of 1972 and further has directed the Board to to pay the balance amount of gratuity due to the Petitioner after deducting the gratuity already paid under Rule 68 of Part III of the KSR. Aggrieved by the orders so passed by the learned Single Judge, the Board is before us in this appeal.

6. The learned Single Judge following the decision in O.P. No. 674 of 2002 has disposed of other writ petitions. The

Board, aggrieved by those orders has filed separate appeals before this Court.

7. The Payment of Gratuity Act, 1972 is an act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oil fields, plantations, ports, railway companies, shops or other establishments and formatters connected therewith or incidental thereto. Section 2 of the Act defines the meaning of certain words that finds a place in the Act. Section 2(e) of the Act defines the meaning of the expression "employee". It means any person (other than an apprentice) employed on wages, in any establishment, factory, mine, oil field, plantation, port, railway company or shop to do any skilled, semi-skilled, or unskilled, manual, supervisory, technical or clerical work, whether the terms of such employment are express or implied, and whether or not such person is employed in a managerial or administrative capacity, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.

8. The definition of an employee is wide enough to include an employee of Kerala State Electricity Board, since it is an establishment. The argument of the learned Counsel for the Appellant is that an employee working in Kerala State Electricity Board is an employee of the State Government and therefore, the Payment of Gratuity Act cannot be made applicable to him. In our view, this submission of the learned Counsel has no merit whatsoever. The clause specifically excludes only those employees who are employed under the Central Government or the State Government. The employees of the Corporation by no stretch of imagination can be an employee of the State Government. The law on the point is well-settled......."

22. In view of the above, the petitioner has failed to make good his case before this court. I find no deficiency in the order passed by the Controlling Authority vide order dated 19.01.2011 and the order dated

02.12.2011 passed by the Appellate Authority.

23. Finding no merit in the petition, the same is dismissed with no order as to costs.

24. Consequently, the Registry is directed to release the deposited amount in favour of the respondent No.2 including the accrued interest thereon.

SURESH KAIT (JUDGE) JULY 31, 2014 hs/sb