Gujarat High Court

Shri Shah Khimchand Laxmichand Deaf And ... vs State Of Gujarat on 1 April, 2025

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                             C/SCA/21672/2023                                         JUDGMENT DATED: 01/04/2025

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                                       IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                        R/SPECIAL CIVIL APPLICATION NO. 21672 of 2023

                                                            With
                                        R/SPECIAL CIVIL APPLICATION NO. 1931 of 2024
                                                            With
                                        R/SPECIAL CIVIL APPLICATION NO. 1998 of 2024
                                                            With
                                        R/SPECIAL CIVIL APPLICATION NO. 21695 of 2023
                                                            With
                                        R/SPECIAL CIVIL APPLICATION NO. 21737 of 2023

                        FOR APPROVAL AND SIGNATURE:


                        HONOURABLE MRS. JUSTICE M. K. THAKKER

                        ==========================================================

                                      Approved for Reporting                         Yes           No
                                                                                 ✔
                        ==========================================================
                             SHRI SHAH KHIMCHAND LAXMICHAND DEAF AND DUMB SCHOOL-
                                                     TRUST
                                                     Versus
                                            STATE OF GUJARAT & ORS.
                        ==========================================================
                        Appearance:
                        MS MESHWA H. BHATT WITH MR DG SHUKLA (1998) for the Petitioner(s)
                        No. 1
                        MR YUVRAJ BRAHMBHATT AGP for the Respondent(s) No. 1,2,3
                        PARTH J ADHYARU(9359) for the Respondent(s) No. 4
                        SIDDHI V VADODARIYA(9533) for the Respondent(s) No. 4
                        ==========================================================

                           CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER

                                                              Date : 01/04/2025

                                                        COMMON ORAL JUDGMENT

1. Rule returnable forthwith. Learned advocates for the

respondents waive service of rule on behalf of the respective

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respondents.

2. Since issue is raised in all partitions are similar, they are

being decided by a common judgment. However, facts of Special

Civil Application No.21672 of 2023 taken into consideration.

3. The petitioner filed the petition under Article 226 of the

Constitution of India with following reliefs:

"(A) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other writ or direction directing the Respondent No.1 herein to release the grant for the balance Gratuity amount of Rs.1,20,046/- as well as 10% simple interest amount on Gratuity w.e.f. 01.11.2006 till the date of payment, payable to Ms. Jayshriben J. Bhatt - Respondent Employee pursuant to the Demand Notice date 31.03.2023/17.04.2023 issued by City Mamlatdar, Bhavnagar Respondent No.3 herein in the interest of justice; Annexure - A, (B) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to grant the interim relief staying the implementation, execution and operation of Demand Notice dated 31.03.2023/17.04.2023 issued by City Mamlatdar, Bhavnagar Respondent No.3 herein at Annexure- A to the present petition in the interest of justice; (C) An ex-parte ad interim relief in terms of paragraphs 11 (B) above may kindly be granted;

(D) Any other and further reliefs as this Hon'ble Court may deem fit and proper in the circumstances of the case."

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4. It is the case of the present petitioner that the petitioner -

Trust is mainly engaging in imparting education and training to

the deaf and dumb students and for that purpose, is running

several educational institutes. The petitioner - Trust is getting

100% grant from the Social Defence Department, Government of

Gujarat. It is further case of the petitioner that the employee

concerned was retired from the service on attaining the age of

superannuation and on retirement, the Form No. I - application

filed for claiming gratuity under the Payment of Gratuity Act,

1972. Thereafter, the Form No.N was filed along with an

application for condonation of delay before the learned

Controlling Authority, Bhavnagar, learned Controlling Authority

has issued the notice of hearing to both the parties, the

petitioner - Trust has written a letter to Director, Social Defence

Department, State of Gujarat, who is respondent No.1 herein,

about the application for claiming gratuity submitted by the

respondent - employee and requested to pass necessary order

for payment of gratuity. The petitioner - Trust is getting 100%

grant from Social Defence Department, Gujarat State,

Gandhinagar and is a grant-in-aid institute and therefore,

application was moved to join the Social Defence Department,

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Gujarat State, Gandhinagar as a necessary party before the

learned Controlling Authority. Learned Controlling Authority

issued the notice on the said application, wherein the

respondents - employees made an endorsement that they have

no objection to the said application. Learned Controlling

Authority, after hearing the submissions of the respective party,

rejected the application submitted by the petitioner to join the

Director, Social Defence Department, Gujarat State, Gandhinagar

as a necessary party on 03.03.2018. The said order challenged

before this Court by way of filling the petitions being Special Civil

Application No.9349, 9315 to 9353 of 2018 and this Court, vide

common oral order dated at 08.04.2019, disposed of the said

petitions by setting aside the impugned order dated 03.03.2018

on recording that the State has no objections, if aforesaid

department is made a party to the proceedings before the

Competent Authority and accordingly, the petitions were

allowed. Thereafter, the Director, Social Defence Department,

State of Gujarat was joined as a party in proceedings before the

learned Controlling Authority. Learned Controlling Authority,

after hearing the party, allowed the application filed by the

employee directing the petitioner - Trust and the respondent

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No.1 of Special Civil Application No.21672 of 2023, Special Civil

Application No.21737 of 2023 and Special Civil Application

No.21695 of 2023. However, in the Special Civil Application

No.1998 of 2024 and Special Civil Application No.1931 of 2024

the directions were issued against the present petitioner only. It

is further observed that the payment of the gratuity for a period

of 1976 to 1997 be taken after taking into consideration the

decision of the Hon'ble Apex Court in the pending matters along

with the amount of 10% interest with effect from date of

retirement till the payment of the gratuity, amount which should

not be exceeding the gratuity amount. It is further case of the

petitioner that even before order passed by the learned

Controlling Authority, the communications were sent to the

respondent No.1 to give necessary directions for the amount of

gratuity as well as the interest thereon. After the order is passed

by the learned Controlling Authority, again communications were

sent informing about the order passed by the learned Controlling

Authority as well as submitting the bill along with interest

thereon. However, neither any reply was given by the respondent

No.1 nor made entire payment along with interest to the

employee, respondent, thereafter, made the payment of the

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amount of gratuity in the account of the employee and informed

the Trust to send the receipt, which was sent by the petitioner -

Trust. Thereafter, the request was made by the Trust on

14.10.2020 to the learned Controlling Authority for waiving of

the interest on the gratuity payable to the employee. Thereafter,

the respondent has also passed an office order for making the

payment of the additional amount of gratuity, as the arrears of

gratuity on higher pay scale benefits, the said amount was also

credited in the account of the employee by respondent No.1.

Thereafter, the petitioner has received demand notice issued by

the City Mamlatdar, Bhavnagar on 31.03.2023 / 17.04.2023

informing that balance amount of the gratuity along with 10%

simple interest has not been paid by the Trust and if the said

amount is not deposited within a period of 10 days, the

proceeding under the Land Revenue Code will be initiated. The

said notice is issued to the petitioner - Trust only and in turn, the

present petitioner has informed the respondent No.3 i.e. - City

Mamlatdar that as the amount of the gratuity was paid by the

respondent No.1, therefore, the liability for the payment of

interest is also on respondent No.1. It is further case of the

petitioner that pattern of assistance made available to the

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voluntary organizations like the petitioner - Trust is provided

under the grant-in-aid Rules and as the petitioner - Trust is

entitled for the reimbursement in respect of the expenses

incurred towards the pay and allowance of the employee. It is the

obligatory function of the State Government to pay the gratuity

due under the Act, 1972. It is further case of the petitioner that

as the respondent Nos.1 and 2 have partly made the payment of

the gratuity but have not paid full gratuity amount and the

interest thereon and as there has been substantial delay on the

part of the respondent Nos.1 and 2 in making the payment of

gratuity, the compliance of the order passed by the learned

Controlling Authority should be made and for that, the grant

shall be released in favour of the petitioner by the respondent

Nos.1 and 2.

5. Heard learned advocate Mr. Shukla for the petitioner,

learned AGP Mr. Yuvraj Brahmbhatt for the State and learned

advocate Ms. Vadodaria for the respondent - employee.

6. Learned advocate Mr. Shukla submits that the petitioner -

Trust has undertaken voluntary task of running the educational

institute for deaf and dump students as well as center for

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rehabilitation in the society with object of providing social

service. It is the obligatory function of the State Government

within Constitutional framework to provide the educational

institutions for deaf and dumb students, which is undertaken by

the present petitioner, as the grant-in-aid regulations due

contemplate payment of pay and allowance of the staff. The

State Government is bound to provide for grant for gratuity

payable to the concerned employee along with interest if there is

the delay in payment by the State Government. Refusal by the

State Government to do so is in breach of provisions of the above

grant-in-aid regulations and therefore, also the directions be

issued to the State Government to release the grant in favour of

the petitioner - Trust. It is further submitted by the learned

advocate Mr. Shukla that when the respondent Nos.1 and 2 have

undertaken 100% availability of grant in respect of the running of

institutions as well as payment of gratuity, respondent No.1 and

2 herein are also bound to provide for any payment i.e. due and

payable to the employees under the provisions of Labour Law as

an employer, which is the undertaking of the work from its

employee through an agent of the State Government. Learned

advocate Mr. Shukla further submits that set up of the staff is

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approved by the Social Defence Department and interview

process for the appointment was also attended by the

representative of the said department. As the 100% grant for the

payment of salary and wages was given by the State

Government, the payment towards the gratuity is also required

to be made, which was partly made by the State Government by

crediting the amount directly in the account of the employee

concerned. In that background, learned advocate Mr. Shukla has

prayed to allow this petition and for the issuance of directions

for the release of the grant at the end of respondent Nos.1 and 2.

7. Par contra, learned AGP Mr. Yuvraj Brahmbhatt has

submitted that there is no provision in the grant-in-aid with

regard to the payment of gratuity. Learned AGP Mr. Yuvraj

Brahmbhatt submitted that under the GCSR Rule employee

would not be entitled for the gratuity as well as the interest and

therefore, State Government is justifying in denying to release

the grant in favour of the petitioner for payment of interest.

Learned AGP Mr. Yuvraj Brahmbhatt further stated that in Special

Civil Application No. 1931 of 2024, wherein directions for

payment of the interest and the gratuity were issued against the

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petitioner - Trust only and in the petition filed by the employee

for implementation of the recovery certificate, the payment is

made by the petitioner - Trust, which is recorded by this Court in

order passed dated 13.12.2022 in Special Civil Application

No.2474 of 2022. Learned AGP Mr. Yuvraj Brahmbhatt, in that

background, stated that when the payment is made in one of the

cases then petitioner is only responsible and liable for payment

of gratuity in all cases. By submitting the same, learned AGP Mr.

Yuvraj Brahmbhatt has requested to dismiss the petition.

8. Having considered the arguments advanced by the learned

advocates for the respective parties, it emerges that the

petitioner is getting 100% grant from the respondent Nos.1 and

2 to run the education institute for the deaf and dumb students.

It is also not in dispute that the respondent No.1 has been joined

as a party respondent after the directions issued by this Court in

the writ petitions. It is also not in dispute that all the employees

are not eligible for the pension, as they had opted for the CPF.

The contention, which was raised by the learned AGP Mr. Yuvraj

Brahmbhatt submit that there is no provision in the grant-in-aid

for payment of gratuity. It is required to be observed herein that

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grant-in-aid was enacted in the year 1964. However, the payment

of the gratuity was enacted in the year 1972, which is subsequent

to the enactment grant-in-aid. It emerges from the record that on

filing the application by the employees for gratuity under the

Act, 1972, the communications were addressed by the present

petitioner to the respondent - State informing the proceedings

initiated and requesting for issuance of the directions for

payment of the gratuity, even after the order passed by the

learned Controlling Authority, it was informed by the petitioner -

Trust to the respondent that the payment is required to be made

within the time prescribed, otherwise, the interest would be

levied. Thereafter, the payment is made by the present

respondent, part payment is made towards the gratuity directly

in the account of the respondent - employee. Subsequently, for

the difference amount of higher pay grade, further amount is

paid that also directly the account of the concerned employee on

18.11.2021. It appears that thereafter, the representation is

made by the respondent Nos.1 and 2 to learned Controlling

Authority requesting to waive the interest on the gratuity

amount. It is undisputed fact that neither the petitioner nor the

respondent No.1 has challenged the impugned order, though

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directions were issued in the order annexed with Special Civil

Application No.1998 of 2024 and Special Civil Application

No.1931 of 2024, in which both the petitioner and respondent

No.1 were held liable for making the payment. The order of the

learned Controlling Authority attains the finality. It is true that in

one of the petitions being Special Civil Application No.1931 of

2024 for the payment of the gratuity is made by the petitioner in

view of the directions issued by this Court in Special Civil

Application No. 2474 of 2022. However, this Court has made an

observation in the order dated 13.12.2022 that if the respondent

is aggrieved by any action of the State Authority, it will be open

for them to challenge the same before the appropriate forum.

8.1 This Court has referred the decision rendered by the

Hon'ble Apex Court in the case of Nutan Bharti Gram Vidyapith

V/s. Government of Gujarat reported in 2024 (12) SCR 366,

wherein identical situation the following observations are made

by the Hon'ble Apex Court in Para Nos.13 to16.

"13. It is not a matter of dispute that the appellant is an institution entitled to Grant-in-Aid and the employees thereof are entitled to pensionary benefits in terms of the aforesaid Scheme. The only argument raised by the learned counsel for the State is regarding conduct of the

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appellant in fighting litigation after the State had directed reinstatement of the respondent no.2 and finally settling the matter before the High Court. In our opinion, the same cannot be fatal for the appellant and burden it with the retiral benefits of respondent no.2 whereas the Scheme provides for otherwise. There is no exception provided in the Scheme to enable the State to deny payment of retiral benefits to an employee of the Grant-in-Aid Institution under certain circumstances and shift the burden on the institution.

14. The judgment relied upon by the State may not have application in the facts of the case, wherein it was found that the action of the Education Institution was without jurisdiction, transgressing its power to terminate its employee. If the facts of the present case are concerned, no such finding has been recorded by the appellate authority. There were serious charges against the respondent no.2 which included inter alia instigation of students to go on strike, improper behaviour with the co-employees, attempt to pollute the atmosphere in the institution, violation of rules and regulations of the institution and involvement in the activities which may cause damage to the institution. Out of 30 charges, 10 were proved. After inquiry, with a view to maintain discipline in the institution, it was found appropriate that the respondent no.2 be dismissed from service. However, the appellate authority found the charges established to be trivial in nature and opined that those should have been sorted out. The appellate authority

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found that the punishment of dismissal is too harsh and the issues could have been resolved by way of discussion.

15. The appellant, keeping in view the discipline in the institution, thought it appropriate to challenge the same. In such circumstances, it cannot be opined that it's conduct was such that it should be burdened with the retiral benefits of delinquent employee. It is not the opinion of the appellate authority or any Court that the action taken by the appellant against the respondent no.2 was without jurisdiction as was the case in Educational Society, Tumsar and Others (supra).

16. For the reasons mentioned above, the appeals are allowed. The impugned order dated 21.04.2023 passed by the High Court, allowing the Review Application filed by the State and dismissing the Review Application filed by the appellant, is set aside. The Review Application filed by the appellant is allowed. As a consequence, the order dated 26.07.2022 is modified. The consequence thereof is that the State, respondent no.1 shall be liable to pay retiral dues to respondent no.2."

8.2 This Court has also referred the decision rendered by the

Division Bench of this Court in LPA No.1315 of 2006 dated

05.12.2012, wherein also the dispute with regard to the liability

of the Government to make the payment of gratuity to the

employee of the Trust, who are getting the 100% grant, was

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raised, wherein the following orders were passed Para No.14(a).

"(a) It is held that the employees working in the Homes run by the NGOs (original petitioners in the respective petitions) would be entitled to all allowances as are available to the employees working in the Homes run by the Government in capacity as the Government service. The State or its concerned authorities would be required to reimburse the grant for such purpose for the concerned employees of the respective Institutions. So far as the availability of the gratuity is concerned, we find that the position will remain the same at par with the employees working in the Homes run by the Government, inasmuch as if such gratuity is available to such employees working in the Homes run by the Government the same would equally be available to the employees working in the Homes run by the NGOs like the original petitioners. However, it is clarified that all benefits of the allowances at par with the employees working in the Homes run by the Government would be available on fulfilling the conditions that such posts were sanctioned by the competent authority concerned and the recruitment process for employment of such person is duly followed in accordance with law by the concerned original petitioner Institutions."

8.3 This Court has also referred the decision rendered by this

Court in LPA No. 822 of 1997 and LPA No. 96 of 2012, wherein

also the directions were issued to the State Government to

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reimburse the payment of the gratuity in identically situated

employees.

8.4 In view of above facts, this Court is of the view that when

100% grant for making payment of pay and allowances of the

approved employees is granted by the State Government and

there is no dispute with regard to the recruitment in accordance