Gujarat High Court
Talaja Taluka Sahakari Kharid Vechan ... vs The Appellate Authority on 2 April, 2025
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 4447 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
==========================================================
Approved for Reporting Yes No
No
==========================================================
TALAJA TALUKA SAHAKARI KHARID VECHAN SANGH THROUGH
MANAGER JAGATSINH RAMSINH SARVAIYA
Versus
THE APPELLATE AUTHORITY & ORS.
==========================================================
Appearance:
MR DHARMESH V SHAH(1050) for the Petitioner(s) No. 1
MS DRASHTI D SHAH(11443) for the Petitioner(s) No. 1
MR RAJESH P MANKAD(2637) for the Respondent(s) No. 3
NOTICE SERVED for the Respondent(s) No. 1,2
==========================================================
CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 02/04/2025
ORAL JUDGMENT
1. The present petition is filed under Article 226 of the
Constitution of India challenging the order passed by the
learned Controlling Authority and confirmed by the
learned Appellate Authority directing the present
petitioner to pay the amount of Rs.1,93,140/- with 10%
interest to the respondent herein.
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
2. It is the case of the petitioner that the petitioner is a
registered Co-operative Society and working at District
level at small scale, and selling seeds and fertilizers to
the farmers. On 07.01.1984 the respondent No.3 was
appointed as a Godown Keeper by passing the
Resolution being No.7, again Resolution No.6 came to be
passed in the year 2013, relieving the respondent
employee on attaining the age of superannuation.
Thereafter, respondent was engaged as a part-timer and
has worked continuously up to year 2021. The
Committee has passed further resolution No.3 on
15.12.2021 relieving the respondent No.3 from the
service as a part-timer. The respondent employee
preferred an application being Gratuity Application No.3
of 2022 before the learned Controlling Authority,
Bhavnagar claiming the gratuity amount of Rs.1,93,140/-
with 10% interest. On 19.01.2023, communication was
sent to the respondent-employee for the recovery of the
amount of Rs.73,633/- which is advanced salary paid to
the respondent by the petitioner.
2.1. Learned Controlling Authorities had passed an order
on 19.06.2023 directing the present petitioner to pay the
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
amount of gratuity as claimed in the application.
Thereafter, the learned Controlling Authority has issued
the certificate on 18.07.2023 certifying the amount of
Rs.2,22,111/- with interest by directing the present
petitioner to pay the said amount. The petitioner has
deposited the amount before the learned Controlling
Authority and filed the appeal before the Appellate
Authority being a Gratuity Appeal No.175 of 2023 which
came to be rejected on 30.10.2023. Challenging the
order passed by the learned Controlling Authority,
affirmed by the learned Appellate Authority the present
petition is filed.
3. Heard learned advocate Mr.Dharmesh Shah for the
petitioner and learned advocate Mr.Rajesh Mankad for
the respondent.
4. Though number of contentions are raised in the memo of
the petition, however, the main ground assailing the
order passed by the learned Controlling Authority is that
the respondent attained the age of superannuation in
the year 2013 and thereafter, he was engaged as a
stopgap arrangement and he was serving as a part-timer
upto 2021 therefore, the order passed by the learned
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
Controlling Authority considering the service up to 2021
is erroneous and therefore, both the orders are required
to be set aside and the petition is required to be allowed.
5. Per contra learned advocate Mr.Mankad appearing for
the respondent has submitted that it is true that the
respondent attained the age of superannuation in the
year 2013, however, there is no any date fixed by the
petitioner for retirement. It is submitted by the learned
advocate Mr.Mankad that on completion of these 37
years of service, with a view to avoid the liability of
payment of gratuity, the back dated resolution was
created by the petitioner-Society to project that the
resolution was passed in the year 2013, permitting the
respondent to retire from the service. It is submitted by
learned advocate Mr.Mankad that till date, there is no
order served to the respondent, intimating the
retirement from the year 2013. Learned advocate
Mr.Mankad submits that so far as the contention with
regard to the advance claim is concerned, receiving the
communication from the petitioner, the reply was given
by the respondent on 08.02.2023 and 21.02.2023
pointing out that amount which was advanced, has
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
already been paid immediately on 05.03.2013. The
receipt with regard to the same was also issued being
No.1109 and 1177. It is submitted by the learned
advocate Mr.Mankad that the said reply was not
responded further by the petitioner. Learned advocate
has submitted that on receiving the communication
dated 14.12.2021, relieving the present respondent from
the service, the communication was addressed to the
petitioner on 21.12.2021 wherein, also it is stated that
no terminal dues were paid by the petitioner.
5.1. It is submitted by the learned advocate Mr.Mankad
that on demanding the difference of wages as per the
minimum wage by filing the recovery application, the
respondent was relieved from the service. Learned
advocate Mr.Mankad submits that though it was
projected that respondent was engaged on part time
basis, however, as per the list of the employees, his
name was shown as a Godown Keeper/Peon. Learned
advocate Mr.Mankad submits that after scrutinizing the
evidence placed on record before the learned
Controlling Authority, the learned Controlling Authority
has directed the present petitioner to pay the amount of
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
gratuity which was confirmed by the learned Appellate
Authority and therefore, no interference is required.
6. Having considering the arguments advanced by the
learned advocate for the respective parties and the
documents placed alongwith memo of the petitions, it
emerges that in the ground of the petitions, the
applicability of the Act though mentioned, however,
during the course of hearing, the said ground was not
argued. The only argument for assailing the impugned
order is that after attaining the age of superannuation in
the year 2013 the respondent would not be entitled for
the gratuity amount up to year 2021.
7. At this stage the provisions of the gratuity act, more
particularly section 4, section 2(r) and section 2(q) of the
Payment of Gratuity Act, 1972 are required to be
referred to which is reproduced hereinbelow:-
Section 4
(1) 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, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
(2) For every completed year of service or part thereof in excess
of six months, the employer shall pay gratuity to an employee at
the rate of fifteen days wages based on the rate of wages last
drawn by the employee concerned:
(3) The amount of gratuity payable to an employee shall not
exceed three lakhs and fifty thousand] rupees.
(4) For the purpose of computing the gratuity payable to an
employee who is employed, after his disablement, on reduced
wages, his wages for the period preceding his disablement shall be
taken to be the wages received by him during that period, and his
wages for the period subsequent to his disablement shall be taken
to be the wages as so reduced.
(5) Nothing in this section shall affect the right of an employee to
receive better terms of gratuity under any award or agreement or
contract with the employer.
(6) Notwithstanding anything contained in sub-section (1),-
(a) the gratuity of an employee, whose services have been
terminated for any act, wilful omission or negligence
causing any damage or loss to, or destruction of, property
belonging to the employer, shall be forfeited to the extent
of the damage or loss so caused.
(b) the gratuity payable to an employee may be wholly or
partially forfeited] -
(i) if the services of such employee have been terminated
for his riotous or disorderly conduct or any other act of
violence on his part, or
(ii) if the services of such employee have been terminated
for any act which constitutes an offence involving moral
turpitude, provided that such offence is committed by him
in the course of his employment.
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
(7) [***]
Section 2(q)
(q) "retirement" means termination of the service of an employee
otherwise than on superannuation;
Section 2(r)
[8] [(r) "superannuation", in relation to an employee, means the
attainment by the employee of such age as is fixed in the contract
or conditions of service at the age on the attainment of which the
employee shall vacate the employment;]"
7.1. Section 2(q) provides that entitlement to gratuity for
an employee would arise only on termination of service
and that amount has to be paid under section 7(3)(a) of
the Payment of Gratuity Act, 1972 within a period of 30
days from the date of cessation of his employment. At
this stage, reference of the judgment rendered by the
Madras High Court in the case of Jeevanlal (1929)
Limited And Ors. vs Controlling Authority is
required to be referred to. Though in the said case, issue
was with regard to the applicability of the Act, however,
it was held that even after attaining the age of 58 years,
which is the age of superannuation, when the
employment was continued up to 01.09.1972, employee
would be entitled for gratuity under the Payment of
Gratuity Act, 1972, the relevant observation is
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
reproduced herein-below:-
"21. We will now take up the next batch of cases, viz., Writ
Petition Nos. 338 to 340 and 492/77, 1377 to 1379/78 and 1540
to 1540 to 1542/78. These petitions have been filed by the
employer, viz., Messrs. Jeevanlal Limited challenging the
correctness of the orders passed by the controlling authority and
the appellate authority. In these cases, the facts are slightly
different. The employees concerned in these cases had reached the
age of superannuation which was 58 years well before the Act
came into force. They were, however, re-employed on an yearly
basis and eventually, their employment came to an end on 31-12-
1972 or 31-12-1973 as the case may be. Having regarded to this
factor, the employees claimed that they were entitled to payment
of gratuity in accordance with the terms of the Act. The
Management, however, contended that their employment had
come to a termination on their reaching the age of superannuation
long before the Act came into force, and as such, they will be
entitled to get gratuity only in accordance with the terms of the
scheme or award which was in force earlier. As illustrative of the
facts, we may set out the case of the worker by name Adisesha
Pillai. He reached the age of superannuation of 58 years in 1968.
The management informed him that this services in the company
ceased on 31-12-1968, but, however, having regarded to his
physical fitness and capacity, he was being given re-employment
for a period of twelve months operative from 1st January, 1969 to
31st December 1969. In the same way for the subsequent years
also, viz., 1970, 1971 and 1972 he was given re-employment and
he stopped working in the company on and from 1-9-1972. Since
the Act came into force on 16-1-1972, the employee claimed
gratuity payments in accordance with the terms of the Act. On the
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
other hand, the management said that gratuity would be paid him
only as per the scheme or award originally governing the parties,
which meant that only the basic pay, and not dearness allowance,
would be taken into consideration for computing gratuity.
22. Mr. Gopalan, learned counsel for the petitioner in these cases,
argued that since the employees had reached superannuation, their
services must be deemed to have become terminated at the end of
that year, in which they reached the age of superannuation, and
since that event had taken place before the Act came into force,
the employees were not entitled to rely upon the provisions of the
Act for payment of gratuity. In support of the contention, reliance
was placed on State of W.B. v. Purenda Sen, (1977) Lab. I.C.,
1978.
23. In our opinion, the contentions of the petitioner are clearly
untenable. Though the employees had reached the age of
superannuation before the Act came into force, they were given
re-employment in such a manner that were there was no break in
their services. Thus purely from a factual point of view the
employees continued to serve the petitioner-company
uninterruptedly. Secondly; it is common ground that on the
employees reaching the age of superannuation and ceasing to be
regular employees of the company, the gratuity payable to them
as per scheme or award governing the parties was not paid to
them by the company. If there was a legal break in their service,
then it follows that the gratuity payable to them upto the date of
their retirement would have been calculated and paid to them.
Such a course had not been followed by the petitioner. Thirdly, it
is seen that in the order of re-employment there is a clause, viz.,
clause (5) which provides for payment of gratuity for the period of
service during re-employment also. The clause reads as follows :
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
"Without prejudice to any of these terms and conditions
and without creating any admission or estopped by the
Management against the binding character of these terms
and conditions, you shall be entitled to contribute to the
Company's Provident Fund Scheme and shall be also
entitled to gratuity, if any, in terms of the Award
(Settlement) Scheme governing you".
No doubt, the words used in the clause are, "Gratuity, if any, in
terms of the Award "Settlement Scheme". But, on account of the
Act coming into force, the provisions of the Act would override
the contract between the parties unless the terms of the contract
were more favourable to the employees than what the Act has
conferred on them. The order of re-employment indicates that for
the period of re-employment also the worker would be entitled to
gratuity benefits. As the actual stoppage of work has taken place
after the Act came into force, the employees were justified in
asking for payment of gratuity in accordance with the terms of the
Act. State of W.B. v. Purnendu Sen, (1977) Lab. I.C., 1978, cited
by the petitioner's counsel decided ones not advance the
petitioner's case in any manner. The decision in that case was
rendered on the basis of the construction placed on a Government
Order issued by the Government of West Bengal. The decision
does not lay down any general principle of law. The concerned
authorities were, therefore, right in taking the view that
employees should get gratuity as per the terms of the Act."
8. This Court is of the view that as it is provided under
section 4 of the Payment of Gratuity Act, 1972 that
gratuity payable to the employee on termination of his
employment and sub clause (b) provides that on his
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
retirement and resignation, reading conjointly with the
definition of section 2(q) of the Payment of Gratuity Act,
1972, in which retirement, means the termination of the
service of an employee otherwise then on
superannuation and the actual stoppage of work or
termination was made admittedly in the instant case in
the year 2021, therefore, employees would be entitled
for the gratuity till the year 2021 as held by the learned
Controlling Authority. This Court has also referred the
list of the Management Committee along with the list of
employees which are produced from the year 2012 to
2021 wherein, the name of the present respondent was
figured as a Godown Keeper/Peon. The list of the
Management Committee dated 31.03.2022 further refers
that the respondent herein has continued up to
15.12.2021. As nothing is mentioned with regard to the
part time employees in the said list, this Court is of the
view that petitioner was continued till 15.12.2021 on the
same post in which he was working before 2013. With
regard to the non clearance of the advance salary of
Rs.27,400/- and Rs.9,200/- is concerned, there is no
separate order passed by the petitioner-Society
NEUTRAL CITATION
C/SCA/4447/2024 JUDGMENT DATED: 02/04/2025
undefined
forfeiting the amount of gratuity to recover the advance
which was taken by the present respondent. In addition
to that, the respondent has contended that all the dues
were cleared and for that, receipts being No.1109 and
1177 were issued which was not rebutted by the present
petitioner by adducing any evidence. In that background
also, the petitioner is entitled for the gratuity up to the
period of 2021.
9. In view of the same, this Court did not find any merits in
the present petition, hence the petition is disposed of.
10. Learned Controlling Authority shall disburse the amount
in favour of the respondent-employee on completion of
the appeal period.
(M. K. THAKKER,J)
NIVYA A. NAIR
