Jammu & Kashmir High Court
Project Construction ... vs State Of Jammu And Kashmir on 6 October, 2023
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
Reserved on 26.09.2023
Pronounced on 06.10.2023
SWP No. 1539/2003
Project Construction Corporation .....Appellant(s)/Petitioner(s)
Workers Association th. its President
Sh. Joginder Paul age 49 years, S/o.
Sh. Thoru Ram R/o. 298, Mohallah
Sarwal Radha Krishan Temple,
Jammu
Through: Mr. O. P. Thakur, Sr. Adv. with
Q
Mr. O. S. Bandral, Adv.
vs
1. State of Jammu and Kashmir ..... Respondent(s)
through Commissioner/Secretary
Public Works Department, Civil
Secretariat, Srinagar.
2. J&K Projects Construction
Corporation Ltd. th. its Managing
Director, Haft Chinar behind Police
Station, Sher-Garhi Srinagar.
Through: Mr. Ravinder Gupta, AAG
Ms. Pallvi Sharma, Assisting Counsel
SWP No. 955/2004
Project Construction Corporation .....Appellant(s)/Petitioner(s)
Workers Association th. its
President Sh. Joginder Paul age 50
years, S/o. Sh. Thoru Ram R/o. 298,
Mohallah Sarwal Radha Krishan
Temple, Jammu
Through: Mr. O. P. Thakur, Sr. Adv. with
Q
Mr. O. S. Bandral, Adv.
vs
1. State of Jammu and Kashmir ..... Respondent(s)
through Commissioner/Secretary
Public Works Department, Civil
Secretariat, Srinagar.
2
SWP Nos. 1539/2003 and 955/2004
2. J&K Projects Construction
Corporation Ltd. th. its Managing
Director, JKPCC, Office Complex,
Panama Chowk, Jammu
Through: Mr. Ravinder Gupta, AAG
Ms. Pallvi Sharma, Assisting Counsel
Coram: HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE
JUDGMENT
1. By this common judgment, two writ petitions, one bearing SWP No.
1539/2003 and the other bearing SWP No. 955/2004 are proposed to be
decided together. Though issues involved in these two writ petitions are
different but the parties to the same are identical.
2. Vide writ petition SWP No. 1539/2003 filed by J&K Projects
Construction Corporation Workers Association, challenge has been thrown to
Rule 5(II) of the J&K Projects Construction Corporation Limited (hereinafter to
be referred as the JKPCC) Gratuity Rules on the ground that the same is
contrary to Section 4(3) of the Payment of Gratuity Act, 1972. A further
direction has been sought upon the respondents to implement the provisions of
Section 4(3) of Payment of Gratuity Act, 1972 and extend the benefit of the
said provision with retrospective effect.
3. Vide SWP No. 955/2004, the petitioner-Association has sought a
direction upon the respondents to extend the benefit of Rules 37 and 38 of the
J&K Civil Services (Leaves Rules), 1979 to the employees of JKPCC Limited
and to make payment of cash equivalent to leave salary to the employees.
SWP Nos. 1539/2003 and 955/2004
SWP No. 1539/2003
4. As already stated in this writ petition, the petitioner-Association has
challenged the vires of Rule 5(II) of the J&K Projects Construction Corporation
Limited Gratuity Rules on the ground that the same is contrary to the
provisions contained in section 4(3) of the Payment of Gratuity Act. It has been
contended by the petitioner-Association that as per the impugned Rule, the
employees of the Corporation have been held entitled to gratuity to the extent
of 20 months wages or Rs. 80,000/- whichever is less. This according to the
petitioner-Association runs contrary to and inconsistent with the provisions of
Section 4(3) of the Payment of Gratuity Act. Since the petitioner-Association
has raised an issue which is purely legal in nature, as such, it is not necessary to
go the facts narrated in the writ petition.
5. The respondent-Corporation has contested the writ petition by filing a
counter affidavit. In the counter affidavit, the respondent-Corporation has taken
a stand that the provisions of Payment of Gratuity Act do not apply to the said
Corporation, therefore, there is no question of framing of rules by the
Corporation in conflict with the said Act. It has been further submitted that the
enhancement in the limit relating to the payment of gratuity of the employees
of the Corporation is possible only after approval of the Board of Directors.
6. I have heard learned counsel for the parties and perused the record of the
case.
7. Before determining the issue as to whether Rule 5(II) of the J&KPCC
Gratuity Rules runs contrary to Section 4(3) of the Payment of Gratuity Act, it
SWP Nos. 1539/2003 and 955/2004
has to be decided that as to whether the provisions of Payment of Gratuity Act
are applicable to the respondent-Corporation.
8. The Payment of Gratuity Act, 1972 provides for a scheme for payment of
gratuity to the employees engaged in certain entities. It extends to whole of
India including the erstwhile State of Jammu and Kashmir except to the extent
of plantations and ports. Section 1(3) of the Payment of Gratuity Act provides
for application of the Act to the following entities.
"(3) It shall apply to--
(a) every factory, mine, oilfield, plantation, port and railway
company;
(b) every shop or establishment within the meaning of any law
for the time being in force in relation to shops and
establishments in a State, in which ten or more persons are
employed, or were employed, on any day of the preceding
twelve months;
(c) such other establishments or class of establishments, in
which ten or more employees are employed, or were employed,
on any day of the preceding twelve months, as the Central
Government may, by notification, specify in this behalf."
9. From the above, it is clear that the provisions of the Act are applicable
inter alia to the establishments within the meaning of any law for the time
being in force in relation to shops and establishments in a State, in which ten or
more persons are employed. The J&K Shops and Establishments Act, 1966
defines an establishment as a shop, commercial establishment, residential hotel,
restaurant, eating house, theatre and or any other place of public amusement or
entertainment. Section 2(4) of the J&K Shops and Establishments Act, 1966
defines commercial establishment as an establishment which carries on any
business, trade or profession or any work in connection with, or incidental or
ancillary to any business, trade or profession etc.
10. The respondent-Corporation is a company incorporated under the
Companies Act. As per the Memorandum of Association of the respondent-
SWP Nos. 1539/2003 and 955/2004
Corporation, a copy whereof has been placed on record by the petitioner-
Association, the objectives of the Corporation are to construct, execute etc
works and convenience of all kinds. The objectives also include the supply for
tenders, purchase or otherwise acquisition of contracts and commissions for or
in relation to construction. One of the objectives of the respondent-Corporation
is to carry on business of bricks, tiles and earthenware and to buy, sell, make,
manufacture and deal in different types of construction material. A perusal of
the objectives of the respondent-Corporation as contained in its Memorandum
of Association which runs into as many as 41 activities, leaves no manner of
doubt that the respondent-Corporation is involved in the business of builders
and constructions. Thus, it is an establishment within the meaning of the
provisions contained in Jammu and Kashmir Shops and Establishments Act,
1966. There is no dispute to the fact that the respondent-Corporation has
employed more than 10 persons. In fact according to the petitioner-Association,
1500 employees are working in the respondent-Corporation. Therefore, the said
Corporation falls within the definition of "establishment" contained in section
1(3) of the Payment of Gratuity Act, 1972.
11. The next question that is required to be determined is as to whether the
employees of the respondent-Corporation qualify to be "employees" within the
meaning of Section 2(e) of Payment of Gratuity Act, 1972, which reads as
under:
"2(e) "employee" means any person (other than an apprentice)
employed on wages, in any establishment, factory, mine,
oilfield, 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
SWP Nos. 1539/2003 and 955/2004
Central Government or a State Government and is governed by
any other Act or by any rules providing for payment of
gratuity."
12. From a reading of aforesaid provision, it is clear that a person, who is
employed on wages in an establishment to do any skilled, semi skilled,
unskilled, manual, supervisory, technical or clerical work, whether or not such
person is employed in managerial or administrative capacity would be an
"employee" within the meaning of aforesaid provision. However, a person who
holds a post under the Central Government or State Government or is governed
by any other Act or Rule providing for payment of gratuity would not fall
within the definition of an "employee".
13. In the instant case, the employees of the respondent-Corporation being
employed on wages in the said Corporation, which qualifies to be an
"establishment", would fall within the definition of "employee" as contained in
Section 2(e) of the Payment of Gratuity Act, 1972. The respondent-
Corporation, as already stated, is a company incorporated under the Companies
Act, as such, it has a separate legal entity and can be sued or it can sue others in
its own name. It is an entity having its existence distinct from that of the
Government. Merely because the Government has a persuasive control upon
the respondent-Corporation it does not cease to be a separate entity. Thus, a
person holding a post in the respondent-Corporation cannot be termed an
employee of the Government so as to be governed by the provisions relating to
the payment of gratuity framed by the Government.
14. Section 5 of the Payment of Gratuity Act vests power with the
appropriate Government to exempt an establishment etc from the operation of
the provisions of the said Act. Admittedly there is no notification of the
SWP Nos. 1539/2003 and 955/2004
Government under Section 5 of the Act to exempt the respondent-Corporation
from the applicability of the provisions of the Act.
15. For the foregoing discussion, there is no manner of doubt in holding that
the respondent-Corporation qualifies to be an "establishment" within the
meaning of Section 1(3) of the Act and its employees qualify to be the
"employees" within the meaning of Section 2(e) of the Act. The contention of
the respondent-Corporation that provisions of the Act are not applicable to it is
therefore, without any merit. Thus, whether or not there is a resolution of the
Board of the respondent-Corporation adopting the provisions of the Act of
1972, is absolutely immateral for applicability of the aforesaid Act to the
respondent-Corporation.
16. The next question that comes up for consideration is as to whether the
J&KPCC Gratuity Rules, particularly Rule 5(ii) runs contrary to the provisions
contained in section 4(3) of the Payment of Gratuity Act. In order to find an
answer to the said question, it would be necessary to refer to the Rule 5(ii) of
the J&KPCC Gratuity Rules and Section 4 of the Act.
17. Rule 5 of the J&KPCC Gratuity Rules (hereinafter to be referred as the
Rules) reads as under:
"5. Amount of Gratuity
i) "For every completed year of service or part thereof in excess of
six months, the gratuity at the rate of fifteen days wages based
on the rate of wages last drawn by the employees will be
payable.
ii) The amount of gratuity payable to an employee shall not exceed
twenty month's wages or Rs. 80,000/- whichever is less.
Note: Wages for purposes of these rules means all emoluments
which are earned by an employee while on duty or on leave in
accordance with the terms and conditions of his employment
and which are paid or payable to him in cash and includes
dearness allowance and special pay but does not include any
bonus, commission, house rent allowance, overtime wages and
SWP Nos. 1539/2003 and 955/2004
other allowance like compensatory allowance, border allowance.
etc.
iii)In the case of death the amount of gratuity will be calculated
under (i) above are worked out below whichever is more:-
a) during the first year of service 2 months emoluments
b) After one year but before
5 years service 6 months emoluments
c) After completion of 5 years
service and above 12 months emoluments."
18. Section 4 of the Payment of Gratuity Act, 1972 (hereafter to be referred
as the Act) reads as under:
"4 Payment of gratuity. --
(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:
Provided that the completion of continuous service of five years
shall not be necessary where the termination of the employment of
any employee is due to death or disablement: Provided further that
in the case of death of the employee, gratuity payable to him shall
be paid to his nominee or, if no nomination has been made, to his
heirs, and where any such nominees or heirs is a minor, the share of
such minor, shall be deposited with the controlling authority who
shall invest the same for the benefit of such minor in such bank or
other financial institution, as may be prescribed, until such minor
attains majority.
Explanation- For the purposes of this section, disablement means
such disablement as incapacitates an employee for the work which
he was capable of performing before the accident or disease
resulting in such disablement.
(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: Provided that in the case of a piece-rated
employee, daily wages shall be computed on the average of the
total wages received by him for a period of three months
immediately preceding the termination of his employment, and, for
this purpose, the wages paid for any overtime work shall not be
taken into account: Provided further that in the case of an
employee who is employed in a seasonal establishment and who is
not so employed throughout the year, the employer shall pay the
gratuity at the rate of seven days' wages for each season.
Explanation-In the case of a monthly rated employee, the fifteen
days' wages shall be calculated by dividing the monthly rate of
wages last drawn by him by twenty-six and multiplying the
quotient by fifteen.
SWP Nos. 1539/2003 and 955/2004
(3) The amount of gratuity payable to an employee shall not
exceed 16 [ten lakh 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."
19. From a perusal of the clauses (i) and (ii) of Rule 5 of the J&KPCC
Gratuity Rules quoted above, it appears that amount of gratuity is to be
computed at the rate of 15 days wages on the rate of wages last drawn by the
employee for every completed year of service or part thereof in excess of six
months. Clause (ii) of Rule 5 limits amount of gratuity payable to an employee
in terms of clause (i) to Rs. 80,000/- or the amount of 20 months wages,
whichever is less.
20. So far as Section 4(2) of the Payment of Gratuity Act is concerned, it
provides that the gratuity has to be computed and paid to an employee at the
rate of 15 days wages based on rate of wages last drawn by the employee for
every completed year of service or part thereof in excess of six months. Sub
Section (3) provides that the amount of gratuity payable to an employee cannot
exceed Rs. 20 lacs, which at the relevant time was rupees three lacs and fifty
thousand only.
21. From a comparison of clause (ii) of the Rules and Sub-Section (3) of
Section 4 of the Act, it is clear that there is a contradiction between the two.
While maximum limit of gratuity payable to an employee under clause (ii) of
the Rules is fixed as Rs. 80,000/-, the maximum limit of gratuity payable to an
SWP Nos. 1539/2003 and 955/2004
employee under Section 4(3) of the Act was Rs. 3.50 lacs at the relevant time,
which has now been enhanced to Rs. 20.00 lacs.
22. It is pertinent to mention here that vide order No. 46 of 2013 dated
01.07.2013 issued by the respondent-Corporation, the gratuity limit has been
enhanced to Rs. 10.00 lacs as per the provisions of Payment of Gratuity Act but
the same has been done with effect from 17.05.2010. Thus, the benefit of the
Act has not been extended to the employees who have been paid gratuity prior
to 17.05.2010 in terms of the Rules. So the challenge to Rule 5 of the Rules to
extent of the cases of gratuity already settled by the respondent-Corporation in
terms of the said Rule does survive.
23. Section 14 of the Payment of Gratuity Act provides that the provisions of
the said Act shall have effect notwithstanding anything inconsistent therewith
contained in any enactment or any instrument or contract having effect by
virtue of any enactment other than the said Act. Thus any instrument or
contract or rule which runs contrary to the provisions contained in Payment of
Gratuity Act has to be ignored while considering the case for grant of gratuity
to an employee.
24. The effect of section 14 of the Act has been a matter of discussion before
the Supreme Court in the case of Allahbad Bank and another vs All India
Allahaband Bank Retired Employees, 2010(10) SCC 44. The Supreme Court
has, while considering this aspect of the matter observed as under:
"35. In the present case the real question that arises for our
consideration is whether the employees having exercised their option to
avail the benefits under the pension scheme are estopped from claiming
the benefit under the provisions of the Act?
36. The appellant being an establishment is under the statutory
obligation to pay gratuity as provided for under Section 4 of the Act
which is required to be read along with Section 14 of the Act which
SWP Nos. 1539/2003 and 955/2004
says that the provisions of the Act shall have effect notwithstanding
anything inconsistent therein contained in any enactment or in any
instrument or contract having effect by virtue of any enactment other
than this Act. The provisions of the Act prevail over all other enactment
or instrument or contract so far as the payment of gratuity is concerned.
The right to receive gratuity under the provisions of the Act cannot be
defeated by any instrument or contract.
37. This Court in Hindustan Lever v. State of Maharashtra relying upon
the decision of this Court in Purshottam H. Judye v. V. B. Poddar held
that the word `instrument' would include award made by the Industrial
Tribunal. It is thus clear that notwithstanding the Desai and Shastry
Awards and the subsequent settlements the members of the employees
association are entitled to avail the benefit conferred upon them for
payment of gratuity under the provisions of the Act. The employees
cannot be deprived of their valuable statutory right conferred upon them
to receive payment of gratuity."
25. Prior to the aforesaid judgment, the Supreme Court has, in the case of
Jaswant Singh vs Bharat Coking Coal Limited and others, 2007(1) SCC
663, held that the Rules framed by the Coal India Ltd. not being statutory in
nature, have to yield to the provisions contained in the Payment of Gratuity
Act. Similarly, the Supreme Court has, in the case of Allahabad Bank vs. A.
C. Aggarwal 2013(4) SCC 141, emphasized the overriding effect of the
provisions of the Act of 1972 and held that notwithstanding anything
inconsistent with contained in any other enactment, or in any instrument or
contract, an eligible employee is entitled to gratuity under the Act of 1972. In a
recent judgment in the case of Union Bank of India vs CG Ajay Babu and
another, 2018(9) SCC 529, the Supreme Court has held that the Gratuity Act
must prevail over rules of payment of gratuity framed by the employer.
Therefore, the employer cannot have recourse of its own rules ignoring the Act
for denying gratuity.
26. From the aforesaid analysis of law on the subject, it is clear that
provisions of the Payment of Gratuity Act have predominance over all other
rules enactments or instruments or contracts so far as the same relate to
SWP Nos. 1539/2003 and 955/2004
payment of gratuity. Therefore, any rule in J&KPCC Gratuity Rules, which is
in conflict with the provisions of the Section 4 of payment of Gratuity Act has
to be ignored if the said rule is not beneficial to an employee as compared to
the provisions of Payment of Gratuity Act. Sub Section (5) of Section 4 of the
Act, however, saves the right of an employee to receive better terms of gratuity
under any award or agreement or contract with the employer. So if under the
provisions of J&KPCC Gratuity Rules, an employee is entitled to receive
amount of gratuity which is more than the amount of gratuity payable under the
provisions of the Payment of Gratuity Act, he has the option of choosing the
amount of gratuity payable under the rules.
27. Thus, even if the respondent-Corporation has framed its Rules as regards
payment of gratuity to its employees, still then the Payment of Gratuity Act
having an overriding effect, the respondent-Corporation cannot ignore the
provisions of the said Act particularly in a case where under the provisions of
the said Act, an employee is entitled to more beneficial package than the
amount of gratuity calculated under the provisions of the J&KPCC Gratuity
Rules.
28. Section 5 of the Payment of Gratuity Act which grants exemption to an
establishment from application of the provisions of the said Act in case a
notification to this effect is issued by the appropriate Government lays down a
condition that exemption cannot be granted by the Government unless it is
established that the employees are in receipt of gratuity or pension benefits
which are more favourable than the benefits conferred under the Act. This
makes it clear that it is only if the rules for payment of gratuity made by an
employer are more beneficial to the employee than the provisions of Payment
SWP Nos. 1539/2003 and 955/2004
of Gratuity Act then only exemption under section 5 can be granted in favour of
such an establishment. The purpose of provisions of the Payment of Gratuity
Act is to extend maximum benefit to the employee and therefore, any rule
which runs contrary to the provisions of the Payment of Gratuity Act has to
give way to the provisions of the Act unless the said rule is more beneficial to
the employees than the provisions of the Act.
29. For the foregoing discussion, the writ petition is disposed of with the
following directions:
1. The employees of the respondent-Corporation are held entitled to
payment of gratuity in terms of the provisions contained in Section 4
of the Payment of Gratuity Act, 1972 retrospectively notwithstanding
anything contained in Rule 5(ii) of the J&K PCC Gratuity Rules.
2. The respondent-Corporation shall examine the individual cases of its
employees who have already received gratuity by application of Rule
5(ii) of the J&KPCC Gratuity Rules and take follow up action in the
light of direction No. (1) above, if and when such instances are
brought to its notice by the aggrieved employee or his/her legal heirs.
SWP No. 955/2004
30. As already stated the petitioner-Association in this writ petition seeks a
direction upon the respondents to implement Rules 37 and 38 of the J&K Civil
Services Leaves Rules, 1979 (hereinafter to be referred as the Rules of 1979) to
the employees of the respondent-Corporation. The main plank of the argument
of the petitioner-Association for seeking implementation of the Leave Rules of
1979 is based upon the fact that in the Service Rules framed by the respondent-
SWP Nos. 1539/2003 and 955/2004
Corporation, a note has been incorporated whereby it has been provided that
any matters not falling under the said Rules would be decided under the J&K
Civil Service Rules.
31. It is contended that since the matter regarding payment of cash in lieu of
leave is not provided for in the rules framed by the respondent-Corporation, as
such, the employees of the Corporation are entitled to payment of cash in lieu
of leave in accordance with the provisions contained in Rules 37 and 38 of the
J&K Civil Service Leave Rules, 1979. It has been further contended that in the
rules framed by the Corporation there is no provision for grant of maternity
leave but still then the respondent-Corporation has been granting maternity
leave in favour of the female employees by taking recourse to the provisions
contained in the rules applicable to the Government servants of Jammu and
Kashmir. It has been contended that even J&K Civil Services Pay Rules, 1988,
have been made applicable to the employees of the Corporation therefore, there
is no reason why the J&K Civil Service Leaves Rules, 1979 cannot be made
applicable to the respondent-Corporation.
32. The respondent-Corporation in its counter affidavit has submitted that
specific provisions relating to matter pertains to grant of leave have been
framed by the respondent-Corporation therefore, there is no question of
applicability of J&K Civil Service Leave Rules 1979 to its employees. It has
been submitted that Rules 37 and 38 of the Rules of 1979 do not have any
applicability to the respondent-Corporation. It is also contended that the
respondent-Corporation is a company registered under the Companies Act and
it has its own separate existence distinct from the Government, therefore, the
provisions of Leaves Rules of 1979 applicable to the employees of the J&K
SWP Nos. 1539/2003 and 955/2004
Government cannot be made applicable to the employees of the respondent-
Corporation ipso facto without approval of the Board of Directors of the
respondent-Corporation.
33. I have heard learned counsel for the parties and perused the record of the
case.
34. If we have a look at the provisions of the Employees Service Rules and
Regulations framed by the respondent-Corporation, its Chapter-I deals with
definitions, Chapter-II deals with the matters relating to recruitment,
promotion, confirmation and conditions of service of the employees of the
respondent-Corporation, Chapter-III relates to Leave Rules, Chapter-IV relates
to Gratuity, Chapter-V relates to travelling allowance, Chapter-VI relates to pay
and allowances, Chapter-VII relates to medical attendance and Chapter VIII
relates to employees advances.
35. The Rules framed by the respondent-Corporation reveal that note
appended in Chapter-I which relates to definitions, provides that any matter not
falling under these rules is to be decided under the rules of J&K Civil Service
Rules. This means that any matter which is not provided for in the Employees
Service Rules and Regulations has to be dealt with in accordance with Rules of
J&K Civil Service Rules. As already indicated, there is a specific Chapter i.e.
Chapter No. III which deals with leave rules and under the said Chapter, the
respondent-Corporation has promulgated J&KPCC Leave Rules. Therefore, the
matters relating to leave and the matters incidental thereto which would include
payment of cash in lieu of leave are specifically dealt with by the J&KPCC
Leave Rules. Therefore, the provisions of J&K Civil Service Leave Rules, 1979
cannot be made applicable for the purpose of considering the matters relating to
SWP Nos. 1539/2003 and 955/2004
leave and the other incidental matters of the employees of respondent-
Corporation. The Leave Rules of the respondent-Corporation do not provide for
payment of cash in lieu of leave. Thus, the employees of respondent-
Corporation cannot claim payment of cash in lieu of leave as a matter of right.
36. There is no provision of law or statute which makes payment of cash in
lieu of leave mandatory. It is the prerogative of an employer to lay down the
service conditions and the matters relating to leave, grant of cash in lieu of
leave to its employee. Unless there is a statutory obligation upon the employer
to extend a particular benefit to its employees, the employer cannot be directed
to extend the said benefit to its employees. In the case of payment of gratuity,
there is specific enactment i.e. Payment of Gratuity Act 1972, which obliges a
particular class of employers as defined under the said Act to make payment of
gratuity to its employees at a particular rate. There is no such statute which
obliges the respondent-Corporation to make payment of cash in lieu of leave to
its employees. Since the leave rules of respondent-Corporation do not provide
for extension of such a benefit to its employees, the respondent-Corporation is
not obliged to grant the said benefit to its employee unless such a decision is
taken by the Board of Directors of the respondent-Corporation.
37. The respondent-Corporation is a Company incorporated under the
Companies Act having its own identity distinct from the identity of the
Government of Jammu and Kashmir as such, the rules applicable to the
employees of the J&K Government are not applicable to its employees ipso
facto. The said rules would become applicable to the employees of the
respondent-Corporation only if the Board of Directors of the Corporation
decides to do so.
SWP Nos. 1539/2003 and 955/2004
38. In view of the above, I do not find any merit in this writ petition. The
same is dismissed accordingly.
(SANJAY DHAR)
JUDGE
Jammu
06.10.2023
Rakesh
Whether the order is speaking: Yes
Whether the order is reportable: Yes
