Jammu & Kashmir High Court
The Cooperative Market Society Limited ... vs Assistant Labour Commissioner on 19 February, 2024
Author: Sanjeev Kumar
Bench: Sanjeev Kumar
Sr.No.21
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
WP(C) No.1483/2020
CM Nos.4927/2020,
7629/2020, 6708/2022 &
5775/2023
The Cooperative Market Society Limited Bishnah
through its Chairman Basant Saini, Age 61 years S/o
Sh. Kartar Chand R/o Arnia Tehsil Arnia District
Jammu. ....Petitioner(s)
Through :- Mr. Gagan Kohli, Advocate
V/s
1. Assistant Labour Commissioner
(Authority under Payment of Gratuity Act,
1972), Behind Shakuntla Theatre, B.C.Road,
Jammu
2. Chaman Lal Sharma S/o Sh. Gian Chand
Sharma R/o Village Karyal Brahmana Tehsil
Bishnah District Jammu
3. Central Bank of India, Branch Office Bishnah,
Through its Branch Manager.
4. S.H.O., Police Station, Bishnah, District
Jammu
....Respondent(s)
Through :- Mr. Dewakar Sharma, Dy. AG for R-1 and 4
Mr. Irfan Khan, Advocate for-2
Coram: HON'BLE MR. JUSTICE SANJEEV KUMAR, JUDGE
ORDER
19.02.2024
1. In this petition filed under Article 226 of the Constitution of India,
the petitioner has called in question following orders:-
i) Order dated 21.10.2019, whereby respondent No.2 has been held
entitled to a sum of Rs.5,02,740/- on account of withheld gratuity. The
order further provides that in case amount of gratuity awarded is not
deposited in the Court within a period of thirty days, the amount shall
become recoverable along with compound interest @ 15% per annum.
ii) Order dated 07.07.2020 passed by the Controlling Authority under the
Payment of Gratuity Act, 1972 ["the Controlling Authority"], whereby
application filed by the petitioner-Society seeking setting aside of ex-
parte award dated 21.10.2019 has been dismissed.
iii) Order dated 27.08.2020 passed by the Controlling Authority, whereby
the office of the petitioner-Society has been attached.
2. The impugned orders have been assailed by the petitioner primarily
on the ground that the same have been passed without affording an opportunity
of being heard to the petitioner. The order of attachment is challenged on the
ground that the Controlling Authority has no power and jurisdiction to execute
the award passed by it. It is submitted that the Controlling Authority can only
issue a certificate of recovery and the order of attachment and other
proceedings to recover the amount as arrears of land revenue are required to be
taken by the Collector. It is submitted by the learned counsel for the petitioner
that after passing of the award and in compliance of the order of this Court, a
sum of Rs. 3.00 lakh has already been deposited with the Registry of this Court.
3. Per contra, learned counsel appearing for the respondent No.2
submits that the writ petition challenging the award passed by the Controlling
Authority is not maintainable in view of the availability of an alternate statutory
remedy of appeal before the Appellate Authority constituted by the
Government. He further submits that appeal before the Appellate Authority is
entertainable only if appellant either produces certificate of the Controlling
Authority to the effect that he has deposited with him an amount equal to the
amount of gratuity required to be deposited as per the award passed by the
Controlling Authority or deposits said amount with the Appellate Authority.
Learned counsel for the respondent argues that the petitioner has filed the
instant petition only with a view to avoid pre-deposit before the Appellate
Authority, which is sine qua non for entertaining an appeal.
4. Having heard learned counsel for the parties and perused the material
on record, I am of the considered opinion that as against the award passed by
the Controlling Authority under Section 7(4) of the Payment of Gratuity Act,
1972 ["the Act"] , an appeal lies before the Appellate Authority under
Subsection (7) of Section 7 of the Act, which is required to be filed by the
person aggrieved within a period of sixty days and must be accompanied by a
certificate of the Controlling Authority to the effect that the person seeking to
file appeal has deposited the amount awarded or else deposits the same with the
Appellate Authority. The remedy provided under Section 7(7) of the Act is
statutory and cannot be bypassed to avoid making pre-deposit, which is sine
qua non for admission of appeal by the Appellate Authority. This issue has
already been considered by a Division Bench of this Court in LPA No.235/2022
titled Badri Nath Koul v UT of Jammu & Kashmir and others decided on 9 th
December, 2022. Paras 5 and 6 of the judgment of the Division Bench (supra)
are relevant and are, therefore, reproduced hereunder:-
"5. It is true that, with a view to availing the remedy of appeal, the
appellant is required to make a pre-deposit of an amount equal to the
amount of gratuity required to be deposited under the orders of the
Controlling Authority. In this regard, the appellant shall either
produce a certificate of the Controlling Authority to this effect or
deposit the amount before the Appellate Authority. This salient
provision is introduced in the Act of 1971 to achieve an avowed
object. The said Act is a sort of social welfare legislation aimed at
providing remedy to the employees who, despite having rendered
dedicated services to their employer for a long period, are deprived
of their gratuity when they leave the services or their services
otherwise get terminated for any reason. The pre-deposit provision
contained in Section 7(7) of the Act is to ensure that, during the
pendency of the appeal against an order of the Controlling Authority
directing the payment of gratuity in favour of the employee, the
amount which may be ultimately payable to the employee is secured
and he may not have to file the execution proceedings even after the
order passed by the controlling authority in his favour is affirmed by
the Appellate Authority.
6. The employer cannot be permitted to circumvent the procedure
provided under Section 7(7) of the Act and approach the High Court
by invoking its extraordinary writ jurisdiction under Article 226 of
the Constitution to avoid pre-deposit before the Appellate Authority.
The remedy as it is provided under the Act is required to be availed
by the appellant. The entitlement of the appellant to gratuity and
other such please taken by him before us, are matters of
determination by the competent Authority under the Act on the touch
stone of evidence and record before it and cannot be made subject
matter of adjudication in writ jurisdiction."
5. In view of the aforesaid settled legal position, this petition as against
the award dated 21.10.2019 and subsequent order dated 07.07.2020 passed by
the Controlling Authority is not maintainable and the petitioner is liable to be
relegated to the statutory remedy of appeal available under the Act. However,
so far as challenge to the order of attachment is concerned, same needs to be
examined in the light of the provisions of Section 8 of the Act, which, for
facility of reference, is set out below:-
"8. Recovery of gratuity.---If the amount of gratuity payable under
this Act is not paid by the employer, within the prescribed time, to
the person entitled thereto, the controlling authority shall, on an
application made to it in this behalf by the aggrieved person, issue a
certificate for that amount to the Collector, who shall recover the
same, together with compound interest thereon at such rate as the
Central Government may, by notification, specify, from the date of
expiry of the prescribed time, as arrears of land revenue and pay the
same to the person entitled thereto:
Provided that the controlling authority shall, before issuing a
certificate under this section, give the employer a reasonable
opportunity of showing cause against the issue of such certificate:
Provided further that the amount of interest payable under this
section shall, in no case exceed the amount of gratuity payable under
this Act.
6. From a plain reading of Section 8 of the Act, it clearly transpires that
if the amount of gratuity payable under the Act, which would necessarily
include the payment of gratuity awarded by the Controlling Authority after
adjudication, is not paid within prescribed time, the Controlling Authority shall,
on an application made to it in this behalf by the aggrieved person, issue a
certificate for that amount to the Collector. The Collector shall then recover the
same along with compound interest thereon at such rate as the Central
Government may, by notification specify, from the date of expiry of the
prescribed time, as arrears of land revenue and pay the same to the person
entitled thereto.
7. The proviso appended to the Section, however, provides that before
issuing certificate of recovery under Section 8 of the Act, the Controlling
Authority shall provide a reasonable opportunity to the employer of showing
cause against the issue of such certificate. From a reading of the impugned
order dated 27.08.2020 passed by the Controlling Authority, it clearly comes
out that the order of attachment has not been passed by the Collector on the
basis of the certificate issued in this behalf by the Controlling Authority nor any
opportunity of being heard has been provided to the petitioner before issuing
such certificate. For this purpose only, this petition is entertained and allowed
to the limited extent. The impugned order of attachment passed by the
Controlling Authority is quashed. However, quashing of the order of
attachment shall not come in the way of the Controller in following due
procedure as prescribed under Section 8 of the Act for recovery of the
outstanding gratuity, if any, from the petitioner.
8. Accordingly, this petition is allowed only to the limited extent as
stated above and the same is dismissed insofar as challenge to the award dated
21.10.2019 and order dated 07.07.2020 passed by the Controlling Authority is
concerned. The petitioner is relegated to the remedy of appeal in terms of
Section 7(7) of the Act. The amount of Rs.3.00 lakh deposited by the petitioner
with the Registry of this Court shall be released in favour of respondent No.2
after due verification and identification.
(Sanjeev Kumar)
Judge
Jammu:
19.02.2024
Vinod, PS
Whether the order is reportable: Yes
