Jharkhand High Court
Heavy Engineering Corporation ... vs The Union Of India Through Deputy ... on 9 October, 2023
IN THE HIGH COURT OF JHARKHAND AT RANCHI
(Letters Patent Appellate Jurisdiction)
L.P.A No. 2 of 2021
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Heavy Engineering Corporation Limited, through its Chairman-cum-
Managing Director, Registered Office at Plant Plaza Road, PO & PS-
Dhurwa, District-Ranchi ... Appellant
Versus
1. The Union of India through Deputy Chief Labour Commissioner
(CENTRAL), PO & PS-Dhanbad, District-Dhanbad
2. The Regional Labour Commissioner (Central), Ranchi, Office at E-
191, Sector-II, HEC Colony, PO-Dhurwa, PS-Jagarnathpur, District-
Ranchi
3. Sri Pandu Topno, s/o late Bucha Topno, r/o New Kalyanpur, c/o
Karu Toppo, Road No.6, PO & PS-Hatia, District-Ranchi
4. Sri Suresh Singh, Contractor, M/s Dhurwa Takniki Shramik
Sahyog Samiti Ltd. Office at: DT 2563(T), PO & PS-Dhurwa, District-
Ranchi ... Respondents
CORAM: HON'BLE MR. JUSTICE SHREE CHANDRASHEKHAR
HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
For the Appellant : Mr. Rajendra Krishna, Advocate
Mr. Mukesh Kumar, Advocate
For the Respondent No.1 &2 : Mr. Anil Kumar, ASGI
Mr. Abhijeet Kumar Singh, Advocate
For the Respondent No.3 : Mr. Pradip Kumar Prasad, Advocate
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ORDER
9th October 2023
Per, Shree Chandrashekhar, J.
Heavy Engineering Corporation Limited (in short,
Corporation) has challenged the order dated 11th November 2020
passed in W.P.(L) No. 5431 of 2019 by which a challenge laid by the
Corporation to the order of the appellate authority under the
Payment of Gratuity Act, 1972 has been dismissed.
2. The controlling authority under the Payment of Gratuity
Act, 1972 by an order dated 22nd September 2017 dismissed the
application moved by the concerned worker seeking a direction upon
the Corporation to make payment of gratuity for the period between
1st November 1983 to 31st March 2012. This is the case set up by
the concerned worker that he worked as a Fitter under the Samiti
for the aforesaid period and superannuated on 31st March 2012. The
controlling authority having recorded a finding that the concerned
worker could not produce documentary evidence as regard his
continuous service under the Corporation as envisaged under
section 4 of the Payment of Gratuity Act dismissed the application
submitted by the concerned worker in Form 'N' under Rule 10(1) of
the Payment of Gratuity (Central) Rules, 1972.
3. The appellate authority under the Payment of Gratuity
Act took additional evidence of the contractor, referred to and
considered the rival contentions in a detailed order running into
seventeen pages. The appellate authority set aside the order of the
controlling authority holding that the controlling authority had failed
to consider the legal status of the Samiti, which for all legal purposes
was working under the Corporation.
4. The Gratuity Appeal No. 3 of 2018-A.7 was accordingly
allowed by an order dated 11th July 2019 holding as under:
"GONING INTO THE CASE:
On perusal of the case-file of the Controlling Authority, this Authority
found that the Controlling Authority has not taken proper evidence
of the parties and this has throttled the course of justice. In fact, I
could have remitted back the case to the Controlling Authority but
since he does not know his job and a Steno dependent Officer, I
thought it appropriate to take fresh evidence so that the poor helpless,
hapless and faceless worker, who has been toiling for last 5 years,
can get justice and a feign smile can come on his dry lips.
Evidence of Shri Suresh Singh, Contractor
The Contractor, Shri Suresh Singh (Secretary of the Society), on
23/02/2018, deposed before Authority that Shri Pandu Topno has
worked for more than 5 years in presence of Shri Navin Mahan,
learned Counsel for HEC Ltd. Shrui Suresh Singh was cross-
examined by Shri R N Sinha, learned Counsel for the Appellant. It
has been revealed that, Shri Suresh Singh had issued an employment
certificate to Shri Pandu Topno, the Appellant wherein it has been
mentioned that the Appellant worked for more than five years in the
said society. Shri Suresh Singh corroborated that he has signed the
Employment Certificate.
Shri Sures Singh, Respondent No.1 has further deposed that the
Principal Employer, HEC Ltd was depositing the wages of the workers
minus Provident Fund in the account of the society and it (HEC Ltd.)
was depositing the EPF and Pension contribution in HEC Provident
Fund Trust Account. This amply proves that the contract was just a
paper arrangement, it was ruse or camouflage. The same has been
happening for years together since the society was formed. The
Society, who was the contractor, was getting a paltry commission on
the wage bill. Under such a situation, how can the society pay huge
amount of gratuity to the workers. For this sorry and sordid state of
affairs, the Principal Employer, HEC Ltd should be held responsible.
It is the duty of HEC Ltd to re-imburse the amount of gratuity as it
was depositing the employees' and employer's contribution to
Provident Fund. It cannot say that it has only the responsibility of
payment of provident fund.
On 1 March 2019 Shri Suresh Singh was cross-examined. On
23/03/2018, Shri Suresh Singh deposed on 23/03/2018 that in a
year the workers were getting work for 7 to eight months and all the
Registers and records were being maintained by HEC Ltd. But on
5/10/2018, when he was cross-examined by the learned Counsel for
Respondent No.2 HEC Ltd, Shri Suresh Singh deposed that he was
getting work for 160 to 170 days which clearly proves that HEC Ltd
has influenced him as it intends to absolve itself from the payment of
gratuity. Due to variation in his statements this Authority declared
him hostile. However, Shri Suresh Singh deposed that Shri Pandu
Topno was working in the society before he came to the society as
Secretary. It is Shri Suresh Singh's statement that Shri Pandu Topno
worked under him for more than 5 years as revealed from the
certificate issued by him.
THE CONCLUSION:
However, on 10 July Shri Navin Mohan, leamed Counsel for HEC Ltd
vehemently and forcefully argued that there was no employer-
employee relationship between Shri Pandu Topno HEC Ltd, HEC Ltd
has not been given adequate opportunity in the proceedings and
there is dues outstanding on HEC Ltd from the Appellant or the
Society but he had no answer to the depositions that the registers
and records were being maintained by HEC Ltd and Provident Fund
was being deposited in HEC Ltd/s pF Trust A/c. This proves that the
contract between the Society and the Principal Employer was sham
and just a paper arrangement, I fail to understand as to how the
provident contribution of a contract worker can be deposited in the
PF A/c of HEC Ltd. the Principal Employer!!! To my little knowledge,
there is no such provision under EPF und Miscellaneous Provisions
Act, 1952. In my considered and well thought view, HEC Ltd is liable
to pay gratuity like contribution of EPF and Pension Fund in the A/c
of HEC Ltd. I have no hesitations to say that after taking work for
years together, now, HEC Ltd has been harassing the poor worker. A
contract labourer has no retirement age according to Contract labour
(R&A) Act, 1970 but Shri Pandu Topno has been retired on attaining
the age of 60 years which is the retirement age for the employees of
HEC Ltd.
In view of what have been discussed hereinbefore, I proceed to pass
the following orders:
THE VERDICT:
1.The Appeal filed by Shri Pandu Topno succeeds and the same is
allowed.
2.The order of the Controlling Authority is set aside
3.HEC Ltd is directed to pay Rs 1,58, 542.00 towards gratuity to Shri
Pandu Topno through the Society.
4. HEC Ltd is also directed to pay interest @ 10% on the gratuity from
1 April 2012 till the date of payment.
Given under my hand and seal on this 11 day of July, 2019."
5. Before the writ Court, a similar plea was raised on behalf
of the Corporation that the concerned worker was not employed by
it rather it worked under the complete control and supervision of
M/s Dhurwa Takniki Shramik Sahyog Samiti Limited (in short, the
Samiti) which was the opposite party no.2 in the proceedings before
the statutory authorities. More specifically, on the basis of a
statement made by the concerned worker that he was engaged by
the Samiti and worked under it for 28 years and 4 months, a plea
was raised that the concerned worker does not fall in the definition
of employee under the Payment of Gratuity Act, 1972.
6. The writ Court has held as under:
"14. In view of the aforesaid discussion, the argument advanced
by the learned counsel for the petitioner-Management that the
respondent No.3 was not a direct employee of the company and as
such, they are not liable to pay the gratuity amount as there was no
relationship of employee and employer, is not accepted to this Court
as there is certainly indirect relationship of employer and employee
between the Principal Employer and the Contract workers.
15. Further, the provident fund contributions of the workmen were
being deposited in the PF Account of HEC Ltd. as also registers and
records were maintained by petitioner-HEC Ltd. and respondent No.3
has been superannuated on attaining the age of 60 years though a
contract labourer has no retirement age according to the Contract
Labour (R & A) Act, 1970, these are the sufficient grounds for holding
that the principal employer of the respondent No.3 is petitioner-HEC
Ltd. and as such, the contract between the society and the principal
employer is just a paper arrangement.
16. As a cumulative effect of the aforesaid rules, guidelines and
judicial pronouncement, this Court is in full agreement with
impugned Appellate Order dated 11.07.2019. There is no illegality or
infirmity in the impugned Appellate Order. The contention of the
learned counsel for the petitioner-Management is not at all accepted
to this Court and judgment relied upon by him does not come to his
rescue as the same are based on different facts. There is no merit in
the instant case. Accordingly, the instant writ petition stands
dismissed.
17. As a result thereof, the petitioner-Management is directed to
pay the gratuity amount and interest as determined by the Appellate
Authority vide its order dated 11.07.2019 to the respondent No.3-
workman, within a period of eight weeks' from the date of receipt of a
copy of this order.
18. In view of the disposal of the writ petition, pending I.A., if any,
also stands disposed of.
19. No order as to costs."
7. The expression "employee" has been defined under
clause(e) to section 2 of the Payment of Gratuity Act, 1972 to mean
any person (other than an apprentice) who is employed for wages,
whether the terms of such employment are express or implied, in
any kind of work, manual or otherwise, in or in connection with the
work of a factory, mine, oilfield, plantation, port, railway company,
shop or other establishment to which this Act applies, 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. There is no dispute
that the Corporation falls under the expression "other
establishment"; the concerned worker was employed for wages and
the employment of the concerned worker was impliedly under the
Corporation. Furthermore, having regard to facts and circumstances
in the case, it can be safely inferred that the employee was impliedly
working under the Corporation inasmuch as the contractor was
engaged by the Corporation for carrying out its work and the
Corporation had complete control over the Samiti and while so the
concerned worker must be held to be under the ultimate control of
the Corporation. The expression "employer" as defined under
sub-clause (iii) to clause (f) of section 2 provides that in any other
case, the person, who or the authority which has the ultimate control
over the affairs of the establishment, factory, mine oilfield, plantation,
port, railway company, shop and where the said affairs are entrusted
to any other person, whether called a manager, managing director
or by any other name, such person shall fall under the expression
employer. It has come on record that the Corporation was depositing
EPF and Pension contributions of the workers and was providing
only salary to the Samiti for disbursement to the workers.
8. Having regard to the beneficial object under the Payment
of Gratuity Act, this cannot be disputed that a wider meaning to the
aforesaid definition under section 2 of the Payment of Gratuity Act
must be given by the Courts so as to attain the ultimate object
behind the statute. The writ Court referred to the judgments in
"Indian Petrochemical Corporation Ltd. v. Shramik Sena" (1999) 6 SCC
439, "Mangalore Ganesh Beedi Workers & Ors. v. Union of India"
(1974) 4 SCC 43 and "Pepsico India Holding (P) Ltd. v. Grocery Market
& Shops Board" (2016) 4 SCC 493 to arrive at a conclusion that the
concerned worker was entitled for gratuity to be paid by the
Corporation.
9. After having thus examined the challenge by the
Corporation to the writ Court's order, we do not find any ground to
disagree with the writ Court's opinion and, accordingly, L.P.A No.2
of 2021 is dismissed.
10. I.A No. 52 of 2021 stands dismissed.
(Shree Chandrashekhar, J.)
(Anubha Rawat Choudhary, J.)
Jharkhand High Court, Ranchi
Dated: 9th October 2023
Amit/N.A.F.R
