Karnataka High Court
C.B. Nanjundappa vs The Chief Executive Officer on 16 February, 2024
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WP No. 27075 of 2019
C/W WP No. 48720 of 2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MRS JUSTICE K.S. HEMALEKHA
WRIT PETITION NO.27075 OF 2019 (L-RES)
C/W
WRIT PETITION NO.48720 OF 2019 (L-PG)
IN W.P. NO.27075/2019
BETWEEN:
C.B. NANJUNDAPPA
S/O. LATE CHELUVAIAH,
AGE: 65 YEARS,
KAMBEDAHALLI VILLAGE & POST,
BINDIGANAVILE HOBLI,
NAGAMANGALA TALUK,
MANDYA DISTRICT - 571401. ... PETITIONER
(BY SRI GOVINDARAJ K., ADVOCATE)
AND:
1. THE CHIEF EXECUTIVE OFFICER,
ZILLA PANCHAYAT, MANDYA,
DISTRICT-MANDYA - 571401.
Digitally signed by
MAHALAKSHMI B M
2. DEPUTY COMMISSIONER,
Location: HIGH
COURT OF MANDYA DISTRICT,
KARNATAKA MANDYA - 571401.
3. THE EXECUTIVE ENGINEER,
PANCHAYATHRAJ ENGINEERING DIVISION,
ZILLA PANCHAYATH,
MANDYA - 571 401.
4. THE ASSISTANT EXECUTIVE ENGINEER,
PANCHAYATHRAJ ENGINEERING SUB-DIVISION,
MANDYA DISTRICT
MANDYA - 571 401. ... RESPONDENTS
(BY SRI B.J. SOMAYAJI, ADVOCATE FOR R-1;
R2 - R4 ARE SERVED)
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WP No. 27075 of 2019
C/W WP No. 48720 of 2019
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO-DIRECT THE
RESPONDENTS TO TAKE ACTION AND DISBURSE THE GRATUITY
AMOUNT TO THE PETITIONER IN TERMS OF ORDER DATED
22.07.2015 PRODUCED AS ANNEXURE-B.
IN W.P. NO.48720/2019
BETWEEN:
1. CHIEF EXECUTIVE OFFICER,
ZILLA PANCHAYATH,
MANDYA-571 401.
2. ASSISTANT EXECUTIVE ENGINEER,
PANCHAYAT RAJ ENGINEERING SUB-DIVISION,
NAGAMANGALA,
MANDYA DISTRICT-571 432. ... PETITIONERS
(BY SRI B.J. SOMAYAJI, ADVOCATE)
AND:
1. SHRI NANJUNDAPPA C.B.
S/O. CHALUVAIAH,
AGED ABOUT 66 YEARS,
KAMBADAHALLI,
BINDIGANEVILE HOBLI,
NAGAMANGALA TALUK,
MANDYA DISTRICT - 571 432.
2. ASSISTANT LABOUR COMMISSIONER AND
GRATUITY CONTROLLING AUTHORITY,
MYSORE DIVISION,
MYSURU - 570 001. ... RESPONDENTS
(BY SRI GOVINDARAJ K., ADVOCATE FOR R-1;
R2 - SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF CONSTITUION OF INDIA PRAYING TO CALL FOR THE RECORDS
PERTAINING TO THE ORDER PASSED BY THE ASSISTANT LABOUR
COMMISSIONER AND GRATUITY CONTROLLING AUTHORITY, MYSORE
ON 22.07.2015 IN CASE AND ON PERUSAL OF THE SAME.
THESE WRIT PETITIONS COMING ON FOR DICTATION, THIS
DAY, THE COURT MADE THE FOLLOWING:
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WP No. 27075 of 2019
C/W WP No. 48720 of 2019
ORDER
The petitioner in W.P. No.27075/2019 is seeking a
writ of mandamus directing the respondent No.2 to take
action against respondent Nos.1, 3 and 4 and recover the
gratuity amount to the petitioner in terms of the order
dated 22.07.2015.
2. W.P.No.48720/2019 by the Chief Executive
Officer, Zilla Panchayath and Assistant Executive Engineer,
Panchayath Raj assailing the order passed by the Assistant
Labour Commissioner and Gratuity Controlling Authority
on 22.07.2015, whereby, the application filed before the
Controlling Authority under the Payment of Gratuity Act by
the workman was allowed ordering payment of gratuity.
3. Parties herein are referred to as per the ranking
in W.P.No.27075/2019.
4. Heard Sri Somayaji, learned counsel for Zilla
Panchayath, Panchayath Raj and Sri K. Govindraj, learned
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counsel for the workman and perused the material on
record.
5. Petitioner is a retired government servant, who
was working as a Junior Inspector in the office of
respondent No.4, respondent extended the benefit of
gratuity for the regular service rendered by him from
01.01.1990 to 31.03.2013. The petitioner approached the
Controlling Authority under the Payment of Gratuity Act,
1972 ('the PG Act,' for short) seeking for difference of
gratuity. The Authority vide order dated 22.07.2015
directed the respondent to pay the balance gratuity of
Rs.1,62,000/- to the petitioner with simple interest.
6. Pursuant to the order passed by the Controlling
Authority, the petitioner repeatedly approached the
respondent by way of application, representation praying
for disbursing the amount as per the order of the
Controlling Authority. The application submitted by the
petitioner was forwarded by the Labour Officer to
respondent No.2 along with the recovery certificate in
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prescribed format for the purpose of revenue recovery.
The order of the Controlling Authority having become final
and in spite of the several efforts by the petitioner, the
detrimental amount has not been disbursed to the
petitioner is the contention of the learned counsel
appearing for the petitioner.
7. Respondent Nos.1 and 4 filed W.P.
No.48720/2019 now "assailing the order passed by the
Controlling Authority in the year 2015" without exhausting
the alternative efficacious remedy available under Section
7 (7) of the PG Act. The contention of respondent Nos.1
and 4 is that the post held by the petitioner is under the
State Government and as per Section 2(e) of the PG Act,
the petitioner being a government servant is excluded
from the definition of 'employee' of the PG Act. It is also
the submission of respondent Nos.1 and 4 that the
petitioner being an employee of a State Government is not
entitled for gratuity under the PG Act, 1972 and on the
other hand, the Karnataka Civil Services Rules (KCSR for
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short) as per Rule 248-A is to be made applicable to the
petitioner and it is the contention of respondent Nos.1 and
4 that the judgment of the Apex Court in the case of
Netram Sahu Vs. State of Chhattisgarh and another1
(Netram Sahu) placed reliance by the learned counsel for
the petitioner has been referred to the Larger Bench and
the same cannot be placed reliance to hold that the
petitioner is entitled for the benefit which he had rendered
prior to his regularization for calculating his continuous
service of 5 years and would contend that the writ petition
before this Court by respondent Nos.1 and 4 is
maintainable without exhausting the alternative efficacious
remedy, as very jurisdiction of the Controlling Authority is
assailed before this Court. The term employee as
mentioned under Section 2(e) of the PG Act reads as
under:
"2(e) "employee" means any person (other
than an apprentice) who is employed on wages, in
any establishment, factory, mine, oilfield,
plantation, port, railway company or shop to do any
(2018) 5 SCC 430
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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
Central Government or a State Government and is
governed by any other Act or by any rules providing
for payment of gratuity."
8. Learned counsel for respondent Nos.1 and 4,
placing reliance on Section 2(e) of the PG Act which
excludes the person who hold post with Central or State
Government and are governed by any other Act or rules
provided for payment of gratuity, would contend that
petitioner could not have invoked Section 7 of the Act, as
such Controlling Authority had no jurisdiction, the Rule
248-A of KCSR states that the persons borne on the work-
charged establishments of Government either on daily or
monthly wages system, when appointed to regular
pensionable service under Government shall count for
pension or gratuity 1/4th of their service rendered on the
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work-charged establishments, subject to a maximum of 3
years.
9. The Apex Court in the case of Municipal
Corporation of Delhi Vs. Dharam Prakash Sharma
and another2 (Dharam Prakash Sharma) has held that
the Payment of Gratuity Act being a special provision for
payment of gratuity, and notwithstanding separate
pension rules, Municipal Corporation of Delhi employees
were entitled to the benefits under the provisions of the
PG Act, 1972 in view of the overriding effect of the PG Act
as per Section 14 of the PG Act.
10. The Apex Court in the case of Netram Sahu
stated supra has held at paragraph No.14 as under:
"14. We do not agree with this submission of the
learned counsel for the respondent State for more
than one reason:
14.1. First, the appellant has actually rendered the
service for a period of 25 years.
AIR 1999 SC 293
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14.2. Second, the State actually regularized his
services by passing the order dated 06.05.2008.
14.3. Third, having regularized the services, the
appellant became entitled to claim its benefit for
counting the period of 22 years regardless of the
post and the capacity on which he worked for 22
years.
14.4. Fourth, no provision under the Act was
brought to our notice which disentitled the appellant
from claiming the gratuity and nor any provision
was brought to our notice which prohibits the
appellant from taking benefit of his long and
continuous period of 22 years of service, which he
rendered prior to his regularization for calculating
his continuous service of five years."
11. The Apex Court held that if the services are
regularized the workman is entitled to claim benefit by
counting his service rendered prior to his regularization for
calculating his continuous service of five years.
12. Though the petitioner would be governed by the
KCSR, and the gratuity amount has been paid to the
petitioner under the KCSR, however, the gratuity paid was
covering the period from the regularization till his
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retirement on superannuation, and the respondents did
not take into consideration the service rendered by the
petitioner prior to regularization.
13. The Apex Court in Nagar Ayukt Nagar
Nigam, Kanpur v. Mujib Ullah Khan and another3
(Nagar Ayukt) has held as under:
"7. On the other hand, the learned counsel
for the respondent pointed out that the Central
Government has published a Notification in terms of
Section 1(3)(c) of the Act on 08.01.1982 to extend
the applicability of the Act to the Municipalities.
Thus, the Act is applicable to the Municipalities.
"1. short title, extent, application and
commencement-(1) This Act may be called the
payment of Gratuity Act, 1972.
(2) It extends to the whole of India:
Provided that insofar as it relates to
plantations or ports, it shall not extend to the
State of Jammu and Kashmir.
(3) It shall apply to-
(a) every factory, mine, oilfield, plantation,
port and railway company;
(2019) 6 SCC 103
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(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 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."
8. A perusal of the above provisions would
show that the Act is applicable to (1) every factory,
mine, oilfield, plantation, port and railway company;
(2) 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, the said provision has
two conditions viz. (i) a shop or establishments
within the meaning of a State law; and (ii) in which
ten or more persons are employed; and (3) the
establishments or class of establishments which the
Central Government may notify.
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9. The appellant is not covered by clauses
(a) and (b) of Section 1 (3) of the Act. Clause (a) is
not applicable on the face of the provisions, but
even clause (b) is not applicable in view of Section
3(1)(c) of the 1962 Act as such Act is not applicable
to the offices of the Government or local authorities.
The local authorities means a municipal committee,
district board, etc. or entrusted with the control or
management of a municipal or local fund in terms of
Section 3(31) of the General Clauses Act, 1897.
10. In terms of the abovesaid Section
1(3)(c) of the Act, the Central Government has
published a notification on 8-1-1982 and specified
local bodies in which ten or more persons are
employed, or were employed, on any day of the
preceding twelve months as a class of establishment
to which this Act shall apply. The said Notification
dated 8-1-1982 reads as under:
"New Delhi, 8-1-1982
NOTIFICATION.
S.O. No. 239.... In exercise of the powers conferred
by clause (c) of Sub-Section (3) of Section 1 of the
Payment of Gratuity Act, 1972 (39 of 1972), the
Central Government hereby specified "local bodies"
in which ten or more persons are employed, or were
employed, on any day preceding twelve months, as
a class of establishments to which the said Act shall
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apply with effect from the date of publication of this
notification in the official Gazette.
sd/-
(R.K.A. Subrahmanya)
Additional Secretary
(F. No. S-70020/16/77-FPG)"
11. We find that the Notification dated:
08.01.1982 was not referred to before the High
Court. Such notification makes it abundantly clear
that the Act is applicable to the local bodies i.e., the
Municipalities. Section 14 of the Act has given an
overriding effect over any other inconsistent
provision in any other enactment. The said provision
reads as under:
"14. Act to override other enactments,
etc.- The provisions of this Act or any rule made
there under shall have effect notwithstanding
anything inconsistent therewith contained in any
enactment other than this Act or in any
instrument or contract having effect by virtue of
any enactment other than this Act."
12. In view of Section 14 of the Act, the
provision in the State Act contemplating payment of
gratuity will be inapplicable in respect of the
employees of the local bodies.
13. Section 2(e) of the Act alone was
referred to in the judgment reported as MCD [MCD
v. Dharam Prakash Sharma, (1998) 7 SCC 221:
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1998 SCC (L&S) 1800: AIR 1999 SC 293]. The said
judgment is in the context of the CCS (Pension)
Rules,. 1972 [1972 Rules] which specifically
provides for payment of pension and gratuity. The
Act is applicable to the Municipalities, therefore, it is
wholly inconsequential even if there is no reference
to the Notification dated: 08.01.1982.
14. The entire argument of the appellant is
that the State Act confers restrictive benefit of
gratuity than what is conferred under the Central
Act. Such argument is not tenable in view of Section
14 of the Act and that liberal payment of gratuity is
in fact in the interest of the employees. Thus, the
gratuity would be payable under the Act. Such is the
view taken by the Controlling Authority."
14. The Apex Court held that though Municipal
Corporation employees are governed by separate
enactments, however, in light of Section 14 of the Act
which has overriding effect, and gratuity would be payable
to the employees under the Gratuity Act.
15. Further, the Division Bench of this Court in Smt.
Mahadevamma Vs. Assistant Executive Engineer and
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others4 (Mahadevamma) held that Payment of Gratuity Act
being a special provision are entitled to gratuity under the
payment of Gratuity Act 1972, referring Netram Sahu's
case referring to Section 248-A of the KCSR, held as under:
"11. It is pertinent to note that the interpretation
put forth by the learned Single Judge that in view of
Rule 248A of the Rules, the provisions of the Act
would not apply cannot be sustained as the
Supreme Court in Municipal Corporation Delhi supra
has held that payment of Gratuity Act being a
special provision for payment of gratuity, unless
there is any provision therein which excludes its
applicability to an employee who is otherwise
governed by provision of Pension Rules, it is not
possible to hold that an employee is not entitled to
gratuity under Payment of Gratuity Act, 1972. In
view of aforesaid enunciation of law by Hon'ble
Supreme Court in Netram Sahu supra, the order
passed by the learned Single Judge cannot be
sustained in the eye of law as the aforesaid decision
binds this court.
16. The decision placed reliance by the learned
counsel appearing for respondent Nos.1 and 4 in the case
W.A. No.100/2013 (L-PG)
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of Senior Superintendent of Post Offices vs.
Gursewak Singh and others5 (Gursewak Singh) was
under the circumstances where Gramin Dak Sewak are
engaged as an extra departmental agents post,
government by 2011 rules and Apex Court held that this
rules have separate provisions for payment of gratuity to
the extra departmental agents and in that circumstances,
the Apex Court held that the Gramin Dak Sevak is not an
employee under Section 1972 Act in Gramin Dak Sevak,
the employees were not regularized. In the instant case,
the rules provided under the KCSR is for a period of 3
years. While the payment of gratuity being a better
entitlement to the petitioner and in light of Section 14,
there being an overriding effect, in the said circumstances,
the decision placed reliance by the learned counsel for
respondent Nos.1 and 4 has no application to the present
facts and circumstances of this case.
AIR (2019) SC 1493
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17. The Co-Ordinate bench of this Court in Chief
Executive Officer, Zilla Panchayat, Mysuru and
another Vs. Shri K.V. Puttaraju and others6
(Puttaraju) and in Sri Basavegowda Vs. The State of
Karnataka and others7 (Basavegowda) placing reliance
on the decision in Dharam Prakash Sharma, Netram
Sahu's case held that employee is entitled to gratuity for
his entire service, not restricting period of regular service
as the Act does not differentiate between a regular
employee and a daily wage employee and observed that
State cannot deny payment of gratuity, if the employee is
entitled under the Act.
18. In the light of the decisions stated supra in
Netram Sahu case by Apex Court, in Mahadevamma
Case by the Division Bench, the Co-Ordinate Bench of this
Court in Puttaraju and Basavegowda, respondent Nos.1
and 4 that the petitioner being a State Government
employee cannot seek gratuity under the PG Act needs to
W.P. No.46017/2017 & connected matters D.D. 12.05.2022
W.P. No.10872/2023 D.D. 20.12.2023
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be rejected. The petitioner has been deprived of his
legitimate right, since eight long years and therefore,
entitled for interest and accordingly, this Court pass the
following:
ORDER
i. W.P. No.27075/2019 is hereby allowed.
ii. W.P. No.48720/2019 is dismissed.
iii. The petitioner in WP.No.48720/2019 to release the
amount of Gratuity within a period of four weeks, in
terms of the order dated 27.07.2015 from the date of
release of this order, if the order or direction is not
complied by the respondent Nos.1 and 4 (petitioner in
W.P.No.48720/2019) within four weeks, the petitioner
is entitle for further interest at 6%, till the gratuity
amount is paid.
Sd/-
JUDGE
AM
