Kerala High Court
The Secretary vs Lalitha K.V on 23 May, 2024
Author: Dinesh Kumar Singh
Bench: Dinesh Kumar Singh
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH
THURSDAY, THE 23RD DAY OF MAY 2024 / 2ND JYAISHTA, 1946
WP(C) NO. 38491 OF 2017
PETITIONER:
THE SECRETARY,
CHINMAYA MISSION & CULTURAL TRUST,
CHINMAYA BALABHAVAN, KANNUR.
BY ADV.
SRI. V. KRISHNA MENON
RESPONDENTS:
1 LALITHA K. V.,
SREELAKSHMI, CHALA EAST (POST),
THANNADA, KANNUR - 670621.
2 THE CONTROLLING AUTHORITY UNDER THE
PAYMENT OF GRATUITY ACT,
DY. LABOUR COMMISSIONER), KANNUR - 670002.
3 THE REGIONAL JOINT LABOUR COMMISSIONER,
APPELLATE AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT,
KOZHIKODE - 673020.
BY ADV.
SRI. P. M. PAREETH
SRI. JUSTIN JACOB - SR. GP
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
23.05.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C) NO. 38491 OF 2017
2
DINESH KUMAR SINGH, J.
--------------------------
W.P.(C) No. 38491 of 2017
-------------------------
Dated this the 23rd day of May, 2024
JUDGMENT
1. The petitioner is an Educational Cultural Trust who runs a
College/Educational Institution in Kannur district. The 1 st
respondent employed as Office Assistant-cum-Instructor
(Typewriting) w.e.f. 01.07.1983. However, she resigned from
the services/College on 13.10.2009. 1 st respondent has
approached the 2nd respondent, the Controlling Authority under
the provisions of the Payment of Gratuity Act, 1972 (hereinafter
referred to as the 'Act of 1972') by filing an application dated
09.05.2013 stating therein that she had worked in the College
for 26 years and 3 months and, therefore, she is entitled to
gratuity for the entire length of service calculated from
01.07.1983.
2. The petitioner is contesting the matter. A specific
pleading was taken that the Educational Institution came within
the provisions of the Act of 1972 only w.e.f. 03.04.1997 in view
of the Notification issued by the Central Government as S. O.
1080 which would read as under;
WP(C) NO. 38491 OF 2017
"New Delhi, the 3rd April, 1997
*S. O. 1080 - 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 the educational institutions
in which ten or more persons are employed
or were employed on any preceding 12
months as a class of establishments to which
the said Act shall apply with effect from the
date of publication of this notification:
Provided that nothing contained in this
notification shall affect the operation of the
notification of the Ministry of Labour S. O.
No. 239, dated the 8th January, 1982.
[F. No. S-420/13/1/95-SS. (II)]
J. P. SHUKLA, Under Secy."
2. It was stated that if at all the 1st respondent was entitled
to payment of gratuity, she would be entitled for the gratuity
from 03.04.1997 to 30.10.2009 and the said amount towards
gratuity had been sent to her, which was refused by her. The 2 nd
respondent, however, directed the petitioner to pay the
gratuity amount for 26 years, i.e. from 01.07.1983 to 30.10.2009.
This order in Exhibit P-3 passed by the Controlling Authority
came to be challenged by the petitioner in appeal under Sub-
WP(C) NO. 38491 OF 2017
section (7) of Section 7 of the Act of 1972. The appellate
authority, however, dismissed the appeal and upheld the order
passed by the 2nd respondent in impugned Order dated
23.07.2017 in Exhibit P-5.
3. The learned Counsel for the petitioner has submitted that
the Act of 1972 by virtue of Sub-section (3) of Section 1 is
applicable 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, or, any day of the preceding
twelve months, as the Central Government may, by notification,
specify in this behalf.
4. The definition of 'employee' contained in Section 2(e) of
the Act of 1972 reads as under;
("e) "employee" means any person (other
than an apprentice) employed on wages,
[3] [***] in any establishment, factory,
mine, oilfield, plantation, port, railway
WP(C) NO. 38491 OF 2017
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, [4] [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]."
5. Before enactment of the Act of 1972 there was no Central
Act to regulate payment of gratuity to industrial workers,
except the Working Journalists (Conditions of Service) and
Miscellaneous Provisions Act, 1955. The Government of Kerala
enacted legislation in 1971 for payment of gratuity to workers
employed in factories, plantations, shops and establishments.
The West Bengal Government promulgated an Ordinance on 3rd
June, 1971 prescribing similar scheme of gratuity. The said
Ordinance was replaced by West Bengal Employees' Payment of
Compulsory Gratuity Act, 1971 which received assent of the
President on 28th August, 1971. Since the enactment of Kerala
and West Bengal Acts came into force, other State Governments
had raised voice expressing their intentions of enacting similar
WP(C) NO. 38491 OF 2017
measures in their respective States and, therefore, need was
felt to have a Central Law on the subject so as to ensure a
uniform pattern of payment of gratuity to the employees
throughout the Country.
6. The Statement of Objects and Reasons would disclose that
it was felt that the enactment of the Central Law was necessary
to avoid different treatments to the employees of the
establishments having branches in more than one State, when,
under the conditions of their service, the employees could be
transferred from one State to another.
7. The proposal for Central legislation on gratuity was
discussed in the Labour Ministers' Conference held at New Delhi
on 24th and 25th August, 1971 and also in the Indian Labour
Conference held on 22nd and 23rd October, 1971. The consensus
emerged that Central legislation on payment of gratuity should
be enacted as early as possible. Thus, the Central legislation,
the Payment of Gratuity Act, 1972 came to be enacted and
enforced.
8. The Payment of Gratuity Act is a beneficial legislation. It is
social legislation which aims to provide social security to an
employee after retirement, resignation, whenever he become
WP(C) NO. 38491 OF 2017
eligible. The Act applies to every factory, mine, oil field,
plantation, port and every company and every shop and
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.
9. The question which is posed for consideration in the
present writ petition is that whether before the date of
Notification dated 03.04.1997, the educational institutions were
covered under the provisions of the Act of 1972.
10. The language of the notification would make it clear that
the educational institutions have been brought within the
purview of the Act of 1972 w.e.f. 03.04.1997 and the nature of
the Notification is prospective inasmuch as it has been said that
the Act of 1972 shall apply with effect from the date of
publication of this Notification in respect of educational
institutions in which ten or more persons are employed.
11. Thus, it can be safely inferred that the educational
institutions were not covered under the provisions of the Act of
1972 before the date of Notification dated 03.04.1997 and they
had come within the purview of the Act of 1972 w.e.f.
WP(C) NO. 38491 OF 2017
03.04.1997.
12. The Supreme Court in the case of Ahmedabad Pvt.
Primary Teachers Association v. Administrative Officer [ 2004
KHC 76] (Supreme Court) in paragrph Nos. 19 and 20 has held
that an educational institutions becomes an establishment in
view of the Notification issued on 03.04.1997 in exercise of the
powers under Section 1(3)(c) of the Act of 1972. It was further
held that the 'teaching staff' would not be covered by the
definition of 'employee' and would not be entitled to the
benefit of the Notification dated 03.04.1997.
13. Considering the language of the Notification which is
prospective in nature and the fact that the said Notification has
been issued in exercise of the powers conferred under Section
1(3)(c) of the Act of 1972, the educational institutions had come
within the purview of the Act of 1972 since 03.04.1997. The 1 st
respondent, therefore, will be entitled to receive the gratuity
w.e.f. 03.04.1997 till she resigned from the service on
13.10.2009.
14. The impugned orders passed by the Controlling Authority
and the Appellate Authority directing the petitioner to make
the payment of gratuity from the date of joining of the 1 st
WP(C) NO. 38491 OF 2017
respondent in the institution i.e. 01.07.1983 till she rendered
the resignation on 13.10.2009 is against the provisions of the
Act of 1972 and the Notification dated 03.04.1997. Thus the
impugned orders are modified and the petitioner is directed to
make payment of gratuity amount to the 1st respondent for the
period from 01.07.1983 to 13.10.2009 with interest @ 8% from
the date of filing of the application by the 1 st respondent. If any
amount has already been paid, same shall be given adjustment.
The petitioner should pay the amount to the 1 st respondent as
directed above, within a period of one month from today.
In the aforesaid terms the present writ petition is finally
disposed of.
Sd/-
DINESH KUMAR SINGH
JUDGE
Svn
WP(C) NO. 38491 OF 2017
APPENDIX OF WP(C) 38491/2017
PETITIONER'S EXHIBITS
EXHIBIT P1 TRUE COPY OF GRATUITY APPLICATION DATED
9.5.2013 FILED BY THE FIRST RESPONDENT
EXHIBIT P2 TRUE COPY OF THE COUNTER STATEMENT FILED
BY THE RESPONDENT IN G. C. NO.14/2013
EXHIBIT P3 TRUE COPY OF ORDER DATED 16.12.2015 IN
EXHIBIT P4 TRUE COPY OF GRATUITY APPEAL NO.1/2016
(WITHOUT ANNEXURES)
EXHIBIT P5 TRUE COPY OF ORDER DATED 23.7.2017 IN
