Kerala High Court
Managing Director Oil Palm India Ltd vs Regional Joint Labour Commissioner on 8 November, 2024
Author: N.Nagaresh
Bench: N.Nagaresh
2024:KER:83259
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 8TH DAY OF NOVEMBER 2024 / 17TH KARTHIKA, 1946
WP(C) NO. 17581 OF 2022
PETITIONER:
MANAGING DIRECTOR, OIL PALM INDIA LTD.
XIV/130, KOTTAYAM SOUTH P.O.,
KODIMATHA,
KOTTAYAM DISTRICT - 686 013.
BY ADV SANJAY THAMPI
RESPONDENTS:
1 REGIONAL JOINT LABOUR COMMISSIONER
(APPELLATE AUTHORITY AS PER PAYMENT OF GRATUITY
ACT, 1972),
OFFICE OF REGIONAL JOINT LABOUR COMMISSIONER,
CIVIL STATION, KAKKANAD,
ERNAKULAM - 682 030.
2 THE CONTROLLING AUTHORITY UNDER PAYMENT OF
GRATUITY ACT & DEPUTY LABOUR COMMISSIONER
ETTUMANOOR,
KOTTAYAM - 686 631.
3 ALIYAMA A.K.
AGED 60 YEARS
D/O.NOT KNOWN, KOCHUCHALATH HOUSE,
KALATHIPPADI, VADAVATHOOR P.O.,
KOTTAYAM - 686 010.
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2
By ADVS.
SRI.ASHOK SHENOY B
SRI.P.S.GIREESH(K/341/2013)
SRI.ARJUN R NAIK(K/001044/2020)
SMT. RESMI THOMAS,GOVERNMENT PLEADER
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 08.11.2024, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
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3
JUDGMENT
Dated this the 8th day of November, 2024
The petitioner, who is the Managing Director of Oil Palm
India Limited, a Public Sector undertaking under the
Government of Kerala, is before this Court aggrieved by
Ext.P6 passed by the Controlling Authority under the
Payment of Gratuity Act, 1972 (hereinafter referred to as 'the
Act, 1972) and Ext.P7 order of the Appellate Authority.
2. The facts are not in dispute. The 3 rd respondent
was engaged by the petitioner on contract basis since
16.05.1994. The petitioner would contend that such
engagement was not continuous and it was renewed from
time to time. The 3rd respondent was regularised in service
on 19.10.2005 as per Ext.P1 Government Order.
3. The petitioner sought permission of the
Government to regularise the 3rd respondent with effect from
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the date of her initial engagement. The request of the
petitioner was rejected by the Government as per Exts.P2
and P3.
4. The petitioner thereafter sought permission of the
Government to count the period of contractual service of the
3rd respondent for the limited purpose of computation of
Gratuity. The said request was also turned down by the
Government as per Ext.P4. The 3rd respondent retired from
service on superannuation on 31.05.2017. The 3 rd
respondent was paid a Gratuity amount of ₹5,97,513/-.
5. Dissatisfied by the amount of Gratuity, the 3 rd
respondent approached the Controlling Authority seeking
payment of Gratuity under the Gratuity Scheme of the
petitioner. The petitioner resisted the application. The
petitioner submitted before the Controlling Authority that
under Section 7(4) of the Act, 1972, the power of Statutory
Authority can be invoked only to resolve any dispute as to the
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amount of Gratuity payable to an employee under the Act,
1972. The Controlling Authority has no jurisdiction to decide
dispute on better terms of Gratuity as per Section 4(5) of the
Act, 1972.
6. The Controlling Authority, however, passed Ext.P6
order computing the total Gratuity amount as ₹10 lakhs and
directing the petitioner to pay the balance Gratuity amount of
₹4,02,487/- along with 10% interest from the date on which
the Gratuity fell due (01.06.2017).
7. Aggrieved by Ext.P6 order, the petitioner filed
Appeal before the Appellate Authority invoking Section 7(7)
of the Act, 1972. The Appellate Authority, after hearing the
parties and perusing the materials available on record,
concurred with the finding of the Controlling Authority and
rejected the Gratuity Appeal preferred by the petitioner, as
per Ext.P7 order.
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8. Exts.P6 and P7 are under challenge. Counsel for
the petitioner submitted that as per Ext.R3(b) Special
Gratuity Scheme of the petitioner, only regular service of an
employee can be considered for the purpose of computation
of Gratuity amount. The period of service under contract is
obviously excluded. Therefore, Exts.P6 and P7 are
unsustainable.
9. Standing Counsel for the petitioner relied on
Ext.P5 Government Order dated 03.03.2018, where the
Government has ordered that in cases of regularisation,
service prior to the date of regularisation cannot be
considered for any purpose including grant of pension,
gratuity and other terminal benefits. In view of Ext.P5, the
petitioner is disabled from counting the contractual service of
the 3rd respondent for the purpose of payment of Gratuity. If
the petitioner pays Gratuity computing the contractual
service, it will go against the Gratuity Scheme as well as
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Ext.P5 Government Order dated 03.03.2018. In the
circumstances, Exts.P6 and P7 orders are liable to be set
aside, contends the petitioner.
10. Counsel entered appearance on behalf of the 3 rd
respondent and resisted the writ petition. On behalf of the 3 rd
respondent, it is submitted that Exts.P6 and P7 orders are
legal. Those orders are not vitiated by any illegalities or
infirmities. The Scheme of Gratuity adopted by the petitioner
does not exclude counting of contractual service for the
purpose of computation of Gratuity. The Act, 1972 also
cannot be relied on for declining Gratuity for the period of
contractual service rendered, provided the service is
continuous.
11. The 3rd respondent further submitted that there are
no inhibitions in Ext.R3(a) restricting the payment of Gratuity
as stipulated therein. The only restriction is that the
entitlement could only be in favour of a permanent employee.
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It only means that the benefit under the Scheme cannot be
extended to persons who are not regular permanent workers
of the petitioner. It does not mean that the prior contractual
service cannot be considered for the purpose of computation
of Gratuity.
12. I have heard the Standing Counsel representing
the petitioner, the learned counsel appearing for the 3 rd
respondent and the learned Government Pleader
representing respondents 1 and 2.
13. The facts are not in serious dispute. The 3rd
respondent was engaged by the petitioner on contract basis
since 16.05.1994. The service of the 3 rd respondent was
reguarlised with effect from 19.10.2005, as can be seen from
Ext.P1. The question is whether the anterior period of
contractual service prior to the date of regularisation should
be considered for the purpose of computation of Gratuity.
The 3rd respondent retired from service on superannuation on
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31.05.2017.
14. The Controlling Authority and the Appellate
Authority found that the prior contractual service should be
considered for the purpose of payment of Gratuity. The
contentions of the petitioner are two-fold. Firstly, the
petitioner contends that as per Ext.R3(b) Special Scheme of
Gratuity, only permanent service of an employee can be
considered for computation of Gratuity. Secondly, it is urged
that Ext.P5 Government Order restrains the petitioner from
computing any period anterior to the date of regularisation,
for any service benefits.
15. Ext.R3(b) is the Special Scheme of the petitioner,
which takes in payment of Gratuity also. Clause 7 of
Ext.R3(b) reads as follows:-
"7. Gratuity
Subject to the payment of Gratuity Act and Rules
thereunder, at the time of termination of service of an
employee otherwise that as disciplinary measure, a
permanent employee will be paid gratuity calculated at the
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rate of one months pay last drawn on duty for every
completed year of service, subject to the ceiling
prescribed by Government."
A perusal of Clause 7 would indicate that the Scheme would
apply only to permanent employees of the petitioner. The
Clause cannot be taken to mean that any other service
including contractual service should be excluded for the
purpose of computation of Gratuity.
16. Furthermore, even under the Act, 1972, no
distinction is made on the basis of nature of service. If any
workman / employee has continuous service for a period of
one year, the said period should be taken for the purpose of
computation of Gratuity subject to minimum qualifying
service. The arguments to the contrary raised by the
petitioner, are only to be rejected.
17. As regards Ext.P5 Government Order, it is to be
noted that the 3rd respondent commenced service on contract
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basis on and from 16.05.1994 and was regularised in service
with effect from 19.10.2005. The 3 rd respondent retired from
service on 31.05.2017. Ext.P5 Government Order came into
force only subsequently, on 03.03.2018. Therefore, Ext.P5
Government Order cannot be made applicable to the 3rd
respondent, who retired on superannuation much prior to the
issuance of Ext.P5. Even assuming that Ext.P5 is applicable
to the 3rd respondent, such a Circular cannot take away the
statutory rights under the Payment of Gratuity Act, 1972.
For all the afore reasons, I find that the challenge
against Exts.P6 and P7 are unsustainable. The writ petition is
hence dismissed. The Controlling Authority will be at liberty
to disburse the amount deposited with them, to the 3 rd
respondent.
Sd/-
N.NAGARESH
JUDGE
hmh
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APPENDIX OF WP(C) 17581/2022
PETITIONER'S EXHIBITS
Exhibit P1 TRUE COPY OF THE G.O.(RT) NO.1496/05/AD
DATED 19/10/2005.
Exhibit P2 TRUE COPY OF THE LETTER BEARING
NO.3784/PUI/09/AD DATED 02/01/2010
REJECTING THE PROPOSAL FOR
REGULARIZATION OF 3RD RESPONDENT FROM
THE INITIAL DATE OF CONTRACTUAL
EMPLOYMENT.
Exhibit P3 TRUE COPY OF THE LETTER
NO.108/PU1/2015/AGRICULTURE DATED
19/04/2016 REJECTING THE PROPOSAL FOR
REGULARIZATION OF 3RD RESPONDENT FROM
THE INITIAL DATE OF CONTRACTUAL
EMPLOYMENT WITH RETROSPECTIVE EFFECT
WITH TRANSLATION.
Exhibit P4 TRUE COPY OF THE LETTER NO.AGRICULTURE-
PU1/132/2017/AGRICULTURE DATED
10/07/2017 REJECTING THE PROPOSAL FOR
CONSIDERING THE PERIOD OF CONTRACTUAL
EMPLOYMENT FOR CALCULATING THE GRATUITY
WITH TRANSLATION.
Exhibit P5 TRUE COPY OF THE G.O.(PRINTING)
NO.31/2018/FINANCE DATED 03/03/2018
WITH TRANSLATION.
Exhibit P6 TRUE COPY OF THE ORDER PASSED BY THE
2ND RESPONDENT DATED 21/12/2020 IN
G.C.NO.272/2018.
Exhibit P7 TRUE COPY OF THE ORDER PASSED BY THE
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1ST RESPONDENT DATED 31/01/2022 IN AS
G.A.NO.10/202 WITH TRANSLATION.
RESPONDENT EXHIBITS
EXHIBIT R3(A) TRUE COPY OF THE COUNTER STATEMENT
DATED 16.10.2018 IN G.C. NO.272 OF 2018
FILED BY PETITIONER BEFORE THE 2ND
RESPONDENT
EXHIBIT R3(B) TRUE COPY OF THE RELEVANT PAGE NUMBERS
6 AND 7 ALONG WITH THE COVER PAGE OF
THE SERVICE RULES FOR STAFF OF THE 1ST
PETITIONER ESTABLISHMENT
