Madras High Court
The Management Of vs R.Poornachandran on 28 July, 2021
W.P.Nos.15871 & 15872 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 28.07.2021
CORAM :
THE HONOURABLE MR.JUSTICE S.VAIDYANATHAN
W.P.Nos.15871 and 15872 of 2020
W.P.No.15871 of 2020:
The Management of
Jaigopal Garodia Vivekananda Vidyalaya,
Vivekananda Nagar,
Avadi, Chennai 600 054,
rep. by its Authorized Representative,
P.Sudhakar ... Petitioner
vs.
1. R.Poornachandran
2. The Deputy Commissioner of Labour-2,
DMS Compound, Teynampet,
Chennai 600 006. ... Respondents
Writ Petition filed under Article 226 of the Constitution of India,
praying to issue a writ of Certiorari, calling for the records relating to the
impugned order in I.A.No.116 of 2019 in P.G.No.23/2020, dated 30.01.2020
passed by the 2nd Respondent, on the file of the Deputy Commissioner of
Labour-II, Chennai, and quash the same.
For Petitioner : Mr.Amikataria
for Mr.P.J.Rishikesh
For 1st Respondent : Mr.Balan Haridas
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W.P.Nos.15871 & 15872 of 2020
W.P.No.15872 of 2020:
The Management of
Jaigopal Garodia Vivekananda Vidyalaya,
Vivekananda Nagar,
Avadi, Chennai 600 054,
rep. by its Authorized Representative,
P.Sudhakar ... Petitioner
vs.
1. C.Ravi Shankar
2. The Deputy Commissioner of Labour
DMS Compound, Teynampet,
Chennai 600 006. ... Respondents
Writ Petition filed under Article 226 of the Constitution of India,
prayed to issue a Writ of Certiorari, calling for the records relating to the
impugned order in I.A.No.117 of 2019 in P.G.No.22/2020 dated 30.01.2020
passed by the 2nd Respondent, on the file of the Deputy Commissioner of
Labour-II, Chennai and quash the same.
For Petitioner : Mr.Amikataria
for Mr.P.J.Rishikesh
For 1st Respondent : Mr.Balan Haridas
COMMON ORDER
Petitioner/School has come up with the above Writ Petitions
challenging the impugned order dated 30.01.2020 passed by the 2nd
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W.P.Nos.15871 & 15872 of 2020
Respondent/Authority in I.A.No.116 of 2019 in P.G.No.23 of 2020 and
I.A.No.117 of 2019 in P.G.No.22 of 2020, respectively, whereby, enormous
delay in filing the Applications claiming Gratuity by the 1 st Respondent
herein, was condoned.
2. As the issue involved in both Writ Petitions is one and the same,
cases are taken up for disposal by a common order.
3. Learned counsel for the Petitioner/School contended that, no
proper reason has been assigned by the 1st Respondent/Teachers about the
enormous delay of ten years in making an Application before the competent
Authority under the Payment of Gratuity Act, 1972, and in the absence of
valid reasons, the Authority ought not to have entertained the Applications for
condoning the delay. According to the learned counsel, the 1st Respondent in
both cases are not illiterates and that, they are Teachers and they are bound to
know the law of the land and rights, which they have not exercised within the
reasonable time.
4. On the other hand, learned counsel appearing for the 1st
Respondent/Teachers in both cases, submitted that, payment of Gratuity is a
right conferred on an employee under the Payment of Gratuity Act, 1972;
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W.P.Nos.15871 & 15872 of 2020
Gratuity is not a gratis or bounty and it is a monetary benefit, which is a
property within the meaning of Article 300-A of the Constitution of India and
it cannot be deprived to anyone, except in accordance with law. He pointed
out that, originally, Teachers were not included in the Payment of Gratuity
Act, 1972 and subsequently, Section 2(e) of the Act was amended in the year
2009 to include Teachers, by giving retrospective effect from 30.04.1997.
5. It is further stated by the learned counsel appearing for the 1st
Respondent/Teachers that, all the Teachers who were on the rolls on
30.04.1997 and subsequent to that, are entitled to Gratuity. It is for the
employer to deposit the amount within the time prescribed under the Act, in
which event, the employer need not pay any interest and the employees can
collect the Gratuity amount together with interest accrued, from the Authority
concerned. When the employer has not deposited the amount, trying to shift
the blame on the employees that, there is a delay, may not be correct and
justified. Hence, according to the learned counsel appearing for the 1st
Respondent, the Authority was right in condoning the delay in filing the
Applications claiming Gratuity.
6. In reply, learned counsel for the Petitioner/School contended
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W.P.Nos.15871 & 15872 of 2020
that, Gratuity has been deprived to the 1st Respondent/Teachers and when the
employer has not paid or deposited the Gratuity, there is a provision under
Section 7 of the Payment of Gratuity Act, 1972 for the employee to approach
the Authority concerned, claiming computation and payment of Gratuity.
Having slept over the matter for more than a decade, the 1 st
Respondent/Teachers have knocked at the doors of the Authority that too,
without assigning valid reasons and the Authority has condoned the delay,
which certainly requires interference.
7. Heard the learned counsel on either side and perused the
material documents available on record.
8. Before proceeding with the issue involved herein, for better
appreciation, Sections 7 and 8 of the Payment of Gratuity Act, 1972 are
extracted hereunder:
7. Determination of the amount of gratuity:
(1) A person who is eligible for payment of
gratuity under this Act or any person authorised, in
writing, to act on his behalf shall send a written
application to the employer, within such time and in
such form, as may be prescribed, for payment of such
gratuity.
(2) As soon as gratuity becomes payable, the
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W.P.Nos.15871 & 15872 of 2020
employer shall, whether an application referred to in
sub-section (1) has been made or not, determine the
amount of gratuity and give notice in writing to the
person to whom the gratuity is payable and also to the
controlling authority specifying the amount gratuity so
determined.
(3) The employer shall arrange to pay the
amount of gratuity within thirty days from the date it
becomes payable to the person to whom the gratuity is
payable.
(3A) If the amount of gratuity payable under
sub-section (3) is not paid by the employer within the
period specified in sub-section (3), the employer shall
pay, from the date on which the gratuity becomes
payable to the date on which it is paid, simple interest at
such rate, not exceeding the rate notified by the Central
Government from time to time for repayment of long-
term deposits, as that Government may, by notification
specify: Provided that no such interest shall be payable
if the delay in the payment is due to the fault of the
employee and the employer has obtained permission in
writing from the controlling authority for the delayed
payment on this ground.]
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:
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W.P.Nos.15871 & 15872 of 2020
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.
9. It is not in dispute that the Applicants before the Authority
concerned are Teachers and they are governed by the provisions of the
Payment of Gratuity Act, 1972, pursuant to the amendment in the year 2009,
which was given retrospective effect from 30.04.1997. A reading of Section 7
of the Payment of Gratuity Act, 1972 makes it clear that, it is the duty cast on
the part of the employer to deposit the entire Gratuity amount and thereafter
proceed to resist the claim of the employees, if they make a claim before the
Authority. If the employer fails to discharge the mandatory provisions of the
Act, the Statute prescribes remedy for the employees to approach the
Authority, claiming Gratuity. However, they cannot sleep over the matter for
years together.
10. In the case on hand, the 1st Respondent/Teachers have
approached the Authority belatedly. In any event, there is an enormous delay.
In terms of Rule 10 of the Tamilnadu Payment of Gratuity Rules, 1973
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W.P.Nos.15871 & 15872 of 2020
(hereinafter referred to as the 'Rules' for short) the employee has to file an
Application seeking condonation of delay within a period of 30 days. If it is
not filed within the time stipulated, the reason for the delay has to be
explained to enable the Authority to condone the same. A Rule cannot
supersede the provisions of the Payment of Gratuity Act, 1972. Suppose
there is a provision under the Act, saying that, the Application has to be filed
within the time stipulated, as prescribed under the Rule, then certainly, the
employee will have to file an Application within the time stipulated. A Rule
is only a procedural one and is not a substantive one, which can take away
the rights conferred under the Act.
11. When an Application has not been filed within the time
stipulated, as contemplated under the Payment of Gratuity Act, 1972, read
with the Rules made thereunder, satisfactory reasons have to be given for
condonation of delay. In the case on hand, the Authority has rendered the
finding based on the plea made by the employees concerned, but, the reasons
as such, are not acceptable in entirety and strictly speaking, the delay ought
not to have been condoned, as there are no sufficient reasons.
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12. Learned counsel for the Petitioner/School has relied upon a
Division Bench decision of this Court in the case of M.Jayaseelan vs. The
Management, Jaigopal Garodia Vivekananda Vidyalaya, Chennai
(W.A.No.570 of 2020, dated 29.07.2020), wherein, it is held that, if the
delay is enormous and if the Applicant has not approached the Authority
within some explainable spell of time, delay cannot be condoned. It was
further held therein, that even if the Limitation Law has to be liberally
construed as per the language used in Rule 7(5), the period should not be
extended unreasonably. The said Division Bench judgment may not be
applicable to the facts of this case, as, in that case, Teachers were asked to
come and collect Gratuity from the Management, however, the amount has
not been paid to them.
13. In a similar circumstance, in the case of M/s.A & F Overseas
Trade Ltd., Puducherry vs. The Appellate Authority under the Payment
of Gratuity Act, 1972, Puducherry (W.P.No.18129 of 2018, dated
01.10.2020), learned Single Judge of this Court, with reference to the
decision rendered by this Court in Madura Coats Ltd. vs. Assistant
Commissioner of Labour, (1993) 3 LLJ 923 Mad., has held that, an
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Application to condone delay would have to be first decided before the main
Application for Gratuity is taken up for hearing. For better understanding,
relevant portion of the said decision is extracted hereunder:
“7. At the same time, it also requires to be mentioned
here that in an earlier decision in Madura Coats Ltd., -vs-
Assistant Commissioner of Labour [(1993) 3 LLJ 923 Mad], it
had been held that an application to condone delay would have
to be first decided before the main application for gratuity is
taken up for hearing and the said view taken has been approved
in M.Devarajulu -vs- Assistant Commissioner of Labour
[(1995) 1 LLJ 348 Mad] by the Division Bench of this Court.
However, on a perusal of the said decisions, it is evident that the
apparent inconsistency of Rule 10 of the Rules with Section 7 of
the Act after the amendments made to the Act with effect from
01.10.1987 had neither been raised nor brought to the notice of
the Court while deciding those cases. It is needless to
recapitulate in this context that a precedent can be an authority
only for what has been actually decided and not what may
logically flow from it, as explained by the Constitution Bench of
the Hon'ble Supreme Court of India in State of Orissa -vs-
Sudhansu Sekhar Misra (AIR 1968 SC 647).”
14. This Court is in entire agreement with the said decision rendered
by this Court that, the Authority has got powers to condone the delay, but
demand of interest is not a matter of right, if a person sleeps over the issue.
15. In terms of Section 7 of the Payment of Gratuity Act, the
employer has the right of Appeal and even against an Interim Application,
Appeal can be preferred and it is not necessary that, only the employer will
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have to file an Appeal. Any person, who is aggrieved by an order, is entitled
to prefer an Appeal. A reading of Section 7(4) of the Act would make it clear
that, the admissibility of any claim, if rejected, is appealable. In this case, the
Controlling Authority has condoned the delay and decided to entertain the
Application and against that order, an Appeal under the Act is maintainable.
16. In case, the Application seeking condonation of delay is rejected,
Appeal can be filed against the final order, as it amounts to rejecting the
Gratuity claim. An Appeal has to be preferred within 60 days from the date
of receipt of a copy of the order and yet another 60 days is prescribed under
the Act, fixing the outer limit of 120 days.
17. In the case on hand, the Controlling Authority has rejected
I.A.No.116 of 2019 in P.G.No.23 of 2020 and I.A.No.117 of 2019 in
P.G.No.22 of 2020 on 30.01.2020 and the outer time limit to file an Appeal
ends in May 2020, during which period, COVID-19 was at its peak, and in
the meantime, the Apex Court has extended the limitation period to enable
the parties to knock at the doors of this Court. During that period, the
employer has approached this Court on 05.10.2020. Hence, any Appeal can
be entertained by the Appellate Authority, if it is filed well within 120 days.
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In the case on hand, there is an Appeal remedy and the period during which
the Writ Petition is pending, needs to be excluded for the purpose of
computing the period of limitation.
18. The reason for quoting the Appeal provision is that, there is no
provision fixing the outer time limit to approach the Controlling Authority to
make the Controlling Authority to become functus officio. The provision
under Section 7 of the Act read with Rule 8 of the Rules would make it clear
that, even if the delay is enormous, and the reasons are justifiable, the
Controlling Authority is empowered to condone the delay. In this case, the
Authority has taken a particular view to condone the delay and no prejudice
is claimed to be caused to the School, if the matter is adjudicated on merits.
19. A reading of Section 7(3)(A) of the Act, which is extracted supra
would make it clear that, the employer will have to pay interest, in case, the
amount is not paid within the time stipulated. Even assuming for the sake of
argument that, the delay in filing the Application is justified and the
Controlling Authority has entertained the Appeal, the employee will not be
entitled to a single pie as interest for the delay period in question. In any
event, interest cannot be more than the principal amount demanded as per the
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proviso to Section 8 of the Act, which is extracted below:
8. Recovery of gratuity:
....
Provided further that the amount of interest payable
under this section, shall, in no case, exceed the amount of
gratuity payable under this Act.
20. Since the employees have got a right of Appeal and the Appellate
Authority is empowered to entertain the Appeal, and now that, they have
knocked at the doors of this Court, this Court directs the Controlling
Authority to take up the matter on merits and in accordance with law and
pass orders within a period of six months from the date of receipt of a copy
of this order. It is needless to mention that, in the meantime, the employer
can deposit the admitted principal amount in terms of the provisions of the
Act, and the same can be withdrawn by the employees without prejudice to
their rights in terms of Section 7 of the Act.
21. It is made clear that, if the employer defaults payment of interest
and if the employee fails to avail the remedy, no interest shall be payable to
the employee. The employee cannot take the place of Justice as a gambling
place.
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22. This Court reiterates that, the employees will not be entitled to
any interest for the delay period in question and for the remaining period,
they must be entitled to interest either in terms of Section 7(3)(A) of the Act
or in terms of Section 8 of the Act, depending upon the facts and
circumstances of the case.
In fine, Writ Petitions are dismissed with the above direction and
observation. No costs. Consequently, connected W.M.P.Nos.19726 and
19727 of 2020 and W.M.P.Nos.25193 and 25194 of 2020 are closed.
28.07.2021
Index : Yes/No
Speaking Order : Yes/No
(aeb)
To:
The Deputy Commissioner of Labour
DMS Compound, Teynampet,
Chennai 600 006.
S.VAIDYANATHAN,J.
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W.P.Nos.15871 & 15872 of 2020
(aeb)
Common order in
W.P.Nos.15871 and 15872 of 2020
28.07.2021
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