Madras High Court
C.Sadasivam vs The Management on 22 April, 2025
W.P.No.13022 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
(Special Original Jurisdiction)
RESERVED ON : 12.03.2025
PRONOUNCED ON : 22.04.2025
PRESENT:
THE HON’BLE DR. JUSTICE A.D. MARIA CLETE
W.P.No.13022 of 2020
and
W.M.P.No. 16132 of 2020
C.Sadasivam,
S/o. Late Chinna Mudaliar,
D.No.25/27, Mariamman Koil Street,
Karattur, Gobichettipalayam – 638 476
Erode District. ….Petitioner
Vs.
1.The Management
Tamil Nadu State Transport Corporation
(Coimbatore), Erode Region,
Regional Office,
45, Chennimalai Road,
Erode – 638 001
2. Appellate Authority under the Payment of
Gratuity Act, 1972/Addl. Commissioner of Labour,
43, Balasundaram Road, ATT Colony,
Gopalapuram, Coimbatore – 641 018.
3. Controlling Authority under the
Payment of Gratuity Act, 1972
Office of the Joint Commissioner of Labour,
Yercaud Main Road,
Gorimedu, Salem – 636 008. ….Respondents
1/10
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W.P.No.13022 of 2020
Prayer in W.P.
To issue a writ, order or direction, in the nature of a Writ of Certiorarified
Mandamus to call for the records from the files of Respondents 2 and 3 in
P.G.No.131/2018 and AGA 53/2019 dated 06.05.2019 and 12.03.2020
respectively and quash both the orders and consequently direct the 1st
Respondent to pay gratuity amount of Rs.2,73,011/- and interest at
Rs.1,73,644/- for delayed payment in all Rs.4,46,655/- within a time frame with
further interest till date of actual payment and pass such other order or direction
as this Hon’ble Court may deem fit and proper in the circumstances of the case.
Prayer in WMP
To dispense with production of original of the Impugned Order passed by the
3rd Respondent in P.G.No.131/2018 dated 06.05.2019
Appearance of Parties
For Petitioner : Mr.K.M.Ramesh, Senior Counsel
For V.Subramani, S.Sandhya, S.Apunu, and
V.Sivaraman, Advocates
For Respondent 1 : Mr.Murali Vinodh, Advocate
For Respondents 2 and 3 : Mr.R.Kumaravel, Additional Government Pleader.
JUDGMENT
Heard.
2. The Petitioner was employed as a Driver in the 1st Respondent Transport
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Corporation. He has filed the present writ petition assailing the order dated
12.03.2020 passed by the 2nd Respondent Appellate Authority in P.G. Appeal
No. AGA 53 of 2019, whereby the appeal preferred by the Petitioner was
dismissed on the ground that a parallel proceeding was pending before the
Labour Court and, therefore, he was not inclined to permit a multiplicity of
proceedings. When the matter was taken up on 22.09.2020, notice was accepted
on behalf of the Respondents.
3. When the matter was listed on 16.02.2024, this Court directed the parties
to apprise the stage of the claim petition stated to be pending before the Labour
Court. A similar direction was reiterated by this Court on 22.03.2024. The case
of the Petitioner is that he joined the service in the 1st Respondent Corporation
as a Driver with effect from 08.11.1986 and retired from service upon attaining
the age of superannuation on 30.04.2017. It is his contention that his gratuity
was computed based on his last drawn wages and he was paid a sum of
Rs.6,68,354/-. However, according to him, he was entitled to a sum of
Rs.9,41,365/- towards gratuity, taking into account his last drawn basic pay and
dearness allowance, which was approximately Rs.49,000/- and Rs.5,390/-
respectively.
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4. Pursuant to the issuance of a notice in Form-I to the 1st Respondent, the
Petitioner filed an application for gratuity before the 3rd Respondent, the
Controlling Authority, which was registered as P.G. Case No. 131 of 2018.
Upon issuance of notice to the 1st Respondent Corporation and after
considering the submissions, the Controlling Authority held that the entire
gratuity amount, along with 6% interest, had already been credited to the
Petitioner's bank account. It was therefore concluded that no further gratuity
was payable, and the Petitioner would only be entitled to an additional 4%
interest. On that basis, the application was closed.
5. Aggrieved by the aforesaid order, the Petitioner preferred an appeal
before the 2nd Respondent Appellate Authority under Section 7(7) of the
Payment of Gratuity Act, 1972. The appeal was taken on file as AGA No. 53 of
2019. After affording an opportunity of hearing to both parties, the Appellate
Authority dismissed the appeal, while granting liberty to the Petitioner to revive
the same upon disposal of the claim petition pending before the Labour Court.
In the operative portion of the order, the authority observed as follows:—
”fPHik kd;wj;jpy; kDjhuu; jpU/rp/rjhrptk; FWf;F tprhuizapy;
“ehd; jhf;fy; bra;Js;s gpukhz gj;jpuj;ij vdf;F fzf;fPL bra;aj;
bjupahJ vd;gjhy; vdJ mwpt[iuapd; bgupy; jpU/gHdpag;gd; mtu;fis
jahu; bra;a nfhupndd;/ nryk;. bjhHpyhsu; ePjpkd;wj;jpy; Review &
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Increment bjhlu;ghf tHf;F jhf;fy; bra;J mt;tHf;F ,d;Dk;
epYitapy; cs;sJ vd;why; rup” vd;W bjuptpjJ
; s;shu;/
,k;kd;wj;jpy; Kd; cs;s tHf;fpYk; ,nj gpur;ridjhd;
jPuk; hdpf;fg;gl ntz;oajhFk;/ ,nj gpur;rid Fwpj;J jPu;khdpg;gJ
multiplicity of proceedings-f;F tHptFf;Fk;/ ,Wjpahd khj
rk;gsk; gzpf;bfhil bjhifia jPu;khdpf;Fk; Kf;fpa fhuzpahf
cs;sjhy; ,g;gpur;ridapy; finality vl;lg;gl;l gpd;du; ,g;gpur;ridia
jPuk; hdpf;f ntz;Lk;/ ,e;epiyapy; finality vl;lg;gl;l gpd;du;
nky;KiwaPll; hsu; - kDjhuu; kPzL ; k; nky;KiwaPL jhf;fy; bra;a[k;
cupikf;F ghjfkpd;wp ,k;nky;KiwaPlL ; kD dispose bra;ag;gLfpwJ/”
6. The Petitioner has impugned the order on the ground that the expression
"wages" is defined under Section 2(s) of the Payment of Gratuity Act, 1972
and, in the case of employees of the 1st Respondent Corporation, the terms of
employment are governed by settlements entered into under Section 12(3) of
the Industrial Disputes Act. Under the said settlement, the Corporation had
introduced a Longevity Pay Scheme. In support of his claim, the Petitioner has
relied upon Exhibits P1 and P7 to P14 to establish that his last drawn pay was
Rs.54,390/-, on the basis of which gratuity ought to have been computed. The
claim made by him before the Labour Court pertain to a claim for difference in
wages and bear no relevance to the computation of gratuity payable to him.
7. In support of his claim, the Petitioner placed reliance on the judgment of
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the Bombay High Court in The Transport Manager, Kolhapur Municipal
Transport v. Pravin Bhabhutlal Shah, reported in 2005 (II) LLJ 104 (Bom),
as well as the decision of this Court in R. Nagarajan v. The Management of
State Express Transport Corporation (Tamil Nadu) Ltd. & Ors., in
W.P.(MD) No. 17073 of 2018 dated 01.08.2018. In the latter case, this Court
had directed that wages be computed in accordance with the terms of the
settlement.
8. It is pertinent to note that under Section 7(3) of the Payment of
Gratuity Act, 1972, the obligation is cast upon the employer to determine the
gratuity amount and disburse the same as soon as it becomes payable. In the
event of any dispute, as contemplated under Section 7(4)(a), the employer is
required to deposit the admitted amount with the Controlling Authority. In
terms of Section 7(4)(b), the employee may then prefer an application before
the Controlling Authority for determination of the gratuity payable. Section
7(4)(c) mandates the Controlling Authority to conduct an enquiry and
determine the amount due to the employee. Any person aggrieved by such
determination has a right of appeal before the Appellate Authority under
Section 7(7) of the Act. Further, by virtue of Section 14 of the Act, any
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stipulation for lesser payment stands overridden, and more beneficial terms in
favour of the employee are expressly protected.
9. In the present case, the approach adopted by the 2nd Respondent in
declining to adjudicate the appeal and instead directing the Petitioner to await
the outcome of the proceedings before the Labour Court is wholly unwarranted.
The Payment of Gratuity Act, 1972, being a special legislation, not only confers
a substantive right to gratuity but also establishes a self-contained mechanism
comprising two tiers—the Controlling Authority and the Appellate Authority—
for determination and enforcement of such right. It is also well settled that an
eligible employee cannot invoke the jurisdiction of the Labour Court for
determination of gratuity; the appropriate forum lies exclusively under the
provisions of the Payment of Gratuity Act. This legal position has been
authoritatively laid down by the Hon’ble Supreme Court in State of Punjab v.
Labour Court, Jullundur & Ors., reported in (1980) 1 SCC 4, wherein it was
held as follows:—
“It is apparent that the Payment of Gratuity Act enacts a complete
code containing detailed provisions covering all the essential
features of a scheme for payment of gratuity. It creates the right to
payment of gratuity, indicates when the right will accrue, and lays
down the principles for quantification of the gratuity. It provides
further for recovery of the amount, and contains an especial
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provision that compound interest at nine per cent per annum will
be payable on delayed payment. For the enforcement of its
provisions, the Act provides for the appointment of a controlling
authority, who is entrusted with the task of administering the Act.
The fulfilment of the rights and obligations of the parties are
made his responsibility, and he has been invested with an
amplitude of power for the full discharge of that responsibility.
Any error committed by him can be corrected in appeal by the
appropriate Government or an appellate authority particularly
constituted under the Act.
Upon all these considerations, the conclusion is inescapable that
Parliament intended that proceedings for payment of gratuity due
under the Payment of Gratuity Act must be taken under that Act
and not under any other. That being so, it must be held that the
applications filed by the employee respondents under section 33-
C(2) of the Industrial Disputes Act did not lie, and the Labour
Court had no jurisdiction to entertain and dispose of them. On
that ground, this appeal must succeed.
10. In the light of the foregoing discussion, the impugned order dated
12.03.2020 passed by the 2nd Respondent Appellate Authority in AGA No. 53
of 2019 is hereby set aside. The matter is remanded to the 2nd Respondent for
fresh consideration of the appeal preferred by the Petitioner, on its own merits
and in accordance with law. Accordingly, the writ petition is allowed to the
extent indicated above. The connected Writ Miscellaneous Petition stands
dismissed as infructuous. No order as to costs.
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22.04.2025
ay
NCC : Yes / No
Index : Yes / No
Internet : Yes / No
To
1.The Management
Tamil Nadu State Transport Corporation
(Coimbatore), Erode Region,
Regional Office,
45, Chennimalai Road,
Erode – 638 001
2. Appellate Authority under the Payment of
Gratuity Act, 1972/Addl. Commissioner of Labour,
43, Balasundaram Road, ATT Colony,
Gopalapuram, Coimbatore – 641 018.
3. Controlling Authority under the
Payment of Gratuity Act, 1972
Office of the Joint Commissioner of Labour,
Yercaud Main Road,
Gorimedu, Salem – 636 008.
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DR. A.D. MARIA CLETE, J
ay
and
22.04.2025
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