Madras High Court

The Managing Director vs Mr. M. Palani on 21 March, 2025

                                                                                     W.P. No. 1180 of 2021

                              IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                      RESERVED ON   : 19.03.2025
                                      PRONOUNCED ON : 21.03.2025

                                                       CORAM:

                            THE HONOURABLE DR. JUSTICE A.D. MARIA CLETE

                                           W.P. No.1180 of 2021
                                                    and
                                      W.M.P. Nos. 1333 & 11035 of 2021


                     1.The Managing Director,
                     Tamilnadu State Transport Corporation (VPM)Ltd.,
                     No.3/137, Salamedu,
                     Valuthareddy Post,
                     Villupuram – 605 602.

                     2.The Administrator,
                     Tamil Nadu State Transport Corporation
                       Pension Fund Trust,
                     Thiruvalluvar House,
                     Pallavan Salai,
                     Chennai – 600 002.                                              ... Petitioners

                                                         Versus

                     Mr. M. Palani
                     (Ex.Staff No.20497)
                     S/o.Munusamy,
                     No.115, New Mettu Street,
                     Thirukkalukkundram,
                     Kancheepuram District – 603 109.                                ... Respondent

                     PRAYER :


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                                                                                              W.P. No. 1180 of 2021

                                  To issue a Writ of Certiorari or such other writ or order or

                     direction in the nature of a writ and call for all the records on the file of

                     the 1st Additional Labour Court, Chennai relating to the order dated

                     18.12.2019 passed in C.P.No.71 of 2019 and quash the same and pass

                     such further or other orders as this Court may deem fit and proper in the

                     circumstances of the case.

                     PRAYER IN W.M.P.No.1333 of 2021:

                                  To stay the operation of the impugned order of the 1st Additional

                     Labour Court, Chennai dated 18.12.2019 made in C.P.No.71 of 2019,

                     pending disposal of the writ petition and pass such further or other orders

                     as this Hon'ble Court may deem fit and proper in the circumstances of the

                     case.

                     PRAYER IN W.M.P.No.11035 of 2021:

                                  To extend the time granted by this Court by order dated

                     21.01.2021 in W.M.P.No.1333 of 2021 in W.P.No.1180 of 2021 to

                     enable the petitioner to deposit the amount of Rs.75,000/- to the credit of

                     the C.P.No.71 of 2019 on the file of the I Additional Labour Court,

                     Chennai in compliance of the order of this Court.

                     APPEARANCE OF PARTIES:
                                  For Petitioners      :Mr. M. Ashwin.
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                                                                                             W.P. No. 1180 of 2021



                                  For Respondent      :No appearance.




                                                        JUDGMENT

Heard.

2. The first petitioner serves as the Managing Director of Tamil Nadu

State Transport Corporation Limited, while the second petitioner is the

Administrator of the Pension Fund Trust. In this writ petition, they

challenge the order issued by the First Additional Labour Court,

Chennai, in C.P. No. 71 of 2019, dated 18.12.2019.

3. The Labour Court entertained the petition filed by the respondent

workman under Section 33C(2) of the Industrial Disputes Act and

computed a sum of Rs. 1,25,723 as the Death Cum Retirement Gratuity

(DCRG), along with interest at 100% on the delayed payment of gratuity.

Aggrieved by this order, the petitioners have approached this Court.

4. This writ petition was admitted on 21.01.2021. While granting an

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interim stay in W.M.P., this Court directed the petitioners to deposit Rs.

75,000 with the Labour Court to the credit of C.P. No. 71/2019 within

four weeks, failing which the interim stay would automatically stand

vacated. The petitioners did not deposit the amount as directed and

instead filed a miscellaneous petition, W.M.P. No. 11035 of 2021, on

19.04.2021, well beyond the time limit prescribed by this Court. Despite

being served with notice in this writ petition, the respondent has neither

appeared in person nor through counsel.

5. It is seen from the records that the respondent workman was

initially employed as a Technical Helper w.e.f. on 20.09.1989 with the

erstwhile Pallavan Transport Corporation, Chennai. Upon reaching the

age of superannuation, he retired on 31.05.2014 as a Senior Tradesman.

As he was not granted his terminal benefits, he filed W.P. No. 11841 of

2016 before this Court, seeking a direction for the disbursement of

retirement benefits, including gratuity, commuted pension value, leave

encashment, pension arrears, and provident fund arrears, along with 18%

interest for the delayed payment.

6. After issuing notice to the petitioners, this Court disposed of the

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writ petition on 30.03.2016, directing the petitioners to pay all terminal

benefits in 12 equal monthly installments with an annual interest of 6%.

The Court further directed that the first installment commence in April

2016. However, the respondent, alleging non-compliance, filed

Contempt Petition No. 1337 of 2018 to punish the petitioners. In

response, the first petitioner submitted a counter-affidavit in January

2019, stating that the respondent had been paid gratuity, pension

installments, interest on gratuity and provident fund, commutation value,

interest on commutation, and leave encashment with interest.

7. The contempt petition was disposed of along with another

contempt petition by a common order dated 05.03.2019. After recording

the petitioners' statement that all payments had been made, this Court

permitted the respondent workman to approach the Labour Court if any

further claims remained. Subsequently, the respondent filed C.P. No.

71/2019 before the First Additional Labour Court, Chennai, seeking a

sum of Rs. 1,25,723. Upon receiving notice, the petitioners filed a

counter-statement dated Nil and resisted the claims regarding gratuity

and interest.

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8. During proceedings before the Labour Court, the respondent

workman testified as P.W.1 and submitted four documents as Exhibits P1

to P4. The petitioners neither examined any witnesses nor produced any

documentary evidence. The Labour Court rejected the petitioners’

arguments, upheld the maintainability of the gratuity claim under Section

33C(2), and computed the amount, including interest on the delayed

payment. The Labour Court relied on a decision reported in 2017

(1) WLR 172, wherein this Court directed the payment of interest as per

Rule 45A for delayed DCRG payments. The Labour Court also

misunderstood the Supreme Court judgment cited before it in State of

Punjab v. Labour Court, Jalandhar(1981 SCC 4), stating that to avoid

multiple proceedings, the claim need not be dismissed, and the workman

was not required to seek redress elsewhere.

9. The Labour Court also cited the Supreme Court judgment in U.P.

Electric Supply Co. Ltd. v. R.K. Shukla (1969 (2) SCC 400), which

explained the scope of Sections 33C(1) and 33C(2). It held that the

judgment did not bar a worker from approaching the Labour Court for

gratuity and interest on delayed gratuity payments. Aggrieved by this

decision, the present writ petition has been filed. The affidavit in support

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of this petition reiterates similar contentions.

10. It is undeniable that in the contempt petition, this Court permitted

the respondent workman to approach the Labour Court for any unpaid

dues. However, that does not entitle the workman to claim amounts

beyond the Labour Court’s jurisdiction. The Labour Court cannot

override a binding Supreme Court precedent rendered by a Bench led

by Justice V.R. Krishna Iyer. In State of Punjab (supra), the Supreme

Court held that gratuity payments under the Payment of Gratuity Act,

1972, are governed by that statute, which establishes a specific forum for

claims and appellate remedies. When a special law creates both a right

and a forum, the workman must seek relief through that designated

forum rather than the Labour Court under Section 33C(2).

11. The following passage from the judgment is relevant:

“…..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 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

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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.

In the circumstances, it is not necessary to notice the further submission on behalf of the appellant that where a serious dispute exists in regard to the basis of a claim for payment of gratuity, no proceedings will lie under section 33-C(2) of the Industrial Disputes Act.”

12. Had the Labour Court properly considered this binding precedent,

it would not have rejected the petitioners’ case. The Labour Court lacks

the discretion to ignore a Supreme Court ruling and grant relief merely to

prevent multiple proceedings. Such discretion does not vest in the

Labour Court.

13. In light of the above, the impugned order of the Labour Court in

C.P. No. 71/2019, dated 18.12.2019, is set aside. The writ petition, W.P.

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No. 1180 of 2021, is allowed. However, no costs are imposed.

Consequently, W.M.P. No. 1333 of 2021 is dismissed as infructuous, and

W.M.P. No. 11035 of 2021 for extension of time also stands dismissed as

unnecessary.