Madras High Court
The Superintending Engineer vs The Controlling Authority Under on 29 May, 2025
W.P.No.7229 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
(Special Original Jurisdiction)
RESERVED ON : 09.04.2025
PRONOUNCED ON : 29.05.2025
PRESENT:
THE HON’BLE DR. JUSTICE A.D. MARIA CLETE
W.P. No. 7229 of 2021
and
W.M.P. No. 7733 of 2021
The Superintending Engineer,
Salem Electricity Distribution Circle,
Tami Nadu Generation & Distribution
Corporation (TANGEDCO)
Salem – 14. …Petitioner
Vs.
1.The Controlling Authority Under
The Payment of Gratuity Act, 1972,
(Deputy Commissioner of Labour)
Office of the Deputy Commissioner of Labour,
Yercaud Main Road, Korimedu,
Salem – 636 008.
2. S.Palaniappan (PPO. No.81953)
Junior Engineer II Gr. / TNEB / Rtd
70 E, Konangipalayam Road,
Kalipatty Post, Alayampatty Via,
Namakkal District – 637 501. …Respondents
Prayer in W.P.
1/11
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W.P.No.7229 of 2021
To issue a Writ of Certiorari calling for the records of the First respondent in
P.G.I.A. No.41 of 2020, quash the order dated 19.01.2021, hold the petition of
the 2nd Respondent as not maintainable and pass further or other orders as this
Hon’ble Court may deem fit in the circumstances of the case.
Prayer in WMP
To stay the operation of the order of the 1st Respondent in P.G.I.A.No41 of
2020, dated 19.01.2021, pending disposal of the writ petition.
Appearance of Parties:
For Petitioner : Mr.Anand Gopalan, Advocate
For T.S.Gopalan & Co., Advocates
For Respondent 1 : Mr.R.Kumaraval AGP
For Respondent 2 : Mr.V.Stalin, Advocate
For Navaneetha Krishnan, Advocate
JUDGMENT
Heard.
2.The present writ petition has been filed by the petitioner–TANGEDCO
challenging the interim order dated 19.01.2021 passed by the first respondent–
Controlling Authority under the Payment of Gratuity Act, 1972, in P.G.I.A. No.
41 of 2020. By the said order, the Controlling Authority rejected the
petitioner’s objection regarding the maintainability of the gratuity claim against
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TANGEDCO and directed the matter to be posted for further hearing on
03.03.2021. The writ petition was admitted on 19.03.2021, and an interim stay
of further proceedings was granted on the same day. Upon service of notice, the
contesting second respondent entered appearance through counsel.
3.The petitioner’s case is that the erstwhile Madras Electricity Board was
constituted under the Electricity (Supply) Act, 1948 with effect from
01.07.1957. The 2nd respondent was engaged as a temporary casual labourer in
the year 1971. The Payment of Gratuity Act, 1972 came into force on
01.09.1972. According to the petitioner, employees of the Tamil Nadu
Electricity Board whose services were provincialized were not extended the
benefits under the P.G. Act, as they were governed by the General Provident
Fund (GPF) scheme and entitled to death-cum-retirement gratuity.
Subsequently, members of the non-provincialized staff (i.e., those in the regular
work establishment) began demanding extension of the pension scheme that
was applicable to provincialized employees.
4.The 2nd respondent was subsequently made a permanent employee of
the Electricity Board, which was later reconstituted as TANGEDCO. By G.O.
Ms. No. 699, dated 16.03.1983, the Government of Tamil Nadu exempted the
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Electricity Board from the applicability of the Payment of Gratuity Act, 1972
with effect from that date. Pursuant thereto, the Board issued Proceedings No. 5
dated 26.06.1986, whereby it was resolved that Regular Work Establishment
(RWE) employees who retired on or after 01.07.1986 would also be brought
under the pension scheme. Subsequently, through Board Proceedings No. B.P.
28 dated 08.02.1988, it was clarified that the maximum qualifying service for
computation of benefits under the contributory pension scheme would be
capped at 33 years. The second respondent retired from service on 31.05.2011.
5.Nearly eight years after his retirement, the 2nd respondent filed a claim
petition before the first respondent–Controlling Authority on 30.09.2019,
seeking payment of gratuity. Along with the claim, he also filed an application
to condone the delay. According to the 2nd respondent, he was entitled to
receive a balance gratuity amount of Rs.2,80,864/-, which included both his
period of service as a temporary casual labourer and his regular service. Upon
receipt of notice on the claim petition, the petitioner–TANGEDCO filed an
interim application contending that the erstwhile Tamil Nadu Electricity Board
had been exempted from the provisions of the Payment of Gratuity Act by the
Government of Tamil Nadu under Section 5 of the Act. It was therefore
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requested that the issue of maintainability be taken up as a preliminary issue. In
response, the 2nd respondent filed an objection, contending that he was entitled
to gratuity for his earlier period of service as a Temporary Casual Labourer
(TCL), as no gratuity had been paid for that period.
6.The 1st respondent–Controlling Authority, while considering the
preliminary objection, referred to the exemption granted under G.O. Ms. No.
699, Labour and Employment Department, dated 16.03.1983, which
nevertheless reserved certain powers for the authority to adjudicate disputes
arising out of the implementation of the exemption scheme. The authority also
took note of Section 14 of the Payment of Gratuity Act and placed reliance on
two judicial precedents—Municipal Corporation of Delhi v. Dharam
Prakash Sharma, (1998) 7 SCC 221, and Ship Ram Mahto v. Jharkhand
State Electricity Board, 2004 (2) LLN 698 (Jharkhand High Court). Based
on these considerations, the authority held that the petition filed by the 2 nd
respondent was maintainable and accordingly rejected the interim application
filed by TANGEDCO. Aggrieved by this order, the present writ petition has
been filed.
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7.In response to the objection raised by the learned counsel for the 2nd
respondent—that this Court ought not to interfere with a preliminary order
passed by the Controlling Authority—the learned counsel for TANGEDCO
relied on the judgment of the Supreme Court in V.G. Jadishan v. Indfos
Industries Limited, reported in (2022) 6 SCC 167. In particular, he referred
to the following passage from paragraph 15 of the judgment:
“In the case of D.P. Maheshwari (supra) is pressed into service
by learned Senior Advocate appearing on behalf of the
appellant in support of the submission that the Labour Court
ought not to have given the decision only on preliminary issue
and ought to have disposed of all the issues, whether
preliminary or otherwise at the same time. On facts the said
decision is not applicable to the facts of the case on hand. In
the aforesaid decision no absolute proposition of law was laid
down by this Court that even the issue touching the
jurisdiction of the court cannot be decided by the court as a
preliminary issue and the court has to dispose of all the issues,
whether preliminary or otherwise, at the same time. When the
issue touches the question of territorial jurisdiction, as far as
possible the same shall have to be decided first as preliminary
issue. Therefore, in the present case, the Labour Court did not
commit any error in deciding the issue with respect to the
territorial jurisdiction as a preliminary issue in the first
instance.”
In the present case, the preliminary issue has already been adjudicated, and the
writ petition has been admitted and posted for final hearing. Therefore, this
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Court is not inclined to reject the writ petition on the ground of its interlocutory
nature.
8. The learned counsel for the 2nd respondent, in support of the claim that
his client is entitled to gratuity, placed reliance on the following three decisions
of this Court:—
(a)M/s. Standard Chartered Global Business Services Private Ltd
Vs. Special Joint Commissionerate of Labour, Chennai & anr. in
W.P.No.5766 of 2020 dt. 17.3.2025
(b) S.Sivashanmugam Vs. Tamil Nadu Electricity Generation and
Distribution Corporation, Cuddalore in W.P.No.26968 of 2012 dt.
29.2.2024
(c)Sri Muthukumaran Institute of Technology Vs. J.Rajalakshmi &
Ors., in W.P.No. 3222 of 2019 dt. 1.10.2020
9.In the first case cited by the learned counsel for the workman, the issue
of exemption from the provisions of the P.G. Act was not raised by the
employer, and therefore, did not fall for consideration. In the second case,
although TANGEDCO had raised the plea of exemption under the Act, the
learned Judge did not address or adjudicate that issue in the order. The third
decision pertained to a private establishment, where the question of exemption
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from the Act was not involved and thus did not arise for consideration.
10.However, an identical issue concerning the exemption granted to
TANGEDCO under Section 5 of the Payment of Gratuity Act, and the
consequent lack of entitlement for its employees to raise claims before the
Controlling Authority, was considered by me in The Superintending Engineer,
Tamil Nadu Generation & Distribution Corporation (TANGEDCO),
Krishnagiri Electricity Distribution Circle v. The Assistant Commissioner
of Labour, Salem, in W.P. Nos. 14381 of 2020 and 23255 of 2021, decided on
09.04.2025. In that case, similar contentions advanced by the workman were
considered and expressly rejected. It was held as follows:—
“45. The learned counsel for the petitioner placed reliance on three
decisions of this Court—one rendered by a Division Bench and two
by learned Single Judges. The details of the said decisions are as
follows:
a.The Tamil Nadu Electricity Board Vs. S.Jagadeesan, Writ
Appeal No. 75 of 2018 dt. 27.9.2018
b.The Superintending Engineer Vs. Appellate Authority
under the Payment of Gratuity Act, Coimbatore, Writ Petition
No. 45390 of 2006 dt. 16.10.2019
c.The Superintending Engineer Vs. The Assistant
Commissioner of Labour, Salem, Writ Petition No.32532 of
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2017 dt. 30.3.2021.
46. In all three cases cited, the respective Benches referred to the
exemption notification issued by the Government and uniformly held
that employees of TANGEDCO are not entitled to make claims under
the Payment of Gratuity Act, 1972. In the first of those cases, the
Division Bench, in paragraph 4 of its order, observed as follows:
“It is pertinent to point out that the learned Single Judge
while allowing the writ petition directed the respondents
to calculate the gratuity of the 1st respondent herein/writ
petitioner in accordance with the calculation provided
under the Payment of Gratuity Act, 1972 and pay him
the difference in Gratuity, with statutory interest as per
the said Act, from the date of entitlement. However, the
learned Counsel appearing for the appellants submitted
that so far as the Tamil Nadu Electricity Board is
concerned, as per G.O.(Ms.) No.699, Labour
Employment Department, dated 16.3.1983, they are
completely exempted from paying the gratuity amount.
As such, according to the appellants, the question of
payment of gratuity or any arrears thereof does not arise.
Further, it is stated that instead of paying the Gratuity,
DCRG is being paid. Accordingly, the DCRG amount
was settled in favour of the 1st respondent.”
47. In view of the fact that the provisions of the Payment of
Gratuity Act, 1972 do not apply to the employees of TANGEDCO
by virtue of the exemption granted by the State Government, this
Court is not inclined to compel the petitioner to exhaust the
appellate remedy before approaching this Court, as contended by
the learned counsel for the second respondent.”
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11.In light of the foregoing discussion, the writ petition is allowed. The
impugned order passed by the first respondent in P.G.I.A. No. 41 of 2020 dated
19.01.2021 is hereby quashed. Consequently, the connected miscellaneous
petition stands dismissed. There shall be no order as to costs.
29.05.2025
ay
NCC : Yes / No
Index : Yes / No
Speaking Order / Non-speaking Order
DR. A.D. MARIA CLETE, J
ay
To
The Controlling Authority Under
The Payment of Gratuity Act, 1972,
(Deputy Commissioner of Labour)
Office of the Deputy Commissioner of Labour,
Yercaud Main Road, Korimedu,
Salem – 636 008.
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Pre-Delivery Judgment made in
and
29.05.2025
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