Vs. Hind Nippon Rural Industrial (P) Ltd  Insc
858 (24 August 2007)
Thakker & Tarun Chatterjee
APPEAL NO. 3889 OF 2007 ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 11321
OF 2006 Hon. C.K. THAKKER, J.
This appeal is filed against the judgment and order dated September 26, 2005,
passed by the Division Bench of the High Court of Karnataka at Bangalore in
Writ Appeal No. 2458 of 2005 (L-PG). By the said order, the Division Bench of
the High Court set aside the order passed by the Controlling Authority and
Assistant Labour Commissioner (Central), Bangalore under the Payment of
Gratuity Act, 1972 (hereinafter referred to as 'the Act') and confirmed by the
Appellate Authority and also by a Single Judge of the High Court.
Short facts giving rise to the present appeal are that according to the
appellant, in September, 1984, he was appointed as Supervisor by Mr. V.K. Poddar,
Managing Director of Agarwal Investments, Poddar Granites and Hind Nippon Co.
Ltd. According to him, he worked as Supervisor in Poddar Mines at Sira upto
1990 and thereafter was transferred to other quarry. He worked at various
places like Bellary, Sira and Chamaraya Nagar. He
worked till February, 1993. From March, 1993, however, he was neither paid his
salary nor served with any order of termination or dismissal. On September 27, 1993, the appellant addressed a letter
asking the Management to settle his dues and also to pay gratuity under the
Act. But it was not paid. He, therefore, approached the Controlling Authority
and Assistant Labour Commissioner, Bangalore by making an application under
sub-section (4) of Section 7 of the Act read with sub-rule (1) of Rule 10 of
the Payment of Gratuity (Central) Rules, 1972. The Controlling Authority, after
hearing both the parties and perusing the materials placed before him, held
that the appellant was entitled to gratuity. Accordingly, an order was passed
on May 26, 2003 that the appellant was entitled to
a sum of Rs.16,875/- towards gratuity. Since the respondent- employer had not
paid the amount of gratuity within 30 days of the leaving of services by the
workman, the payment was ordered to be made with interest @ 10% p.a. from June 12, 1993 till the date of payment.
Being aggrieved by the order of the Controlling Authority, the
respondent-Company filed an appeal before the Appellate Authority under the
Act. The Appellate Authority vide his order dated December 20, 2004 dismissed the appeal and confirmed the order passed by the
Management challenged the said order by filing a writ petition in the High
Court but the learned Single Judge also dismissed the petition confirming the
orders passed by the Authorities under the Act. The aggrieved Management
challenged the order of the learned Single Judge in intra court appeal and as
stated above, the appeal of the Management was allowed by the Division Bench
setting aside all the orders and holding that the application filed by the
workman was liable to be dismissed.
appellant has challenged the said order before this Court.
7. On July 10, 2006, notice was issued by this Court.
Later on, the parties appeared and the matter was ordered to be posted for
have heard learned counsel for the parties.
Learned counsel for the appellant contended that the Division Bench was wholly
unjustified in setting aside the orders passed by the Authorities under the Act
and confirmed by the learned Single Judge. It was also submitted that while
setting aside the orders, the Division Bench has virtually re-appreciated the
evidence which could not have been done and on that ground also, the impugned
judgment deserves to be set aside. It was further submitted that a finding of
fact was recorded by the Authorities under the Act that different units where
the appellant had worked, were 'one' and there was 'funcitonal unity' and the
appellant was entitled to gratuity since he had worked for more than five
finding could not have been disturbed by the Division Bench. It was, therefore,
submitted that the appeal deserves to be allowed by setting aside the judgment
of the Division Bench and confirming the view taken by the Authorities under
the Act and by the learned Single Judge.
Learned counsel for the respondent, on the other hand, supported the order of
the Division Bench and submitted that since the appellant was not entitled to
gratuity, the Division Bench was right in allowing the appeal and dismissing
the application filed by him.
Having heard learned counsel for the parties, in our opinion, the appeal
deserves to be allowed. From the record, it is clear that the question which
was raised before the Authorities under the Act was whether the appellant had
completed five years' continuous service so as to be eligible to claim gratuity
under the Act. The Authorities considered the said question and on the basis of
the evidence adduced before them, held that various units where the appellant
had worked were "one and the same" and hence the entire service of
the workman ought to be considered and taken into account for the purpose of
computation of benefit of gratuity. On the basis of the above reasoning, the
Controlling Authority as well as the Appellate Authority held that the
appellant was qualified and entitled to gratuity under the Act.
The Appellate Authority, after considering the arguments of the parties and the
findings recorded by the Controlling Authority, concluded;
have carefully perused the records on which the CA has placed reliance on. I am
in full agreement with the findings of the CA. The CA has given cogent reasons
for arriving at his conclusion that the respondent herein is entitled for
payment of gratuity right from September 1984. The learned counsel for the
appellant has not countered the statement of the respondent that Shri V.K. Poddar
runs the establishments of Aggarwal Investments, Poddar Granites and Hind
Nippon and that there is just interchangeability in the services of the
respondent. Two witnesses have been lead by the respondent herein before the CA
in support of his claim that he had worked during the period from 1984 onwards
with Poddar Granites and Aggarwal Investments.
has been produced before me to show that the said two companies are indeed run
by a different person other than Shri V.K. Poddar.
I have to draw an adverse inference that the three companies including the
appellant company is run by Shri V.K. Poddar and hence there is functional
integrally among these three establishments and that the services of respondent
has been merely transferred to the appellant company without his knowledge. It
appears that the appellant has been changing the employer-ship of the
respondent solely to deprive him of the statutory benefits. Hence, I am of the
considering opinion that the decision of the CA under challenge is in
us, the learned Single Judge was wholly right in dismissing the writ petition
on the basis of the findings recorded by the Authorities under the Act and in
not interfering with the said orders. The Division Bench, surprisingly, went
into the questions of fact and came to the conclusion that it was not
established by the appellant-workman that he had worked for more than five
years continuously in the Company so as to be eligible to claim gratuity. The
Division Bench also perused certain documents and observed that certain letters
said to have been written were not on the letterhead of the Company and it
could not be said that the appellant had worked for a period of five years
continuously which was an essential requirement to claim gratuity. On that
reasoning, the Division Bench held that the case was of 'no evidence'. The
Bench also held that the onus to establish eligibility was on the employee and
since it was not discharged by him, he should fail. Accordingly, the orders
were set aside.
our considered opinion, the Division Bench ought not to have undertaken the
above exercise which had been done by the Controlling Authority as also by the
Appellate Authority. The High Court was exercising power of 'judicial review'
which, in its inherent nature, has limitations. This is particularly true since
the learned Single Judge also did not think it fit to interfere. We are,
therefore, of the view that the Division Bench was wrong in setting aside all
the orders and in allowing the appeal of the Management and in dismissing the
application filed by the workman.
There is another aspect also which is relevant.
Act has been enacted with a view to grant benefit to workers, a 'weaker
section' in industrial adjudicatory process. In interpreting the provisions of
such beneficial legislation, therefore, liberal view should be taken. A benefit
has been extended by the Authorities under the Act to the workman by recording
a finding that the applicant (appellant herein) had completed requisite service
of five years to be eligible to get gratuity. In that case, even if another
view was possible, the Division Bench should not have set aside the findings
recorded by the Authorities under the Act and confirmed by a Single Judge by
allowing the appeal of the employer.
Finally, we are of the view that on the facts and in the circumstances of the
case also, the Division Bench was not justified in setting aside the orders passed
by the Authorities and confirmed by the learned Single Judge considering
comparatively a small amount involved in the appeal. As already noted in the
earlier part of the judgment, the appellant was held entitled to Rs.16,785/-
along with interest @ 10% p.a. To us, therefore, even on that ground, the
Division Bench should have refrained from quashing the orders.
For the foregoing reasons, the appeal deserves to be allowed and is accordingly
allowed. The order passed by the Division Bench of the High Court is hereby set
aside and the orders passed by the Controlling Authority and Appellate
Authority under the Payment of Gratuity Act, 1972 as confirmed by the learned
Single Judge is hereby restored. In the facts and circumstances of the case,
however, there shall be no order as to costs.
The payment to which the appellant-workman is held entitled shall be made
within a period of twelve weeks from today.