Nath Roy Vs. Surendra Hikram Singh Agarwal & Ors  INSC 513 (9 April 1996)
Uddin (J) Faizan Uddin (J) Kuldip Singh (J) Faizan Uddin, J.
1996 AIR 1736 1996 SCC (4) 403 JT 1996 (4) 296 1996 SCALE (3)499
This appeal by one of the retired employees of the Trust created by one Later Babu
Lal Agarwal has been directed against the order dated July 25, 1995 passed in
appeal by the Division Bench of the Calcutta High Court setting aside the order
passed on December 12, 1994 by a learned Single judge of that Court in Civil
Suit No.703/1993 whereby the learned Single judge has held that the appellant
was entitled for the pension as well as the gratuity from the said Trust.
Late Babu Lal Agarwal, during his life time, had executed a Will and testament
creating a Trust for religious and charitable purposes. In a suit between one
Amrita Bibi the widow of the pre-deceased son of late Babu Lal Agarwal and his
other heirs a comprehensive scheme was framed for administration of the Trust.
Amongst other matters, the scheme provided for grant of pension and other
facilities to the employees of the Trust and the relevant provisions in the
said scheme were as under:-
The Trustees at their discretion may grant to such of the employees of the
Estate who have satisfactorily served with the Estate for a period of not less
than 30 years, pension either by monthly payments or by payment of a lump sum.
The pension granted to an employee in case of monthly payments should not
ordinarily be more than one third of his last pay and in case of lump sum
payment should not be a sum more than four thousand rupees.
The Trustees may at their discretion also pay gratuity to such members of the
family of an employee dying during his service with the Estate as they think
amount of such gratuity shall not ordinarily exceed one year's full pay last
drawn by such deceased employee."
appellant being a retired employee of the Trust claimed pension and gratuity by
contending that he had joined the employment of the Trust on April, 1950 and
retired as Personal Assistant of the Trustees on April 8, 1993 while he was
receiving a salary of Rs. 2322/- per month and that having regard to the
relevant terms of the scheme prepared by the High Court and reproduced in the
foregoing para, he is entitled to pension at the rate of one third of the last
salary drawn by him and also the gratuity as per rules in accordance with the
provisions of Payment of Gratuity Act, 1972. It was alleged that inspite of the
demand having been made by the appellant the Trustees failed to release the
amount of pension and gratuity payable to him and, therefore, the appellant
approached the High Court for a direction to the Trustees to pay pension and
gratuity with interest.
Learned Single Judge took the view that the retirement benefits are no longer
bounty of the employers but they constitute a right under the law and,
therefore, the appellant was entitled for the pension. As regards the gratuity
the learned Single Judge relying on the provisions of Section 14 of the Payment
of Gratuity Act, 1972 took the view that the scheme being silent with regard to
the payment of gratuity does not alter the situation in so far as entitlement
of gratuity is concerned. On appeal being preferred by the respondent, one of
the Trustees, the Division Bench of the High Court took a contrary view, set
aside the order of the learned Single Judge and dismissed the appellant's claim
for pension and gratuity. The Division Bench took the view that the Trust
cannot be regarded as an establishment as defined in Section 2(5) of the West
Bengal Shops and Establishment Act, 1963 and, therefore, the provisions of
Payment of Gratuity Act, 1962 could not be attracted in the case of the
appellant as the appellant did not fall in any of the categories mentioned in
sub-clauses (a) and (c) of sub-section (3) of Section 1 of the Payment of
Gratuity Act, 1972.
Learned counsel for the appellant assailed the view taken by the Division Bench
of the High Court and urged that the Division Bench was patently wrong in
holding that the appellant should have filed a suit for pension and the same
could not be granted by the High Court in a petition filed to that affect. In
our considered opinion there is much substance in this submission. The Division
Bench has disallowed the claim of pension on the ground that according to the
definition of an employee given in Section 2(e) of the Payment of Gratuity Act
1972 an employee means any person whose wages do not exceed Rs. 2500/- per mensum
and as it was not certain whether the appellant was getting basic pay to the
tune of Rs. 2322/- per month inclusive of D.A. or not, he could not be treated
to be an employee. In our opinion it is clearly a mistaken view of the Division
Bench as the appellant had asserted in the petition before the High Court
supported by an affidavit that the last salary drawn by the appellant at the
time of his retirement was Rs. 2322/- per month only and this fact has neither
been controverted by the respondent nor there is any assertion that the
appellant was getting any O.A.over and above the aforesaid amount. In this view
of the matter there was no occasion to assume that the appellant was getting
wages exceeding Rs. 2500/-.
Apart from the above facts, the appellant had claimed pension on the basis of a
provision to that effect in the scheme itself. There is no dispute about the
said scheme nor the said scheme was sought to be amended by the appellant.
(a) and (b) of the scheme reproduced in para 3 above clearly go to show that
the appellant was entitled for the pension as he had served for a period of
about 43 years, much beyond the requisite period of 30 years. In the absence of
any material to show that the services of the appellant were unsatisfactory
there is no reason to deny the exercise of discretion in favour of the
appellant for grant of pension as envisaged in the scheme of the Trust
sanctioned by the High Court itself.
Learned counsel for the appellant submitted that the Division Bench took an
erroneous view that the religious and charitable Trust is not an Establishment
within the meaning of Section 2(5) read with Section 2 (2) of West Bengal Shops
and Establishment Act, 1963 and consequently the provisions of Payment of
Gratuity Act were not attracted to the instant case.
After hearing the learned counsel for parties and on perusal of the record we
are unable to persuade ourselves to accede to the view taken by the Division
Bench in this behalf. A reading of the judgment of the learned Single Judge
will go to show that it was nobody's case that the provisions of Payment of
Gratuity Act could not be pressed into service but the claim of gratuity was
contested on the ground that the scheme of the Trust as framed by the High
Court did not provide for payment of gratuity to the retired employees though
in the event of an employee dying in harness, certain provisions have been made
in the scheme for payment of gratuity to the members of the family of such
employee. It appears that no assertion was made before the High Court that the
Trust was not an Establishment within the meaning of the relevant provisions of
the Payment of Gratuity Act. Neither any material has been placed before us nor
any argument was advanced on behalf of the respondent that the Trust is not an
Establishment as contemplated in the Payment of Gratuity Act. On the contrary
the appellant has placed on record a notification dated July 16, 1972 published
by the Government of India, Ministry of Labour and Rehabilitation Department
published in Part 2, Section 3 (II) of the Gazette of India whereby the Trust
Estate in question was treated to be an Establishment and the provisions of
Employees Provident Funds and Family Pension Fund Act, 1952 were applied to the
said Trust Estate of Babu Lal Agarwal in relation to employees of the said
Trust treating it to be an Establishment under the said Act. A photo-copy of
the said notification has been placed on record of this court, which has not
been disputed by the respondent. This position further strengthens the fact
that the Trust has been treated to be an Establishment.
the our opinion having regard to the facts and circumstances of the present
case the provisions of the Payment of Gratuity Act would be attracted and the
appellant would be entitled for the gratuity also.
the aforesaid reasons the appeal succeeds and is hereby allowed with costs. The
impugned order of the Division Bench is set aside and the order of learned
Single Judge is restored. Cost quantified at Rs. 2000/-.
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