ivil Appeal Nos
1088 of 1976 and 480 of 1977
Appeals from the Judgments and Orders dated 19 4 1976 and 12 10 1976 of the Gujarat High Court in SCA No 49576 and SCA No 164176 respectively
PR Mridul PH Parekh and CB Singh and Miss Vineeta Caprihan for the Appellant in CA No 48077
65 Gobind Das AN Karkhanis and T Sridharan and Mrs Sunanda Bhandare for the Respondent in CA No 48077
YS Chitale PH Parekh R Karan Jawala and Miss Vineeta Caprihan for the Appellant in CA No 108876
YM Tarkunde KL Hathi and PC Kapur for the Respondent in CA No 108876
Shanker Ghosh GB Pai and DN Gupta for the Intervener
Superintendent Mines and Quarries Bisra Stone Lime Co Ltd  Anr Anil Kumar Gupta for the Intervener Baba Jha Bhai Talekar
The Judgment of the Court was delivered by GUPTA J
A common question arises for consideration in these two appeals relating to the mode of calculating fifteen days  wages of a monthly rated employee under section 42 of the hereinafter referred to as the Act
Section 42 provides For every completed year of service or part thereof in excess of six months the employer shall pay gratuity to an employee at the rate of fifteen days  wages based on the rate of wages last drawn by the employee concerned Provided that in the case of a piece rated employee daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment and for this purpose the wages paid for any overtime work shall not be taken into account Provided further that in the case of an employee employed in a seasonal establishment the employer shall pay the gratuity at the rate of seven days  wages for each season Wages has been defined in section 2s of the Act as follows wages means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus commission house rent allowance overtime wages and any other allowance
 It is not necessary to state the facts in any great detail
In both cases the respondent was a monthly rated employee and the appellant a public limited company was his employer
In Civil Appeal No 1088 of 1976 Shri Digvijay Woollen Mills Limited appellant vs 66 Shri Mahendra Prataprai Buch respondent the respondent ceased to be an employee on attaining the age of superannuation after completing 19 years of service
The appellant company calculated the amount of gratuity payable to him on the basis that fifteen days  wages was half of the monthly wages last drawn by him
The respondent demanded an additional sum as gratuity on the ground that his monthly wages should be taken as what he got for 26 working days his daily wages should be ascertained on that basis and his fifteen days  wages worked out accordingly not by just taking half of his wages for a month of 30 days or fixing his daily wages by dividing his monthly wages by 30
The Controlling Authority under the Act accepted the respondent s contention and his decision was affirmed by the appellate authority
A division bench of the High Court of Gujarat at Ahmedabad summarily dismissed the petition under Article 227 of the Constitution made by the appellant company challenging the decision of the authorities under the Act
The learned Judges however gave reasons in support of the order made
The appeal before us is by special leave
In Civil Appeal 480 of 1977 The Maharana Mills Limited appellant vs Shri Gopal Das Ladhabhai Kakkad respondent the respondent resigned his job after a little over 22 years of service
The appellant company paid him gratuity calculating his daily wages by dividing his monthly wages by 30 and computing fifteen days  wages on that basis
Here also the respondent claimed an additional sum as gratuity and the basis of the claim was the same as in the other appeal
The Controlling Authority accepted the respondent s contention and the appellate authority affirmed his decision following the view taken by the Gujarat High Court in the other case
In this case also the Gujarat High Court summarily rejected the petition made by the appellant company challenging the decision of the authorities under the Act
This appeal however is brought on a certificate granted by the High Court
In dismissing the petition in Digvijay Woollen Mills case the division bench of the Gujarat High Court observed as follows The employee is to be paid gratuity for every completed year of service and the only yardstick provided is that the rate of wages last drawn by an employee concerned shall be utilised and on that basis at the rate of fifteen days  wages for each year of service the gratuity would be computed
In any factory it is well known that an employee never works and could never be permitted to work for all the 30 days of the month
He gets 52 Sundays in a year as paid holidays and therefore the basic wages 67 and dearness allowance are always fixed by taking into consideration this economic reality 
A worker gets full month s wages not by remaining on duty for all the 30 days within a month but by remaining on work and doing duty for only 26 days
The other extra holidays may make some marginal variation into 26 working days but all wage boards and wage fixing authorities or Tribunals in the country have always followed this pattern of fixation of wages by this method of 26 working days
 The view expressed in the extract quoted above appears to be legitimate and reasonable
Ordinarily of course a month is understood to mean 30 days but the manner of calculating gratuity payable under the Act to the employees who work for 26 days a month followed by the Gujarat High Court cannot be called perverse
It is not necessary to consider whether another view is possible
The High Court summarily dismissed the petition of the appellant in both the appeals before us and upheld the decision of the authorities under the Act
We are not inclined to interfere with the decision of the High Court because it seems to us that the view taken by the authorities is not in any way unreasonable or perverse
Incidentally to indicate that treating monthly wages as wages for 26 working days is not anything unique or unknown we may refer to a passage from the judgment of this Court in Delhi Cloth and General Mills Company Ltd vs Workmen and other etc1 which disposed of several appeals arising out of an award made by the Industrial Tribunal Delhi
In the award schemes were framed relating to the payment of gratuity
The expression average of the basic wage occurring in the schemes was explained by this Court as follows It was also urged by Mr Ramamurthi that the expression average of the basic wage in the definition of wages in Cl
4 of the Schemes is likely to create complications in the implementation of the Schemes
He urged that if the wages earned by a workman during a month are divided by the total number of working days the expression wages will have an artificial meaning and especially where the workman is old or disabled or incapacitated from rendering service gratuity payable to him will be substantially reduced
We do not think that there is any cause for such apprehension
The expression average of the basic wage can only mean the wage earned by a workman during a month divided by the number of days for which he has worked 68 and multiplied by 26 in order to arrive at the monthly wage for the computation of gratuity payable
Counsel for the employers agree to this interpretation
 In the view we take we do not find it necessary to consider the decisions of some of the High Courts cited at the bar taking one view or the other on the question involved in these appeals also the decisions based on some provisions of the Minimum Wages Act and other statutes which were relied on by either side are in our opinion not relevant on the question of computation of fifteen days  wages under section 42 of the 
The appeals are dismissed in civil appeal 480 of 1977 with costs in civil appeal 1088 of 1976 this Court while granting special leave on September 22 1976 had directed the appellant to pay the costs of the appeal in any event accordingly respondent Mahendra Prataprai Buch will be entitled to his costs
PBR Appeals dismissed


Summary:
Section 42 of the provides that for every completed year of service or part thereof in excess of six months the employer shall pay gratuity to an employee at the rate of 15 days  wages based on the rate of wages last drawn by the employee concerned
The employers sought to pay gratuity by dividing the workman s monthly wages by 30 and computing the 15 days  wages on that basis but the workman demanded that his monthly wages should be taken as what he got for 26 working days and not by taking half of his wages in a month of 30 days
The Controlling Authority upheld the workman s contention
In dismissing the employer s petition under article 227 of the Constitution the High Court observed that a worker received a full month s wages not by remaining on duty for all the 30 days within a month but by remaining on work and doing duty for only 26 days and therefore gratuity payable to him should be calculated on this basis
Dismissing the employers  appeals  HELD The view taken by the authorities and upheld by the High Court is not in any way unreasonable
Although a month is understood to mean 30 days the manner of calculating gratuity payable under the Act to employees who worked for 26 days a month followed by the High Court cannot be called perverse
67C Treating monthly wages as wages for 26 working days is not new or unknown
The expression average of the basic wage occurring in an award has been interpreted by this Court to mean the wage earned by a workman during a month divided by the number of days for which he has worked and multiplied by 26 in order to arrive at the monthly wage for the computation of gratuity payable to the workman
67D  H Delhi Cloth and General Mills Company Ltd vs Workmen and others etc 19692 SCR 107 referred to