Civil Appeal No169 of 1958
Appeal by special leave from the decision dated June 29 1955 of the Labour Appellate Tribunal of India Bombay in Appeal Bombay No 245 of 1955 arising out of the Award dated July 14 1955 of the Industrial Tribunal Bombay in Reference IT No 100 of 1954
5 34 C K Daphtary Solicitor General of India Purshottam Tricumdas and I N Shroff for the appellant
N V Phadke and K R Chaudhuri for the respondents
October 16
The Judgment of the Court was delivered by GAJENDRAGADKAR J
Are workmen entitled to the double benefit of a gratuity scheme as well as retrenchment compensation That is the main question which falls to be considered in the present appeal
The same question along with some other subsidiary points arises in some other appeals and so all of them have been grouped together and placed before us for disposal
We propose to deal with the main point in the present appeal and discuss the other points arising in the other appeals separately
This appeal by special leave arises from an industrial dispute between the Indian Hume Pipe Co Ltd Bombay hereinafter called the appellant and its workmen monthly rated including canteen boys employed under it hereinafter called the respondents
The dispute was in regard to the claim for gratuity made by the respondents and it was referred to the tribunal in these words  Gratuity employees should be paid gratuity on the scale and the conditions prescribed in the industrial tribunal s award in Ref
IT No 82 of 1950 dated August 13 1951
It should also be paid to those whose services have been terminated by the management after the termination of the aforesaid award
 It appears that the respondents had raised an industrial dispute in 1950 which covered their claims for scale of pay dearness allowance provident fund and gratuity and it was referred to the adjudication of Mr Thakore
On this reference Mr Thakore made his award on August 13 1951 which inter alia provided for a scheme of gratuity
Both the parties had gone in appeal against the said award but the appellate tribunal dismissed both the appeals and confirmed the award
On June 2 1953 notice was given by the respondents terminating the said award and making a fresh demand for gratuity at 35 a higher rate
Conciliation proceedings were started but they failed and so on July 1 1954 the present reference was made
Before the tribunal the employees urged that the State Government had no jurisdiction to confine their demand to the scheme of gratuity as framed by Mr Thakore and they urged the tribunal to consider their claim for a revision of the said scheme
The tribunal held that its jurisdiction was limited by the terms of reference and it could not entertain any such plea it also observed that even if it was open to the respondents to agitate for the revision of the said award there was not much chance of their succeeding in that demand
The appellant opposed the scheme of gratuity framed by the earlier award and contended that no gratuity should be paid to the workmen who would be entitled to receive retrenchment compensation under section 25F of the hereinafter called the Act
This contention was negatived by the tribunal
It held that the respondents were entitled to claim both gratuity and retrenchment compensation
The tribunal then examined the financial position of the appellant and held that the gratuity scheme framed by the earlier award should be en forced subject to certain modifications specified by it
This award was challenged by the appellant before the Labour Appellate Tribunal and it was argued that the respondents were not entitled to the double benefit of the gratuity scheme and the statutory retrenchment compensation
The appellate tribunal agreed with the view taken by the tribunal and rejected the appellant s contention
It also examined the financial position of the appellant and held that it saw no reason to interfere with the discretion exer cised by the tribunal in granting  the same gratuity to the workmen in the case of retrenchment as in other cases 
Then the appellate tribunal considered the merits of the scheme sanctioned by the tribunal and made some changes and added one paragraph which had been included in the earlier award but had been omitted by the tribunal
This paragraph dealt with the cases of persons retrenched after the date of 36 reference but before the award came into operation and it directed that in the case of such persons no additional gratuity shall be paid if they have already received unemployment or retrenchment compensation in excess of the gratuity awarded above in other cases the difference alone shall be paid
It is against this award that the present appeal has been preferred
On the contentions raised in the tribunals below the principal point which calls for our decision is whether a scheme of gratuity can be framed by industrial tribunals for workmen who are entitled to the benefits of 25F of the Act
This question has been frequently raised before industrial tribunals and has generally been answered in favour of the employees
In dealing with this question it is important to bear in mind the true character of gratuity as distinguished from retrenchment compensation
Gratuity is a kind of retirement benefit like the provident fund or pension
At one time it was treated as payment gratuitously made by the employer to his employee at his pleasure but as a result of a long series of decisions of industrial tribunals gratuity has now come to be regarded as a legitimate claim which workmen can make and which in a proper case can give rise to an industrial dispute
Gratuity paid to workmen is intended to help them after retirement whether the retirement is the result of the rules of superannuation or of physical disability
The general principle underlying such gratuity schemes is that by their length of service workmen are entitled to claim a certain amount as a retrial benefit
On the other hand retrenchment compensation is not a retirement benefit at all
As the expression  retrenchment compensation indicates it is compensation paid to a workman on his retrenchment and it is intended to give him some relief and to soften the rigor of hardship which retrenchment inevitably causes
The retrenched workman is suddenly and without his fault thrown on the street and has to face the grim problem of unemployment
At the com mencement of his employment a workman naturally expects and looks forward to security of service 37 spread over a long period but retrenchment destroys his hopes and expectations
The object of retrenchment compensation is to give partial protection to the retrenched employee and his family to enable them to tide over the hard period of unemployment
Thus the concept on which grant of retrenchment compensation is based is essentially different from the concept on which gratuity is founded
It is true that a retrenched workmen would by virtue of his retrenchment be entitled to claim retrenchment compensation in addition to gratuity because industrial adjudication has generally taken the view that the payment of retrenchment compensation cannot affect the workmen s claim for gratuity
In fact the whole object of granting retrenchment com pensation is to enable the workman to keep his gratuity safe and unused so that it may be available to him after his retirement
Thus the object of granting retrenchment compensation to the employee is very different from the object which gratuity is intended to serve
That is why on principle the two schemes are not at all irreconcilable nor even inconsistent  they really complement each other and so on considerations of social justice there is no reason why both the claims should not be treated as legitimate
The fact that they appear to constitute a double benefit does not affect their validity
That is the view which industrial tribunals have generally taken in a large number of reported decisions on this point
Let us now refer to some of these decisions and indicate very briefly the broad outlines of the development of industrial law on this subject
Whenever industrial tribunals deal with the employees  claim for gratuity they consider the financial position of the employer before granting the employees  demand for framing a gratuity scheme it is only if they are satisfied that the financial condition of the employer is satisfactory and the burden of the gratuity scheme can be borne by him that they proceed to frame schemes of gratuity and thereby secure for the employees the retirement benefit in the form of gratuity
Though awards framing such schemes had been made for some 38 years before 1951 the question of framing a gratuity scheme was carefully examined by the Labour Appellate Tribunal in the case of The Army and Navy Stores Ltd Bombay And Their Workmen 1
The scheme framed in this case directed the payment of gratuity on the following scale  1 On the death of an employee while in the service of the company or on his becoming physically or mentally incapable of further service month s salary or wages for each year of continuous service to be paid to the disabled employee or if he has died to his heirs or legal represen tatives or assigns
2 On voluntary retirement or resignation of an employee after 15 years continuous service 12 month s salary or wages for each year of continuous service
3 On termination of service by the company month s salary or wages for each year of completed service
 Under this scheme gratuity was not however payable to any employee dismissed for misconduct
This scheme has been generally treated as a model scheme in all subsequent disputes about gratuity
It also appears that the benefit of gratuity schemes has been generally given even to workmen whose services have been terminated and who have thereby become entitled to retrenchment compensation also
In Bangalore Woollen Cotton and Silk Mills Co Ltd And Binny Mills Labour Association 2 the Labour Appellate Tribunal gave permission to the company to retrench 179 workmen subject to the condition that the workmen sought to be retrenched shall be paid by way of retrenchment relief a sum equivalent to one month s basic wage for every year of completed service in the company and the basic wage on which such calculation is to be made shall be the last basic wage prior to the grant of this permission
It also made it clear that the grant of such retrenchment relief shall not in any way tend to prejudice the issue 1 2 39 of a gratuity scheme which was before the adjudicator and to which the adjudicator was directed to apply an altogether independent mind unaffected by the decision of the Labour Appellate Tribunal
It may however be conceded that sometimes though rarely tribunals have thought it fit not to grant gratuity in cases of workmen whose services have been terminated on the ground that they would be entitled receive compensation under the Act
But it is not disputed that this dissenting note has been struck only in a few cases Vide Chemical Industrial and Pharmaceutical Laboratory Ltd And Their Workmen 1
Speaking generally subject to the capacity of the employer to pay workmen have been given the benefit of both retrenchment compensation and gratuity by industrial awards prior to the enactment of section 25F of the Act
This question was elaborately considered by the Labour Appellate Tribunal in the appeals against the award of All India Industrial Tribunal Bank Disputes where it has been held that the award of retrenchment compensation cannot adversely affect the claim for gratuity
The two claims are made for entirely different reasons and in a proper case both the claims can be awarded
The measure of compensation however varied from case to case and the awards made in that behalf naturally were not always uniform
But it does appear that the determination of the quantum of retrenchment compensation was generally linked with the period of the past service rendered by the retrenched workman
In Rashtriya Mill Mazdoor Sangh and Gold Mohur Mills 2 the Labour Appellate Tribunal accepted the view that the quantum of compensation payable to retrenched workmen should be calculated at the rate of 10 days  basic wages plus dearness allowance for each year of service and it also held that no maximum limit should be put on this quantum In the Bombay Gas Co Ltd And Their Workmen3 a detailed scheme was framed for the computation of the retrenchment compensation
Those who had completed a year s service but less than three years  service 1 2  3 40 got wages for 26 days with dearness allowance and those who had completed three years of service or more got 26 days  wages with dearness allowance for each year of service subject to a maximum of 104 days  Wages with dearness allowance
In The National Industrial Works And Their Workmen 1 a still more elaborate scheme was framed for
determining the quantum of compensation
Thus it would be seen that the result of industrial decisions was that workmen were held entitled both to gratuity and compensation on retrenchment and the amount of retrenchment compensation was measured by reference to the period of service rendered by the retrenched employee
It may however be stated that industrial decisions on the twin topics of gratuity and retrenchment compensation were not always uniform and sometimes they disclosed an element of uncertainty and perhaps even ambiguity in their approach
While this was the state of industrial decisions on this point Ordinance V was promulgated on October 24 1953
By section 25E the Ordinance prescribed conditions precedent to retrenchment of workmen
One of the conditions thus prescribed by section 25Eb was that before a workman is retrenched he must be paid at the time of retrenchment gratuity which shall be equivalent to 15 days  average pay for every completed year of service or any part thereof in excess of six months
This Ordinance was followed by Act 43 of 1953 which is deemed to have come into force on October 24 1953
It is by this amending Act that section 25F has been introduced in the Act
Section 25Fb is in the same terms as section 25Eb of the Ordinance except that for the word gratuity  the expression retrenchment compensation  has been substituted We may incidentally mention the fact that in the statement of aims and objects of the Act it was observed that  in regard to retrenchment the bill provides that a workman who had been in continuous employment for not less than one year under the employer shall not be retrenched until he has been given one month s notice in writing or one 1 41 month s wages in lieu of such notice and also a gratuity calculated at 15 days  average pay for every completed year of service or any part thereof in excess of six months 
The appellant s case is that after section 25F was enacted there is no longer any scope for framing gratuity schemes in addition to the statuory retrenchment compensation for retrenched employees
In support of this contention the appellant sought to rely on the fact that both in section 25Eb of the Ordinance and the statement of aims and objects of the amending Act the word  gratuity  has been used and not retrenchment compensation
It is obvious that for construing section 25F the words used in the statement about the aims and objects of the Act are not relevant and in regard to the use of the word  gratuity  in section 25Eb of the Ordinance it is significant that the said word has been deliberately omitted and the words retrenchment compensation have been used in its place by section 25F
Therefore it would not be possible to determine the character of the payment statutorily prescribed by section 25F by reference to the word gratuity  used either by the Ordinance or in the statement about the aims and objects of the Act
If we have to decide the character of the payment merely by the words used in describing it then the words used section 25F are retrenchment compensation  and not gratuity
But apart from the mere use of words there can be no doubt that section 25F is intended to provide compensation to retrenched workmen solely on account of the difficulties which they have to face on their retrenchment
It is well known that at the time when the Ordinance was issued the problem of retrenchment had become widespread and acute and Legislature thought it necessary to step in and make a statutory provision for the payment of adequate retrenchment compensation
Legislature knew that retrenchment compensation was being awarded by industrial tribunals but it must have thought that in determining the amount of compensation the tribunals considered a variety of relevant factors with the result that there was no uniformity or certainty in the matter and so 6 42 it decided to standardise the payment of compensation by prescribing a statutory rule in that behalf
The enactment of section 25F thus merely standardises the payment of retrenchment compensation and nothing more
If retrenchment compensation could be claimed by the employees in addition to gratuity prior to the enactment of section 25F there is no reason why a similar claim cannot be made by them subsequent to its enactment
It is then urged that in determining the amount of compensation payable to a retrenched workman the length of his past service has been taken into account and it is pointed out that schemes of gratuity also provide for payment of gratuity on similar considerations and adopt a similar measure
As we have already pointed out even before section 25F was enacted tribunals were adopting similar methods in determining the amount of retrenchment compensation and so the mere fact that the length of the past service of the retrenched workman is made the basis for computing retrenchment compensation cannot clothe retrench ment compensation with the character of gratuity
The claims for retrenchment compensation and gratuity proceed on different considerations and it would be impossible to bold that the grant of one excludes the claim or grant of the other
It is true that a retrenched workman would get both the retrenchment compensation and gratuity and in a sense on his retrenchment he would get more than what other workmen with corresponding length of service would get on their retirement but it must be remembered that the retrenched workman gets compensation because involuntarily he has been forced to face unemployment and it is to enable him to tide over the period of unemployment that retrenchment compensation is paid to him
So on the general contention raised before us that the employees are not entitled to claim the double benefit of gratuity and retrenchment compensation there can be only one answerand that is that there is no conflict between the two claims and industrial tribunals are right in recognising that both claims can be entertained and 43 granted and reasonable gratuity schemes can and should be framed even after the enactment of section 25F in the Act
In this connection it would be relevant to refer to the definition of wages under section 2rr of the Act inasmuch as it excludes any gratuity payable on the termination of the employee s service
This shows that Legislature was aware that gratuity can be claimed by employees and is often awarded to them
If Legislature had intended that the statutory retrenchment compensation provided for by section 25F should affect the employees  claim for gratuity it would have expressly made a suitable provision in that behalf
Legislature makes such provisions when it thinks necessary to do so
Section 17 of the Employees  Provident Funds Act 1952 Act 19 of 1952 for instance confers on the appropriate Government power to exempt from the operation of all or any of the provisions of the scheme establishments which have already introduced provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under this Act
In the absence of any such provision in the it would be unreasonable to hold that the mere enactment of section 25F either ousts the jurisdiction of industrial tribunals to entertain claims for gratuity schemes or makes it improper or unjust to frame such schemes for all employees including those who are retrenched
So far we have dealt with the general question as it arose on the contentions of the parties but in fairness we must add that the learned Solicitor General conceded that he could not urge that as a matter of law the point raised by his client should be answered in his favour
He however strenuously urged that in framing gratuity schemes industrial tribunals should make appropriate provision for giving gratuity to retrenched workmen on a basis different from that on which gratuity to other workmen is calculated
The argument is that since the retrenched workmen get statutory compensation on a very liberal scale they should not get gratuity at the rates fixed by the scheme for other workmen
They may and should get gratuity 44 but at a lesser rate and on less generous terms and conditions
Indeed he suggested that we should make suitable amendments in the gratuity scheme framed by the appellate tribunal in that behalf
We do not think we can accede to this request
Whether or not a twofold scheme of gratuity should be framed one applicable to retrenched workmen and the other to the rest is a matter which may if necessary be raised before the tribunal in a proper case
Besides it may be pertinent to observe that the question as presented in this form is not one of general importance for in the present state of our economy which has received and is receiving the stimulus of national plans our industries may not have to face the problem of retrenchment on an appreciable or extensive scale but apart from this consideration we cannot entertain or decide the point raised by the learned Solicitor General in an appeal under article 136
Before we part with this appeal we ought to refer to another aspect of the matter which our present decision does not consider or decide
It is likely that gratuity schemes framed by consent or by awards may provide for payment of compensation to retrenched workmen either in lieu of or in addition to gratuity  in such cases the question as to whether the retrenched workmen can claim the benefit of such a scheme in addition to the retrenchment compensation under section 25F would depend on the construction of the material terms of the relevant scheme considered in the light of the provisions of section 25F of the Act
In the present appeal we are not called upon to consider such a question
Therefore our decision has and can have no reference to cases which would fall to be decided under section 25F of the Act
In the result the appeal fails and is dismissed with costs
Appeal dismissed


Summary:
The appellant who had been a contractor in Burma in response to an advertisement issued in August 1942 by the evacuee Government of Burma then functioning at Simla inviting claims from contractors for works of construction and repairs executed by them submitted claims aggregating to several lacs of rupees
The Government of Burma sent these claims for verification to Major Henderson at Jhansi in March and May 1943 as he was the officer who had knowledge of these matters
He certified many of these claims to be correct and on his certification the Government of Burma sanctioned the claims and directed the Controller of Military claims at Kolhapur to pay the amounts
On the request of the appellant cheques drawn on the Imperial Bank of India at Lahore were posted to him from Kolhapur and they were encashed at Lahore
The largeness of such claims aroused the suspicions of the Government and it was discovered that the claims made by the appellant were false
He was tried in several trials under section 420 of the Indian Penal Code along with Henderson charged under section 420109 of the Code for abetment of those offences before a special Tribunal at Lahore functioning 90 under Ordinance No XXIX of 1943 as amended by ordinance No XII of 1945
After the partition of India the trials by the Special Tribunal took place at Simla
The appellant was convicted at these trials and sentenced to imprisonment ranging from Punjab one year to three years and payment of fines of various amounts
The Tribunal divided the fines into ordinary  and compulsory  the latter by virtue of s 10 of the Ordinance which prescribed a minimum fine equal to the amount procured by the offence
In default of payment of the ordinary  fines it directed the appellant to undergo further imprisonment for certain periods but there was no such direction with respect to the compulsory  fines
The High Court on appeal affirmed the convictions but varied the sentences by reducing the term of imprisonment and setting aside the compulsory  fines
The appellant as also the State of Punjab appealed to this Court
It was contended on behalf of the appellant that 1 the offences having been committed at Kolhapur then outside British India the trial at Simla in the absence of any certificate or sanction given under section 188 of the Code of Criminal Procedure was illegal  2 the joint trial of the appellant and Henderson at Simla was also illegal  3 SS
2341 and 239b of the Code could not be combined to try a person charged with three offences of cheating with another charged with abetment in respect thereof in a single trial and 4 sanction under section 197 of the Code was necessary for the prosecution of Henderson and the absence of such sanction vitiated the joint trial
The contention of the State in the appeals preferred by it was that the imposition of the compulsory  fines by the Tribunal was perfectly valid in law and the High Court was in error in setting aside the same
Held that before the provisions of section 188 of the Code of Criminal Procedure could apply to a case it was necessary to establish that the crime was committed outside British India In the instant case the misrepresentation by the appellant the false certification by Henderson and the resulting payment having been made respectively at Simla Jhansi and Lahore then in British India no part of the offence could be said to have taken place outside British India
The contention that the posting of the cheques at Kolhapur was tantamount to delivery of them to the appellant at Kolhapur the Post Office being the agent of the appellant was wholly misconceived in the facts and circumstances of the case
Moreover what might be a relevant consideration as to the place of payment for the purpose of the Income tax Act would not necessarily be relevant for the purposes of a criminal case
The Commissioner of Income tax Bombay South Bombay vs Messrs Ogle Glass Works Ltd Ogale Wadi 1955 1 SCR 185 held inapplicale
The Commissioner of Income tax Bihar  Orissa vs Messrs Patney  Co  referred to
91 The words  an offence  in section 239b of the Code which is singular must by virtue of section 13 of the General Clauses Act 1879 include the plural and therefore a person accused of several offences of the same kind can be tried in a single trial with another accused of abetment thereof The concluding words of section 239 of the Code obviously mean that in framing charges against each of the several persons mentioned in its different clauses not only the provisions relating to the form of charges but also those in respect of joinder of charges should apply
Consequently the joint trial of the appellant with the abettor on the charges as framed did not vitiate the trial The provisions of sections 179 and 180 of the Code are wide enough to enable either the court within whose territorial jurisdiction anything was done or the court where the consequences ensued to take cognisance of the matter
Under section 179 the appellant could be tried either at Lahore or Simla and under section 180 Henderson could be tried at either of the two places
There was therefore no illegality in trying the appellant and Henderson together at Simla
Section 420 of the Indian Penal Code read with section 63 of the Code prescribes a fine that is unlimited
It was not therefore correct to contend that section 10 of the Ordinance in prescribing the minimum fine imposed a penalty that was greater than what could be inflicted under the former so as to contravene article 201 of the Constitution
As section 10 of the Ordinance prescribed a minimum fine no question as to its excessive character could arise and the order of the High Court setting aside the compulsory fines must therefore be set aside and the orders of the Special Tribunal restored
Rao Shiv Bahadur Singh and Another vs The State of Vindhya Pradesh and Kedar Nath Bajoria vs The State of West Bengal   explained and distinguished
Per Sinha CJ Imam Wanchoo and Das Gupta JJOffences such as bribery and cheating or abetment thereof cannot by their very nature be regarded as having been committed by public servants while acting or purporting to act in the discharge of their official duties
Such offences can have Do reasonable connection with the performance of their duties as such  no sanction therefore is necessary under section 197 of the Code of Criminal Procedure for their prosecution
Amrik Singh vs The State of PEPSU  and Matajog Dobey vs H C Bhari   referred to
Per Kapur J
In order that the protection afforded by section 197 of the Code of Criminal Procedure might be available to Henderson it was not enough to show that he was a Major in the Army but it must also be shown that he was an officer not removable from office except with the sanction of the Central Government and that in certifying the appellant s claims which was the crux of the offence charged against him he was acting or purporting to act in the discharge of his official duty
92 The true test as to whether a public servant was acting or purporting to act in discharge of his duties would be whether the act complained of was directly connected with his official duties or it was done in the discharge of his official duties or it was so integrally connected with or attached to his office as to be inseparable from it
Gill vs The King 75 IA 41 Albert West Meads vs The King 75 IA 815 Phenindra Chandra Neogy vs The King 76 IA 10 Hori Ram Singh vs The Crown  Amrik Singh vs The State of PEPSU   Ronald Wood Mathams vs State of West Bengal and Shree Kanthiah Ramayya Munipalli vs The State of Bombay  referred to
As there was no evidence in the instant case to show that Henderson was an officer as contemplated by section 197 of the Code and that in verifying the appellant s claims he was discharging his official duty section 197 could not apply