SCA/16587/2007 1/10 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 16587 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE K.M.THAKER ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= JUNAGADH AGRICULTURAL UNIVERSITY - Petitioner(s) Versus SAMJUBEN WD/O. MAYABHAI LEGALHEIRS OF DECEASED MAYA KANA - Respondent(s) ========================================================= Appearance : MR DG CHAUHAN for Petitioner(s) : 1, MR ASHOK YAGNIK for Respondent(s) : 1, Mr.Krunal Pandya, AGP for respondent No.2 State. ========================================================= CORAM : HONOURABLE MR.JUSTICE K.M.THAKER Date : 31/07/2008 ORAL JUDGMENT Leave to amend the cause title. Rule. Mr. Ashok Yagnik, advocate appearing for respondent No.1 and Ms. Krunal Pandya, AGP appearing for respondent No.2 waive service of Rule. With the consent of the SCA/16587/2007 2/10 JUDGMENT learned advocates appearing for the respective parties, the matter is taken up for final hearing today. 2. By this petition, the petitioner Junagadh Agricultural University has challenged order dated 5.4.2006 passed by Controlling Authority, Bhavnagar, under the Payment of Gratuity Act, 1972 [hereinafter referred to as 'the Act']. The petitioner has also challenged an order dated 12.9.2006 passed by the appellate authority, Rajkot under the said Act in Appeals No. 36 to 38 of 2006, 40 of 2006, and 43 of 2006 to 49 of 2006. By its order, the controlling authority came to the conclusion that the applicant workman was entitled for payment of Rs. 5,175/- towards gratuity, whereas the University had not made payment towards gratuity and that therefore there was non-payment of any amount towards gratuity. Upon arriving at the said conclusion, the controlling authority by aforesaid order directed the petitioner university to make payment of said amount to the respondent along with interest at the rate of 10% to be calculated from the date specified in the order. SCA/16587/2007 3/10 JUDGMENT 3. Aggrieved by the said order, the petitioner University preferred appeal before the appellate authority and appellate authority by its order dated 12.9.2006 confirmed the order of appellate authority. Against the aforesaid orders, the University is before this Court by way of captioned petition. 4. Mr. DG Chauhan appears for the petitioner University and Mr. Anand Yagnik appears for the respondent. I have heard the learned advocates for respective parties. 5. Mr. Chauhan submitted that the petitioner University has not made payment to the respondent towards gratuity because according to the University nothing was due and payable, however, the respondent approached the controlling authority, and controlling authority arrived at a different conclusion and ordered the petitioner University to make the payment of the determined amount. Mr. Chauhan submitted that there is error apparent on the face of the order by the controlling authority and controlling authority has erroneously calculated the amount. He has also submitted that being aggrieved by the said order of SCA/16587/2007 4/10 JUDGMENT the controlling authority the petitioner University approached the appellate authority, however the appellate authority also committed the similar mistake instead of setting aside the order of the controlling authority and approving the payment made by the petitioner University, confirmed the order of controlling authority. 6. Mr. Yagnik on the other hand submitted that the petitioner University did not make payment towards gratuity in accordance with provisions of the Act and settled legal position, whereas the controlling authority has rightly calculated the amount and there is no error in the order of the controlling authority or the appellate authority. 7. So far as the issue regarding applicability of the Act to the University and the issue of entitlement of respondent for gratuity under the Act are concerned, no dispute has been raised at this stage. Under the circumstances, it is not in dispute that the respondent would be entitled for gratuity under the provisions of the said Act. When the factual aspects are examined, then it is noticed that SCA/16587/2007 5/10 JUDGMENT there is also no dispute between the parties so far as the relevant factual details are concerned inasmuch as the date of joining of the respondent, the date of superannuation of respondent, his last drawn salary, and length of service are not disputed. Thus, the only dispute which arises in the petition is about the justifiability of the quantum determined by the controlling authority on the basis of the said undisputed factual aspects. 8. Since, there was no dispute between the parties regarding the date of joining and date of retirement, total length of service and the last drawn salary all that was required to be done by the controlling authority was to calculate the payable amount as per the provisions under the Act and in accordance with settled legal position. 9. As per Section 4(2) in case of monthly rated employee, employer is required to pay an employee {who has become eligible for gratuity as per S. 4(1) r/w. 2-A and 4(6)} Gratuity at the rate of 15 days' salary last drawn for every completed year of service gratuity and in view of the explanation (which has SCA/16587/2007 6/10 JUDGMENT been inserted w.e.f. 1.10.1987 by Act 22 of 1987) to sub-section (2) of Section 4, the last drawn monthly salary has to be divided by 26 and the quotient has to be multiplied by 15 so as to arrive at 15 days' salary. 10. However, in case of piece-rated employee, the daily wage shall be computed on the basis of average of total wages (excluding overtime wages) received by him over a period of three months immediately preceding the termination of his employment. 10.1. So far as employee engaged on daialy wage basis i.e. daily-rated employee is concerned, the Act does not contain any separate explanation as in the case of piece-rated employee. The controlling authority has, therefore, rightly taken into account the last drawn daily rate paid to those petitioners who were daily-rated employees. 11. Thus, in present case, so as to determine the amount payable towards gratuity the rate of SCA/16587/2007 7/10 JUDGMENT petitioner's daily wage is required to be multiplied by 15 so as to arrive at the 15 days' wages. Then the total amount payable towards gratuity is to be arrived at by multiplying such rate i.e. 15 days' wages by the total number of years of eligible service put in by the employee. To put it differently, the payable amount is to be arrived at by calculating in following manner; Per day wage X 15 X Total eligible service. 12. When the order in question is examined in light of the settled legal position, it is noticed that the controlling authority has applied the said formula inasmuch as it has taken into account the last drawn salary of the respondent as Rs. 15/- per day and the same has been multiplied by 15, and then the resultant amount has been multiplied by total length of eligible service of concerned employee i.e. 23 years. Further, from perusal of the order, it also comes out clearly that the Controlling Authority has taken into account only those years in which employee completed 240 days of service, for calculating total length of service i.e. total SCA/16587/2007 8/10 JUDGMENT eligible service. As regards the point of applicability of the Act also the authority has taken into consideration earlier order of appellate authority (which does not appear to have been challenged further) determining the applicability of Act, however, this issue was rightly not pressed during hearing of these petitions and it appears that other 11 similarly placed persons are paid gratuity. Thus, so far as the question of method and mode of calculation and arriving at payable amount is concerned, Controlling Authority has not committed any error. In present case, there is no dispute that the total length of eligible service of the petitioner is of 23 years. Accordingly, the controlling authority had concluded that the petitioner was entitled for Rs. 5,175/-. For the purpose of satisfaction about the correctness of the calculation, the counsel for the petitioner was asked to recalculate the amount in accordance with the aforesaid formula. After calculating the same, the counsel for the petitioner also found that there is no error in the calculation made by the controlling authority. SCA/16587/2007 9/10 JUDGMENT 13. In this view of the matter, it is clear that the controlling authority has calculated the payable amount by applying correct formula and has not committed any error in arriving at the final figure. Therefore, the order of the controlling authority does not suffer from any error of law or jurisdiction or even on factual aspects. Hence, the appellate authority was also justified in confirming the said order of the controlling authority. 14. On the overall consideration, the order of the Controlling Authority does not suffer from any error and jurisdiction and the authority has determined the payable amount in accordance with the settled legal position and the Appellate Authority has also not committed any error in law or jurisdiction or even of facts in confirming the order of the Controlling Authority. Hence, there is no reason to interfere with two concurrent orders which do not suffer from any error of law and no case for interference is made out and that therefore the petition does not deserve to be entertained. Hence the same is rejected. Rule is discharged. SCA/16587/2007 10/10 JUDGMENT Rmr. [ K.M. Thaker, J. ]