^"' w-f IN THE HIGH COURT OF fiSDtNASB.lSESH AT JABALPUR ^^\ M.P.ifo, OF 1993 .-":n ^••/ -y. /;>'l.-_fc.. V' -S" l.:?.^ 1.1.. ^'' . s", ,<i South Eastem Ooalfields Ltd., ThroughtDy.Genera1 Manager» Kurasia Colliery«Distt$Surguja(M.P) ^^/ . •/<V"-&7/ ^ VERSUS ^- . . .gE'KTIONEK <y 1. Sri. P.C. Khasnavl.s - Sx.Sr. Loading Supdt. PoO. Kurasia Oolllery,Ot.stt?Surguja(M.P) ^•1 2< Controlling Authori-fcy under the Payment of Gtatw.lty Sct, (Asstt.Labour Cbnnnissioher (G) ShahdoI,H.P. ,,^ 3. Appella-te Authprity under the 'j' Payment pf Gratuity ,Aet* . (Regional ;Labour Commlssioner (C) Jabalpur. RESPONDENTS PETltlON UNDE.RAR'EICLE ,226 AND 227 OF.THE eQNSTITUTXON -OE^i®lA ^- ~ • ^ ^ HEGH CGURT QF GHHRTTE$$ARH AT BELASFQR $mgie Bench: Han’bie $hyi H.L. Earth, $.J. W¥ii Petitimi b4132326 0f $93; ‘Nri’t Petii‘ion No.2330 0f 789?; Wri€ Paméon No.2323 af 1%3 Writi‘ Pstmon N023??? r3? ¢$33 Writ ?et§%m‘; Mc.2$28 (3f $9§3 Wri'i Pei§%§on N9232Q 0f '€§%3 Wri? ?é‘ii‘1iem Ng2331 of “$93 Wfié‘ ?&?§t§an o.2332 ef 1:35.93 Mifié' ?eii€ian No.2333 M 1$$3 Wgrii Feti‘tkm NG.2334 of $3.433?) Writ Peti§en Na2335 0f wgS wm Peti€iom No.233s af 1%3 Wr§t Pefiééiem N0.38M chf 13$3 Wyit Peii‘éaw No.335? o? @93 Wr§t ?e€ii:ion N9335': 42f 1%3 ‘Dosi for O9 IG5QGO7‘ Sdl- Chief Justice 05!O5i’2007. N HIGH COURT OF CHHATTISGARH AT B¥LASPUR SSngle Bench : Hon’ble Shri H.L, Datm, C.J. Writ Petition No.2325 of 1%3 Patitkmer South Eastern Coameids LTcl. through: Chief General Manager, South Eastern Coaifieids Limited, Korba East Area: PO. Korba CoHiery, Dist Bilaspur, Vs. Resporadents Smt. Jagni Devi Win late B Thakur aged Legai heirs of 62 years. reepondent No.1 ii Raikumar Thakur, S/o iaie B Thakur I aged 38 years Vinay Kumar Thakur} 8/0 iate B Thakur All Rio SECL Jopri, Pest, Banki Mongra, Distt. Korba {CG) 2, Controiiing Authority under the Payment of Gratuity Act (Assit. Labour Commissioner (C) Bilaspur). 3. Appeiiate Authority under the Payment of Gratuity -. Act (Regional Labour Commissioner (C), Jabaipur). Writ ?eiition No.2330 of 1393 Peiitioner South Eastern Coaifieicis Ltd. through: Chief Generai Manager! South Eastern Coaifieids Limited, Korba East Area. PO. Korba Coiiiery, Dist Biiaspur. Vs. W Md Sadique Mina, Slo Late Pokhan, Qr NoBliB, Subhash Block, Korba, PO Korba Coiiiery, DisttBiiaspur 2. Controiiing Authority under the Payment of Gratuity Act (Aestt Labour Commissioner (C) Biiaspur). 3, Appeiiate Authority under the Payment of Gratuity Act (Regional Labour Commissioner (C), Jabaipur), Writ Petition No.2323 of 'ia93 Petitioner South Eaetern Coaiiields Ltd. through: Chief General Manager, South Eastern Coalfields Limited, Korba East Area. PO. Korba Colliery, Dist Bilaspur. Ra$gmdee~ets 1, Chundi Lohar Sfo. Late .Bilaspur: Madhya Pradesh. 2. Controlling Authority under Patitiener m Writ Petition Ne.2327 of 1993 Chief South Genera! Eastern Manager, Coalfields South Ltd. through: Eastern Coamelds Limited, Korba Vs. Village Agdoni Kalam PO Via- Giridih: Diett, Giridih (Bihar) Resgondents Goof Lohar Banki, PO Banki Mongra, Diett‘ the Payment East Area, PO. Korba Colliery, Diet. Bilaspur. 1t Sri Kirat Kumar S/o. Sri Tilak Kumar, 2. Contromng Authority under the Payment of Gratuity Act (Asstf. Labour Commissioner (C) Biiaspur. Baniadhih, a Writ Petition No.2328 of 19%! Petitioner Coaifieicis Limited, Korba Vs. Resgondents Pradesh. Commissioner (C) Biiaspur. Commiesioner (C), Jabaipur), N Writ Petition No.2329 of 1393 of Controlling Gratuity Authority Act under (Asstt. the Payment of Appeiiate Gratuity Auihority Act under (Regionai the Payment Labour 9 . etationer . . Resaomients Vs. ‘i. Sri Chamru S/o. Khuias, Qr. Labour No. [3/34, Chief South General Eastern Manager, Coalfields South Ltd. through: Eastern PO. Coalfields Korba Limited, Colliery, Dist. Korba Bilaspur. East Area, of Gratuity Act (Asstt. Labour Appellate Commissioner Authority (C) Bllaspur) under the Payment ' of Gratuity Act {Regional Labour Commissioner (C), Jabaipur). of Appellate Gratuity Authority Act under (Regionai the Payment Labour Commissioner (C); Jabalpur). Chief South General Eastern Manager, Coalfields South Ltd. through: Eastern PO. Korba Colliery, Dist. Bilaspur. East Area, A?! 1, J Appellate Authority under the Payment of Gratuity Act (Regional Labour Commissioner (C), Jabaipur). Writ Petition No.384’i of 1993 Petitione! South Eastern Coaliieids Ltd. through: Dy. General Manager, Kurasia Colliery, Disti: Surguja (MP) Vs. Sri. PC. Khasnavis! EX. Sr. Loading Supdt, PO. Kurasia Colliery, Distt: Surguja (MP) Controlling Authority under the Payment of Gratuity Act (Asstt. Labour Commissioner (C), Shahclol, MP‘ Appellate Authority under the Payment of Gratuity Act (Regional Labour Commissioner (C), Jabalpur. Writ Petition No.3857 0f 1993 South Eastern Coalfields Ltdi through: Dy. General Manager, Kurasia Colliery, Distt: Surguja (MP) Vs. Mr, Paritosh Chakraborty Ex. Sr. Clerk} Kurasia Colliery PLO. Kuraeia Colliery Diett; Surguja (MP) Controlling Authority under the Payment of Gratuity Act (Asstt. Labour Commissioner (C), Shahdoi: MP. Appellate Authority under the Payment of Gratuity Act (Regional Labour Commissioner (C), Jabalpurr Writ Petition No.3861 of 1993 South Eastern Coalfields Ltdi through: General Manager, SECL, PO Chirimiri, Distt: .Surguja, MP. (South Eastern Coalfields Ltd, C..r.m.r. Area, District surguja, MP.) Vs. Sri KM. Khasnabis, Ex. Office Supdt., Chirimiri Colliery, SECL PO Chimiri, Distt: Surguja (MP) Controlling Authority under the Payment of Gratuity Act (Asstt. Labour Commissioner (C), Shahdol, MP.‘ Appellate Authority under the Payment of Gratuity Act (Regional Labour Commissioner (C), Jabalpur. Respondents Rewonoents Petitioner Respondents Petitioner @ Writ Petitions under Articles 226 and 227 of the Censtitution of fndl‘a. Present: Shri PS. Koshy, counse! for the petitioner/ SECL ' Shri oyees Gary Mukhopadhyay, in W.P.Nos2326i1993 counsel & for 3861/1993 respondents~ ORDER (Passeé on _Qg_ May, 2007) Sinca common question of facts and iaw .és involved in au these writ petitions, they are clubbed, heard and isposed of by this common order, 2. Facts in nutsheii are: Petiti e provisione of the it is a Government of indie undertaking.’ In these writ petitions tiled under Aitic oner is a Company incorporated under tn Companies Act and ies 226 and 227 of the Constitution of indie, the petitioner primariiy caiis in question the orde Authority and the Appeiiate Authority under the provisions of Payment of Gratuity Act, 1972 and further to hoid that the respondents reiiefs under the provisions of Payment of Gratuity Act, i9?2, (“the Ac " rs passed by the Controiiing ~ workmen are not entitied to any of the ror short) in view bf the fact that they had opted for service conditions appiicebie to empioyeee. the Centre! Government 3. The petitioner ~ (Now Chhattisgarh). One of the areas of the petiti situate in Korba and is known as Korba East Area. 4. The‘responcients were appointed in various coiiieriee b Company owns Coal Mines in Madhya Pradeeh oner — Company is efore 1952 and aii these coiiieries were owned by State RaiiwaysfCentrai subsequentiy taken over by the duction, Government of India and Government. These ooiiieries were Ministry of Pro thereafter it was I d wag transferred to Nationa! Goa! Development Corporation (NCDC), a Government Company with effect from 110.1956. Subsequently, after nationalization of the Coal Mines in the year 1973, the Coiiiery came under the control of Coal lndia Ltd. and then to the petitioner Lei South Eastern Coalfields Ltd. ,_ o. lnitially, the respondente were Government empioyees and their service conditions were governed by the rules and regulations governing t‘ne terms and conditions of appointment of employees appointed by the Government of lndia and ail the rules and regulationsapplicable to the Central Government employees were made applicable to the respondents. When the services of the respondents were transferred to the NCDC Ltd. an option was given to the respondents to opt for the service conditions that were prevailing in NCDC Ltd or to continue with the service conditions of the previous employer ‘lt is the specific case of the petitioner — Company that the respondents did not opt for the conditions of service that were prevaiiing in NCDC Ltd, that the respondents had an option either to accept the same terms and conditions regarding leave, gratuity, provident fund etc as applicabte to the Central Government employees or to opt for the benefits that were available to the employees of NCDC Ltd. it is further stated that since the service conditions applicable to the Central Government employees were better, the respondents had opted to remain in Central Government service conditions even on their transfer to NCDC Ltd. it is their further case that the respondents had taken ali service benefits including the wage revisions and other benefits applicabie to the Central Government employees tilt they retired from service on attaining the age of superannuation. it is their further case, that, after they retired from service they had applied for gratuity and other pensionary benents under the Death Cum Retirement Scheme as applicable to the Centrai Government \ok employees; and all the benefits were paid t0 the respondents‘ It is the further assertion of the petitioner—Company that the respondents having accepted the gratuity payabte to them Lmder the Death cum Retirement Scheme and atso after drawing the pensionary benefite, for the met time, they could not have approached the Controlling Authority under the provisions of the Act 6. The petitioner — Company further asserts that before the Controlling Authority the petitioner — Company had specifically contended that the claim made by the respondents for payment of gratuity under the provisions of the Act is barred by iimitation‘ They had further asserted that they have brought to the notice of the Controlling Authority that under the provisions of Rule 10 of the Payment of GratuitytCentral) Rules, 1972, (“the Rutes" for short) any'claim for payment of gratuity requires to be made within 90 days from the date of cause of action i.e. from the date they retired from sen/ice on attaining the age of superannuation. it is further submitted that since the respondents had not filed any application for condonation of delay, the Controlling Authority ‘could not have condoned the delay in making the claim by the respondents for payment of gratuity. They have also stated that they had brought to the notice of the Controiling Authority that the respondents having opted for the benehts under the Death—cum-Retirement Scheme and having availed all the benefits, could not claim the benefits under the Act. T, lt is the case of the petitioner — Company that the Controlling Authority without considering any one of the grounds urged by them has granted the claim made by the respondents and therefore, the order passed by the Controlling Authority requires to be annulled by this Court, At this stage itself, it is pertinent to mention here, that the Controlling Authority being of the view that though the respondents had taken the benefits under the Death-cum-Retirement Scheme applicable to the . Kw Central Government employees; they are also entitied for the difference of the amount payable under the provisions of the Act and having cum to that conciueion had directed the petitioner ~ Company to pay the difference of the gratuity amount ‘8. ihsofar as the delay’in fiting the appiication is concerned, the Controliirig Authority in its order has stated that it is not mandatory that separate appiioation for oondohation of delay requires to be filed. it has further observed that the reepondehte after making eeverai efforts before the petitioner ~ Company and having faiied to get the benefits under the Aot, have approached the Controiiing Authority within a reasonabie time. 9. The petitioner ~ Company further asserted that being aggrieved by the order passed by the Controiiing Authority) they had filed an appeal before the Appellate Authority under the provisions of the Aot. it is their further case that the Appellate Authority taking into consideration the wages fixed under the NCWA had directed the petitioner — Company to pay the gratuity amount of Rs.75,000/~ after deducting the payment of gratuity already made to the respondents. lt is their case that the Appeiiate Authority wae not justified in confirming the orders paesed/by the Controiling Authority 10. At the time of hearing of theywrit petitione, Shrt PS. Koehy; learned counsel appearing for the petitioner — Company would submit that the respondents having accepted alt the benefits under the Death oum Retirement Scheme and having continued to receive the pensionary benefits, could not have filed any application before the Controlling Authority under the provisions of Act. Therefore, iearned counsel submits that though the Act is a beneficiai legisiation, the employee ie not entitied to receive the benefits applicable to Central Government employees and also gratuity under the provisions of the Act. ln support of his submission, ‘l l. l l 10 learned coumsei has relied upon the observations made by the Apex Caur’c in the case of Seed Dis‘irict Central Coop. Bank Ltd. Vs. state of Maharashtra and others reported in (200E) 8 SCC 514. Learned counsel specifically points out certain observations made by the Apex Court in para ’l4 of thejudgment. 11‘ Learned counsel appearing for the petitioner would further submit that under Section 7 of the Act a specific procedure is laid down for claiming gratuity and disposal of the same Pointing to rule 10 of the Rules, learned counsel would submit that every application for gratuity, requires to be filed Within 90 days before the Controlling Authority. However, the Controlling Authority can accept an application filed by the employee after expiry of QO days if sumcient cause is shown by the claimant. According to the learned counsel, in the lnstantcase the respondents after a long lapse of time from the date of retirement from service on attaining the age of superannuation have made claims before the Controlling Authority for payment of gratuity and the Controlling ’Authority without being satisfied with the explanation offered, could not have condoned the detay. Therefore, the Controlling Authority has erred in accepting the claim made by the respondents-employees. 12‘ lt is their further case that the Controlling Authority and the Appellate Authority should have noticed that the respondents having opted to remain in the terms and conditions of service as provided to Central Government employees way back in the year 1965, could not have claimed any benefits under the provisions of the Act. ln sum and substance, the contention of the learned Counsel appears to be that the respondents were entitled either to have gratuity or in the alternative pension or retiring allowance, in case where pension scheme or retiring allowance are in existence and an employee has to choose whether he would receive gratuity or opt for pension. Admittedly respondents have 11 \EW opted for pension and other pensionary benefits and having started availing all the benen‘ts of pension and gratuily under the Death cum Retirement Scheme from the date of retirement from service on attaining the age of superannuation were not entitled to gratuity under the Act. 13. Lastly, it is stated that the scheme for payment of gratuity Act does not provide the employees who are in receipt of contributory provident fund scheme and also pensionary benefits. Since, the respondents were getting provident fund and having opted for pensionary benefits in lieu of gratuity could not have Claimed torrpayment of gratuity. According to the learned oounsei, the contributory fund takee care of the pensionary benefits and peneionary benents granted over and above the benents of contributory provident fund is in conformity with various welfare legislations and as such the respondents could not have made any claim for payment of gratuity in addition to the pensionary benefits. 14f that though the respondents were initially appointed in the collieries owned by the State Railways, they were taken over by the Ministry of Production, Government of india which were ultimately transferred to Nationai Coal Development Corporation Ltd. with effect from 1.10i’ig56 and the respondents were given an option to join the new department or to be continued with the service condition of the previous employer and the respondents opted the service under the NCDC management Clause 3 of the Government Order provided that in the eyent of option beingv given to serve under the NCDC management, the transferred employee shalt cease to be in Centrai Government Service with effect from 1.10.1956 Thereafter, the Coal Mines were nationalized, as a result of this all the coilieries including NCDC colliery ( Korba Colliery) along with its employees were transferred to the petitioner Company, viz South Eastern Coal Fields Ltd, and the service conditions of the employees Per contra, learned counsel for the respondents would contend 12 appointed prior to take over by NCDC Ltd were not altered to the prejudice of the respondents. They have further stated that in view of bipartite settiement, the wage‘struoture and other conditions of service inciuding retire) benefits are provided to the workers in the industry under the Wage Board Agreements, it has been speoincaiiy provided that the employees ehaii be entitied to Rs. 75,000I- gratuity Which was more than Rs. 25,000I- that is fixed under Section 4(3) of the Act, The respondents further contend that under Section 4(5) of the Act, the employees have the right to receive better terms of Gratuity under any award or contract with the empioyer and therefore, they are entitled to payment of gratuity of 15 days salaryfor each completed year of service for the first 30 years and for the period beyond 3O years, one month’s salary for each compieted year of service. 15. The learned counsei appearing for the respondents would reiterate the assertions made in the returns med before this Court and in aid of his submission, he relies on the observations made by the Apex Court in the case of $0M Prakash Rekhi Vs. Union of indie and another reported in (1981} 1 SCC 449 wherein the Apex Court has observed as under: M‘s /,c “65. The public policy behind the provisions of Sections 10, 12 and 14 of the respective Statutes is clears We iive in a weifare State, in a ‘sooialist’ republic, under a Constitution with profound concern for the weaker classes including workers (Part lV)i Weifare benefits such as pensions, payment of provident fund and gratuity are in fulfillment of the directive principles, The payment of gratuity or provident fund shouid not occasion any deduction from the pension as a “set—off”, Otherwise, the solemn statutory provisions ensuring provident fund and gratuity become itiusory. Pensions are paid out of regard for past meritorious services. The root of t; K” 13 gratuity and the foundation 0f provident fund ars different. Each one is a salutary benefaction statutorily guaranteed independentiy of the other. Even assuming that by private treaty parties had otherwise agreed to deductions before the coming into force of these benenoiai enactments they cannot now be deprivatory. it is precisely to guard against such mischief that t‘ne non obstante and overriding provisione are engrafted on these statutes. $7. We must reaiise that the pension scheme came into existence prior to the two benehciai statutes and Parliament when enacting these tegislations must have clearly intended extra benefits being conferred on employees. Such a consequence will foilow only if over and above the normal pension, the benefits of provident fund and gratuity are enjoyed. On the other hand, if consequent on the receipt of these benehts there is a proportionate reduction in the pension, there is no real beneht to the employee because the Management takes away by the left hand what it seems to confer by the right, making the legislation itself left—handed. To hold that on receipt of gratuity and provident fund the pension of the employees may be reduced pro tanto is to frustrate the supplementary character of the benefits. indeed, that is why by Sections 12 and 14 overriding effect is imparted and reduction in the retirai benefits on account of provident fund and gratuity derived by the employee is frowned upon. We, accordingly, hold that it is not open to the second respondent to deduct from the full pension any sum any sum based upon Reguiation 16 read with Regulation 13. lf Regulation 16 which now has acquired statutory fiavoury having been adapted and continued by statutory rules, operates contrary to the ' provisions of the PF Act and the Gratuity Act, it must fail as invaiid. We uphoid the contention of the petitioner. 14 WO ‘16. eference is also made to the obeervations of the Apex Cow‘t in the case of Kameega Bai V3. SupeEEntending Engineer and others, reported in (i984) 3 SGC 518. in the said deoieion the Apex Court has obsewed that prevident fund reguiation providing the empioyee’s special ‘centribution to provident fund payable to good, efficient and faithfui employeee, in addition to empioyer’e usual provident fund contribution is not an alternative to gratuity payment and the employer having itseif a: - described it as its provident fund contribution must ordinarily be paid in ><V ‘ I»; i. up addition to gratuity after retirement and deniai of such provident fund to‘ an employee who retired after a long and satisfactory service, on the ground of payment of gratuity to him is violative of fundamental rights. 17. Nearer to the issues-involved in. this case, is the decision of the Apex Court in the case of Municipal! Corporation of Dethi Vs. Dharam Prakash Shanna and another reported in (1998) 7 SCC i221. That was a case where Municipal Corporation, Deihi had adopted the CCS (Pension) Rules, 1972; which both, pension and gratuity payments. Since the gratuity was not paid under the provisions of Payment of Gratuity Act, the employee had approached the Controlling Authority, who had awarded an extra amount of gratuity under the Payment of Gratuity Act, 1972 and after unsuccessfully challenging the order before the High Couit, the Corporation had tiled an appeal before the Supreme Court, The Court while disposing of the appeal has observed: “The mere fact that the gratuity is provided for under the Pension Rules will not disentitie an employee from getting the payment of gratuity under the Payment of Gratuity Act ln view of the overriding provisions contained in Section 1-4 of the Payment of Gratuity Act, the provisions for gratuity under the Pension Rules will have no effect. Section 5 of the Payment of Gratuity Act has conferred authority on the appropriate Government to exempt any establishment from the R 15 W cperation of the provisions of the Act, if in it$ opinion the empioyees of such estabiishment are in receipt of gratuity or pensionary benefits not iess favourabie than the benefits conferred under this Act Appeiiant municipality has not taken any steps to invoke the power of Central Government under Section 5 of the Payment of Gratuity Act. Therefore; the employees of the MCD would be entitled to the payment of gratuity under the Act notwithstanding the fact that the provisions of the Pension Ruiee have been made appiioable to them for the purpose of determining the pension. However, the empioyees cannot ciaim gratuity avaiiabie under the Pension Ruies as weii.” 18. Before considering the issues invoived in these petitions, iet me hrst answer how the decision relied on by learned Counsei Shri PS. Koshy would not assist him in aid of his submission before this Court that the respondents having opted the pension and other pensionaiy benefits and having started availing of the benefit of pension and gratuity under death-oum—gratuity Rules ever since his retirement was not entitled to gratuity under the Payment of Gratuity Act. 1g. The Beed District Centrai Coop. Bank Ltd (Supra). was the appellant before the Apex Court. The respondents are its employees. A policy decision was taken by the bank to extend the benefit of better rate of gratuity to a large number of its employees. A scheme was formulated which was linked with the policy of Life insurance Corporation of lndia who were on its rolls. in the said scheme the rate of gratuity was to be calculated on one month’s salary for every completed year of service with a ceiling limit of 2O months salary The employees ofthe Bank accepted the said scheme and availed the benehts thereof. The said scheme was amended providing the payment of gratuity at the rate of 26 days salary for every completed year of service with a ceiling limit of Rs.1r7 iakhs and the said scheme was in force from May 1994 to W 24.9.199Z yet again the scheme wa$ floated raising the limit of Rs. 1.? fakh$ to Rs. 2.50 lakhs. 20‘