IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP No.50 of 2003 Reserved on.24.4.2007 Decided on.1.6.2007 H.P.S.E.B. & another. …Petitioners. Versus Balak Ram and another. …Respondents Coram The Hon’ble Mr. Rajiv Sharma, J. Whether approved for reporting ?1. yes. For the petitioners : Mr. Shrawan Dogra, Advocate For the respondent No.1 Mr. Ramakant Sharma, Advocate. Rajiv Sharma, J. This petition is directed against the order of the Appellate Authority-cum-Joint Labour Commissioner dated 16th November, 2000. The brief facts necessary for the adjudication of this petition are that the respondent No.1 (hereinafter referred to as the workman for convenience) was engaged as daily rated Beldar with effect from 26.8.1993 upto 3rd June, 1995. The workman was thereafter regularized as ‘T’ mate. He retired as ‘T’ Mate from the service of the Board on 31.12.1998. He filed an application under section 7 of the Payment of Gratuity Act, 1972 (hereinafter referred to as the Act) before the Controlling Authority (Labour Officer). The Controlling Authority vide order dated 20.3.2001 directed the Board to pay the workman a sum of Rs. 34,238/- within 30 days on the receipt of the notice. Feeling aggrieved by the order dated 20th March, 2001, the Board had filed an application under 1 Whether the reporters of Local Papers may be allowed to see the judgment? yes 2 section 151 of the Code of Civil Procedure seeking review of order dated 20th March, 2001 before the Controlling Authority. The Controlling Authority rejected the review application of the Board on 4.7.2001. Feeling aggrieved by the orders passed by the Controlling Authority the Board had filed appeal through its Superintending Engineer (OP) Circle H.P. and Additional Superintending Engineer, Electrical Division, HPSEB, Bilaspur before the Appellate Authority. The Appellate Authority decided the appeal on 16th November, 2002 and had directed the Board to make the payment of Rs. 54,567/- towards the gratuity to the workman. Mr. Shrawan Dogra, Advocate appearing on behalf of the Board has strenuously argued that the orders passed by the Controlling Authority and the Appellate Authority are not in accordance with law. Mr. Dogra has elaborated his submission further by submitted that the period the workman was engaged as a Beldar with effect from 26.8.1983 to 3.6.1995 was to be calculated under the Payment of Gratuity Act, 1972 and after the regularization of the workman the period from 1995 to 31.12.1998 is to be counted under the CCS (Pension) Rules, 1972. Mr. Ramakant Sharma, Advocate appearing on behalf of the workman has submitted that the orders passed by the Controlling Authority and Appellate Authority dated 16th November, 2002 are in accordance with law. I have heard the parties and perused the record. It will be apt to reproduce the relevant provisions of the Payment of Gratuity Act, 1972 to appreciate the rival submissions of the parties. Section 1(3) (b) and 4 which read as under: “1 (3) It shall apply to – “(a) every factory, mine, oilfield, plantation, port and railway company; 3 (b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months; (c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.” 4. Payment of gratuity.- (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered “continuous service” for not less than five years,- a) on his superannuation, or b) on his retirement or resignation, or c) on his death or disablement due to accident or disease: Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement. Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority. Explanation.-For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement. (2) 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 4 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 who is employed in a seasonal establishment and who is not so employed throughout the year), the employer shall pay the gratuity at the rate of seven days’ wages for each season. [Explanation.-In the case of a monthly rated employee, the fifteen days’ wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty- six and multiplying the quotient by fifteen]. In Black’s Law Dictionary 6th Edition, the word ‘continuous” is assigned the following meaning: “Continuous. Uninterrupted; unbroken; not intermittent or occasional; so persistently repeated at short intervals as to constitute virtually an unbroken series. Connected, extended, or prolonged without cessation or interruption of sequence.” In “Words and Phrases” (Permanent Edition) Vol.9, the word “continuous employment” is assigned the following meaning: “Word “continuous” means without break, cessation, or interruption, uninterrupted, or unbroken, and “continuous service” is that which is practically uninterrupted. Kennedy v. Westinghouse Elec. Corp., 101 A.2d 592, 595, 596, 29 N.J. super. 68.” The expression “continuous service” came for consideration before the Supreme Court in M/s Jeewanlal (1929) Ltd. Calcutta Vs. Its workmen, AIR 1961 SC 1567. Their Lordship of the Supreme Court have held as under: “”continuous service” in the context of the scheme of gratuity framed by the tribunal in the earlier reference postulates the 5 continuance of the relationship of master and servant between the employer and his employees.” It is evident from the plain reading of the expression ‘continuous service’ that the entire period of the workman i.e from the date of initial engagement on daily wage basis and thereafter on regular basis is to be taken into consideration for the payment of gratuity. The prayer of Mr. Shrawan Dogra, Advocate that the period when the workman was engaged on daily wage basis is to be treated separately vis-à-vis regular period is untenable. This kind of situation is not stipulated under the Payment of Gratuity Act, 1972. This Court is of the firm opinion that the expression ‘continuous service’ has to be given plain meaning. It can also be viewed from another angle. If the contention of Mr. Sharwan Dogra, Advocate is accepted, it may lead to an anomalous situation. In the present case the workman had put in daily wage service with effect from 1983 to 1995 and thereafter he was regularized only with effect from 1995 to 31.12.1998 for four years, though as per CCS (CCA) Rules, 1965, the minimum period prescribed for the payment of gratuity is five years. This situation is not warranted under the expression ‘continuous service’. The intention of the Legislature is to grant the gratuity for the entire continuous period when the workman is engaged till he attains the age of superannuation without dividing the period on artificial basis. The further period with effect from 1983 to 31.12.1998 has to be treated as one block for the payment of gratuity under the Payment of Gratuity Act, 1972. It is a case where “the golden rule of construction” will apply i.e. to read the statutory language grammatically and terminologically in the ordinary and primary sense as it appears in its contents without omission and addition. 6 The Apex Court has held in Maharashtra State Financial Corporation Vs. Jaycee Drugs and Pharmaceuticals Pvt. Ltd. and others, 1992 (2) SCC 637 as under: “It is a settled rule of interpretation of statutes that if the language and words used are plain and unambiguous, full effect must be given to them as they stand and in the garb of finding out of the intention of the legislature no words should be added thereto or substracted therefrom. Likewise, it is again a settled rule of interpretation that statutory provisions should be construed in a manner which subserves the purpose of the enactment and does not defeat it and that no part thereof is rendered surplus or otiose. The aforesaid interpretation of sub-section (11) of section 32 of the Act is not only in conformity with the rule of interpretation referred to above, it also does not militate in any way with the concept of an application under section 31(1) of the Act, not being a plaint in a suit for recovery of money.” The Apex Court in Mohan Kumar Singhania and others, 1992 Supp. (1) SCC 594 has held as under: “Before we cogitate and analyse this bone of contention in some detail, it will be convenient at this stage to pore over some of the well established rules of construction which would assist us to steer clear of the impasse entertained by the learned counsel, according to whom some complications are created by the impugned notification being ultra vires clause (iii-a) of Regulation 4 of Regulations, 1955. Maxwell on the Interpretation of Statutes (10th edn. At p.7) says thus: 7 “…if the choice is between two interpretations, the narrower of which would fail to achieve the manifest purpose of the legislation, we should avoid a construction which would reduce the legislation to futility and should rather accept the bolder construction based on the view that Parliament would legislate only for the purpose of bringing about an effective result.” In Principles of Statutory Interpretation by Justice G.P. Singh, (4th edn., 1988, at p. 18) it is stated thus: “It is a rule now firmly established that the intention of the legislature must be found by reading the statute as a whole.” It is said in Craies on Statute Law, (5th edn.) as follows: “Manifest absurdity or futility, palpable injustice, or absurd inconvenience or anomaly to be avoided.” In the same textbook, (6th edn. At p. 89) the following passage is found: “The argument from inconvenience and hardship is a dangerous one and is only admissible in construction where the meaning of the statute is obscure and there are alternative methods of constructions.” Viscount Simon in Kind Emperor v. Benoari Lal Sarma has said thus: (AIR head note) “In construing enacted words the Court is not concerned with the policy involved or with the results, injurious or otherwise, which may follow from giving effect to the language used.” In Waburton v. Loveland it is observed that: 8 “Where the language of the Act is clear and explicit, we must give effect to it whatever may be the consequences, for in that case the words of the statute speak the intention of the legislature.” Se also Suffers v. Briggs. This Court in CIT v. S. Teja Singh has expressed that a construction which would defeat the object of legislature must, if that is possible, be avoided. See also M. Pentiah v. Muddala Veeramallappa. Desai, J. speaking for the bench in Lt. Col. Prithi Pal Singh Bedi v. Union of India has pointed out as follows: (SCC p. 150, para 8) “The dominant purpose in construing a statute is to ascertain the intention of the Parliament. One of the well recognized canons of construction is that the legislature speaks its mind by use of correct expression and unless there is any ambiguity in the language of the provision the court should adopt literal construction if it does not lead to any absurdity.” The Constitution Bench of this Court in A.R. Antulay v. R.S. Nayak has observed thus: (SCC pp. 518-19, para 18) “It is a well established canon of construction that the court should read the section as it is and cannot rewrite it to suit its convenience; nor does any canon of construction permit the court to read the section in such manner as to render it to some extent otiose.” The Supreme Court in Maharashtra State Board of Secondary and high Secondary Education v. Paritosh 9 Bhupeshkumar Sheth ruled that the well established doctrine of interpretation is (SCC p. 47, para 20) “that the provisions contained in a statutory enactment or in rules/regulations framed thereunder have to be so construed as to be in harmony with each other and that where under a specific section or rule a particular subject has received special treatment, such special provision will exclude the applicability of any general provision which might otherwise cover the said topic.” In Philips India Ltd. V. Labour Court, Madras it is observed: (SCC p.112, para 15) “No canon of statutory construction is more firmly established than that the statute must be read as a whole. This is a general rule of construction applicable to all statutes alike which is spoken of as construction ex visceribus actus.” It has been held by this Court in Balasinor Nagrik Cooperative Bank Ltd. V. Babubhai Shankerlal Pandya as follows (para 4) “It is an elementary rule that construction of a section is to be made of all parts together. It is not permissible to omit any part of it. For, the principle that the statute must be read as a whole is equally applicable to different parts of the same section”. In Dr. Ajay Pradhan v. State of M.P. the Court has registered its view in the matter of construing a statute thus: (para 7) 10 “if the precise words used are plain and unambiguous, we are bound to construe them in their ordinary sense and given them full effect. The argument of inconvenience and hardship is a dangerous one and is only admissible in construction where the meaning of the statute is obscure and there are alternative methods of construction. Where the language is explicit its consequences are for Parliament, and not for the courts, to consider.” We think, it is not necessary to proliferate this judgment by citing all the judgments and extracting the textual passages from the various textbooks on the principles of Interpretation of Statutes. However, it will suffice to say that while interpreting a statute the consideration of inconvenience and hardships should be avoided and that when the language is clear and explicit and the words used are plain and unambiguous, we are bound to construe them in their ordinary sense with reference to other clauses of the Act or Rules as the case may be, so far as possible, to make a consistent enactment of the whole statute or series of statutes/rules/regulations relating to the subject matter, Added to this, in construing a statute, the Court has to ascertain the intention of the law making authority in the backdrop of the dominant purpose and the underlying intendment of the said statute and that every statute is to be interpreted without any violence to its language and applied as far as its explicit language admits consistent with the established rule of interpretation. 11 The Supreme Court in Oswal Agro Mills Ltd. And others. V. Collector of Central Excise and others,1993 Supp (3) SCC 716, has held under: “The provisions of the tariff do not determine the relevant entity of the goods. They deal whether and under what entry, the identified entity attracts duty. The goods are to be identified and then to find the appropriate heading, sub heading under which the identified goods/products would be classified. To find the appropriate classification description employed in the tariff nomenclature should be appreciated having regard to the terms of the headings read with the relevant provisions or statutory rules or interpretation put up thereon. For exigibility to excise duty the entity must be specified in positive terms under a particular tariff entry. In its absence it must be deduced from a proper construction of the tariff entry. There is neither intendment nor equity in taxing statute. Nothing is implied. Neither can we insert nor can we delete anything but it should be interpreted and construed as per the words the legislature has chosen to employ in the Act or rules. There is no room for assumption or presumptions. The object of the Parliament has to be gathered from the language used in the statue. The contention that toilet soap is commercially different from household and laundry soaps, as could be seen from the opening words of Entry 15, needs careful analysis. It is well, at the outset, to guard against confusion between the meaning and the legal effect of an expression used in a statute. Where the words of the state are plain and clear, there is no room for applying any of the 12 principles of interpretation which are merely presumption in cases of ambiguity in the statue. The court would interpret them as they stand. The object and purpose has to be gathered from such words, themselves. Words should not be regarded as being surplus nor be rendered otiose. Strictly speaking there is no place in such cases for interpretation or construction except where the words of statute admit of two meanings. The safer and more correct course to deal with a question of construction of statute is to take the words themselves and arrive, if possible, at their meaning, without, in the first place, reference to cases or theories of construction. Let us, therefore, consider the meaning of the word soap ‘household’. The word household signifies a family living together. In the simplistic language toilet soap being used by the family as household soap is too simplification to reach a conclusion. Therefore, one has to gather its meaning in the legal setting to discover the object which the Act seeks to serve and the purpose of the amendment brought about. The task of interpretation of the statute is not a mechanical one. It is more than mire reading of mathematical formula. It is an attempt to discover the intention of the legislature from the language used by it, keeping always in mind, that the language is at best an imperfect instrument for the expression of actual human thoughts. It is also idle to expect that the draftsman drafted it with divine prescience and perfect and unequivocal clarity. Therefore, court would endeavour to eschew literal construction if it produces manifest absurdity or unjust result. 13 In Manmohan Das v. Bishun Das a Constitution Bench held as follows: “…The ordinary rule of construction is that a provision of a statute must be construed in accordance with the language used therein unless there are compelling reasons, such as, where a literal construction would reduce the provision to absurdity or prevent the manifest intention of the legislature from being carried out.” The Apex Court has held in Promoters & Builders Association of Pune Vs. Pune Municipal Corporation and others, 2007 (7) Scale 218 as under: “The main challenge of the review petitioners is to the addition of the words “from the very said plot” towards the end of clause (b) in DCR-2.4.11. Learned counsel for the petitioners have submitted that in the proposal sent by the Pune Municipal Corporation after following the procedure prescribed in Sub-Section (1) of Section 37 the aforesaid words were not there. However, the State Government while sanctioning the proposal added the said words which in law it could not do. It has been submitted that the Municipal Corporation had submitted the proposal after inviting objections and after giving an opportunity of hearing and the proposal so made by the Municipal Corporation could not have been modified or altered by the State Government without inviting objections or giving an opportunity of hearing with regard to changes which it proposed to make and which were ultimately made in the notification issued by it. This point has been considered and examined in the judgment and order of this Court dated 5.5.2004. The language of sub- section (2) of Section 37 uses the expression “sanction the modification with or without such changes, and subject to such conditions as it may deem fit, or refuse to accord sanction”. The language of the Section is very clear and it 14 empowers the State Government to sanction the proposal of the Municipal Corporation regarding modification of Development Control Rules “with or without any changes as it may deem fit.” These words are important and cannot be ignored. They have to be given their natural meaning. In Union of India v. Hansoli Devi (2002) 7 SCCF 273 it has been held that it is a cardinal principle of construction of a statute that when the language of the state is plain and unambiguous, then the Court must give effect to the words used in the statute and it would not be open to the Court to adopt a hypothetical construction on the ground that such construction is more consistent with the alleged object and the policy of the Act. In Nathi Devi v. Radha Devi Gupta (2005) 2 SCC 271 it was emphasized that it is well settled that in interpreting a statute, effort should be made to give effect to each and every word used by the legislative. The courts always presume that the legislature inserted every part of a statue for a purpose and the legislative intention is that every part of the statute should have effect. In Dr. Ganga Prasad Verma V. State of Bihar (1995) Supp. 1 SCC 192 it has been held that where the language of the Act is clear and explicit, the Court must give effect to it, whatever may be the consequences, for in that case the words of the statue speak the intention of the legislature. Therefore, the view taken by this Court in the judgment and order dated 5.5.2004 that the State Government had full authority to make any changes or add any condition in the proposal of the Municipal Corporation is perfectly correct. In fact, on the plain language of the statute no other view can possible be taken. The Full Bench of Punjab and Haryana High Court in Kesar Chand Vs. State of Punjab 1988 (2) PLR 223 observed that the period of the workman i.e. rendered on daily wage post and regular is to be counted for the purpose of Payment of Gratuity Act, 1972: Their Lordships have held as under: In the light of the above, let us examine the validity of rule 3.17 (ii) of the Punjab Civil Services Rules Vol.II. This rule says that 15 the period of service in a work charged establishment shall not be taken into account in calculating the qualifying service. After the services of a work-charged employee have been regularized he becomes a public servant. The service is under the Government and is paid by it. This is what was precisely stated in the Industrial Award dated June 1, 1972, between the Workmen and the Chief Engineer, PWD (B&R, Establishment Branch, Punjab, Patiala, which was published in the Government Gazette dated July 14, 1972. Even otherwise, the matter was settled by the Punjab Government Memo No. 1409- BRI (3)-72/5383 dated 6th February, 1973 (Annexure P-7) where it was stated that all those work charged employees who had put in ten years of service or more as on 15th August, 1972, their services would be