IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 09.02.2011 CORAM: THE HON’BLE MR. JUSTICE K.CHANDRU W.P.No.34191 of 2007 and M.P.No.1 of 2007 The Chairman and Managing Director Hindustan Photo Films Manufacturing Company Ltd Indu Nagar Ootacamud-643 005 The Nilgiris ..Petitioner Vs. 1.The Regional Labour Commissioner (Central) Chennai-600 001 The Appellate Authority under the Payment of Gratuity Act 1972 No.26, Haddows Road Sastri Bhavan Chennai-600 006 2.The Assistant Labour Commissioner (Central) Controlling Authority under the Payment of Gratuity Act, 1972 No.26, Haddows Road Sastri Bhavan Chennai-600 006 3.M.Manoharan 4.A.Govindarajan 5.K.Subramanian 6.P.Palaniappan 7.A.Duraisamy 8.P.Leelakrishnan 9.V.M.Madanagopal 10.P.Sampathkumar 11.M.Ramsamy 12.R.Sathiyanarayana Rao 13.M.Natesan 14.C.Dharaninathan 15.P.V.Sivarakan https://hcservices.ecourts.gov.in/hcservices/ 16.A.Krishnan 17.R.Krishnaveni 18.V.N.Sankaranarayanan 19.A.Venkatachalam 20.K.C.Sekar 21.V.Gopalan 22.Savithri G.Ramachandar 23.E.Kuppuswamy 24.R.Lakshmi 25.S.Ramachandran 26.R.Raghavan 27.A.Gopalakrishnan 28.M.Shanmugam 29.C.Mani 30.S.Jayaraman 31.K.Srinivasan 32.Kalyani 33.R.Subramanian 34.C.D.Krishnamurthy 35.K.Ramani 36.K.Natarajan 37.K.Radha 38.K.Radhasoundar Rajan 39.K.V.Prasada Rao 40.N.Madurai Muthu 41.S.Dhandayuthapani 42.S.Kamakshi 43.S.Raghu 44.P.V.Gopalakrishnan 45.D.Harikrishnan 46.A.M.Selvanathan 47.S.Jeevarathinam 48.R.H.Swaminathan 49.K.N.Krishnamurthy 50.B.Suresh .. Respondents Prayer : Petition under Article 226 of the Constitution of India praying for a Writ of Certiorari calling for the records relating to the order dated 27.07.2007 made in P.G.Appeal Nos.280 to 326-A/2007 on the files of the first respondent and quash the same. For Petitioner :: Ms.Rita Chandrasekaran for M/s.Aiyar and Dolia For Respondents :: Mr.K.Dhananjayan for R1 and R2 Mr.K.Elango for R3 to R50 https://hcservices.ecourts.gov.in/hcservices/ O R D E R The writ petition is filed by the Chairman and Managing Director, M/s.Hindustan Photo Films, the wholly owned company by the Central Government. The challenge made in this writ petition is to the common order passed by the first respondent in Appeal Nos.280 to 326-A/2007 dated 22.07.2007. The writ petition was admitted on 31.10.2007. Pending writ petition, this court granted an interim stay. For contesting respondents, Mr.K.Elango, learned counsel appears. 2. Respondents 3 to 50 were employees of the petitioner company and they moved the second respondent – Controlling Authority under the Payment of Gratuity Act,1972 with Gratuity Appeals Nos. 299 to 326-A/2007 claiming a difference in gratuity payable to them. Their claim was based upon the interim relief granted to them. Therefore, they moved the applications before the second respondent claiming the computation of the interim relief as part of the wage and for non- payment, they claimed 10% simple interest. The second respondent – Controlling Authority by order dated 04.10.2006 dismissed the claim petitions on the ground that similar issue relating to the same is pending on the file of this Court in W.A.No.498 and 499 of 2006 and closed the individual claim petitions. Against the order dated 04.10.2006, the respondents 3 to 50 preferred Appeal before the first respondent – Appellate Authority in P.G.Appeal Nos.280 to 326-A of 2007. 3. The Appellate Authority by his order dated 27.07.2007 allowed the appeals and set aside the order passed by the second respondent dated 04.10.2006. The appellate authority held that the term wage found in Section 2(s) of the Payment of Gratuity Act, 1972 includes all payments 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. Therefore, on the basis of the all inclusive definition, the appellate authority held that the interim relief paid was part of the emoluments which were earned by the employees and it should be automatically treated as wages for calculating gratuity. 4. Challenging this order, the petitioner company had filed this writ petition. It was contended that the petitioner company was having a gratuity scheme and if any dispute regarding the payment, only by an arbitration it can be settled. It was also contended that since the petitioner company had become sick and it was referred to BIFR for framing a scheme and due to the intervention of Central https://hcservices.ecourts.gov.in/hcservices/ Government's decision to ban wage revision in terms of sick industries, the company had entered into a settlement under Section 18(1) of the Industrial Disputes Act for the payment of interim relief at the rate of 5% of pay. Subsequently, despite a revival package, the company could not be revived. Therefore, the employees were given voluntary retirement in terms of Voluntary Retirement Scheme (VRS) introduced during 1999. At that time, the dues of the employees were paid including gratuity. Therefore, there cannot be any further claim in respect of the payment of gratuity. 5. Since the claim of gratuity was based upon the provisions of the Payment of Gratuity Act, 1972 being a special enactment any claim for payment has to be raised before the authorities under the Act and not before any other forum. This position of law has been clarified by the Supreme Court in State of Punjab Vs. Labour Court, Jullundur and other reported in (1980) 1 SCC 4. In paragraph No.7, the Supreme Court had observed that the Payment of Gratuity Act being a complete code containing detailed provisions covering all the essential features of a scheme for payment of gratuity ; it creates the right of payment of gratuity, indicates when the right will accrue, and lays down the principles for quantification of the gratuity. It provides further for recovery of the amount, and contains an especial provision that compound interest at nine per cent per annum will be payable on the delayed payment. For the enforcement of its provisions, the Act provides for the appointment of a controlling authority, who is entrusted with the task of administering the Act. The fulfilment of the rights and obligations of the parties are made his responsibility, and he has been invested with an amplitude of power for the full discharge of that responsibility. Any error committed by the Controlling Authority can also be corrected in appeal by the appropriate government or an appellate authority particularly constituted under the Act. Therefore, it was held that the inescapable conclusion was that the preliminary independent proceedings due under the Act must be taken only under the Act and not in any other forum. Therefore, the first objection, that the workmen must go before an Arbitrator fails. 6. The second objection of the petitioner company was that the employees were sent out on Voluntary Retirement Scheme and that gratuity due to them was paid and therefore, no further claim can be made. It must be noted that under Section 14, the provisions of the Gratuity Act or any rule will override anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act. Therefore, inasmuch as full gratuity due was not paid to the employees, they are eligible to get the dues of gratuity. https://hcservices.ecourts.gov.in/hcservices/ 7. The last objection that the interim relief paid pursuant to the settlement under Section 18(1) cannot be termed as wage as it is an interim relief. It cannot be accepted that the employees working in a sick industry having been prevented by the Government of India, no further wage negotiation can be made and the management in order to have better industrial relations have provided certain amounts labelling it as interim relief. Pending consideration of any final payment must also be taken as wage as the term wage has been defined under Section 2(s) of the payment of Gratuity Act. Such a definition will have to receive liberal interpretation. The term wage includes not only what was paid but also what was payable. The term "last drawn wages" found in Section 4(2) came to be considered by a Division Bench of this Court headed by Shri.A.P.Shah, C.J., (as he then was) vide judgment in Selvaraj.P. Vs. Management of Shardlow India Ltd., Chennai and others reported in 2007 I LLJ 1048. In that judgment, the Division Bench after referring to several other decisions of the Supreme Court, in paragraph 35 of its judgment, held that the Gratuity Act is a beneficial piece of legislation and it should receive an interpreted consistent with the principles of equity and fair play. Therefore, the term "last drawn wage" found in Section 4(2) of the Gratuity Act should receive its full meaning and cannot be given any fractured interpretation. It was also pointed out that the Management cannot adopt an artifical interpretation with reference to the term "wages" defined under the Gratuity Act and it must include not only what is paid but also what is payable to a workman. 8. It is seen in the light of the above principles, the term 'wage' will include the interim relief granted to the workmen and it does not come within the exclusions found in the definition. It must be noted that a similar view was taken by this Court in W.P.No.873/2005 dated 01.02.2011 filed by the same petitioner. 9. Under the above said circumstances, the writ petition is misconceived and bereft of legal reasons. Accordingly, the writ petition stands dismissed. No costs. Consequently, connected MP is closed. Sd/- Asst.Registrar /True Copy/ Sub.Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ nvsri To 1.The Regional Labour Commissioner (Central) Chennai-600 001 The Appellate Authority under the Payment of Gratuity Act 1972 No.26, Haddows Road Sastri Bhavan Chennai-600 006 2.The Assistant Labour Commissioner (Central) Controlling Authority under the Payment of Gratuity Act, 1972 No.26, Haddows Road Sastri Bhavan Chennai-600 006 + 1 cc to Mr.K. Elango, Advocate Sr.9894 W.P.No.34191 of 2007 PUR(CO) EU 2.3.11 https://hcservices.ecourts.gov.in/hcservices/