IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 15.02.2011 CORAM: THE HON’BLE MR.JUSTICE K.CHANDRU W.P.No.7346 of 2009 and M.P.No.1 of 2009 M.Ramasamy ...Petitioner Vs 1.The Joint Commissioner of Labour, Appellate Authority Under the Payment of Gratuity Act, Coimbatore. 2.M/s.Shree Janardana Mills Limited, Post Box No.3304, Uppilipalayam Post, Coimbatore 641 015. ...Respondents Prayer :Petition under Article 226 of the Constitution of India praying for a Writ of certiorari, calling for the records culminating in order dated 13.10.2007 in A.G.A.No.57/2006 on the file of the Joint Commissioner of Labour, Coimbatore, setting to aside the order passed by the Authority under the Payment of Gratuity Act in G.A.No.268/2005 and quash the same. For Petitioner :Mr.G.B.Saravana Bhavan For Respondents :Mr.R.Murali,G.A.for R1 Mr.Mukundan for M/s.Sarvabhauman Associates for R2 O R D E R The petitioner is a worker. He has come forward to challenge the order of the first respondent Appellate Authority under the Payment of Gratuity Act and seeks to set aside the order made in A.G.A.No.57/2006 dated 13.10.2007. After setting aside the same, he seeks to restore the order passed by the Controlling Authority in G.A.No.268 of 2005 dated 03.07.2006. 2. The writ petition was admitted on 22.04.2009. Pending the writ petition, this Court granted an interim stay of the order passed by the first respondent. 3. The petitioner claimed that he had raised an Industrial Dispute against his termination dated 03.01.1997 before the Labour https://hcservices.ecourts.gov.in/hcservices/ Court, Coimbatore. The said dispute was taken on file as I.D.No.120 of 1998. The Labour Court by its Award dated 19.12.2002 directed the second respondent Management to pay Rs.30,000/- as compensation in lieu of his reinstatement along with the other legal dues. 4. Thereafter, the petitioner filed an application seeking for gratuity for the services rendered by him for the period from 1968 to 1997. The authority took up the case as G.A.No.268 of 2005. On notice from the authority, the second respondent filed a counter statement. Before the authority, the petitioner examined himself as P.W.1. On the side of the second respondent, no witnesses were examined. On the side of the petitioner, he had filed two documents, which were marked as Exs.P1 and P2. On the side of the second respondent Management, three documents were filed and were marked as Exs.R1 to R3. 5. On the basis of these materials, the Controlling Authority found that the petitioner was entitled to get his gratuity and computed a sum of Rs.38.481/- towards gratuity payable. He also held that as per the provisions of the Act read with the government order, he was eligible to get 10% interest. 6. The second respondent filed an appeal under Section 7(7) of the Payment of Gratuity Act before the first respondent Appellate Authority. As a condition precedent, they had deposited the amount. The Appellate Authority found that since the petitioner filed the gratuity application after considerable delay and there was no sufficient reasons, the order of the Controlling Authority was not valid and the gratuity application filed by the petitioner was hit by limitation. In that view of the matter, he had allowed the appeal and set aside the order of the Controlling Authority dated 03.07.2006 in G.A.No.268 of 2005. 7. Mr.G.B.Saravanabhavan, learned counsel for the petitioner submitted that along with gratuity application, the petitioner had filed I.A.No.157 of 2005 stating sufficient reasons for the delay and that IA was allowed by a separate order which was not challenged by the second respondent Management. Therefore, the Appellate Authority was erroneous in allowing the appeal filed by the Management. This contention of the petitioner was well founded and the order of the first respondent impugned in the writ petition is liable to be set aside. But however, this Court is of the view that there was no necessity to remand the matter for fresh disposal of the appeal and parties have addressed on the merits of the order passed by the Controlling Authority. 8. The Management contended that the Labour Court had given Rs.30,000/- towards compensation taking into account all relevant criteria and there cannot be any further amount. But the petitioner contended that the Labour Court had only settled the dues towards non-employment and after ordering Rs.30,000/-, the Labour Court specifically directed other statutory dues to be paid apart from Rs.30,000/-. This contention of the petitioner is well founded. There is nothing in the Labour Court's Award that while ordering https://hcservices.ecourts.gov.in/hcservices/ compensation in lieu of reinstatement, it had taken into account all other dues payable. On the other hand, if the statutory payment of gratuity alone is worked out, it comes to Rs.38,480/- ( as ordered by the Controlling Authority). If that is correct, then the Labour Court could not have fixed Rs.30,000/- as total compensation including all other claims. At no point of time, the petitioner had given up his claim for gratuity. Certainly a perusal of the Award of the Labour Court does not give that impression. 9. In this context, it is necessary to refer to Section 14 of the Payment of Gratuity Act, which is as follows:- "14.Act to override other enactments, etc.- The provisions of this Act or any rule made thereunder shall have effect notwithstanding 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." 10. The Supreme Court in Allahabad Bank and another v. All India Allahabad Bank Retired Employees Assn. reported in (2010) 2 SCC 44, dealt with the scope of Section 14 and in Paragraphs 36 and 38 of the judgment, it was observed as follows:- "36. The appellant being an establishment is under the statutory obligation to pay gratuity as provided for under Section 4 of the Act which is required to be read along with Section 14 of the Act which says that the provisions of the Act shall have effect notwithstanding anything inconsistent therein contained in any enactment or in any instrument or contract having effect by virtue of any enactment other than this Act. The provisions of the Act prevail over all other enactments or instruments or contracts so far as the payment of gratuity is concerned. The right to receive gratuity under the provisions of the Act cannot be defeated by any instrument or contract. 37. This Court in Hindustan Lever v. State of Maharashtra relying upon the decision of this Court in Purshottam H. Judye v. V.B. Potdar held that the word “instrument” would include award made by the Industrial Tribunal. It is thus clear that notwithstanding the Desai and Shastry Awards and the subsequent settlements the members of the Employees’ Association are entitled to avail the benefit conferred upon them for payment of gratuity under the https://hcservices.ecourts.gov.in/hcservices/ provisions of the Act. The employees cannot be deprived of their valuable statutory right conferred upon them to receive payment of gratuity. Thus, even if the worker had given an undertaking, the same was not valid in the teeth of Section 14 of the P.G.Act. 11. Further, the Labour Court in the guise of passing an Award and ordering payment in lieu of reinstatement could not have deprived the petitioner's right to receive gratuity which is a distinct and separate entitlement. The Labour Court is not the forum in which the entitlement for gratuity claim can ever be decided. The Supreme Court in State of Punjab v. Labour Court, Jullunder and others reported in (1980) 1 SCC 4 has held that the Gratuity Act is a special law and since it also provides forum any dispute regarding gratuity can be settled only by authorities constituted under the Act. In paragraphs 7 and 8, it was observed as follows:- "7.It is apparent that the Payment of Gratuity Act enacts 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 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 him can be corrected in appeal by the appropriate government or an appellate authority particularly constituted under the Act. 8.Upon all these considerations, the conclusion is inescapable that Parliament intended that proceedings for payment of gratuity due under the Payment of Gratuity Act must be taken under that Act and not under any other. That being so, it must be held that the applications filed by the employee-respondents under Section 33-C (2) of the Industrial Disputes Act did not lie, and the Labour Court had no jurisdiction to entertain and dispose of them. On that ground, this appeal must succeed." https://hcservices.ecourts.gov.in/hcservices/ 12. In the light of the above, the writ petition stands allowed and the order of the first respondent in A.G.A.No.57 of 2006 dated 13.10.2007 stands set aside. The order of the Controlling Authority in G.A.No.268 of 2005 dated 03.07.2006 stands restored. The petitioner is entitled to withdraw the amounts lying in deposit with the Controlling Authority. No costs. Consequently, connected miscellaneous petition is closed. Svki Sd/ Assistant Registrar /True Copy/ Sub Assistant Registrar To The Joint Commissioner of Labour, Appellate Authority Under the Payment of Gratuity Act, Coimbatore. +1cc to Government Pleader SR.No.11676 Delivery Order in W.P.No.7346 of 2009 SAI(CO) rvr 04/03/2011 https://hcservices.ecourts.gov.in/hcservices/