IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No 13447 of 2009 1 Bihar State Industrial Development Corporation through its Managing Director having its registered office at Indira Bhawan, R C Path, Patna – 800 001 2 The Managing Director, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 3 Mr Manoranjan Prasad Chaudhary son of Sri Ramesh Chandra Pd Chaudhary, Financial Advisor – cum- Manager Audit, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 4 Mr Jaishanker Mishra, son of late Shree Kant Mishra, Chief Personnel Officer, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 - Petitioners Versus 1 The State of Bihar through its Chief Secretary, Government of Bihar, Old Secretariat, Patna 2 Deputy Labour Commissioner –cum- Controlling authority under the payment of Gratuity Act, 1972 Labour Bhawan, Near Income Tax Chauraha, Patna – 1 3 Kamlesh Kumar Singh, son of Ramesh Pd Singh, retired Assistant and resident of BSIDC Colony, Boring Patliputra Road, Adri Gali, Patna – 800 013 4 The Certificate Offcier –cum- District Panchayat Officer, Patna - Respondents W I T H CWJC No 13453 of 2009 1 Bihar State Industrial Development Corporation through its Managing Director, having its registered office at Indira Bhawan, R C Path, Patna – 800 001 2 The Managing Director, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 3 Mr Manoranjan Prasad Chaudhary, son of Sri Ramesh Chandra Pd Chaudhary, Financial Advisor –cum- Manager Audit, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 4 Mr Jaishanker Mishra, son of late Shreekant Mishra, Chief Personnel Officer, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 - Petitioners Versus 1 The State of Bihar through its Chief Secretary, Government of Bihar, Old Secretariat, Patna 2 Deputy Labour Commissioner –cum- Controlling authority under the payment of Gratuity Act, 1972, Labour Bhawan, Near Income Tax Chauraha, Patna – 1 3 Rudal Raut, son of Ram Briksh Raut, resident of Yarpur Khagaul Road, P S – Gardanibagh, District – Patna 4 Nandlal Prasad, son of Ram Briksh Raut, resident of Yarpur Khagaul Road, P S – Gardanibagh, Distrcit – Patna 5 The Certificate Officer –cum- District Panchayat Officer, Patna - Respondents W I T H CWJC No 13459 of 2009 1 Bihar State Industrial Development Corporation through its Managing Director having its registered office at Indira Bhawan, R C Path, Patna – 800 001 2 2 The Managing Director, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 3 Mr Manoranjan Prasad Chaudhary, son of Sri Ramesh Chandra Pd Chaudhary, Financial Advisor –cum- Manager Audit, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 4 Mr Jaishanker Mishra, son of late Shree Kant Mishra, Chief Personnel Officer, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 - Petitioners Versus 1 The State of Bihar through its Chief Secretary, Government of Bihar, Old Secretariat, Patna 2 Sheo Muni Sah, son of Banshi Sah @ Bansi Ram, retired Peon, Bihar State Industrial Development Corporation, resident of Mohalla – Dujra, Raja Bazar, Bhaktin Gali, Patna 3 Jairam Prasad Gupta, son of late Shukhdeo Sah, retired Store Keeper, Bihar State Industrial Development Corporation, resident of Mohalla – Salimpur Dumra, Raja Bazar, Bhaktingali, Patna 4 Rameshwar Prasad, son of Bihari Bhagat, Retired Chaukidar, resident of Mohalla – Saguna Karim Gali, Danapur, Police Station – Danapur, Patna 5 Deputy Labour Commissioner –cum- Controlling authority under the payment of Gratuity Act, 1972, Labour Bhawan, Near – Income Tax Chauraha, Patna – 1 6 The Certificate Officer –cum- District Panchayat Officer, Patna - Respondents W I T H CWJC No 13460 of 2009 1 Bihar State Industrial Development Corporation through its Managing Director having its registered office at Indira Bhawan, R C Path, Patna – 800 001 2 The Managing Director, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 3 Mr Manoranjan Prasad Chaudhary, son of Sri Ramesh Chandra Pd Chaudhary, Financial Advisor –cum- Manager Audit, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna -1 4 Mr Jaishanker Mishra, son of late Shree Kant Chaudhary, Chief Personnel Officer, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 - Petitioners Versus 1 The State of Bihar through its Chief Secretary, Government of Bihar, Old Secretariat, Patna 2 Deputy Labour Commissioner – cum- Controlling authority under the payment of Gratuity Act, 1972, Labour Bhawan, Near – Income Tax Chauraha, Patna – 1 3 Manman Prasad, son of late Rameshwar Prasad, retired Senior PA and resident of Bitco Colony, Road No 2, East Indira Nagar, P O – Kankarbagh, Patna 4 The Certificate Officer –cum- District Panchayat Officer, Patna - Respondents W I T H CWJC No 13467 of 2009 3 1 Bihar State Industrial Developlopment Corporation through its Managing Director having its registered office at Indira Bhawan, R C Path, Patna – 800 001 2 The Managing Director, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 3 Mr Manoranjan Prasad Chaudhary, son of Sri Ramesh Chandra Pd Chaudhary, Financial Advisor –cum- Manager Audit, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 4 Mr Jaishanker Mishra, son of late Shree Kant Mishra, Chief Personnel Officer, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 - Petitioners Versus 1 The State of Bihar through its Chief Secretary, Government of Bihar, Old Secretariat, Patna 2 Deputy Labour Commissioner –cum- Controlling authority under the payment of Gratuity Act, 1972, Labour Bhawan, Near – Income Tax Chauraha, Patna – 1 3 Subhash Kumar Sinha, son of Sri Rameshwar Pd Sinha, retired Section Officer & resident of East Indira Nagar, Road No 2, Bitco Colony, PO – Lohiya Nagar, PS – Kankarbagh, Patna 4 The Certificate Officer –cum- District Panchayat Officer, Patna - Respondents W I T H CWJC No 13475 of 2009 1 Bihar State Industrial Development Corporation through its Managing Director having its registered office at Indira Bhawan, R C Path, Patna – 800 001 2 The Managing Director, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 3 Mr Manoranjan Prasad Chaudhary, son of Sri Ramesh Chandra Pd Chaudhary, Financial Advisor –cum- Manager Audit, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 4 Mr Jaishanker Mishra, son of late Shree Kant Chaudhary, Chief Personnel Officer, Bihar State Industrial Development Corporation, Indira Bhawan, R C Path, Patna – 1 - Petitioners Versus 1 The State of Bihar through its Chief Secretary, Government of Bihar, Old Secretariat, Patna 2 Deputy Labour Commissioner –cum- Controlling authority under the payment of Gratuity Act, 1972, Labour Bhawan, Near – Income Tax Chauraha, Patna -1 3 Shivan Singh, son of late Yadu Singh, resident of East Indira Nagar, Road No 2, Bitco Colony, P O – Lohiya Nagar, P S – Kankarbagh, Patna 4 Saryug Prasad, son of late Bulkan Ram, resident of East Indira Nagar, Road No 2, Bitco Colony, P O – Lohiya Nagar, P S – Kankanbagh, Patna 5 The Certificate Officer –cum- District Panchayat Officer, Patna - Respondents *** For the petitioners : Mr Shailendra Kumar Singh, Advocate 4 For the S t a t e : M/s Sanjay Prakash Verma, Mohini Kumari Rakesh Ambastha For private respondents Mr Anil Kumar Roy *** 3 28.10.2009 Government of India enacted the Payment of Gratuity Act, 1972 for ensuring payment of gratuity, a statutory liability of an employer to be paid to employees by various employers in the country as a measure of social commitment and obligation. It is not in dispute that the Bihar State Industrial Development Corporation Limited, a 100% State Government undertaking is duly covered by the provisions of the said Act and, thus, is obliged to comply with the statutory provisions and obligations therein. Section 4 of the Act also quantifies the minimum amount of gratuity that is statutorily liable to be paid. The amount of gratuity can be higher if the employer so desires. Section 7 (3) provides that the employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable to the person to whom gratuity is payable. By virtue of Section 4, the amount of gratuity becomes payable on termination/superannuation of the employee. Thus seen, the statutory liability to pay gratuity is within 30 days of superannuation. Section 7 (3A) provides that if gratuity is not paid accordingly then it will incur simple interest not exceeding rate for repayment of long term deposit. Section 7 (4) provides that in case there is any dispute as to the amount of gratuity payable or as to the admissibility of any claim etc then firstly the employer has an obligation to deposit the gratuity with 5 the controlling authority and the controlling authority is then required to determine the amount payable. Against the determination, a statutory appeal is provided in terms of sub- section (7) of Section 7 to the appropriate Government. Section 8 of the Act provides that if the amount of gratuity is payable under this Act is not paid by the employer within the prescribed time to the person entitled thereto, the controlling authority shall, on an application to it in this behalf by the employee take steps to recover the amount through certificate proceedings together with compound interest thereon from the date of expiry of prescribed period due for payment and recover the same as arrears of land revenue subject to the interest not exceeding the gratuity. Section 9 provides for penalty and it makes it mandatory for a Court to award a minimum sentence of 6 months’ imprisonment on default to comply with the provisions of the Act except for special reasons where a lesser term of imprisonment or fine could be imposed. Thus seen, the liability to pay, the period in which to pay, the interest implications, simple or compound as the case may be, are all statutorily fixed. The State Government has the authority to exempt an employer. Undisputedly, no such exemption has been given in relation to the Corporation. Thus, statutorily the Corporation is obliged to discharge its duties in accordance with the statute aforesaid. The unfortunate aspect is that when it came to establishing a Corporation for doing the functions which otherwise 6 the Government was required to do and obliged to do, it took a decision and corporatised its constitutional function. It gave birth to the Corporation with 100% shareholding of the State Government. It used the Corporation to fulfil the policies of the State Government but now when statutory liabilities are to be met, the State Government takes a stand that the Corporation is an incorporated body distinct from the State and, as such, State cannot be made liable for the dues of the Corporation. In other words, having given birth to the Corporation, nurtured it for its own use, when it comes to meet liability, it is dumped as an orphan child by the State to shirk the responsibility to pay the dues. If the State is not ready to liquidate the dues much less the statutory dues of the Corporation then the Corporation has no reason to exist. In fairness to the learned counsel for the Corporation, I must note his submission. He submitted firstly that there being no dispute, the liability being admitted by the Corporation, the appropriate authority could not exercise jurisdiction under Section 7 of the Act. Submission is noted only to be rejected for what the Corporation is aggrieved is by the certificate proceedings for recovery of the said amount. The validity of the certificate proceedings cannot be challenged as the certificate proceedings are not based on a determination under Section 7 but is based on default in compliance of the statutory liability. The question of determination, thus, is academic. It was next submitted that in the 7 certificate proceedings, the recovery could not be ordered with compound interest. The submission is noted only to be rejected in view of the specific provision in this regard as contained in Section 8 of the Act. Lastly, learned counsel for the petitioners submitted that the Corporation would require sometime to consider steps to be taken to liquidate the dues. The same is also noted merely for the purpose of rejection inasmuch as the situation is not new and this situation has remained pending for 8 long years. Liability of petitioners arose in the year 2001 and if 8 long years were not enough time for the Corporation to consider ways and means to liquidate its statutory liability, it cannot be done in 2 weeks. There is neither will nor anxiety to solve the problem. In the present case, respondent No 3 was an employee of the Corporation. That is not in dispute. The statutory dues payable to the employee are not in dispute. The obligation to pay by the Corporation to respondent No 3 is not in dispute. The Corporation being in gross default for almost a decade in meeting its statutory liability is not in dispute still it wants to avoid/evade its liability on ground of its financial sickness. No medicine is being prescribed nor care being taken by the State. Respondent No 3 moved the controlling authority. Before the controlling authority, there was no dispute as to liability. Corporation admitted its liability. On the liability not being liquidated as provided under the law, the controlling authority, as obliged by the statute, instituted a certificate proceedings for recovery of the 8 amount with compound interest as provided under Section 8 of the Act itself. The Corporation, instead of filing statutory appeal that was available, has come to this Court pleading that it cannot avail of the alternative remedy because the condition of full payment before appeal is too honorous. It states that it has no funds to pay the dues. It does not say that it has no assets to liquidate the dues. The liability being statutory and this Court not having the power to amend the statute, the liability has to be paid. It is open to the State to come to the rescue of its orphan child, the Corporation or abandon it but enforcement of liability cannot be stayed. It would be open to the Certificate Court to take all appropriate steps including attachment and selling the property of Corporation for satisfaction of the statutory liability of gratuity payable to the employee. Let the law be implemented. These writ petitions are dismissed summarily. M.E.H./ (Navaniti Prasad Singh)