IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 08.12.2009 CORAM: THE HONOURABLE MR.JUSTICE S.MANIKUMAR W.P.No.14481 of 2001 Rajammal .. Petitioner .Vs. 1.The Secretary to Government, Rural Development Department, Government of Tamilnadu, Fort St.George, Chennai-600 009. 2.The District Collector, Erode District. 3.The Commissioner, Modakurichi Panchayat Union, Erode District. .. Respondents Prayer: Writ Petition came to be numbered under Article 226 of Constitution of India praying for a writ of Certiorarified mandamus calling for the records relating to the proceedings passed by the second respondent vide his Reference No.6434/89 dated 8.5.89 and quash the same and consequently direct the second respondent to sanction and relief of gratuity amount of Rs.20,000/- (Rupees Twenty Thousand only) due to the petitioner's late husband to the petitioner and to pass such further or other orders. For petitioner : Mr. T.S.Rajagopal For respondents : Mr.P.Subramaniam, AGP-for R1 and R2 : Mr.N.Sampath, for R3 O R D E R: By order dated 8.5.1989, the District Collector, Erode District, second respondent, has rejected the request of the petitioner for grant of gratuity. The said order is under challenge. Consequently, the petitioner has prayed for a direction to the second respondent to sanction gratuity amount of Rs.20,000/- due and payable to her late husband. 2. According to the petitioner, her husband joined as Carpentry Tutor on 5.4.65 and was employed under the control of the Commissioner, Modakurichi Panchayat Union, Erode District, third respondent. He was suspended from service on 11.9.76, on the ground that there was some shortage of wooden stock in the godown and that there was also an allegation of misappropriation. The Criminal case in C.C.No.1372 of 1979 on the file of the learned Judicial First Class Magistrate, Erode, has ended in acquittal. Consequently, by order dated 16.2.1984, the District Collector, Erode District directed reinstatement. The Commissioner, Modakurichi Panchayat Union, Erode District, third respondent herein has issued an order of reappointment on 20.2.1984. Within two days i.e. on 22.2.84, the petitioner was relieved from the post of Carpentry Tutor, on the ground that the unit was not functioning and therefore it was wound up. The third respondent retrenched the workman for want of vacancy. Thereafter, the petitioner's husband died on 29.10.88. After his death, the petitioner submitted a representation dated 2.1.89 to the second respondent to settle the gratuity amount of Rs.20,000/- due to her late husband. The said request was rejected by the second respondent on 8.5.89, on the ground that the petitioner's husband was dismissed from service and hence he was not eligible to get the amount. Aggrieved by the same, the petitioner has filed the present writ petition. 3. Taking this Court through the orders of reinstatement dated 20.2.84 and retrenchment dated 22.2.84 and 21.5.84 respectively of the Commissioner, Modakurichi Panchayat Union, Erode District, third respondent herein, learned counsel for the writ petitioner submitted that the impugned order rejecting the claim of the petitioner for gratuity, on the ground that the petitioner's husband was dismissed from service on 22.5.84 and that therefore he was not eligible, is arbitrary and contrary to the provisions of Payment of Gratuity Act. According to him, it is factually an incorrect statement. According to him, it is an error apparent on the face of the record and therefore, the said order is liable to be set aside. He further submitted that the petitioner's husband, had worked from 5.4.1965 to 22.5.1984, till he was relieved from service on retrenchment and therefore entitled to gratuity. Hence, he prayed for a direction to the second respondent to sanction gratuity amount of Rs.20,000/- due and payable to her husband. 4. Based on the averments made in the counter affidavit filed by the Commissioner, Panchayat Union, Modakkurichi, third respondent herein, Mr.N.Sampath, learned counsel submitted that the petitioner's husband who was employed as Carpentry tutor under the third respondent Panchayat Union was suspended from service on 11.9.1976, on the ground that there was some shortage of wooden stock in the godown and also for misappropriation. He was acquitted from the criminal case in C.C. No. 1372 of 1979 and thereafter was reinstated in the same cadre. Thereafter, the Carpentry Unit was not functioning and therefore, the petitioner's husband was relieved from service on 22.5.1984. He further submitted that the petitioner's husband was not in continuous service in the third respondent Panchayat Union and therefore not entitled for gratuity. For the abovesaid reasons, he prayed for dismissal of the writ petition. 5. There is no dispute that the petitioner's husband was employed as Carpentry Tutor in the third respondent Panchayat Union on 5.4.65. Pleadings disclose that he was suspended from service on 11.9.76, for certain charges including misappropriation and that the criminal case lodged against him in C.C.No.1372 of 1979 on the file of the learned Judicial First Class Magistrate, Erode, ended in acquittal. There is also no dispute that he was reinstated in service on 20.2.84. Thus the earlier order of dismissal from service dated 23.11.1983 stands cancelled. As the unit was not functioning for a long time and that there was no possibility of revival, the third respondent had passed an order dated 22.2.1984, to relieve the petitioner from 22.5.84, after giving three months notice, as required under the statutory provision of Industrial Dispute Act. Material on record shows that in proceedings R.C.No.8161/82/A1, dated 21.5.84, on the expiry of the three months notice, the petitioner was directed to be relieved from the post of Carpentry Tutor. Accordingly, he had been relieved. Retrenchment in service has been wrongly construed as dismissal. There is an error apparent on the face of record. Heard the learned counsel appearing for the parties and perused the materials available on record. 6. In State of Punjab Vs. Labour Court, Jullunder and others reported in 1981 LLJ at page 354, the expression retrenchment has been defined. Under Section 2 (a) of the Payment of Gratuity Act to mean, "termination of the service of an employee otherwise than on superannuation". Except for superannuation, any termination would amount to retrenchment for the purpose of Payment of Gratuity Act. It is immaterial that the termination is occasioned by the need to discharge Surplus Labour. Retrenchment implies the discharge of surplus labour, as explained in Varsi Light Railway Company Limited and another Vs. Joglekar (KN) and others reported in 1957 (1) LLJ 243. Nonetheless, it amounts to termination of service. Retrenchment of the employee would fall within the scope of Section 4 (1) of the Payment of Gratuity Act and that therefore a retrenched employee is entitled to gratuity under the Act. 7. The principles under the schemes of the two enactments are different and they do not reconcile together. In K.Subba Rao Vs. Deputy Commissioner of Labour, reported in 1998 (2) LLN 914, a Division Bench of this Court held that: The Statutory liability under the Payment of Gratuity Act is not in lieu of any other entitlement, but stands on its own. Retrenchment compensation is totally different benefit recognised and conferred under section 25-F of Industrial Dispute Act. The entitlement under two different laws would depend upon the satisfaction of the essential requirements for claiming the sum due under the relevant provisions of these two enactments. It was held that it would not be open to claim that the payment made towards retrenchment compensation under section 25-F can be set off or adjusted against the entitlement of or payment to the workers or employees under the Payment of Gratuity Act. 8. It is to be noted that payment of gratuity under the beneficial Act is distinct from payment of retrenchment compensation under the Industrial Disputes Act and it does preclude the employee from claiming gratuity or affect his statutory right. The object sought to be achieved by payment of retrenchment compensation is not the same as that of Payment of Gratuity Act. 9. For the reasons stated supra, the petitioner is entitled to gratuity due and payable to her deceased husband. Therefore, the impugned order is set aside. In Gangahaume Gowda Vs. Karnataka Agro Industries Corporation Limited, reported in 2003 (3) SCC 40, the Supreme Court held that interest on belated payment of gratuity has been held as mandatory and not discretionary if the delay is not due to the fault of the employee. 10. In the case on hand, it is a case of denial of Payment of Gratuity, by erroneous construction of retrenchment as dismissal. Therefore, the respondents are bound to pay interest. Consequently, a direction is issued to the second and third respondents to settle the gratuity of Rs.20,000/- due and payable to the petitioner's husband with interest as per the statute, within three months from the date of receipt of the copy of this order. 11. With the above said directions, the writ petition is allowed. No costs. 08.12.2009 Index : Yes/No Inernet : Yes/No aes To 1.The Secretary to Government, Rural Development Department, Government of Tamilnadu, Fort St.George, Chennai-600 009. 2.The District Collector, Erode District. 3.The Commissioner, Modakurichi Panchayat Union, Erode District. S.MANIKUMAR,J. aes W.P.No.14481 of 2001 08.12.2009