Case: Andhra Pradesh State Road Transport Corp Vs. P. Venkateswara Rao Etc

the Co-operative Credit Society of the appellant Corporation from the gratuity which would have become payable to him on retirement. He was declared entitled to Rs. 1630/only. The two issues framed in that case were as follows:"1. Whether gratuity is wages within the meaning of payment of Wages Act ?2. Whether the Corporation had the discretion to refuse to pay the gratuity to the respondent and whether it cannot be questioned ?"The case had gone up to the High Court of Andhra Pradesh in revision under Section 115 Civil Procedure Code. The High Court, while rejecting the objection advanced on behalf of the appellant Corporation in a case arising out of the proceeding under the Payment of Wages Act, had observed that Rule 8.15 indicated that Rule 8.01 did not stand in the way of awarding gratuity to a person who is also entitled to the Provident Fund.4. We are unable to read Rule 8.15 in the same way as the High Court had done it in the earlier ca se. We think that Rule8.15 only explains how Rule 8.05 was to be applied in certain cases. It lays down that the period for which gratuity of retirement or contribution to the Provident Fund had been received will count towards the qualifications laid down in Rule 8.05. It then clarifies that this period will not, however, affect the calculation of the amount of gratuity under Rule 8.19. The obvious intention of Rule 8 .15 was that the amount already received either as gratuity or contribution to the Provident Fund will not be paid again to the employee. The period for which payments had already been made, which may happen in certain cases, such as those of broken service or of anticipatory payments, like the one to satisfy debt of the respondent P. Venkateswara Rao, to the Cooperative Society, would, nevertheless, count towards the qualifying period prescribed by Rule 8.05.On the strength of the judgment of the High Court, in the previous proceeding, which was the basis of the decision of the Labour Court, Learned Counsel for the respondent had put forward a preliminary objection that the matter cannot be reagitated. It is clear that the provisions of Section 11 C.P.C. have no application to such a case. The nature of the proceedings and of authorities before which the claims were made were different. It is, however, urged that the principles of res Judicata should bar raising the same question once again in a subsequent proceeding. It is true that the High Court h ad made observations which had a clear bearing on the question to be decided subsequently, but, it will be noticed that the question now before us was not directly the subject , matter of the issues framed in the previous proceeding which have been set out above. Nevertheless, an objection was taken on behalf of the appellant. that a basic condition for the eligibility of a claim for gratuity had not been satisfied inasmuch as the respondent was a subscriber to a Provident Fund. This objection had been over-ruled. It was held that the gratuity could be claimed as of right. We do not know what direction was exactly given in that case. The finding, however, that the petitioner was entitled to a payment of gratuity, as of right, to the extent of Rs. 1630/-, appears to have been given as a result of the decision that he was entitled to the payment of this much gratuity and no more for the purposes of the claim made in the proceedings under the Payment of Wages Act.5. It seems to us that, when gratuity was awarded in a previous proceeding, as a part of W ages, in the teeth of the clear provision of Rule 8.01 imposing a condition precedent, which was not satisfied, to eligibility for it, it is difficult to hold that such a patently illegal view could or should be held to be binding on the parties in a subsequent claim for gratuity on the same footing, before the Labour Court. We find that, even if we were to hold, as we think we must, as the matter was not taken further, that the declaration of entitlement to Rs. 1630/- in the previous proceeding should be held to be binding between parties, we cannot apply the same reasoning to the subsequent claim made before the Labour Court which is now before us. The Labour Court had not even deducted the amount already awarded earlier from the amount awarded by its judgment now before us. The most we can say is that the previous recognition of a claim to gratuity, practically in excess of jurisdiction to do so, debars the Labour Court from going into the question whether the respondent was rightly paid that amount as gratuity in the past. We have already set out the rule which disentitles him from being eligible for the award of gratuity when he contributes to a provident fund also. We have also interpreted the rule which was misunderstood earlier by the High Court.We need not here set out the relevant provident fund rules contained in Chapter 7 of the Code. It is true that the whole idea of the Provident Fund, to which the employer also contributes, seems to be different from a gratuity to which "good, continuous, efficient and faithful servant" may entitle an employee, yet, we are unable to hold that the employee is able to claim the benefit of , both a , guaranteed or other Provident Fund, to which the employer contributes, as well as to gratuity, as of right, in the face of the provisions of Rule 8.01 and 8.02 of the gratuity rules set out above.6. Although we have held that a claim to gratuity, as of right, cannot be put forward, under the Code, by an employee who gets the benefit of a Provident Fund also, yet illegal payments of gratuity in the past will not affect legal claims to Provident Fund.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]We are unable to read Rule 8.15 in the same way as the High Court had done it in the earlier ca se. We think that Rule8.15 only explains how Rule 8.05 was to be applied in certain cases. It lays down that the period for which gratuity of retirement or contribution to the Provident Fund had been received will count towards the qualifications laid down in Rule 8.05. It then clarifies that this period will not, however, affect the calculation of the amount of gratuity under Rule 8.19. The obvious intention of Rule 8 .15 was that the amount already received either as gratuity or contribution to the Provident Fund will not be paid again to the employee. The period for which payments had already been made, which may happen in certain cases, such as those of broken service or of anticipatory payments, like the one to satisfy debt of the respondent P. Venkateswara Rao, to the Cooperative Society, would, nevertheless, count towards the qualifying period prescribed by Rule 8.05.On the strength of the judgment of the High Court, in the previous proceeding, which was the basis of the decision of the Labour Court, Learned Counsel for the respondent had put forward a preliminary objection that the matter cannot be reagitated. It is clear that the provisions of Section 11 C.P.C. have no application to such a case. The nature of the proceedings and of authorities before which the claims were made were different. It is, however, urged that the principles of res Judicata should bar raising the same question once again in a subsequent proceeding. It is true that the High Court h ad made observations which had a clear bearing on the question to be decided subsequently, but, it will be noticed that the question now before us was not directly the subject , matter of the issues framed in the previous proceeding which have been set out above. Nevertheless, an objection was taken on behalf of the appellant. that a basic condition for the eligibility of a claim for gratuity had not been satisfied inasmuch as the respondent was a subscriber to a Provident Fund. This objection had been over-ruled. It was held that the gratuity could be claimed as of right. We do not know what direction was exactly given in that case. The finding, however, that the petitioner was entitled to a payment of gratuity, as of right, to the extent of Rs. 1630/-, appears to have been given as a result of the decision that he was entitled to the payment of this much gratuity and no more for the purposes of the claim made in the proceedings under the Payment of Wagesseems to us that, when gratuity was awarded in a previous proceeding, as a part of W ages, in the teeth of the clear provision of Rule 8.01 imposing a condition precedent, which was not satisfied, to eligibility for it, it is difficult to hold that such a patently illegal view could or should be held to be binding on the parties in a subsequent claim for gratuity on the same footing, before the Labour Court. We find that, even if we were to hold, as we think we must, as the matter was not taken further, that the declaration of entitlement to Rs. 1630/- in the previous proceeding should be held to be binding between parties, we cannot apply the same reasoning to the subsequent claim made before the Labour Court which is now before us. The Labour Court had not even deducted the amount already awarded earlier from the amount awarded by its judgment now before us. The most we can say is that the previous recognition of a claim to gratuity, practically in excess of jurisdiction to do so, debars the Labour Court from going into the question whether the respondent was rightly paid that amount as gratuity in the past. We have already set out the rule which disentitles him from being eligible for the award of gratuity when he contributes to a provident fund also. We have also interpreted the rule which was misunderstood earlier by the High Court.We need not here set out the relevant provident fund rules contained in Chapter 7 of the Code. It is true that the whole idea of the Provident Fund, to which the employer also contributes, seems to be different from a gratuity to which "good, continuous, efficient and faithful servant" may entitle an employee, yet, we are unable to hold that the employee is able to claim the benefit of , both a , guaranteed or other Provident Fund, to which the employer contributes, as well as to gratuity, as of right, in the face of the provisions of Rule 8.01 and 8.02 of the gratuity rules set outwe have held that a claim to gratuity, as of right, cannot be put forward, under the Code, by an employee who gets the benefit of a Provident Fund also, yet illegal payments of gratuity in the past will not affect legal claims to Provident Fund.