Case: State of Punjab Vs. Labour Court, Jullundur and Others

In this appeal by special leave the State of Punjab appeals against the judgment and order of the High Court of Punjab &Haryana refusing to quash an order under section 33-C(2) ofthe Industrial Disputes Act, 1947 for payment of gratuity to the respondents underthe Payment of Gratuity Act,Hydel Department of the Governmen t of Punjab had undertaken a Project described as the "Hydel Upper Bari Doab Construction Project." The respondents Nos. 2 to 8 were employed as workcharged employees. On completion of the work assigned to them they were retrenched, and retrenchment compensation was paid to them. The employee respondents claimed that they were also entitled to gratuity, bonus and certain other allowances and benefits. The gratuity was claimed underthe Payment of Gratuity Act,1972. The claim being disputed, the respondents applied under section 33- C(2) ofthe Industrial Disputes Act, 1947 to the Labour Court, Jullundur. The Labour Court made an order dated April 30, 1975 that the employee respondents were entitled to the gratuity claimed b y them but not to bonus and the other allowances and benefits. A writ petition filed by the appellant has been dismissed in limine by the High Court of Punjab and Haryana.

Reasoning:
Section 1(3) (b) speaks of "any law for the time being in force in r elation to shops and establishments in a State." There can be no dispute that the Payment of Wages Act is in force in the State ofis difficult to accept that contention because there is no warrant for so limiting the meaning of the expression "law " in section 1(3) (b). The expression is comprehensive in its scope, and can mean a law in relation to shops as well as, separately, a law in relation to establishments, or a law in relation to shops and commercial establishments and a law in relation t o noncommercial establishments. Had section 1(3)(b) intended to refer to a single enactment, surely the appellant would have been able to point to such a statute, that is to say, a statute relating to shops and establishments, both commercial and non-commercial. The Punjab Shops &Commercial Establishments Act does not relate to all kinds of establishments. Besides shops, it relates to commercial establishments alone. Had the intention of Parliament been, when enacting section 1(3)(b), to refer to a law relating to commercial establishments, it would not have left the expression "establishments" unqualified. We have carefully examined the various provisions ofthe Payment of Gratuity Act,and we are unable to discern any reason for giving the limited meaning to section 1(3) (b) urged before us on behalf of the1(3) (b) applies to every establishment within the meaning of any law for the time being in force in relation to establishment s in a State. Such an establishment would include an industrial establishment within the meaning of section 2(ii) (g) of the Payment of Wages Act. Accordingly, we are of opinion that the Payment of Gratuity Act applies to an establishment in which any work relating to construction, development or maintenance of buildings, roads, bridges or canals, or relating to operations connected with navigation, irrigation or the supply of water, or relating to the generation , transmission and distribution of electricity or any other form of power is being carried on. The Hydel Upper Bari Doab Construction Project is such an establishment, and the Payment of Gratuity Act applies toregard to the definition of "superannuation" in section 2(r) of the Act, it is clear that the case is not one under clause (a). Nor, admittedly, is it a case which falls under clause (c). As regards clause (b), it is not a case of resignation. The only question is whether it can be regarded under clause (b) as a case of retirement. The expression "retirement" has been defined by section 2(q) to mean "termination of the service of an employee otherwise than on superannuation." The definition is framed in the widest terms. Except for superannuation, any termination of service would amount to "retirement" for the purposes of the Act. Retrenchment is a termination of service. It is immaterial that the termination is occasioned by the need to discharge surplus labour.We are of opinion that the retrenchment of the employee respondents falls within the scope of sect ion 4(1) ofthe Payment of Gratuity Act,and the employee respondents are therefore entitled to gratuity under thatcareful perusal of the relevant provisions of the Payment of Gratuity Act shows that Parliament has enacted a closely knit scheme providing for payment of gratuity. A controlling authority is appointed by the appropriate Government under section 3. and Parliament has made him responsible for the administration of the entireall 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) o f 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 mustthe circumstances, it is not necessary to notice the further submission on behalf of the appellant that where a serious dispute exists in regard to the basis of a claim for payment of gratuity, no proceedings will lie under section 33-C(2)of the Industrial Disputes