NETRAM SAHU versus STATE OF CHHATTISGARH & ANR.
[2018] 3 S.C.R. 682, Supreme Court of India, 2018
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
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SUPREME COURT REPORTS
[2018] 3 S.C.R.
NETRAM SAHU
v.
STATE OF CHHATTISGARH & ANR.
(Civil Appeal No. 1254 of  2018)
MARCH 23, 2018
[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]
Payment of Gratuity Act, 1972 – s.2(e) r/w s.2A – Qualified
service – Appellant rendered 22 years as daily wager and 3 years
as regular work charge employee i.e. he was regularised 3 years
prior to his retirement – Whether appellant can be said to have
rendered qualified service i.e. continuous service as specified in
s.2(e) r/w s.2A so as to make him eligible to claim gratuity as provided
under the Act from the State – Held: Appellant  actually rendered
total service for a period of 25 years and the State actually
regularized his services – Having regularized the services, the
appellant became entitled to claim its benefit for counting the period
of 22 years regardless of the post and the capacity on which he
worked for 22 years – Once the State regularized the services of
the appellant while he was in State services, the appellant became
entitled to count his total period of service for claiming the gratuity
amount subject to his proving continuous service of 5 years as
specified under s.2A of the Act which, in this case, the appellant
has duly proved – The statute being a welfare legislation meant for
the benefit of the employees, who serve their employer for a long
time, it is the duty of the State to voluntarily pay the gratuity amount
to the appellant rather than to force the
employee to approach the
Court to get his genuine claim.
Allowing the appeal, the Court
HELD:  In the circumstances appearing in the case, it would
be the travesty of justice, if the appellant is denied his legitimate
claim of gratuity despite rendering “continuous service” for a
period of 25 years which even, according to the State, were
regularized.  The question as to from which date such services
were regularized was of no significance for calculating the total
length of service for claiming gratuity amount once the services
[2018] 3 S.C.R. 682
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were regularized by the State.  It was indeed the State who took
22 years to regularize the service of the appellant and went on
taking work from the appellant on payment of a meager salary of
Rs.2776/- per month for 22 long years uninterruptedly and only
in the last three years, the State started paying a salary of
Rs.11,107/- per month to the appellant.  Having regularized the
services of the appellant, the State had no justifiable reason to
deny the benefit of gratuity to the appellant which was his statutory
right under the Act.  It being a welfare legislation meant for the
benefit of the employees, who serve their employer for a long
time, it is the duty of the State to voluntarily pay the gratuity
amount to the appellant rather than to force the employee to
approach the Court to get his genuine claim. It is really
unfortunate that the genuine claim of the appellant was being
denied by the State at every stage of the proceedings up to this
Court and dragged him in fruitless litigation for all these years.
[Paras 17, 18, 19] [687-A-E]
Secretary, State of Karnataka & Ors. v. Umadevi (3) &
Ors, (2006) 4 SCC 1 : [2006] 3 SCR 953 –
held inapplicable.
Firm Kaluram Sitaram v. The Dominion of India
AIR 1954 Bombay 50 – approved.
Case Law Reference
[2006] 3 SCR 953         held inapplicable
Para 15
AIR 1954 Bombay 50
approved
Para 18
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1254
of 2018.
From the Judgment and Order dated 01.08.2014 of the High Court
of
Chhatisgarh at Bilaspur in WA No. 240 of 2014.
Kiran Kumar Jaipuriar, Anshuman Shrivastava, Advs. for the
Appellant.
Aniruddha P. Mayee, A. Selvin Raja, Avnish M. Oza, Advs. for
the Respondents.
NETRAM SAHU v. STATE OF CHHATTISGARH & ANR.
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SUPREME COURT REPORTS
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The Judgment of the Court was delivered by
ABHAY MANOHAR SAPRE, J. 1. This appeal is directed
against the final judgment and order dated 01.08.2014 passed by the
High Court of Chhattisgarh at Bilaspur in Writ Appeal No.240 of 2014
whereby the Division Bench of the High Court dismissed the appeal
filed by the appellant herein and affirmed the judgment and order dated
16.12.2013 passed by the Single Judge of the High Court in Writ
Petition(L) No.178 of 2013 by which the Single Judge allowed the petition
preferred by the respondents herein and set aside the orders of the
Controlling Authority and Appellate Authority by which the  claim of the
appellant herein of gratuity for the period from 01.04.1986 to 23.05.2008
was allowed.
2. Few relevant facts need mention to appreciate the short
controversy involved in the appeal.
3. The appellant was appointed as daily wager on 01.04.1986 by
the Water Resources Department of the State of Chhattisgarh and was
attached to the office of SDO (E/M) Light Machinery Tubewell & Gage
Sub-Division Sakri, P.S. Charkarbhata, District Baster (CG).
Subsequently, the services of the appellant were regularized on work
charge establishment to the post of Pump Operator by order dated
06.05.2008. After attaining the age of superannuation, the appellant retired
on 30.07.2011.
4. The appellant was, however, not paid the gratuity amount by
the State which, according to him, was payable to him after
his retirement.
Therefore, the appellant filed an application before the Controlling
Authority under the Payment of Gratuity Act, 1972 (hereinafter referred
to as “the Act”) and prayed for payment of gratuity amount to him in
accordance with the provisions of the Act.
5. By order dated 27.03.2012, the Controlling Authority allowed
the application and held that the appellant is entitled to claim gratuity
amount from the State for the services rendered by him. It was further
held that the appellant has in all rendered 25 years and 3 months of
service (22 years and 1 month as daily wager and 3 years and 2 months
as regular work charge employee) and hence rendered the required
years of qualified service as per the requirements of the Act.
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6. The State felt aggrieved and filed appeal before the specified
Appellate Authority under the Act. By order dated 30.01.2013, the
Appellate Court dismissed the appeal filed by the State and affirmed the
order of the Controlling Authority.
7. The State pursued the matter and filed Writ Petition No.178/
2013 against the order passed by the Appellate Authority in the High
Court of Chhattisgarh at Bilaspur. The Single Judge  of the High Court,
by order dated 16.12.2013 allowed the writ petition and set aside the
orders of the Controlling Authority and the Appellate Authority.
8. The appellant herein (employee) felt aggrieved by the order of
the Single Judge and filed writ appeal before the Division Bench. By
impugned judgment, the Division Bench dismissed the appellant’s appeal
and upheld the order passed by the Single Judge, which has given rise to
filing of the appeal by way of special leave by the employee concerned
in this Court.
9. The short question, which arises for consideration in this appeal,
is whether the High Court (Single Judge/Division Bench) was justified
in holding that the appellant (employee) was not entitled to claim gratuity
from the State (respondent herein) for the services rendered by him or
in other words, the question arises for consideration is whether the
appellant can be held to have rendered qualified service, i.e., continuous
service as specified in Section 2(e) read with Section 2A of the Act so
as to make him eligible to
claim gratuity, as provided under the Act, from
the State.
10. Heard Mr. Kiran Kumar Jaipuriar, learned counsel for the
appellant and Mr. Aniruddha P. Mayee, learned counsel for the
respondents.
11. Having heard the learned counsel for the parties and on perusal
of the record of the case, we are inclined to allow the appeal and while
setting aside the orders of the High Court (Single Judge and Division
Bench) restore the orders of the Controlling Authority and Appellate
Authority.
12. It is not in dispute that the appellant has actually rendered the
total service for a period of 25 years 3 months, i.e., from 01.04.1986 to
30.07.2011 to the State. It is also not in dispute that the appellant’s services
were regularized by the State by order dated 06.05.2008, i.e., much
NETRAM SAHU v. STATE OF CHHATTISGARH & ANR.
[ABHAY MANOHAR SAPRE, J.]
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prior to the appellant attained the age of superannuation. It is also not in
dispute that the appellant’s 25 years and 3 months period of service
satisfied the rigor of the expression “continuous service” as defined under
Section 2-A of the Act.
13. The submission of the learned counsel for the respondent-
State was that the appellant could not be held eligible to claim the gratuity
amount because out of the total period of 25 years of his service, he
worked 22 years as daily wager and only 3 years as regular employee.
It is for this reason, the learned counsel urged that the appellant could
not be said to have worked continuously for a period of 5 years as provided
under the Act so as to make him eligible to claim gratuity.
14. We do not agree with this submission of learned counsel for
the respondent-State for more than one reason. First, the appellant has
actually rendered the service for a period of 25 years; Second, the State
actually regularized his services by passing the order dated 06.05.2008;
Third, having regularized the services, the appellant became entitled to
claim its benefit for counting the period of 22 years regardless of the
post and the capacity on which he worked for 22 years; Fourth, no
provision under the Act was brought to our notice which disentitled the
appellant from claiming the gratuity and nor any provision was brought
to our notice which prohibits the appellant from taking benefit of
his long
and continuous period of 22 years of service, which he rendered prior to
his regularization for calculating his continuous service of five years.
15. In our considered opinion, the High Court committed an error
in placing reliance on the decision of this Court in Secretary, State of
Karnataka & Ors. vs. Umadevi(3) & Ors., (2006) 4 SCC 1 to deny
the relief of grant of gratuity to the appellant.  In the case at hand, the
High Court should have seen that the services of the appellant was
actually regularized by the State and, therefore, the law laid down in
Umadevi(supra) could not be relied on.  Indeed, even the decision of
Umadevi (supra) makes a distinction in cases and where the services
stand regularized, the ratio of Umadevi to deny the relief would not
apply.
16. In our considered opinion, once the State regularized the
services of the appellant while he was in State services, the appellant
became entitled to count his total period of service for claiming the gratuity
amount subject to his proving continuous service of 5 years as specified
under Section 2A of the Act which, in this case, the appellant has duly
proved.
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17. In the circumstances appearing in the case, it would be the
travesty of justice, if the appellant is denied his legitimate claim of gratuity
despite rendering “continuous service” for a period of 25 years which
even, according to the State, were regularized.  The question as to from
which date such services were regularized was of no significance for
calculating the total length of service for claiming gratuity amount once
the services were regularized by the State.
18. It was indeed the State who took 22 years to regularize the
service of the appellant and went on taking work from the appellant on
payment of a meager salary of Rs.2776/- per month for 22 long years
uninterruptedly and only in the last three years, the State started paying
a salary of Rs.11,107/- per month to the appellant.  Having regularized
the services of the appellant, the State had no justifiable reason to deny
the benefit of gratuity to the appellant which was his statutory right
under the Act.  It being a welfare legislation meant for the benefit of the
employees, who serve their employer for a long time, it is the duty of the
State to voluntarily pay the gratuity amount to the appellant rather than
to force the employee to approach the Court to get his genuine claim.
19. In view of the foregoing discussion, we cannot agree with the
reasoning and the conclusion arrived at by the High Court which is legally
unsustainable. It is really unfortunate that the genuine claim of the
appellant was being denied by the State at every stage of the proceedings
up to this Court and dragged him in fruitless litigation for all these years.
20. Indeed, this reminds us of the apt observations made by the
Chief Justice M.C. Chagla (as he then was) in the case of Firm Kaluram
Sitaram vs. The Dominion of India (AIR 1954 Bombay 50). The
learned Chief Justice in his distinctive style of writing while deciding the
case between an individual citizen and the State made the following
pertinent observations:
“Now, we have often had occasion to say that when the State
deals with a citizen it should not ordinarily reply on
technicalities, and if the State is satisfied that the case of
the citizen is a just one, even though legal defences may be
open to it, it must act, as has been said by eminent Judges,
as an honest person.”
NETRAM SAHU v. STATE OF CHHATTISGARH & ANR.
[ABHAY MANOHAR SAPRE, J.]
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21. These observations apply in full force against the State in this
case because just case of the appellant was being opposed by the State
on technical grounds. As a consequence, the appeal succeeds and is
allowed. Impugned judgment/order passed by the High Court (Single
Judge and Division Bench) are set aside and the orders of the Controlling
Authority and Appellate Authority are restored with cost of Rs.25,000/-
payable by the State to the appellant. Cost to be paid by the State along
with the payment of gratuity amount.
22. The respondent-State is directed to release/pay the gratuity
amount as determined by the Controlling Authority within three months
to the appellant.
Devika Gujral
                 Appeal allowed.