111. r~ : Sant Rnm

Sit1ha C. J

April Tl.

SUPREME COURT REPORTS ll960J

cngaging other a<hocates, h:1s not been accepted b)' the Registrar.

It appears to have been the case that not being a registered clerk, he could not do any job perr111.ss1hle for such a clerk.

N:1t11rally, therefore, he \\'as found .wandering about in the corridors in circ11m.stanccs which led to the gem1ine belief th:1t he had no other business in Court than that of touting for such legal practitioners as would engage him for that nefarious activitv. \\le cannot, therefore, accede to the argument that the appellant has been a l'ictim o[ mere .suspicion.

The nidence of general repute aga1nst hin1, in our opinion, 'vas suA.icient: to brand him as a "!Out". It follows that there is no merit in this appeal, which is hereby dismissed.

AfJfJeal dismissed.

M/S. MULLER Re PHIPPS (INDJA) LTD. v.

K. C. SUD

(P. B. GAJENDRAGADKAR and K. C. DAs

GUPTA, J.J.) Industrial Dispute-Scheme for gratuity-Claim for gratuity by workmen under the scheme in addition to retrenchment compensation-If must depend on the construction of the scheme- Industrial Disputes Act, 1947 (14 of 1947), s. 25F.

The Labour Court, Delhi, made an award framing gratuity scheme, one of the provisions being that on the termination of service by the company, the workmen shall be entitled to half a month's basic salary or wage for each year of completed service as gratuity.

The respondent who was retrenched had received compensation under s. 25F of the Industrial Disputes Act made an application under s. 33C of the Act claiming the gratuity in accordance with the sche1ne in addition to the retrenchment compensation already received.

The contention of the appellant was that the gratuity which the respondent claims was in essence the same thing as compensation for the retrenchment and to allow gratuity in addition to the retrenchment compensation under s. 25F would be to give double benefit for the same eYent, i.e., .retrenchment: _ Held, that whether retrenched workmen can claim the benefit of a gratuity scheme in addition to the retrenchment compensation would depend on the construction of the material terms of

' -

the scheme considered in the light of s. 25F of the Industrial Disputes Act, 1947. The reasonable conclusion .from the present scheme is that the gratuity that could be daimed . under the award was intended to be in addition to the retrcnchmenf compensation and not in lieu thereof.

The respondent was entitled to such gratuity even thoug!i he had already received payment of compensation for retrenchment in accordance with the provisions of s .. 25F of the Act.

Indian Hume Pipe Co. v. Its Workman, [19601 2 S.C.R. 32, followed.

Bramachari Research Institute v. Its Workme~, [1~6o] 2 S.C.R. 45, referred to.· ·· • ' : · CrvrL APPELLATE JuRISDICTION: Civil •Appeal No . . 147 of 1960. · Appeal by special leave from the dcision dated May 18; 1959, of the Labotir Court, Delhi, in L.C.A.

No. 53/1959. '. .

Pnrshottam Tricwiidas, S. N. Andley, ]. . B. Dadachanji and Rameshwar Nath, for the appellrtnts. Sulwmar Chose, for the respondent. ;·

1960. April 11.

The Judgment of the Court was delivered by ' DAs GuPTA, J.-This appeal is against an order of the Judge, Labour Court, Delhi, in an application under s. 33C of. the Industrial Disputes Act by the respondent, K. C. Sud, by which the' ~Otlft computed the amount fh1e to the petitioner by way of ' g-ratuity under an award to be Rs. 80.42 np. only.

Sud; who was a workman of the appellant company, M /s. Muller & Phipps (India) Ltd. was retrenched by the company on January 31, 1958.

At that time a lefere11ce on the question of introduction of a gratu_ity' scheme for the workmen of the company was pending before the Industrial Tribunal.

An application by Sud against this order of retrenchment under s. 33A failed. In the reference above-mentioned the Court. made an award framing a gratuity scheme in th~_following terms:- .. "On the death of an employee while in te service of the company, or on his becoming. physically m mentally incapable of further service, half a !nonth's basic salary or wages for each year of continuous service shall be paid to the disabled employees, or if he h:1~ died, to his he'irs or legal representative~ or

• llf ' • . assigns. ·

3-6 SCI/ND/82 \

Muller & Phipps

(India) Lttf.

K. C. Sud

Dns Gupta].

' "

ll!ul!tr & Phif;/is

(India) Ltd. v. /(.C.S, ud Das G11/1fa }.

On volnntarv retirement or resignation of an emplovec, after. five \ears' continnons service, ha![ a montJ{'s basic salar)· or wages for each year of continuous service.

On terminati.on of serl'ice by the company, half a month's basic salary or wages for each year of completecl service." The scheme was also made applicable with effect from the d; ite on "hich the reference had been made, viz., June '-2s, 19;,7, It was on the basic of this .award that Sud has made his application under s. l3C, his case being that as his retrenchment amounted to termination of se1'vice within the meaning of the award he was entitled to half a month's basic salary for each year of completed serl'ice.

Admittedly he had completed two years of service.

It is also not disputed that his basic wage at the time of retrenchment was Rs. 80.42 np.

If, therefore, he is entitled to have a gratuity in accordance with the scheme of the award

the amount due to him "ill be Rs. 80.42 np.

Of the manv contentions raised on behalf of the company in re; lsting the petition, all of which were rejected by the Court below, the only one which is pressed before us is on the question whether the respondent is entitled to recover gratuity under this scheme in addit:ion to the compensation, he had admittedly received already in accordance with the provisions of s. 2iiF of the Industrial Disputes Act.

In suppon of this contention it is urged tht the gratuity which the respondent claim's is in essence the same thing as compensation for his retrenchment and to allow him gratuity in addition to retrenchment compensation ui1der s. 2.'iF woulrl be to gi, e double benefit for the same event i.e., retrenchment.

This it is ursed is unfair to the employer am! is against the Industrial Disputes Act. , The <]Ue, stion whether a double benefit of a gratuity scheme as well as retrenchment compensation can be given to workmen, came up for consideration before this Court in Indian Hume Pifu: Co. v. !Is Worhl'rs (').

This Court there considered in some detail the real nature and object of the retrenchment compensation

(I) [1960]2 S.C.R.3 2.

. "

provided by s. 25F of the Industrial Disputes Act and the nature and object of a gratuity scheme as a retirement benefit. It pointed out that while gratuity is intended to help workmen after retirement . to whatever' cause the retirement may be due to, the retrenchment compensation is intended to give relief for the suaden and unexpected termination of employment by giving partial protection to the retrenched person and his family to enable them to tide over the hard period of uncm polyment.

The Court also traced the history of development of the industrial law as regards gratuity schemes and retrenchment compensations, and. after a full . consideration of the question,. came to the conclusion that there was notliing in law to prevent a workman from•getting double benefit, one under a gratuity scheme and the other as retrenchment cqmpensation. The Court however took care to point out that gratuity schemes may be so framed, whether by consent or by award, that retrenchment confpensation is thereunder payable only in lieu of gratuity and again they may be .so framed as to provide for payment of gratuity in adition to retrenchment compensation.

Accordingly, the Court laid it down that the. question as to whether retrenched workmen can claim the benefit of a gratuity scl; ieme in addition to the retrenchment compensation m!der s. 25F or not would depend on the construction of the material terms of the .scheme <::onsidered in the ljght of the provisions of', s. 25F of the Act.

On the very day this pronouncement was made the Court also delivered judgment in Brahmachari Research Institute v. Its W orkmer~ (1) in which the question as indicated above fell to be considered. In Brahmachari's case the Court after mentioning . that the general question as to double benefits of retrenchment. compensation and gratuity being available to. workmen had already been considered in the Indian Hume

Pipe Company's case proceeded to examine the award , that had been made in a dispute between thet Institute and its workmen to ascertain. whether gratuity. in addition to retrenchment compensation was provided thereby. 1"he Court pointed out that in that award

(I) [1960) S.C.HA5.

Muller & Phipps (India) Ltd. v K. C. Sud

Das Gupta J.

.A1ulkr & PhijijJs

(India) Ltd. v.

K. C. Sud

Das Gupta J ..

512 SUPRE'NlE COURT REPORTS [1960]

the word 'gratuity' had been used to coyer all three cases, \'iz., (i) retrenchment, (ii) termination of service by any reason. at.her than misconduct and (iii) resignation with the consent of the . management; what deserved special notice was that cases of retienchment as such were specifically covered by t.he award. It was of opinion that such payment to workmen for retrenchment as such did not lose its character of retrenchment compensation by reason of t.he mere fact that it was described as gratuity. Jt was mainly on the basis of this fact that the award had provided gratuity for retrenchment as such in addition t.o gratuit\' for other modes of termination of service that the 'courtdecided in Brahmachari's case that the gTatuity there on ret.rcnchn1c11t lras nothing 111orc or less than compensation on account of retrenchment as provided under s. 25F of the Act and decided that the workmen were entitled to only one or the other, whichever i~ more adv•intageous to them. lf we examine the award in the case before us in the light: of the two decisions of the Court mentioned above the first thing that strikes us is tl1at this a'\rard did not. make any provision for gratuity for retrenchment as such.

It is important: to notice that the worknlt!n themselves in their statement of claim had urged for a distinct provision for , retrenchment in addition to other modes of termination of service.

The Tribunal holl'ever made n6 special provision for retrenchment but: provided in its scheme of gratuity for three classes of cases, namely, (i) on the death of an employee or on his becoming physically or mentally incapable of further sb-vice, (ii) on voluntary retirement or resignation and (iii) on termination of service by the company.

Retrenchment, it is true, will fall within the termination of service.

Tlpt, however, as is clear from the above cases, cannot by itself justify a conclusion that the gratuity that could be claimed under such a schen)e in case of ret renchrnent was in lieu of retrenchment: compensation.

If the intention was that in cases of retrenchment the gratuity will be in lieu of retrenchment compensation provided under s. '25F the ohviom thing woulcl be' to make scpar:itc

provisions for gratuity for retrenchment as such and

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...

...

• I

3 S.C.R.

SUlJREME COURT REPORTS 513

gratuity for other modes' oi termination of service.

That was the method followed in the award that fell for comideration fr1 Brahmachari's case.

That method has however not been followed in the award that we have to. consider here. ln this case there is no specific reference 'in the award to retrenchment as such: The reasonable conclusion from the scheme as drawn up is that the gratuity that could be claimed under this

award by retrenched workmen because of the fact that retrenchment is also one kind of termination !l'of service vl'ithin the meaning of the award was intended to be in addition to the retrenchment compensation and not in lieu thereof.

The decision in Brahmachari.'s case on the special facts of the award therein is therefoi; e of no assistance to the appeUai1t. \Ve are bound to hold on an examination of the award in the present case that the gratuity which the respoi1dent claims on the basis of the award is distinct from and in addition to the retrenchment compensatioh he has received. v\Te are of opinion therefore that the Tribunal was right in holding that the respondent is e1ititlecl to such gratuity e11en though he has already received payment of compensa'tion for retrenchment in accordance with the provisions of s. 25F of the Industrial Disputes Act.

The appeal 1s accordingly' dismissed with costs.

A jJ/JCal disntissed.

COMivIISSIONER OF INCOME-TAX, BOMBAY

v . (S. K. DAs, J. L. KAPUR and/M. 1-TmAYATULLAtt, JJ.)

Income-tax-Association of persons-Meaning o(-Indian Incume-tax Act, 1922 (XI of .1922), s. 3.

A Hindu governed by the Mitakshara School of Hindu Law died leaving three widows as his legal heirs.

The widows took the estate as joint tenants and did not exercise their right to separate possession and enjoyment.

The main income was from - dividends and from immovable property.

The latter was held under s. 9(3) of the Income-tax Act not to be assessable as income

Muller & Phij1ps .(India) Ltd. v. K. C. Sud

Das Gupla ].

Af, ril 14.