Himachal Pradesh High Court

Sd Senior Secondary School Shimla vs State Of Himachal Pradesh And Ors on 7 November, 2024

Author:
Sandeep Sharma

Bench:
Sandeep Sharma

2024:HHC:12413

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWP No. 861 of 2024 with CWP Nos. 854, 857 to 860,
862 to 865, 872 to 874, 3088 to 3091, 3477 to 3479,
3481, 3483, 3901 and 3903 of 2024
Date of Decision: 7.11.2024
_____________________________________________________________________
1. CWP No. 861 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
2. CWP No. 854 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
3. CWP No. 857 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
4. CWP No. 858 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
5. CWP No. 859 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
6. CWP No. 860 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
7. CWP No. 862 of 2024
2024:HHC:12413
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SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
8. CWP No. 863 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
9. CWP No. 864 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
10. CWP No. 865 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
11. CWP No. 872 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
12. CWP No. 873 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
13. CWP No. 874 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
14. CWP No. 3088 of 2024
SD Senior Secondary School Shimla
.........Petitioner
2024:HHC:12413
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Versus
State of Himachal Pradesh and Ors.
.......Respondents
15. CWP No.3089 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
16. CWP No.3090 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
17. CWP No. 3091 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
18. CWP No. 3477 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
19. CWP No. 3478 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
20. CWP No. 3479 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
21. CWP No. 3481 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
2024:HHC:12413
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.......Respondents
22. CWP No. 3483 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
23. CWP No. 3901 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents
24. CWP No. 3903 of 2024
SD Senior Secondary School Shimla
.........Petitioner
Versus
State of Himachal Pradesh and Ors.
.......Respondents

Coram
Hon'ble Mr. Justice Sandeep Sharma, Judge.
Whether approved for reporting? Yes.
For the Petitioners: Mr. M.L. Sharma and Ms. Meghna Kashava,
Advocates.
For the respondents: Mr. Anup Rattan, Advocate General with Mr.
Rajan Kahol, Mr. Vishal Panwar and Mr. B.C.
Verma, Additional Advocates General with Mr.
Ravi Chauhan and Mr. Arsh Rattan, Deputy
Advocate General, for the State.
Mr. Vishal Singh Thakur, Advocate, for the
private respondents in all the petitions.
___________________________________________________________________________
Sandeep Sharma, J. (Oral)

Since common questions of facts and law are involved in

the above captioned cases and the petitioner, who is common in all the

cases is aggrieved of the order dated 16.1.2024, passed by the Deputy

Labour Commissioner-cum-Appellate Authority (Annexure P-9)

under the
Payment of Gratuity Act, 1972
( in short "the Act"), this
2024:HHC:12413

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Court after having clubbed all the cases, heard the same together and

are now being disposed of vide common judgment.

2. For having bird's eye view, facts which may be relevant for

adjudication of the case at hand, are that private respondents, in all

the cases, prior to their services being taken over by the State of

Himachal Pradesh in the department of Education Himachal Pradesh,

were working with the Petitioner-School i.e. SD Senior Secondary

School, Gunj Bazaar, Shimla, which though was being managed by

Sanatan Dharam Prabhandan Committee, Gunj Bazaar, Shimla, but

w.e.f. 1987 to 1993 had been getting lump-sum Grant-in-Aid from

State of Himachal Pradesh. Though w.e.f. 1987 to 1993, Grant-in-Aid

was paid by the State Government in lump sum, but thereafter,

pursuant to judgment passed by the Hon'ble Apex Court in case titled

State of Himachal Pradesh v. HP State Recognized and Aided

Schools Managing Committees and Ors.
, 1995 (4) SCC 507,

petitioner-school came to be granted 95% Grant-in-Aid, as a result

thereof, staff working in the school, at the relevant time, started

getting salary at par with the salary being received by their

counterparts in the various educational institutions of the State of

Himachal Pradesh. Though at one point of time, school management

refused to accept the Grant-in-Aid from the State Government and in

that regard, litigation was contested by the school management upto

Hon'ble Apex Court, whereby Hon'ble Apex Court directed the State
2024:HHC:12413

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Government to make the payment for remaining period i.e. from 1993

to 1997 without interest and cost. In the year 2012, services of the

employees of 95% Grant-in-Aid schools were decided to be taken over

by the State Government (without the assets and liabilities), by placing

them lowest in the promotion list, as proposed by the management of

petitioner-school, but their pay was protected by the respondent-State

as per scheme formulated for taking over the services of the privately

managed government aided school. Private respondents, who at one

point of time, were the employees of the petitioner-school had become

employees of State of Himachal Pradesh and after taking over their

services in the year 2012 in the State of Himachal Pradesh, they

continued to work in the different schools controlled by the

Department of Education of the Himachal Pradesh in various

capacities.

3. On 08.10.2012, first application for payment of gratuity

was collectively moved by the employees of petitioner-school alongwith

several other issues, which was though accepted by the management

of petitioner-school, but even then gratuity was not paid. After

issuance of notices by the private respondents, private respondents

staked their claim for gratuity for the period they had rendered

services with the petitioner-school prior to their services being taken

over by the Government of Himachal Pradesh in 2012. Since, no heed

was paid to the notices issued by the private respondents, they were
2024:HHC:12413

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compelled to approach Labour Officer-cum-Controlling Authority, who

after having afforded due opportunity of hearing to both the parties,

passed order dated 25.7.2022 (Annexure P-5), thereby directing the

petitioner herein to make the payment of gratuity to the private

respondents within one month from the receipt of the notice under

intimation to his office.

4. Being aggrieved and dissatisfied with aforesaid order,

petitioner herein filed an appeal before the appellate authority i.e.

Labour Officer-cum-Controlling Authority, but since petitioner-School

failed to deposit the amount ordered to be deposited by the Controlling

Authority as per
Section 7
Sub-Clause 7 of the Act, authority refused

to entertain the appeal.

5. Being aggrieved and dissatisfied with aforesaid order

passed by the appellate authority, petitioner herein approached this

Court by way of number of writ petitions. This Court vide order dated

22.8.2023, passed in CWP No. 4754 of 2023 and other connected

matters, allowed the petition and set-aside the order dated 20.4.2023,

passed by the Appellate Authority and remanded the case back to the

aforesaid authority to decide the same afresh, subject to furnishing

bank guarantee equivalent to the amount determined by the

Controlling Authority alongwith a certificate in terms of Second Proviso

to
Section 7
Sub-Clause 7 of the Act, which provides that no appeal by

an employer shall be admitted unless at the time of preferring the
2024:HHC:12413

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appeal, the appellant either produces a certificate of the controlling

authority to the effect that the appellant has deposited with him an

amount equal to the amount of gratuity required to be deposited

under
Section 4
of or deposit with the appellate authority such

amount.

6. Since bank guarantee in terms of the aforesaid order

passed by this Court was furnished by the petitioner before the

appellate authority, appellate authority proceeded to decide the

appeals having been filed by the petitioner on its own merits and

ultimately, vide order dated 16.1.2024 (Annexure P-9), afore authority

proceeded to dismiss the appeals. In the aforesaid, background,

petitioner-School has approached this Court in the instant

proceedings, praying therein to set-aside the afore order.

7. Precisely, the grouse of the petitioner-school, as has been

highlighted in the petition and further canvassed by Mr. M.L. Sharma,

learned counsel for the petitioner is that learned appellate court below

while passing impugned order failed to consider plea of limitation

raised by the petitioner as well as liability of State Government

towards payment of gratuity to the extent of 95% being government

aided school to that extent. Besides above, petitioner has also raised

ground that appellate court below also erred in ordering payment of

gratuity from the date of joining, whereas order of payment of gratuity

ought to have been made applicable from 3.4.1997 prospectively,
2024:HHC:12413

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when an amendment was introduced in Parliament, thereby bringing

teachers in the ambit of
Payment of Gratuity Act
under the definition

an of 'employee'.

8. Mr. M.L. Sharma, learned counsel for the petitioner-

School, while elaborating submissions made by him with regard to

limitation strenuously argued that Payment of Gratuity HP Rules 1971

(Annexure P11) (herein after referred to as "the Rules") are applicable

to the claim petitions filed by the petitioner. He submitted that as per

aforesaid Rules, which have a statutory force, a person who is eligible

for payment of gratuity under this Act or any person authorized, in

writing, to act on his behalf shall send a written application to the

employer, within such time and in such form, as may be prescribed,

for payment of such gratuity. He submitted that since 7(1) of Rules

provides that an employee, who is eligible for payment of gratuity

under the Act shall apply, ordinarily within thirty days from the date

he/she is entitled for gratuity and in the case at hand, no application

within the afore period of thirty days was submitted by the any of the

private respondents, claim put forth by the private respondents ought

to have been rejected on the ground of limitation itself. He further

submitted that bare perusal of claim petitions filed at the behest of

private respondents nowhere suggests that cogent and convincing

reason was ever adduced qua the inordinate delay in filing the claim

petitions and as such, impugned order passed by the appellate
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authority, which ultimately upheld the order of controlling authority,

deserves to be quashed and set-aside on this sole ground only.

9. Mr. Sharma, while inviting attention to Rule 7 (5), which

provides that no claim for gratuity under the Act shall be invalid

merely because the claimant failed to present his application within a

specified period, submitted that even in that eventuality an application

praying therein for condonation of delay is required to be filed and in

case, no cogent and convincing reason is assigned, enabling the court

to consider such application, delay, if any, in furnishing claim petition

cannot be condoned. He further submitted that though Rule 7 (1)

specifically provides for limitation of thirty days, but even if it is

presumed that in terms of Rule 7 (5), claimant can file claim petition

after expiry of thirty days, even then, same is required to be filed

within a reasonable time, but definitely not beyond the period of three

years as prescribed under
Article 137
of the
Limitation Act
. In support

of aforesaid contention, Mr. Sharma
placed reliance upon
judgments

i.e. 1.
Sultan Begum v. Prem Chand Jain
(1997) 1 SCC 373, 2. Anwar

Hasan Khanv. Mohammed Shafi (2001) 8 SCC 540, 3.

Fertilizer

Corporation of India Limited v. Cormondal Sacks
2024 STPL 5156 (SC),

4. Addl.
Spl. Land Acquisition Officer, Bangalore v. Thakoredas, Major

& Ors
(1997) 11 SCC 412 and ; 5.

State of Karnatka v. Laxman
(2005) 8

SCC 709.

2024:HHC:12413

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10. While elaborating his submissions qua the second point

raised by him with regard to liability of State Government to gratuity,

Mr. Sharma, further argued that though there is no dispute that

petitioner-School was a State Government aided school getting 95%

aid to meet the salary burden of the teachers and other employees of

the school, but bare perusal of
Section 2 (f) (1)
, which defines

employer, uses the specific expression "belonging to or under the

control of", meaning thereby, employees of Government aided schools

were to be provided all benefits including the gratuity by the State of

Himachal Pradesh not by School, who had been otherwise disbursing

95% Grant-in-Aid as salary to its employees.
In support of his

aforesaid submissions, Mr. Sharma
,
placed reliance upon
judgment

passed by the Chhattisgarh High Court in
Ambika Mission Boys

Middle School, Ambikapur v. State of Chhattisgarh
(2020) 2 SLJ

499, and judgments passed by the Hon'ble Apex Court in
Birla

Institute of Technology v. State of Jharkhand and Ors.
(
2019) 4

SCC 513 and Regional Provident Fund Commissioner v. Sanatan

Dharma Girls Secondary School
(2007) 1 SCC 268.

11. Lastly, Mr. Sharma, argued that since payment of gratuity

act was made applicable to educational institution w.e.f. 3.4.1997,

there was no occasion for the controlling authority to order payment of

gratuity from the date of their joining, rather private respondents, if

any, could have been held entitled for payment of gratuity w.e.f.

2024:HHC:12413

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3.4.1997 when
Payment of Gratuity Act
was made applicable to the

teachers.
In support of his aforesaid arguments, he
placed reliance

upon
judgment passed by the Hon'ble Apex Court in
Birla Institute of

Technology v. State of Jharkhand and Ors.
(2019) 4 SCC 513.

12. While refuting the aforesaid submissions made by the

learned counsel for the petitioner, Mr. Arsh Rattan, learned Deputy

Advocate General appearing for the State and Mr. Vishal Thakur,

learned counsel appearing for the private respondents in all the

petitions, vehemently argued that there is no limitation in approaching

the controlling authority for claiming payment of gratuity. While

referring to
Section 7 (2)
of the Act, above named counsel argued that

employer is obliged to determine the amount of gratuity and give

notice in writing to a person to whom the gratuity is payable. If it is

so, there is otherwise no requirement, if any, for the private

respondents to lodge a complaint, rather same should have been itself

allowed by the employer in terms of
Section 7(2)
of the Act. They also

submitted that otherwise also,
Payment of Gratuity Act
1972, being a

beneficial legislation has to be liberally interpreted. To substantiate

their aforesaid submissions, learned counsel for the respondents
,

placed reliance upon
judgment passed by the Hon'ble Apex Court in

H. Gangahanume Gowda v. Karnataka Agro Industries Corporation

Limited
2003 3 SCC 40 (para-7), wherein it came to be ruled that
2024:HHC:12413

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payment of gratuity is the duty of the employer and as such, claim in

that regard cannot be defeated on the ground of limitation.

13. Learned counsel representing the respondents further

argued that once it is not in dispute that at the time of their discharge

from the private school on account of taking over their services by the

government they were entitled to payment of gratuity under the Act

coupled with the fact that no assets and liabilities of the private school

were transferred, petitioner is estopped from claiming that liability, if

any, to pay gratuity under the afore Act is of State Government, rather

liability to pay gratuity for the period private respondents had served

with the institution squarely lies with the petitioner. They further

argued that till the time of taking over the services of private

respondents by the government, their principal employer was

petitioner herein, who had issued appointment letters in their favour

and after receipt of Grant-in-Aid from the school petitioner-school had

been paying salaries.

14. While responding to the another submission raised by the

learned counsel representing petitioner with regard to date from which

gratuity scheme became applicable to the claimants, learned counsel

for the respondents invited attention of this Court to judgment passed

by the Hon'ble Apex Court in
Birla Institute of Technology v. State

of Jharkhand and Ors.
(2019) 4 SCC 513, wherein retrospective

applications for amendment Act 2009, came to be upheld. While
2024:HHC:12413

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inviting attention of this Court to afore judgment, learned counsel for

the respondent argued that Hon'ble Apex Court having taken note of

the amendment, which came into force w.e.f. 3.4.1997, ruled that once

category of teachers also came to be included under the definition of

employee for the purpose of payment under the
Payment of Gratuity

Act
, rightful claim of such persons, who, before amendment, had been

admittedly working as a teacher, cannot be defeated on the ground

that since amendment came in force in 2009, it cannot be made

applicable retrospectively, rather would only apply to the cases of the

teachers, who were appointed after 2009.

15. I have heard learned counsel for the parties and perused

the material available on record.

16. Having heard learned counsel for the parties and perused

material available on record, this court finds that there is no dispute

that private respondents prior to taking over their services by the State

had been working with the petitioner-school in various capacities. It is

also not in dispute that at the time of taking over of services of the

respondents by the State, 95% of the Grant-in-Aid was being received

by the management of the petitioner school. It is also not in dispute

that in the year 2012, services of the private respondents herein were

taken over by the State Government and thereafter, management of

the petitioner-school, despite there being offer made by the State of

Himachal Pradesh, chose not to be taken over, rather decided to run
2024:HHC:12413

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itself by using its own resources. It is also not in dispute that at the

time of taking over of the services of private respondents by the

respondent-State, assets and liabilities of the petitioner-school were

never taken over by the respondent-State, rather same remained with

the school management, who is still running the institution, but of

their resources, not with the government aid.

17. Precisely, the question which needs to be decided in the

instant proceedings is "whether petitioner-school is under obligation to

pay gratuity to the private respondents qua the period they had

rendered their services with the petitioner-school prior to their services

being taken over by the State Government or not."?

18. Though it came to be vehemently argued by learned

counsel for the petitioner that since services of the private respondents

were taken over by the State of Himachal Pradesh w.e.f. 2012, liability,

if any, to pay gratuity squarely lies with the State of Himachal

Pradesh, especially when it is not in dispute that school was being run

with 95% aid provided by the State of Himachal Pradesh, however this

Court is not persuaded to agree with aforesaid submissions made by

the petitioners for the reason that though till the year 2012, petitioner-

school was being provided 95% Grant-in-Aid by the State of Himachal

Pradesh, but not for payment of gratuity, rather such amount was

being provided for giving salary to the employees of the school at par

with the salaries received by the teachers in the government schools.

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19. Mr. Sharma, further argued that by providing 95% Grant-

in-Aid, State had virtually become employer within the meaning of 2

(f) of the Act, which reads as under:

2(f) "employer" means, in relation to any establishment, factory, mine,
oilfield, plantation, port, railway company or shop -

(i) belonging to, or under the control of, the Central Government or a
State Government, a person or authority appointed by the appropriate
Government for the supervision and control of employees, or where no
person or authority has been so appointed, the head of the Ministry or
the Department concerned,

(ii) belonging to, or under the control of, any local authority, the
person appointed by such authority for the supervision and control of
employees or where no person has been so appointed, the chief
executive office of the local authority,

(iii) in any other case, the person, who, or the authority which, has the
ultimate control over the affairs of the establishment, factory, mine,
oilfield, plantation, port, railway company or shop, and where the said
affairs are entrusted to any other person, whether called a manager,
managing director or by any other name, such person;"

20. As per aforesaid provision of law, employer, in relation to

any establishment, would mean a person, who has control over the

establishment. Mr. M.L. Sharma, learned counsel for the petitioner

attempted to argue that since by providing 95% aid, control of the

school was actually with the State, petitioner school cannot be held

liable to pay gratuity, however, such plea of Mr. Sharma, deserves to

be rejected outrightly, being totally fallacious. No doubt, in the case at

hand, 95% aid was being provided by the respondent-State, but there

is nothing to suggest that with the grant of 95% aid, respondent-State

had become owner of the school or same was being managed by the
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respondent-State, rather there is ample material available on record

suggestive of the fact that till the year 2012, services of the private

respondents were being controlled by the management of the school

and not by the respondent-State. Had by virtue of providing 95% aid,

respondent State's, intention was to take over the school, parties

would have not contested up to Hon'ble Apex Court, rather in the year

2012, number of schools, who were being provided 95% Grant-in-Aid,

were taken over by the State of Himachal Pradesh subject to certain

terms and conditions. Though opportunity, in the case at hand, was

also provided to the petitioner-school herein to give complete control of

the school to the respondent-State, but as has been observed herein

above, management of the petitioner-school chose to remain

independent, but services of the some of the employees including the

private respondents were taken over by the respondent-State, in terms

of policy framed by the State of Himachal Pradesh for taking over the

services of privately management government aided schools. It is also

not in dispute that assets and liabilities were never taken over by the

State at the time of taking over the services of the private respondents,

rather fact is that petitioner-School is being run privately by the

management of the school as of today. Had management of the

petitioner-school agreed to transfer the school in totality, they would

have been right in contending that since entire assets and liabilities

stand transferred to the State of Himachal Pradesh, liability, if any, to
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make the payment, if any, is of the State of Himachal Pradesh, but

since in the case at hand, only services of few of the employees

including the private respondents were taken over and assets and

liabilities remained with the school, aforesaid submission made by the

Mr. Sharma with regard to control of the respondent-State, deserves

outright rejection.

21. At this stage, it would be apt to take note of judgments

pressed into service by Mr. M. L. Sharma, learned counsel for the

petitioner in support of his afore contentions. While referring to

judgment passed by the High Court of Chhattisgarh in
Ambika

Mission Boys Middle School, Ambikapur v. State of Chhattisgarh

(supra), Mr. M.L. Sharma, vehemently argued that State would be

employer within the definition of
Payment of Gratuity Act, 1970
, of the

employees of the government aided educational institutions. If it is so,

liability, if any, to pay gratuity, as has been claimed by the private

respondents in the case at hand, is entirely of the State of Himachal

Pradesh, however having perused aforesaid judgments, this Court

finds no application of the same in the facts and circumstances of the

case. In the afore case, plea came to be raised by the petitioner-school

that since it was being provided 100% aid by the State of Himachal

Pradesh, State cannot be permitted to disown the teachers, who were

receiving the salary under the grant-in-aid on the pretext that school

was not under the control of the State. High Court of Chhattisgarh
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having taken note of the fact that petitioner-school was being provided

100% aid, proceeded to rule that State would be employer under the

definition of the Act of the employees of aided educational institutions.

Most importantly, in the aforesaid case, an attempt was made to carve

out a distinction between two classes of teachers/employees for

payment of gratuity before or after cutoff date i.e. 1.4.2013 received by

the institution. While holding afore classification made by the State of

Chhattisgarh, High Court of Chhattisgarh ruled that once both the

categories are considered to be employee for the purpose of gratuity

under the Act, there cannot be unjustified classification so as to deny

benefit of gratuity to one set of employees. In the instant case, it is not

in dispute that petitioner school never received 100% aid, rather it was

in receipt of 95% of Grant-in-Aid and control of the management always

remained with the petitioner-school. It is also not in dispute that services

of private respondents from one particular date were taken over by the

State of Himachal Pradesh, but petitioner school, despite there being offer

made by the State of Himachal Pradesh, decided to be managed/run by

the management of the petitioner school. Moreover, State of Himachal

Pradesh, at no point of time, took responsibility of paying gratuity under

the Act to the employees of government aided school, rather liability,

if any, came to be taken by the respondent-State qua those

employees, whose services were taken over by the State of Himachal

Pradesh that too from the date their services were taken over. Since
2024:HHC:12413

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issue, which ultimately came to be decided by the High Court of

Chhattisgarh was with regard to unreasonable classification made by

the State of Chhattisgarh between two classes of teacher/employees

for payment of gratuity before or after the cutoff date and
in that

case
, responsibility was taken by the State of Chhattisgarh to provide

benefit of gratuity under the Act to employees of Schools, who were in

receipt of 100% Grant-in-aid, no parity, if any, can be claimed by the

petitioner-school placing reliance upon the aforesaid judgment, which

is not applicable in the present facts and circumstances of the case.

22. Similarly, this Court finds no application of judgment

passed by the Hon'ble Apex Court in case
Birla Institute of

Technology v. State of Jharkhand and Ors
(
2019) 4 SC 513 and

Regional Provident Fund Commissioner v. Sanatan Dharam Girls

Secondary School and Ors.
(2007) 1 SCC 268, wherein Hon'ble Apex

Court while interpreting the expressions "under control of" and

"belonging to" held that State cannot disown teacher, who are

receiving the salaries under the Act on the ground that that they

were not under the control of the State.

23. If the aforesaid judgment is read in entirety, Hon'ble Apex

Court while taking note of
Section 2 (f) (i)
of the Act, wherein

"employer" has been defined, proceeded to elaborate the terms "under

control of" and "belonging to", but nowhere ruled that State would be

under obligation to pay gratuity to the employees/teachers of school,
2024:HHC:12413

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who though are in receipt of 95% grant-in-aid, but yet are controlled

and managed by private management, rather in the aforesaid

judgments, Hon'ble Apex Court ruled that if the schools are under the

control of the government, it can otherwise not escape the liability to

pay gratuity in terms of Act being the Central Legislation, however, in

the case at hand, as has been discussed herein above, private

respondents, prior to taking over their services by the State of

Himachal Pradesh though received salary from petitioner-school out of

95% grant-in-aid provided by the State, but fact remains that for all

intents and purposes, they continued to be employees of the

petitioner institution. Private respondents became employees of State

of Himachal Pradesh from the date their services were taken over by

the State of Himachal Pradesh that too subject to certain terms and

conditions. In afore cases decided by the High Court of Chhattisgarh

and Jharkhand, schools were being provided 100% aid by the State of

Chhattisgarh and Jharkhand, as a result of thereof, complete control

of the institution concerned was with the State of Himachal Pradesh,

whereas in the case at hand, situation is totally converse. Petitioner-

institution like many other private institutions though kept on

receiving 95% grant-in-aid, but for a limited purpose i.e. payment of

salary, at no point of time, gave control of the administration and

other assets to the State of Himachal Pradesh. Though at one point of

time, effort was made by the State Government to take over the school,
2024:HHC:12413

- 22 -

complete in all respects, but such offer was rejected and only services

of State employees, who had opted for taking over their services by the

State of Himachal Pradesh were permitted to be taken over by the

State of Himachal Pradesh, as a result thereof, private respondents

ceased to be employees of petitioner institution from the date their

services were taken over by the State of Himachal Pradesh. Most

importantly, in the case at hand, petitioner school is being run as of

today, by the private management out of its own resources.

Submission made by Mr. M.L. Sharma, learned counsel for the

petitioner, with regard to liability of the State of Himachal Pradesh to

pay gratuity to the private respondents on account of its having

provided 95% grant-in-aid, may not only open Pandora box, rather in

that eventuality, respondent-State would be liable to pay gratuity to all

such employees, who despite there being offer made by the State,

chose to work under the private institution fully knowing the

consequences of their having decided to continue with the private

management.

24. Similarly, this Court having perused
Section 7
of the Act

in its entirety finds no force in the submission of Mr. Sharma, learned

counsel for the petitioner that claim put forth by the private

respondents ought to have been rejected by the controlling authority

being barred by limitation. It would be apt to take note of
Section 7 (1)

and
7(2)
, which read as under:

2024:HHC:12413

- 23 -

"7(1) A person who is eligible for payment of gratuity under this Act or
any person authorised, in writing, to act on his behalf shall send a
written application to the employer, within such time and in such
form, as may be prescribed, for payment of such gratuity.
7(2) As soon as gratuity becomes payable, the employer shall, whether
an application referred to in sub-section (1) has been made or not,
determine the amount of gratuity and give notice in writing to the
person to whom the gratuity is payable and also to the controlling
authority specifying the amount gratuity so determined."

25. If
Section 7(1)
is read in its entirety, it clearly suggests

that any person, who is eligible for payment of gratuity under the Act,

shall send a written application for payment of gratuity to the

employer, within the time as specified in the Rules, himself or through

an authorized agent.
Section 7 (2)
as reproduced herein above, makes

it mandatory for employer to give a notice in writing to a person, who

becomes entitled to gratuity so that amount, if any, on account of

gratuity is paid to him/her within reasonable time. Though in the case

at hand, claims for payment of gratuity appear to have been put forth

by the respondents after 7-8 years of their discharge from the

petitioner school, but that would not defeat their rightful claim, which

otherwise flows from
Section 7
of the Act. Though
Section 7 (1)

provides for making an application within the time as specified in the

Rules but if
Section 7 (2)
is read, it clearly casts duty upon the

employer to give notice to its employee as well as controlling authority

with regard to gratuity payable to its employee. However in the case at

hand, there is nothing to suggest that petitioner, ever gave notice to
2024:HHC:12413

- 24 -

the private respondents or controlling authority, specifying the amount

of gratuity so determined, on account of services rendered by the

private respondents before taking over their services by the State of

Himachal Pradesh.

26. At this stage it would be pat to take note of Rule 7 (1) of

the Gratuity Rules, which read as under:

"7(1). An employee who is eligible for payment of gratuity under
the Act, or any person authorized, in writing, to act on his
behalf, shall apply, ordinarily within thirty days from the date
the gratuity became payable, in Form 'I' to the employer"

27. Rule 7 (5), provides that an application for payment of

gratuity filed after the expiry of the periods specified in this rule shall

also be entertained by the employer, if the applicant adduces sufficient

cause for the delay. Rule 7(5) reads as under:

"7(5)An application for payment of gratuity filed after the expiry
of the periods specified in this rule shall also be entertained by
the employer, if the applicant adduces sufficient cause for the
delay in preferring his claim, and no claim for gratuity under
the Act shall be invalid merely because the claimant failed to
present his application within the specified period. Any dispute
in this regard shall be referred to the controlling authority for
his decision."

28. If the aforesaid Rules, which are statutory, are read in

conjunction clearly reveals that ordinarily, an application should be

filed by the claimant within 30 days from the date gratuity becomes
2024:HHC:12413

- 25 -

payable, but it also gives him liberty to stake claim after expiry of 30

days, but for that purpose, cogent and convincing reason is required to

be adduced.

29. Question which needs to be determined at this stage is

'whether Rule framed under the Act override the statue, which itself

casts duty upon the employer to give notice to an employee specifying

amount of gratuity so determined.

30. No doubt,
Section 7(1)
talks about time for filing claim as

may be prescribed in rules, but
Section 7 (2)
dilutes the aforesaid

mandate, if any, given in
Section 7
. Bare reading of
Section 2
casts

duty upon the employer to give notice to the employee as soon as

gratuity becomes payable so that necessary steps, if any, at the behest

of the claimant are taken in that regard.
Section 7 (2)
besides casting

liability upon employer to give notice to the employee also makes it

mandatory to employer to give notice to the controlling authority

specifying therein amount of gratuity, meaning thereby, duty to

determine amount of gratuity and thereafter, to notify the same is of

employer irrespective of the application.
Section 7 (2)
specifically states

whether an application referred to in sub-section (1) has been made or

not, duty is of employer to determine the amount of gratuity and

thereafter notice in terms of the of aforesaid is required to be given to

the employee and controlling authority.

2024:HHC:12413

- 26 -

31. Mr. Sharma, learned counsel for the petitioner while

inviting attention of this court to judgment passed by the Hon'ble Apex

Court in
Sultan Begum v. Prem Chand Jain
(1997) 1 SCC 373,

vehemently argued that every clause of statute should be construed

with reference to the context or other clauses of the act so as far as

possible to make a consistent enactment or whole statute or series of

statutes relating to the subject matter. He submitted that since Rules,

which are applicable in the case at hand, have a statutory force,

having been framed in exercise of power conferred under
Section 14

and
Section 7
of the Act and there is specific provision for making

application within thirty days from the date gratuity becomes payable

in Form I to the employer, private respondents herein, cannot be

permitted to draw advantage, if any, of
Section 7 (2)
of the Act, which

casts duty upon employer to give notice in writing to a person who has

become entitled to gratuity but aforesaid provision of law cannot be

read in isolation, rather both
Sections 7 (1)
and
7 (2)
are to be read in

conjunction. He submitted that since
Section 7 (1)
clearly talks about

making of an application within a time frame as may be prescribed by

the rules, submission made by the learned counsel for the

respondents cannot be accepted that in terms of
Section 7 (2)
, no

application at all is required to be made. Aforesaid submission made

by Mr. Sharma deserves outright rejection for two reasons; i.) Rules, if

any, framed pursuant to power, if any, given under the parent Act
2024:HHC:12413

- 27 -

cannot override the statute. No doubt,
Section 7 (1)
of the Act permits

the employer to prescribe timeline for making application, but if

Section 7(2)
is read in conjunction with
Section 7 (1)
, duty has been

cast upon the employer to give notice in writing to a person who

becomes entitled to gratuity so that amount on account of gratuity, if

any, is paid to him/her within reasonable time.

32. At this stage it would be apt to take note of Rule 7 (5)

which provides that no claim for gratuity under the Act shall be invalid

merely because the claimant failed to present his application within a

specified period. Aforesaid rule, which admittedly cannot override

provision contained under the
Parent Act
wholly does away with the

provisions of Rule 7 (1), which provides that an employee, who is

eligible for payment of gratuity under this Act or any person

authorized, in writing to act on his behalf, shall apply within 30 days

from the date gratuity becomes payable to the employee.

33. True it is that as per cardinal principle of interpretation of

statutes, where there is a conflict between two different sections of the

same statue or different portion of the same, court has to adopt

principle of doctrine of harmonious construction as has been

repeatedly held in the judgments pressed into service by the learned

counsel for the petitioner. In all the judgments pressed into service

by the petitioner, it has been held that provision of one section of the

statute cannot be used to defeat the other provision, otherwise court
2024:HHC:12413

- 28 -

in its effort would find it impossible to effect reconciliation between

them. Most importantly in the aforesaid judgments, Hon'ble Apex

Court has held that while interpreting such provision of law court

should bear in mind that when there are two conflicting provisions in

the Act which cannot be reconciled with each other, they should be so

interpreted that, if possible, effect should be given to both.

34. Mr. Sharma, attempted to argue that interpretation

sought to be given by the aforesaid provision contained under
Section

7(2)
of the Act, if accepted would render one of the provision as dead

letter or useless number, which otherwise cannot be said to be

harmonious construction. Though this Court finds no quarrel with

the aforesaid proposition of law
laid down in
the judgments pressed

into service by learned counsel representing petitioner, but in the case

at hand, no provision, if any, ever came to be made in the
Parent Act

with regard to period of limitation, rather
Section 7(1)
gave leverage to

the employer to provide timeframe within which period, an application,

if any, can be made by person claiming gratuity. No doubt, in terms of

aforesaid provision of law, Payment of Gratuity Central Rules, 1972,

came to be framed by the Government of India, Rule 7 whereof talks

about application, if any, by the employee entitled for payment of

gratuity within a period of 30 days from the date of gratuity.

35. If aforesaid Rule is read in its entirety, it nowhere talks

about specific time of 30 days, rather word "ordinarily" has been used,
2024:HHC:12413

- 29 -

meaning thereby "ordinarily" or in normal circumstances, application

in terms of aforesaid Rule should be filed within 30 days from the date

gratuity became payable. Aforesaid Rule otherwise nowhere suggests

that in any eventuality, application is to be filed within 30 days. If

aforesaid rule is read in conjunction with Rule 7 (5), there appears to

be merit in the contention of the learned counsel for the private

respondents that an application for payment of gratuity filed after the

expiry of period, shall also be entertained by the employer.

36. Though initial part of Rule 7 (5) suggests that application,

if any, for release of payment of gratuity under the Act can be received

after prescribed period of 30 days, but in that regard, applicant may

have to render plausible explanation qua the delay, if any, but if

second part of Rule is read, it clearly suggests that no claim for

gratuity under the Act shall be invalid merely because the claimant

failed to present his application within the specified period, rather any

dispute, in that regard, shall be referred to the controlling authority for

decision.

37. At the cost of repetition, though this Court is of the view

that rules, if any, framed in terms of power of rule making provided in

the Act cannot override the provisions contained in the statute, but

even if it is presumed that in terms of Rule 7 (1), private respondents

herein ought to have filed an application, which they failed in doing so,

claim put forth by the private respondents cannot be defeated solely
2024:HHC:12413

- 30 -

on the ground of late submission of applications as has been provided

under Rule 7 (5).

38.
Section 7 (2)
if read in conjunction with Rule 7 (5), clearly

provides that no claim of gratuity can be defeated on the ground of

delay and laches, rather duty has been cast upon the employer to

determine the amount of gratuity and give notice in writing to a

person, to whom gratuity is payable and also controlling authority

specifying the amount of gratuity so determined. Once duty under the

aforesaid provision of law is cast upon the employer to intimate

amount of gratuity payable to employee, employer otherwise cannot be

permitted to claim that application in that regard was required to be

filed by the person entitled for gratuity under the aforesaid act.

39. At this stage it would be apt to take note of
Section 7
(3 A),

which clearly provides that if amount of gratuity payable under sub-

section (3) is not paid by the employer within the period specified in

sub-section (3), the employer shall pay, from the date on which the

gratuity becomes payable to the date on which it is paid, simple

interest at such rate, not exceeding the rate notified by the Central

Government from time to time for repayment of long terms deposits, as

that Government may, by notification specify.

40. Though proviso to aforesaid provision of law provides that

no such interest shall be payable if the delay in the payment is due to

the fault of the employee and employer has obtained permission in
2024:HHC:12413

- 31 -

writing from the controlling authority for the delayed payment on this

ground, however, no material worth credence ever came to be led on

record to suggest that steps if any, were ever taken by the employer

i.e. petitioner herein to intimate the controlling authority of the

amount payable to the respondents on account of gratuity under the

Act. There is nothing to suggest that there was default, if any, on the

part of the employees and petitioner had obtained permission in

writing from the controlling authority for the delayed payment.

41.
Section 7 (3)
of the Act casts duty upon the employer to

pay the amount gratuity within 30 days from the date it becomes

payable to the persons to whom the gratuity is payable and as such,

rightful claim of the private respondents cannot be permitted to be

defeated on the ground of delay and laches. For the discussion made

herein above, this Court finds no application of the judgments

(
Sultana Begum vs. Prem Chand Jain
, Fertilizer Corporation of India

and ors. vs. M/S Coromandal Sacks Private Limited and Anwar Hasan

Khan vs. Mohammad Shafi and ors.) pressed into service by Sh. M.L.

Sharma, learned counsel representing petitioner, wherein, Hon'ble

Apex while defining the essence of rule of harmonious construction,

proceeded to rule that rule in conflict, if any, should be interpreted in

such a manner that effect is given to both.

42. If the aforementioned finding returned by the Hon'ble Apex

Court is applied to the case at hand, it is evident that while Section
2024:HHC:12413

- 32 -

7(1) of the Act grants the employer the liberty to frame rules,

specifying a time limit for submitting an application for payment of

gratuity, Rule 7(2) imposes a clear obligation on the employer to issue

a notice to the employee as well as to the controlling authority

regarding amount due, if any, under the Act.

43. If the aforesaid provisions are read in conjunction with

Rule 7 (5), this Court would be inclined to give interpretation to the

aforesaid provision in a way where no claim, if any, for gratuity can be

rejected on the ground of limitation, rather duty always shall remain

cast upon the employer to apprise its employee as well as controlling

authority with regard to amount, if any, payable under the Act. In the

case at hand, there is nothing to suggest that notice, either to private

respondents or to controlling authority was ever given by the petitioner

thereby notifying the amount of gratuity payable by the petitioner,

rather its consistent stand has been that it is not liable to pay gratuity

and liability, if any, to pay gratuity is of the State as it was providing

95% grant-in-aid.

44. Next question which needs to be answered in the instant

proceedings is qua the date from which the gratuity scheme became

applicable for the employees of the petitioner-institution.

45. Mr. M.L. Sharma, learned counsel for the petitioner-

School argued that
Payment of Gratuity Act, 1972
was made

applicable to educational institution w.e.f. 3.4.1997 and as such,
2024:HHC:12413

- 33 -

private respondents otherwise could have been made entitled to

gratuity, if any, from the afore date, but definitely, not from the date of

joining as has been ordered by the controlling authority. While

referring to the claim petitions made by some of the employees, Mr.

Sharma, further argued that once private respondents themselves

claimed gratuity w.e.f. 3.4.1997, there was otherwise no occasion for

the controlling authority to allow such prayer with effect from the date

of their joining.

46. While referring to the judgment passed by the Hon'ble

Apex Court in
Birla Institute of Technology v. State of Jharkhand

and Ors.
(2019) 4 SCC 513, Mr. M.L. Sharma, learned counsel for

the petitioner argued that though in the aforesaid judgment,

respective application of amendment No. 47 of 2009 was upheld, but it

nowhere came to be ruled that persons retired prior to the afore date

are also entitled to be given gratuity from the date of their joining. He

further submitted that even after amendment Act, 2009, private

respondents herein would be entitled to gratuity w.e.f. 3.4.1997 till

their services were taken over by the respondent-State because prior

to afore date, category of teachers was not in the purview of the

Payment of Gratuity Act
. He further submitted that mere upholding of

judgment passed by the High Court of Jharkhand would not mean

that private respondents herein can claim parity with the persons, who

were before Division Bench of Jharkhand, especially when while
2024:HHC:12413

- 34 -

rendering judgment in the year 2019, Hon'ble Apex Court, nowhere

deliberated upon the issue with regard to applicability of the Act qua

the employees/teachers, who stood retired prior to 3.4.1997.

47. While ascertaining the correctness of afore submissions

made by the learned counsel for the petitioner, it would be apt to take

note of relevant paras of judgment passed by the Division Bench of

Jharkhand High Court in Birla Institute of Technology Versus

State of Jharkhand & Ors. 2008 SCC OnLine Jhar 91, which

ultimately came to be upheld by the Hon'ble Apex Court. Relevant

paras of the afore judgment read as under:

"15. Let us now come to the Second Point, i.e., with regard to
question as to whether respondent No. 4 is covered under the
notification dated 03-04-1997 issued by the Central
Government, especially when he has not completed 5 years of
continuous service.

(a) This point also has been considered by both the
Controlling Authority and the Appellate Authority as well
as by the learned single Judge in detail.

(b) It is contended by the learned counsel for the appellant
that the provisions of the
Payment of Gratuity Act
has
been extended to educational institutions by notification
dated 03-04-1997 and it is only applicable to non-teaching
staff of institute and this will not definitely cover
respondent No. 4, who has not completed 5 years of
continuous service.

(c) This contention, as correctly pointed out by the learned
single Judge, has no force. It is true that the
Payment of
Gratuity Act, 1972
has been implemented in the institute
2024:HHC:12413

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of the appellant through the notification of the
Government of India dated 3-4-1997 having formulated a
separate Act for the educational institutions, the
Government of India has implemented it with effect from
03-04-1997. It means such workman of the educational
institution who has superannuated before 03-04-1997 are
not entitled to gratuity, but the workman superannuated
on or after 03-04-1997 shall be entitled to gratuity. The
reckoning of the service period for the purpose of eligibility
of gratuity is made under
Section 4
of the Payment of
Gratuity Act, 1972, which contains the provisions of
reckoning the total service of the workman. Admittedly,
the total service of the respondent No. 4 is 30 years and on
that reason, both the Controlling Authority as well as the
Appellate Authority has correctly rejected the contention.

(d) While dealing with this point, the learned single Judge
would reject the said contention on the basis of the
observations made by the Supreme Court in (1995) 5 SCC
642 : (AIR 1996 SC 580). In
the said judgment
, the
Supreme Court considered the commencement of the
period for continuous ser vice and observed as under:--

"The starting point of the said period is from the date
an employee gets employment, which in the nature of
things would vary from employee to employee. It is
nowhere envisaged in the scheme from the above
provisions that the continuous service of the
employee would be computed in a chain from
calendar year to calendar year. Completed year of
service would plainly mean continuous service for
one year reckonable from the date of joining
employment".

2024:HHC:12413

- 36 -

(e) As indicated above, the Act became applicable to the
employees of educational institution with effect from 03-
04-1997. At that time, petitioner was in service and he
retired only in 2001. As such, his entire period of service
has to be reckoned for the purpose of payment of gratuity.

(f) Therefore, the second ground also has to fail.

16. The next question is as to whether the judgment reported
in (2004) 1 SCC 755 is applicable in the present facts and
circumstances of the case.

(a) This point has been dealt with by the learned single
Judge in detail. It is true as pointed out by the learned
counsel for the appellant that the Apex Court in (2004) 1
SCC 755 held that a teacher employed in a School is not
an employee within the meaning of
Section 2 (e)
of the Act.
Let us refer to the relevant observations made by the
Supreme Court:--

24. The contention advanced that teachers should be
treated as included in the expression "unskilled" or
"skilled" cannot, therefore, be accepted. The teachers
might have been imparted training for teaching or
there may be cases where teachers who are employed
in primary schools are untrained. A trained teacher is
not described in the industrial field or service
jurisprudence as a "skilled employee". Such adjective
generally is used for an employee doing manual or
technical work. Similarly, the words "semi-skilled"

and "unskilled" are not understood in educational
establishments as describing nature of job of
untrained teachers. We do not attach much
importance to the arguments advanced on the
question as to whether "skilled", "semiskilled" and
"unskilled" qualify the words "manual", supervisory",
2024:HHC:12413

- 37 -

technical", or "clerical" or the above words qualify the
word "work". Even if all the words are read
disjunctively or in any other manner, trained or
untrained teachers do not plainly answer any of the
descriptions of the nature of various employments
given in the definition clause. Trained or untrained
teachers are not "skilled", "semi-skilled", "unskilled",
"manual", "supervisory", "technical" or "clerical"

employees. They are also not employed in
"managerial" or "administrative" capacity.

Occasionally, even if they do some administrative
work as part of their duty with teaching, since their
main job is imparting education, they cannot be held
employed in "managerial" or "administrative"

capacity. The teachers are clearly not intended to be
covered by the definition of "employee".

(b) The reading of
the entire judgment
including the said
paragraph would clearly show that the judgment was
rendered in the case of primary school teachers and it
cannot be expected that they should be possessed of
expert knowledge. In that context, the Apex Court held
that the teachers in the primary school do not fail within
the definition of employee under the Act.

(c) The Supreme Court was not considering the case of an
employee who was doing technical work which has been
clearly specified in
Section 2 (e)
of the Act to bring an
employee within the ambit of
Section 2 (e)
of the Act. As
indicated in the above paragraphs, the duties entrusted to
the skilled and technical person like respondent No. 4 is
entirely different from the teacher working in the primary
school.

2024:HHC:12413

- 38 -

(d) Similarly, the learned single Judge has also given the
reason as to why this point has to be rejected in the
following observation:--

"Based upon above observations, it is contended that
teachers have not been held to be "employee" within
the meaning of
Section 2 (e)
of the Act and thus
benefit of gratuity is not available to respondent No.

4. It is relevant to notice that the judgment was
rendered in the case of Primary School Teachers and
they cannot be said to be possessed of any expert
knowledge of teaching or any technical or any skilled
knowledge. It is under these circumstances, Apex
Court held that the teachers do not fall within the
definition of "employee" under the Act. Though
respondent No. 4 is a teacher in the petitioner-

Institution but he is possessed of a degree in
Mechanical Engineering and in course of his
employment he not only teaches the students but
also performs other functions like imparting technical
knowledge even based on material testing in a
laboratory. By and large, the nature of job of the
petitioner as a teacher in engineering faculty cannot
be considered to be teaching job simpliciter. Such a
job, though academic, is also technical in nature. In
my humble opinion, above judgment will not apply in
the present case.

(e) This observation by the learned single Judge to reject
this point, in our view, is perfectly justified.

48. In the afore case before the High Court of Jharkhand,

petitioner therein though was engaged by the employer concerned in

the year 1971, but admittedly, he retired in the year 2001. Since with
2024:HHC:12413

- 39 -

the promulgation of the Amendment Act No. 47 of 2009, category of

teacher was also brought under the purview of the
Payment of

Gratuity Act
with retrospective effect from 03.04.1997, Division Bench

of Jharkhand High Court held that since at the time of his retirement,

petitioner
in that case
had become eligible for gratuity in terms of the

Act, his services rendered prior to afore date are also required to be

taken into consideration while computing period for calculation of

gratuity.
It is not in dispute that aforesaid view taken by the Division

Bench of Jharkhand ultimately came to be upheld by the Hon'ble Apex

Court in
Birla Institute of Technology v. State of Jharkhand and

Ors.
(2019) 4 SCC 513.

At this stage, it may be apt to take note of

the fact that prior to filing the judgment in the year 2019, as detailed

herein above, Hon'ble Supreme Court had earlier dealt with the issue

in
Ahmadabad Private Primary Teachers' Association v.

Administrative Officer
, 2004 (1) SCC 755, wherein plea, which was

accepted by the Hon'ble Division Bench of the Jharkhand High court

was negated by the Hon'ble Supreme Court by holding that teachers

are not in the ambit of payment of
Gratuity Act
. Though in the case

before the Hon'ble Apex Court, one notification was produced

suggestive of the fact that category of teachers was included in the

definition of employee in terms of the Act, but since no amendment

was carried in the Act, afore notification was not taken into

consideration by the Hon'ble Apex Court, as a result thereof, claim put
2024:HHC:12413

- 40 -

forth by the teachers claiming themselves entitled to payment of

gratuity under the Act was negated, however, subsequently, in

judgment passed in
Birla Institute of Technology v. State of

Jharkhand and Ors.
(2019) 4 SCC 513, Hon'ble Apex Court ruled

that law
laid down by
it in
Ahmadabad Private Primary Teachers'

Association v. Administrative Officer
, 2004 (1) SCC 755 was no

longer applicable against the petitioner and secondly, teachers were

entitled to claim gratuity.

Relevant paras of the judgment passed in

Birla Institute of Technology v. State of Jharkhand
read as under:

"22. The definition of "employee" as defined under
Section 2(e)

was accordingly amended with effect from 03.04.1997
retrospectively vide
Payment of the Gratuity (Amendment) Act,
(No. 47 of 2009) published on 31.12.2009. The amended
definition reads as under:

"(e) "employee" means any person (other than an apprentice)
who is employed for wages, whether the terms of such
employment are express or implied, in any kind of work,
manual or otherwise, in or in connection with the work of a
factory, mine, oilfield, plantation, port, railway company,
shop or other establishment to which this Act applies, but
does not include any such person who holds a post under the
Central Government or a State Government and is governed
by any other Act or by any rules providing for payment of
gratuity."

23. In the light of the amendment made in the definition of the
word "employee" as defined in
Section 2(e)
of the Act by

Amending Act
No. 47 of 2009 with retrospective effect from
03.04.1997, the benefit of the
Payment of Gratuity Act
was also
extended to the teachers from 03.04.1997. In other words, the
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teachers were brought within the purview of "employee" as
defined in
Section 2(e)
of the Payment of Gratuity Act by

Amending Act
No. 47 of 2009 with retrospective effect from
03.04.1997.

24.The effect of the amendment made in the
Payment of
Gratuity Act
vide
Amending Act
No. 47 of 2009 on 31.12.2009
was two-fold. First, the law
laid down by
this Court in the case
of
Ahmadabad Pvt. Primary Teachers Association
(supra) was
no longer applicable against the teachers, as if not rendered,
and Second, the teachers were held entitled to claim the
amount of gratuity under the
Payment of Gratuity Act
from
their employer with effect from 03.04.1997.

25.
In our considered opinion, in the light of the amendment
made in the
Payment of Gratuity Act
as detailed above, reliance
placed by the learned counsel appearing for the appellant
(employer) on the decision of
Ahmedabad Pvt. Primary Teachers
Association
(supra) is wholly misplaced and does not help the
appellant in any manner. It has lost its binding effect.

26. Learned counsel for the appellant then urged that the
constitutional validity of
Amending Act
No. 47 of 2009 is under
challenge in this Court in a writ petition, which is pending. 33.
Be that as it may, in our view, pendency of any writ petition by
itself does not affect the constitutionality of the
Amending Act
,
and nor does it affect the right of respondent No.4 (teacher) in
any manner in claiming gratuity amount from the
appellant(employer) under the Act.

27. It is only when the Court declares a Statute as being ultra
vires the provisions of the Constitution then the question may
arise to consider its effect on the rights of the parties and that
would always depend upon the declaration rendered by the
Court and the directions given
in that case
. Such is not the case
here as of now.

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28. In the light of the foregoing discussion, we find no merit in
this appeal, which fails and is hereby dismissed with costs
quantified at Rs.25,000/- payable by the appellant to
respondent No.4(teacher)."

49. If the aforesaid judgment is read in its entirety, it came to

be rule by Hon'ble Apex Court that once a teacher has been brought in

the definition of employee as defined under
Section 2 (e)
of the Act by

amending Act No. 47 of 2009 with retrospective effect from 3.4.1997,

the benefit of the Act is required to be extended to the teachers from

3.4.1997.

50. Though, at this stage, Mr. M.L. Sharma, learned counsel

for the petitioner vehemently argued that even in terms of aforesaid

judgment passed by the Hon'ble Apex Court, teacher or category of

teacher is eligible to be granted benefit of gratuity w.e.f. 3.4.1997, but

this Court is not persuaded to agree with aforesaid submission of Mr.

Sharma, for the reason that in a case before Hon'ble Apex Court, issue

was not with regard to applicability of Amendment Act qua the

teachers, who admittedly stood retired prior to 3.4.1997, rather
in that

case
, judgment passed by the Division Bench of Jharkhand, upholding

the claim of the petitioner, who was appointed as teacher in the 1971

but had retired after 2007 was upheld. By upholding judgment

passed by the Division Bench in the aforesaid judgment, Hon'ble Apex

Court virtually ruled that since on 3.4.1997, category of teacher had

become eligible for payment of gratuity under the Act, teachers
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working on that day, shall be eligible for payment of gratuity under the

Act and period for computing minimum service would be counted

taking note of service rendered prior to such date i.e. 3.4.1997.

51. There is another aspect of the matter that minimum

service required for claiming the payment of gratuity is five years in

terms of
Section 4
Clause 1, which reads as under:

"4. Payment of gratuity.-(1) Gratuity shall be payable to an
employee on the termination of his employment after he has
rendered continuous service for not less than five years,

(a) on his superannuation, or

(b) on his retirement or resignation, or

(c)on his death or disablement due to accident or disease:

Provided that the completion of continuous service of five years
shall not be necessary where the termination of the employment
of any employee is due to death or disablement:

[Provided further that in the case of death of the employee,
gratuity payable to him shall be paid to his nominee or, if no
nomination has been made, to his heirs, and where any such
nominees or heirs is a minor, the share of such minor, shall be
deposited with the controlling authority who shall invest the
same for the benefit of such minor in such bank or other
financial institution, as may be prescribed, until such minor
attains majority.] [ Substituted by Act 22 of 1987,
Section 4

(w.e.f. 1.2.1991).]

Explanation .-For the purposes of this section, disablement
means such disablement as incapacitates an employee for the
work which he was capable of performing before the accident or
disease resulting in such disablement."

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52. As per aforesaid provision, gratuity shall be payable to an

employee on the termination of his employment after his having

rendered continuous service for not less than five years. In case

argument advanced by Mr. Sharma, is accepted that private

respondents herein became eligible for payment of gratuity after

3.4.1997, they would never become eligible for gratuity for the reason

that person claiming gratuity must have rendered at least five years of

service.

53. By way of parliamentary amendment brought in the year

2009, with retrospective effect from 03.04.1997, "teachers" have been

specifically included within the ambit of the word employee as defined

under
section 2
of the Payment of Gratuity Act, 1972. Upon the said

amendment being introduced in the Act, the Hon'ble Supreme Court of

India in
Birla Institute of Technology vs State of Jharkhand2019
SCC 513, upheld the claim of Gratuity of the private respondent

involved in the aforesaid case.

54. At the same time, the Hon'ble Supreme Court of India also

observed in para 24,

"The effect of amendment made in the
Payment of Gratuity Act

vide the amending act, 47 of 2009on 31.12.2009 was twofold.
First, the law
laid down by
this Court in Ahmedabad Private
Primary Teachers Association(2004 1 SCC 755) was no longer
applicable against the teachers, as if not rendered, and second,
the teachers were held entitled to claim the amount of gratuity
2024:HHC:12413

- 45 -

under the payment of Gratuity act, from their employer with
effect from 03.04.1997".

55. In the aforesaid case, the private respondent, whose claim

for gratuity was upheld by the Hon'ble Supreme Court, had rendered

the services as a teacher at the Institute from 16.09.1971 to

30.11.2001. The claim of Gratuity, raised by the private respondent

therein, was allowed by the Controlling Authority, (i.e., the First

Authority), thereafter, sequentially upheld by the Appellate Authority,

the Hon'ble Single Bench of the Jharkhand High Court, and the

Hon'ble Division Bench. Ultimately, the appeal against these decisions

was dismissed by the Hon'ble Supreme Court of India in the
Birla

Institute
case (supra). Therefore, the entire services rendered by the

private respondent concerned in the said litigation i.e., w.e.f. 1971 to

2001, were counted in order to compute the claim of gratuity, which

was ultimately affirmed by the Hon'ble Supreme Court.

56. Furthermore, the Act itself stipulates by way of
Section 4

(1)
that in order to be eligible for gratuity, a person must have

rendered at least 5 years of service and in case, the services are to be

counted w.e.f. 03.04.1997 then the private respondent concerned

before Apex Court would never have been eligible to seek gratuity in

the first place because from 03.04.1997 to 30.11.2001 (date of

retirement), the period of 5 years is not completed and thus the person

does not becomes entitled for gratuity, however, the Hon'ble Supreme

Court after discussing the facts of the case in para 12 of Birla Institute
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(Supra), upheld the claim of Gratuity, thereby necessarily implying

that the services rendered before the date of 03.04.1997 would be

counted for computing the claim of gratuity.

57. Otherwise also, if the services rendered by an employee

prior to 03.04.1997, are excluded, any person retiring after that date

but before completing the statutorily prescribed of five years of service

would be rendered ineligible to claim gratuity. For instance, employees

retiring on 04.04.1997, 05.04.1997 or 30.04.1997, and so forth would

remain ineligible to claim gratuity, despite their total service exceeding

five years. Therefore, such an interpretation would cause grave

injustice to employees who have dedicated their entire careers as

teachers, effectively denying them gratuity merely because they retired

after 03.04.1997, but before completing five years counted from that

date.

58. Furthermore, the effect of the amendment is not that a

person becomes a teacher only after 03.04.1997, rather a person who

has been a teacher prior to such date, also becomes entitled to claim

gratuity provided he fulfills the requirement of rendering 5 years of

service as a teacher. A teacher retiring prior to 03.04.1997, say on

02.04.1997, would not be entitled to claim gratuity because gratuity

becomes payable only upon superannuation and since on the

superannuation of such a person, teachers were not included within

the definition of employee, a teacher who had superannuated prior to
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03.07.1997 could not claim gratuity. However, a teacher retiring on or

after 03.04.1997 would be entitled to claim gratuity because upon the

superannuation of such a person, category of 'teacher' stood included

within the definition of employee under the Act.

59. Consequently, in view of the detailed discussion made

herein above as well as law taken into consideration, this Court finds

no illegality and infirmity in the impugned order passed by the

appellate authority, which appears to be based upon proper

appreciation of facts and law and as such, same is upheld.

Accordingly, present petitions fail and dismissed being devoid of merit.

All pending applications also stand disposed of.

November 7, 2024 (Sandeep Sharma),
manjit Judge