Andhra HC (Pre-Telangana)

The Krishna District Milk Producers ... vs The State Of Andhra Pradesh And 2 Others on 1 October, 2015

Author:
Nooty Ramamohana Rao

Bench:
Nooty Ramamohana Rao

THE HONBLE SRI JUSTICE NOOTY RAMAMOHANA RAO

WRIT PETITION Nos.7210 of 2015 and batch

01-10-2015

The Krishna District Milk Producers Mutually Aided Co.op Union Petitioner

The State of Andhra Pradesh and 2 others. Respondents

Counsel for the petitioner:Sri N. Rajeswar Rao

Counsel for the respondents:Government Pleader for Labour

<GIST:

>HEAD NOTE:

? Cases referred
1. AIR 1972 SC 1935
2. 2007 (1) SCC 584

THE HONBLE SRI JUSTICE NOOTY RAMAMOHANA RAO
WRIT PETITION Nos.7210, 8896, 9494, 9529, 9530, 9981, 9985,
9993, 9999, 10001, 10004, 10007, 10011, 10015, 10130, 10131,
10132, 10133, 10134, 10816, 10818, 10823, 10926, 10935, 10941,
10942, 10945, 10948, 10951, 10957, 11060, 11147, 11179, 11181,
11183, 11207, 11209, 11212, 11224, 11242, 11244, 11248, 11253,
11254, 11257, 11261, 11265, 11266, 11269, 11272, 11295, 11297,
11366, 11370, 11371, 11372, 11373, 11374, 11375, 11376, 11412,
11415, 11417, 11418, 11419, 11420, 11421, 11423, 11610, 11611,
11612, 11613, 11614, 11616, 11617, 11619, 11623, 11624, 11634,
11672, 11675, 11681, 11700, 12127, 12128, 12129, 12130, 12131,
12132, 12133, 12134, 12135, 12136, 12137, 12154, 12155, 12156
and 14028 of 2015

COMMON ORDER:

All these writ petitions are directed against the common
order passed by the Controlling Authority under
Payment of
Gratuity Act
and Assistant Commissioner of Labour, Gudiwada,
Krishna District, condoning the delay ranging from 63 to 1095
days in preferring claim petitions for payment of differential
amount of gratuity by the respective employees of the writ
petitioner/employer. Hence, they are heard together and are
decided by this common order.

The petitioner is the Krishna District Milk Producers
Mutually Aided Cooperative Union, Vijayawada (henceforth referred
to as the employer). There is no dispute that the
respondent/employee concerned in each of these cases has
rendered service to the petitioner/employer and retired from its
service on attaining the age of superannuation. It is also not in
dispute that the petitioner/employer has settled and paid the
amount of gratuity payable to them as expeditiously as possible
after his retirement. However, each of these employees having
thus accepted the payment of gratuity, has approached the
2nd respondent-Controlling Authority under the
Payment of
Gratuity Act
(henceforth referred to as Controlling Authority),
making a further claim for payment of differential amount of
gratuity running to few thousand rupees more than what has been
received by them, on the basis that the service rendered by each
one of them prior to the regularization of their services by the
employer is not taken into account and consideration for purpose
of computation of gratuity. It is the claim of the respective
employees that if the length of service rendered by them prior to
the date of regularization of their services was taken into account
and consideration, the quantum of gratuity payable would be
much higher, by few thousand rupees than what has already been
settled and paid by the employer. Hence, they made the claim.
They also filed miscellaneous petitions in each of the claims
seeking condonation of delay ranging from 63 to 1095 days as
noticed supra. Though the petitioner/employer has contested the
matter, the 2nd respondent-Controlling Authority by his common
order dated 23.02.2015 allowed all the miscellaneous petition
Nos.1 of 2013 to 98 of 2013, condoning the delay in filing the claim
petitions and accordingly ordered the claim petitions to be
numbered as payment of gratuity case Nos.1 to 98 of 2015.
Challenging the correctness of the orders dated 23.02.2015, the
present batch of writ petitions have been instituted by the
petitioner/employer.

Heard Sri N. Rajeswara Rao, learned counsel for the
petitioner/employer, and the learned Assistant Government
Pleader, Sri Durga Prasad, who has accepted notice on behalf of
the 1st respondent-State.

Sri N.Rajeswara Rao had contended that all the employees
have accepted the gratuity settled and paid by the
petitioner/employer without any demur or protest and having
thus, accepted the payment of gratuity in full and final settlement
thereof are estopped now from making any further claim. This
apart, the claim of the respective employees lacks any tenability.
Further, no justifiable reason or ground has been urged seeking
condonation of huge amounts of delay in lodging the claim
petitions and hence, no such claim/delay condonation petition
ought to have entertained by the 2nd respondent-Controlling
Authority. In spite of pointing out lack of tenability behind the
claim as well as the petition for condonation of delay, the 2nd
respondent-Controlling Authority has gone about mechanically in
condoning the delay. For purpose of condoning the delay, the 2nd
respondent-Controlling Authority has considered that claim for
payment of gratuity is a continuous claim and hence, there is no
delay in lodging a claim at all. Sri N.Rajeswara Rao would submit
that this is a completely erroneous view of the matter. He would
further submit that in spite of bringing to the notice of the 2nd
respondent-Controlling Authority the judgment rendered by a
Division Bench of Calcutta High Court, the judgment of the
Bombay High Court and that of the Jharkhand High Court in
support of the point that the delay cannot be condoned beyond the
limit prescribed under the statue in as much as the
Payment of
Gratuity Act
is a complete code by itself and hence, the provisions
of
Section 5
of the Limitation Act cannot be invoked for condoning
huge delay, the delay was condoned mechanically. Sri
N.Rajeswara Rao would further submit that for condonation of
delay there must be justifiable reason or ground, the same cannot
be claimed as a matter of right nor can the delay be condoned in a
routine manner.

The Payment of Gratuity Act, 1972
(henceforth referred to as
the Act) as a social security and welfare measure, has been
providing for a scheme for payment of gratuity to the employees
engaged in factories, mines, oil fields, plantations, ports, railway
companies, shops or other establishments. Sub
Section 3
of

Section 1
of the Act made it clear that it shall apply to every
factory, mine, oil field, plantation, port and Railway Company. In
so far as shops and other establishments are concerned, wherever
there are 10 or more number of persons employed, or were
employed, on any day of the preceding twelve months, the Act gets
attracted. There is no dispute on the factual score that the
petitioner/employer is covered by the provisions of the Act.

Section 2-A
has been incorporated in the Act by amending
Act 26 of 1984, which was brought into force with effect from
11.02.1981.
Section 2-A
has provided for the definition of the
expression continuous service. The claim of the respective
employees is obviously rested upon this provision.
Section 4
of the
Act has created an obligation for payment of gratuity to an
employee on the termination of his employment after he has
rendered continuous service for not less than five years, on his
superannuation, or on his resignation or retirement, or on his
death or disablement due to accident or disease. Sub
Section 2

thereof would spelt out that for every completed year of service or
part thereof in excess of six months, the employer shall pay
gratuity to an employee at the rate of fifteen days wages based on
the rate of wages last drawn by the employee concerned. Thus,

Section 4
has created a right in the hands of the employee to
receive gratuity upon his superannuation, retirement or
resignation or disablement due to accident or disease or upon his
death. There was also a corresponding liability cast upon every
employer to pay gratuity calculated at the rate of fifteen days
wages for every completed year of service put in by the employee.

Section 5
which conferred power on the appropriate government to
exempt any establishment from the operation of the provisions of
this Act made it clear that such exemption can be granted, if, in
the opinion of the appropriate government, the employees in such
establishment are in receipt of gratuity or pensionary benefits not
less favourable than the benefits conferred under the Act.
Therefore, the power to grant exemption is clearly circumscribed by
the consideration that the employee of the concerned
establishment must be in receipt of amount of gratuity, which
cannot be less favourable than the one which he is entitled to
receive in terms and in accordance with this Act.

Section 7
of the Act dealt with the determination of amount
of gratuity. It would be appropriate to notice in detail the said
provision (as also the provision contained in Section 7A).

7. Determination of the amount of Gratuity.- (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.

(2) As soon as gratuity becomes payable, the
employer shall, whether an application referred to in sub-
section (i) 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 of gratuity so determined.

(3) The employer shall arrange to pay the amount of
gratuity within thirty days from the date it becomes payable
to the person to whom the gratuity is payable.

(3-A) If the 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 term deposits, as that
Government may, by notification specify:

Provided that no such interest shall be payable if the
delay in the payment is due to the fault of the employee and
the employer has obtained permission in writing from the
Controlling Authority for the delayed payment on this
ground].

(4)(a) If there is any dispute as to the amount of
gratuity payable to an employee under this Act or as to the
admissibility of any claim of, or in relation to, an employee
for payment of gratuity, or as to the person entitled to
receive the gratuity, the employer shall deposit with the
Controlling Authority such amount as he admits to be
payable by him as gratuity.

[***]
[(b) Where there is a dispute with regard to any
matter or matters specified in Clause (a), the employer or
employee or any other person raising the dispute may make
an application to the Controlling Authority for deciding the
dispute.]
[(c)] The Controlling Authority shall, after due inquiry
and after giving the parties to the dispute a reasonable
opportunity of being heard, determine the matter or matters
in dispute and, if, as a result of such inquiry any amount is
found to be payable to the employee, the Controlling
Authority shall direct the employer to pay such amount or,
as the case may be, such amount as reduced by the
amount already deposited by the employer.]
[(d)] The Controlling Authority shall pay the amount
deposited, including the excess amount, if any, deposited
by the employer, to the person entitled thereto.

[(e)] As soon as may be after a deposit is made under
Clause (a), the Controlling Authority shall pay the amount
of the deposit-

(i) to the applicant where he is the employee; or

(ii) where the applicant is the employee, to the
[nominee or, as the case may be, the guardian of such
nominee or] heir of the employee if the Controlling
Authority is satisfied that there is no dispute as to the right
of the applicant to receive the amount of gratuity.

(5) For the purpose of conducting an inquiry under
Sub-Section (4), the controlling authority shall have the
same powers as are vested in a Court, while trying a suit,
under
the Code of Civil Procedure
,1908 (5 of 1908), in
respect of the following matters namely:-

(a) enforcing the attendance of any person or
examining him on oath;

(b) requiring the discovery and production of
documents;

(c) receiving evidence on affidavits;

(d) issuing commissions for the examination of
witnesses.

(6) Any inquiry under this Section shall be a judicial
proceeding within the meaning of Sections 193 and 228,
and for the purpose of
Section 196
, of the Indian Penal
Code, 1860 (45 of 1860).

(7) Any person aggrieved by an order under sub-

section (4), may, within sixty days from the date of the
receipt of the order, prefer an appeal to the appropriate
Government or such other authority as may be specified by
the appropriate Government in this behalf:

Provided that the appropriate Government or the
appellate authority, as the case may be, may, if it is
satisfied that the appellant was prevented by sufficient
cause from preferring the appeal within the said period of
sixty days, extend the said period by a further period of
sixty days.

[Provided further that no appeal by an employer shall
be admitted unless at the time of preferring the 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 subsection (4), or deposits with the
appellate authority such amount.]
(8) The appropriate Government or the appellate
authority, as the case may be, may, after giving the parties
to the appeal a reasonable opportunity of being heard,
confirm, modify or reverse the decision of the controlling
authority.

[7A. Inspectors.-(1) The appropriate Government
may, by notification, appoint as many Inspectors, as it
deems fit, for the purposes of this Act.

(2) The appropriate Government may, by general or
special order, define the area to which the authority of an
Inspector so appointed shall extend and where two or more
Inspectors are appointed for the same area, also provide, by
such order, for the distribution or allocation of work to be
performed by them under the Act.

(3) Every Inspector shall be deemed to be a public
servant within the meaning of
Sec. 21
of the Indian Penal
Code, 1860 (Act 45 of 1860).

[7B. Powers of Inspectors.- (1) Subject to any rules
made by the appropriate Government in this behalf, an
Inspector may, for the purpose of ascertaining whether any
of the provisions of this Act or the conditions, if any, of any
exemption granted thereunder, have been complied with,
exercise all or any of the following powers, namely:-

(a) require an employer to furnish such information
as he may consider necessary;

(b) enter and inspect, at all reasonable hours, with
such assistants (if any), being persons in the service of the
Government or local or any public authority, as he thinks
fit, any premises of or place in any factory, mine, oil-field,
plantation, port, railway company, shop or other
establishment to which this Act applies, for the purpose of
examining any register, record or notice or other document
required to be kept or exhibited under this Act or the rules
made thereunder, or otherwise kept or exhibited in relation
to the employment of any person or the payment of gratuity
to the employees, and require the production thereof for
inspection;

(c) examine with respect to any matter relevant to
any of the purposes aforesaid, the employer or any person
whom he finds in such premises or place and who, he has
reasonable cause to believe, is an employee employed
therein;

(d) make copies of, or take extracts from any register,
record, notice or other document, as he may consider
relevant, and where he has reason to believe that any
offence under this Act has been committed by an employer,
search and seize with such assistance as he may think fit,
such register, record, notice or other document as he may
consider relevant in respect of that offence;

(e) exercise such other powers as may be prescribed.
(2) Any person required to produce any register,
record, notice or other document or to give any information,
by an Inspector under sub-section (1) shall be deemed to be
legally bound to do so within the meaning of
Sections 175

and
of the Indian Penal Code (45 of 1860).

(3) The provisions of the
Code of Criminal Procedure
,
1973 (2 of 1974), shall so far as may be, apply to any
search or seizure under this section as they apply to any
search or seizure made under the authority of a warrant
issued under Section 94 of that Code.]

Under sub
Section 1
of
Section 7
, the person who is eligible
for payment of gratuity was required to send a written application
to the employer, within such time and in such form, as may be
prescribed, for payment of such gratuity. Since
Section 15
of the
Act conferred rule making power on the appropriate government,
rules have been accordingly framed.

So far as the Central Government is concerned, it made the
Payment of Gratuity (Central) Rules, 1972. Rule 7 dealt with the
application of gratuity and spelt out that the employee who is
eligible for payment of gratuity shall apply, ordinarily within 30
days from the date the gratuity became payable in Form-I to the
employer. Sub Rule 5 thereof made it clear that an application for
payment of gratuity filed after the expiry of the period specified in
this Rule shall also be entertained by the employer, if the applicant
adduces sufficient cause for the delay in preferring the claim.
However, it did not stop there but proceeded to clarify that no
claim for gratuity under the Act shall be invalid merely because the
claimant failed to present his application within the specified
period. Thus, it was abundantly clear that no claim for payment of
gratuity shall be treated as invalid merely because the said claim is
not made within the period of 30 days from the date the gratuity
becomes payable. Thus clearly bringing out that delay in
submission of the claim is not fatal.

Further, the reason behind Sub
Section 1
of
Section 7

requiring submission of an application to the employer seeking
payment of gratuity can be gathered from
Section 4
of the Act itself
which created the obligation for payment of gratuity. Gratuity is
liable to be paid to those who have resigned from service and also
in case of death of an employee, who served the employer for a
period of 5 years. It is conceivable, hence, that when an employee
resigns and thus terminates the employment with the employer,
payment of gratuity may not have occasioned on the last day of his
employment. Hence if an application is filed by him, the
settlement of gratuity becomes easy and effective, giving little or no
scope for disputes thereafter. Similarly in case of death of an
employee, the employer may not be keeping the data of family
members of such an employee. Further, there can be many
claimants in such cases like a surviving spouse, children, some of
them could be minors and parents etc. The employer by
entertaining an application from any of them can settle the gratuity
amount payable to the employee and can also seek indemnification
from any subsequent claim. Hence the requirement of submission
of an application is contemplated by sub
Section 1
of
Section 7
of
the Act. Sub
Sections 2
and
of
Section 7
of the Act are most vital
for understanding as to whether the Parliament has contemplated
to forfeit the right to receive gratuity at all. Sub
Section 2
of

Section 7
of the Act brings out emphatically that as soon as the
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 of gratuity so determined.
Thereafter, Sub
Section 3
spelt out that employer shall arrange
payment of the amount of gratuity within 30 days from the date it
becomes payable to the person to whom the gratuity is payable.
Therefore, when Sub
Sections 1
,
and
of
Section 7
of the Act are
read together it emerges that the employee is entitled to make a
formal claim for payment of gratuity, but however, irrespective of
the fact whether or not such a claim has been made by the
employee, the employer is under an obligation not only to
determine the amount of gratuity payable to the employee but also
effect the payment within 30 days from the date the gratuity
becomes payable. Therefore, to my mind the provisions contained
under Sub
Section 1
of
Section 7
of the Act are purely directory,
while the provisions contained under Sub
Sections 2
and
of

Section 7
are mandatory in content and scope. The payment of
gratuity is a statutorily created obligation on the employer. It is for
him to make a calculation and determine the amount of gratuity
payable and also effect its payment. For payment of gratuity, the
employer need not wait for receipt of a claim in Form-I from the
employee. The employer was required, on his own, to comply with
Sub
Sections 2
and
of
Section 7
, independent of the provision
contained in Sub
Section 1
of
Section 7
of the Act. That was the
mandate contained in Sub
Section 2
of
Section 7
, by employing the
words whether an application referred to in Sub Section (1) has
been made or not. As a matter of ordinary prudence and also as a
golden rule of construction no part/words of a statute should be
left out as redundant. If there is a dispute between the employee
and employer, then perhaps, such dispute becomes resolvable by
the Controlling Authority. My opinion about the mandatory nature
of the provisions contained under Sub
Sections 2
and
of
Section
derive additional support, apart from the tone and tenor of the
words employed therein suggest, from the provisions contained
under
Sections 7-A
,
7-B
,
,
and
of the Act. Sections 7-A and
7-B have been incorporated by the amending Act 25 of 1984,
which has been brought into force from 01.07.1984. Under
Section 7-A, the appropriate government was required to appoint
as many inspectors as it deems fit for purpose of the Act. Under
Section 7-B, powers have been conferred upon the Inspector for
the purpose of ascertaining whether any of the provisions of the
Act or the conditions, if any, of exemption granted thereunder,
have been complied with or not by the employer. Inter-alia the
Inspector can require an employer to furnish such information as
he may consider it necessary or enter and inspect at all reasonable
hours any premises of any place in any factory, mine, oil field,
plantation, port, railway company, shop or other establishment to
which the Act applies for purpose of examining any register, record
or notice or other document required to be kept or exhibited;
examine with respect to any matter relevant for any other purpose
spelt out above, the employer or any person etc. Thus, during the
course of an inspection, if it is revealed that accurate payment of
gratuity to any employee has not occurred, there was scope
provided for rectification of such an error at the behest of
Inspector/Enforcement Officer. Employees may be getting
superannuated regularly or routinely in any establishment
depending upon the date of their superannuation. But the
inspections are not required to be carried out on month to month
basis. It may be undertaken once in a while, let us say 6 months
or 1 year or even after a longer period. That is the reason why the
statute has not attempted to either insulate the payment once
made or the right to receive the accurate amount of gratuity.

Section 8
enables the Controlling Authority to issue a certificate for
that amount to the Collector, to recover the same together with
compound interest thereon as arrears of land revenue.
Section 8

has not set out any time limit within which an application is
required to be made by the aggrieved person to whom the amount
of gratuity payable under the Act is not paid. Therefore, it is clear
that the Parliament has not intended to prescribe any specific
period of time for payment of gratuity by the employer at the
behest of the Controlling Authority.
Section 9
recognizes any false
statement or false representation made for purpose of avoiding any
payment of gratuity as punishable with imprisonment for a term
which may extend to six months, or with fine which may extend to
Rs.10,000/- (with effect from 01.10.1987) or with both. Sub

Section 2
thereof clearly spelt out that any employer who
contravenes, or makes default in complying with any of the
provisions of the Act or any Rule or order made thereunder shall
be punishable with imprisonment for a term which shall not be
less than three months but which may extend to one year, or with
fine which shall not be less than 10,000/- but which may extend
to Rs.20,000/- or with both. Thus,
Section 9
has recognized the
default in complying with any of the provisions of the Act as an
offence by itself. It stands to good sense, therefore, to assume that
any failure to comply with sub
Sections 2
and
of
section 7
of the
Act envisages action contemplated by
Section 9
of the Act to be
taken against the employer.
The Act
never contemplated any such
corresponding penal action against the employee for his failure to
comply with sub
Section 1
of
Section 7
of the Act.
Section 11
of
the Act provided for matters of cognizance to be taken of such
offences. When all these provisions have been kept in view, it
emerges that every employer was required to comply with sub

Sections 2
and
of
Section 7
on his own without waiting for a
formal application to be made under Sub
Section 1
of
Section 7
of
the Act by the employee.

The provisions of the
Gratuity Act
have been brought forth
as a social security measure for providing the necessary financial
support and assistance to the employee concerned. Apart from
payment of wages, once the provisions of the Act become
applicable to any establishment, an additional obligation is thrust
upon the employer to make the payment of gratuity, irrespective of
whether he likes the quality of services rendered by the employee
or not. The statute itself, therefore, has not recognized any outer
period of limitation for payment of gratuity to the employee
concerned at the behest of the Controlling Authority.

The criticism of N. Rajeswara Rao that payment of gratuity is
not a continuous affair, but is only a one time affair and hence an
outer limit of period is in the realm of contemplation requires
serious consideration. If an employer has properly and correctly
calculated the amount of gratuity payable to the employee, the
payment thereof is only a one time measure and it will not recur
once again. Only in the event of any dispute in the matter of
calculation/quantification of the amount of gratuity payable,
perhaps, such a dispute is capable of being resolved by the
Controlling Authority later in point of time to the occurring of the
event of liability. If there exists, no such dispute between the
employer and employee, the payment of gratuity is made strictly a
one time affair. In that respect, therefore, the criticism of Sri
N.Rajeswara Rao that payment of gratuity is not a continuous
affair is required to be accepted in all such cases where there is no
dispute raised. In contrast to payment of pension, which is
regulated on month to month basis, appropriate and correct
payment of gratuity being a one time affair is confined to a third
time affair. However, where there is a dispute, the actual payment
of gratuity once before made does not attain any such finality.
Lest the very scope for resolution of disputes becomes illusory and
an unfaithful employer can wash his hands off, once he tenders
the amount of gratuity, even if the same is not accurate.

Incidentally one of the questions that is required to be
resolved is whether the provisions of the limitation Act are purely
procedural or they are also substantive legal principles. Such a
question is not free from doubt or ambiguity. However, in a classic
exposition, the Supreme Court in
Bharat Barrel and Drum Mfg.
Company Private Limited and Another Vs. The Employees
State Insurance Corporation
, at page No.860 has brought out
the relevant principles as under:

4. The topic of procedure has been the subject of academic
debate and scrutiny as well as of judicial decisions over a long
period but in spite of it, it has defied the formulation of a logical test
or definition which enables us, to determine and demarcate the
bounds where procedural law ends and substantive law begins, or
in other words it hardly facilitates us in distinguishing in a given
case whether the subject of controversy concerns procedural law or
substantive law. The reason for this appears to be obvious, because
substantive law deals with right and is fundamental while
procedure is concerned with legal process involving actions and
remedies, which Salmond defines "as that branch of law which
governs the process of litigation", or to put it in another way,
substantive law is that which we enforce while procedure deals with
rules by which we enforce it. We are tempted in this regard to cite a
picturesque aphorism of Therman Arnold when he says
"Substantive law is canonised procedure. Procedure is unfrocked
substantive law(HLJ 617 at p.645)".

5. .The necessity for enacting periods of limitation is
to ensure that actions are commenced within a particular period,
firstly to assure the availability of evidence documentary as well as
oral to enable the defendant to contest the claim against him;

secondly to give effect to the principle that law does not assist a
person who is inactive and sleeps over his lights by allowing them
when challenged or disputed to remain dormant, without asserting
them in a court of law. The, principle which forms the basis of this
rule is expressed in the maxim vigilantibus, non dormientibus, jura
subveniunt (the laws give help to those who are watchful and not to
those who sleep). Therefore the, object of the statutes of limitations
is to compel a person to exercise his right to action within a
reasonable time as also to discourage and suppress stale, fake or
fraudulent claims. While this is so there are two aspects of the
statutes of limitation the one concerns the extinguishment of the
right if a claim or action is not commenced with a particular time
and the other merely bars the claim without affecting the right
which either remains merely as a moral obligation or can be availed
of to furnish the consideration for a fresh enforceable obligation.
Where a statute prescribing the limitation extinguishes the right, it
affects substantive rights while that which purely pertains to the
commencement of action without touching the right is said to be
procedural.

In this context, it will also be useful to notice the judgment
of the Supreme Court in
E.S.I.C. Vs. C.C.Santhakumar
, wherein
a similar question has been answered as under:

On a plain reading of Sections 45A and 45B in Chapter IV
and 75 and 77 in
Chapter VI of the Act
, as indicated above, there
cannot be any doubt that the area and the scope and ambit of
Sections 45A and 75 are quite different.

If the period of limitation, prescribed under proviso (b) of
Section 77(1A) is read into the provisions of Section 45A, it would
defeat the very purpose of enacting Sections 45A and 45B. The
prescription of limitation under
Section 77(IA)(b)
of the Act has not
been made applicable to the adjudication proceedings under
Section 45A by the legislature, since such a restriction would
restrict the right of the Corporation to determine the claims under
Section 45A and the right of recovery under Section 45B and,
further, it would give a benefit to an unscrupulous employer. The
period of five years, fixed under Regulation 32(2) of the Regulations,
is with regard to maintenance of registers of workmen and the same
cannot take away the right of the Corporation to adjudicate,
determine and fix the liability of the employer under
Section 45A
of
the Act, in respect of the claim other than those found in the
register of workmen, maintained and filed in terms of the
Regulations.

The distinction to be borne in mind, therefore, is where there
exists any extinguishment of rights or obligations under the
statute, particularly, due to the delay and default on the part of the
opposite party. The analysis of the provisions contained in the Act
revealed that only sub
Section 1
of
Section 7
required the person
eligible to receive gratuity to file his application with the employer
seeking such payment. The right of the employee to receive
gratuity under
Section 4
has not been extinguished by the failure
to comply with sub
Section 1
of
Section 7
of the Act. On the other
hand, the obligation thrust upon the employer under sub
Section 2

of
Section 4
has found its full echo in sub
Sections 2
and
of

Section 7
of the Act. The obligations thrust upon the employer
under Sub
Section 2
of
Section 4
will not get discharged until and
unless the payment in toto, subject to the limit of ceiling fixed on
the maximum amount has been achieved. In other words, the
obligation to make payment of gratuity will never get discharged,
particularly, due to default of the employee to lodge a claim under
Sub
Section 1
of
Section 7
of the Act. In the absence of any such
extinguishment of rights and obligations statutorily created by

Section 4
of the Act, the provisions of any period of limitation
become purely procedural and they are liable to be treated as non-
substantive. This apart, any exercise of rule making power under

Section 15
of the Act, is not open to the appropriate Government to
prescribe any period of limitation, which might work out to
extinguish the right itself. A rule making power is conferred only
for purpose of giving effect to the provisions of the Act and they are
not liable to be utilized for creating additional burdens or liabilities
which are not contemplated by the Act itself. Any such exercise of
power, which tends to limit the applicability of the provisions of the
statute amounts to unauthorized exercise of power and
consequently, the Doctrine of Ultra Vires gets attracted.
In fact,
the judgment in
Bharat Barrels
case (
Supra 1) and E.S.I.
Corporations
case (Supra 2) would lend great support to this
view of mine.

Further the cases on which reliance was placed by Sri
Rajeswara Rao, deal with, the powers of the Appellate Authority to
condone delay beyond what is provided by the
Gratuity Act
. That
was not the present case. Hence, I am of the opinion, that they do
not have any bearing upon the present cases.

Hence, these writ petitions are dismissed. No order as to
costs.

The miscellaneous petitions, if any pending in these
petitions, shall stand dismissed.

_______________________________________
JUSTICE NOOTY RAMAMOHANA RAO
01.10.2015