ORDER
1. The short point that arises for consideration in this writ petition is whether the appropriate Government under S. 2 of the Payment of Gratuity Act, 1972 (in short, “the Act” is the Central Government in the case of the petitioner-company, which admittedly owns textile mills and other industries in more than one State.
2. The facts which are not in dispute are that the petitioner which is a Public Company has its registered office in Madras and owns a textile mill in the State of Tamil Nadu. It also owns a textile mill in Bangalore (Karnataka State) carrying on operations similar to those carried on in its Madras factory. On an application under S. 7 of the Payment of Gratuity Act, 1972, (in short, “the Act” made by respondent 3, a workman of the petitioner’s Bangalore factory, respondent-2 the Controlling Authority and respondent 1, the Appellate Authority appointed by the State Government under the Act, took the view that the appropriate Government in relation to the petitioner-company is the State Government and not the Central Government and, therefore, respondent 2 was competent to entertain the application and adjudicate the claim of respondent 3.
3. Is the petitioner-company an establishment and if so, whether its factory in Bangalore is a branch of that establishment ? If the Act had made a distinction between an establishment and a factory, how is the word “establishment” to be interpreted. These are the questions that arise for determination in this petition. The Act came into force on 16-9-1972. S. 1(3) of the Act reads :
“It (the Act) shall apply to –
(a) every factory, mine, oilfield, plantation, port and railway Company;
(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the proceeding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf.”
Section 2(a) of the Act reads as :
“In this Act, unless the context otherwise requires, –
(a) ‘appropriate Government’ means, –
(i) in relation to an establishment
(a) belonging to, or under the control of, the Central Government.,
(b) having branches in more than one State.,
(c) of a factory belonging to, or under the control of, the Central Government,
(d) of a major port, mine, oilfield or railway company, the Central Government,
(ii) in any other case, the State Government;”
Under Rule 3(1) of the Rules framed under the Act, which also came into force on 16-9-1972, the employer of an establishment to which the Act is applicable, has to submit a notice in Form – A to the Controlling Authority of the area. Under Rule 3(2) of the Rules, such employer has to submit a notice in Form “B” to the Controlling Authority of the Area. There are other notices in Forms “C” and “D” to be submitted and displayed under Rules 3(3) and 4 of the Rules. All these forms prescribed under the Rules provide for the name and address of the establishment covered by the Act. Form “A” relates to notice of opening of the establishment; Form “B” relates to notice of change in the earlier notice in Form “A”; Form “C” relates to notice of closure of the Establishment. Similarly, the forms prescribed under Rule 5 of the Rules for excluding the husband from the ambit of the word “family” (Form “D”) for withdrawal of such notice (Form “E”) and under Rule 6 for making a fresh nomination (Form “G”) and the various other forms prescribed under the Rules for administering the provisions of the Act, prove for the name and address of the establishment. These Rules and forms clearly indicate that the word “establishment” is used in a general sense to include a factory, mine, oil-field, plantation, port and railway company and also establishments specified in S. 1(3)(b) and (c) of the Act which are covered by the Act. In the absence of a definition of the word “establishment” in the Act, this general meaning must be given to that word in S. 2(a)(i) of the Act unless the context otherwise requires. This is further made clear in the second proviso to S. 4(2) of the Act, which reads as follows :
“Provided further that in the case of an employee employed in a seasonal establishment, the employer shall pay the gratuity at the rate of seven days’ wages for each season.”
4. The Act is applicable to the petitioner under S. 1(3)(a) of the Act because it owns a factory. But it does not mean that it is not an establishment for the purpose of determining which is the appropriate Government, when it has admittedly factories in more than one State. The petitioner is also a company as defined in S. 3(1) of the Companies Act, 1956, and its mill in Bangalore could be termed as branch office since it carries on either the same or substantially the same activity as that carried on by its other mills in Madras. (See S. 2(9) of the Companies Act, 1956). The Scheme and the object of the Act also lend support to the interpretation I have sought to put on the word “establishment” in undertakings having branches in more than one State, transfer of an employee from one State to another State may take place during the tenure of his service if transfer is a condition of his service. A dispute may arise as to the total number of completed years of service put in by the employer for the purpose of gratuity. There may be a case of an employee working in five different States during the first five years of service and then resigning his job. A dispute may arise as to the minimum qualifying years of service for the purpose of gratuity. The appropriate Controlling Authority appointed by the Central Government would be in a better position to deal with these cases expeditiously than the authorities appointed by different State Governments in different States, if the rule-making powers of the Central Government under S. 15 of the Act, are exercised to facilitate such investigation. The Act is a comprehensive and self-contained piece of legislation for investigation of all disputes and claims for gratuity and the law-makers had in view, presumably, S. 10(1A) of the Industrial Disputes Act, 1947, which provides for a National Tribunal for adjudication of an industrial dispute when establishments situated in more than one State are likely to be interest in, of affected by such dispute. See State of Punjab v. Labour Court, Jullunder, . For all these reasons, I have no doubt that the word “establishment” in S. 2(a)(i) of the Act, must be understood in its general sense and thus understood, the petitioner-company is an establishment having its main place of business in Tamil Nadu State and a Branch in Karnataka and, therefore, the appropriate Government is the Central Government in relation to the petitioner establishment for the purpose of S. 7 of the Act. Accordingly, the Controlling Authority appointed by the State Government had no jurisdiction to entertain the application of the workman but the Controlling Authority appointed by the Central Government had such jurisdiction.
5. The learned counsel for the respondents had nothing to urge to sustain the impugned orders. The impugned orders of respondents 1 and 2 (Annexures. F and G) are, therefore, liable to be quashed.
6. For the reasons stated above, this Writ Petition is allowed and the orders of respondents I and 2 (produced as Annexures F and G with the writ petition) are quashed. It is, however, open to respondent – 3 to make a fresh application before the Controlling Authority for Bangalore District appointed by the Central Government as required under Section 7 of the Act and the same shall be considered by that authority by condoning the delay, if any, in making such application. No costs.