IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED :12/03/2002
CORAM:
THE HONOURABLE MR. JUSTICE V.KANAGARAJ
W.P.No.16422 of 1998
The Management
Good Samaritan Rural Development
Project,
Tirupattur
Vellore District. .. Petitioner
Vs.
1. T.A. Ramaiah
2. Deputy Commissioner of Labour
(Appeals),
(Appellate Authority under Payment
of Gratuity Act, 1972)
DMS Complex,
Teynampet, Chennai - 6.
3. The Assistant Commissioner of Labour
(Controlling Authority under Payment
of Gratuity Act, 1972),
DMS Complex,
Teynampet, Chennai - 6. .. Respondents
Petition filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorari as stated therein.
!For petitioner : Mr.Vijayan, S.C.
for M/s.King and Patridge
For respondents : Mr.K.M. Ramesh for R.1
Mr.M.Mahalingam,
Govt. Advocate for R.2 and R.3
: O R D E R
Petitioner has filed this writ petition praying to issue
a Writ of Certiorari calling for the records in P.G.A. No.37
of 1997 on the file of the second respondent dated 10.3.1998
and quash the same.
2. In the affidavit filed in support of the writ
petition, the petitioner would submit that the Payment of
Gratuity Act, 1972 is not applicable to the petitioner
management since it is not a commercial establishment; that
the petitioner management was started in the year 19 78 by an
American Missionary and was registered under the Societies
Registration Act, 1975; that the above project is a
charitable organisation aimed to serve without any
consideration of caste, creed or religion lending its medical
aid for eye care, rural health, medical aid to tribal
welfare, child care, evangelism, care of orphans, handicapped
and also carrying out rehabilitation programme, relief
nutrition and immunization programmes for poor and needy in
and around Tirupattur Town, Vellore District; that the
petitioner project receives financial assistance from one
Christoffel Blinden Mission, Germany and the nominal charges
voluntarily paid by some of the patients are also made use of
for running the project successfully; that there is no other
source of income, nor received from any quarter, much less
from the Central or State Government by the petitioner; that
the intention of the funding agency is to see that the
project gradually becomes self-supporting, and therefore,
they are also planning to reduce the grant year after year;
that in such background, the project is run without any
profit, motive, but only on service to the needy public.
3. The petitioner would further submit that the
petitioner organisation being charitable and non-profit
making one, it falls outside the scope of the Payment of
Gratuity Act, 1972; that the first respondent, who was
working with the petitioner as an Opthalmic Technician,
resigned on 12.4.1994 and preferred a claim before the third
respondent for the payment of gratuity of Rs.10,675/- stating
that his last drawn wages was Rs.1,682/- for the service
rendered by him from 1.4.1983 to 12.4.1994; that the third
respondent ought to have rejected the claim made by the first
respondent on the simple ground that it is barred by
limitation since having approached the authorities after a
delay of 636 days, besides on ground that the Payment of
Gratuity Act is not applicable to the petitioner management;
that an appeal preferred before the second respondent in
P.G.A. No.37 of 1997 also having come to be rejected by the
second respondent confirming the order passed by the third
respondent as per its order dated 10.3.1998 which is impugned
herein, the petitioner has come forward to seek the remedy
extracted supra.
4. During arguments, the learned counsel appearing on
behalf of the petitioner would submit that the main question
that is to be answered in the writ petition is whether the
Payment of Gratuity Act will be applicable to a hospital run
by a society, based on donation especially when it is alleged
that the hospital is not making any profit. To establish
this fact, the learned counsel would cite the preamble
Section 1(2) of the Payment of Gratuity Act, 1972 which reads
as follows:
1. Short title, extent, application and commencement –
(1) This Act may be called the Payment of Gratuity Act, 1972.
(2) it extends to the whole of India: provided that in
so far as it relates to plantations or ports, it shall not
extend to the State of Jammu and Kashmir. (3) It shall
apply to- (a) every factory, mine, oil field, 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 preceding 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.
At this juncture, the learned counsel would cite a judgment
delivered in W.M.Panjarapole Vs. B.D. Bhavasar reported in
1995-I L.L.N. 10 5 wherein it is held that ‘the petitioner
is a Panjarapole … dealing mainly with taking care of
disabled animals as set out in its constitution annexed to
the petition. A question arose whether its employee is
entitled to payment of gratuity under the Act. The authority
under the Act had decided in favour of the employee and the
matter was carried in appeal provided under the said act and
there also, the petitioner lost and ultimately it was held by
the High Court of Judicature, Gujarat that Panjarapole is not
doing any business or trade or profession or any work in
connection with or incidental or ancillary to it – Obviously,
it will not be covered by definition of ” commercial
establishment” – Payment of Gratuity Act, 1972, is not
applicable to employees of Panjarapole.”
5. While such being the position of law, the learned
counsel would continue to argue that the decision of the
controlling authority and the appellate authority would only
be perverse since no reasonable man would arrive at such a
decision based on the materials placed before them; that the
appellate authority simply relies on the salary of Rs.1,200/=
p.m. alleged to have been obtained by the first respondent,
which is incorrect. On such arguments, the learned counsel
would end up saying that the order of the appellate authority
becomes liable only to be set aside.
6. On the other hand, the learned counsel appearing on
behalf of the respondent, besides laying emphasis to the
preamble and definition contained in Section (1) to (3) of
the Payment of Gratuity Act, 1972 would further submit that
Section 2(6) of the Tamil Nadu Shops and Establishments Act,
1947 is relevant to the context of the case, which gives the
definition for the term “establishment”, wherein the State
Government may by notification declare any establishment
within the definition of “establishment” under the Shops and
Establishments Act. Further more, even from the Payment of
Gratuity Act, 1972, provision has been made to the effect
that ‘such other establishments or class of establishments,
in which ten or more employees are employed’, and therefore,
the import of the Section is, any establishment having ten or
more employees employed would be liable under the Payment of
Gratuity Act, 1972 and hence it cannot be argued that the Act
does not apply to the management of the nature of the
petitioner. On such arguments, the learned counsel would
pray to dismiss the writ petition as devoid of merits,
especially in view of the fact that no legal questions are
involved so far as the impugned order passed by the appellate
authority is concerned. 7. In consideration of the
pleadings by parties, having regard to the materials placed
on record and upon hearing the learned counsel for both, what
comes to be known is that the order impugned in the writ
petition has been passed by the appellate authority under the
Payment of Gratuity Act, 1972 in P.G.A. No.37 of 1997 on an
appeal preferred by the petitioner herein under the relevant
provisions, praying to set aside the order passed by the
Controlling Authority in P.G. Case No. 315 of 1996 thereby
not only holding that the eye hospital run by the petitioner
is governed by the Payment of Gratuity Act, but also the
first respondent is entitled to the gratuity amount of
Rs.6,473/= on the basis of his basic pay of Rs.850/= and D.A.
at Rs.170/= per month. It is only aggrieved against this
order passed by the controlling authority, the petitioner
management has preferred the appeal before the appellate
authority, which has passed the order impugned herein.
8. A careful perusal of the order passed by the
appellate authority would reveal that it had not only traced
the facts and circumstances encircling the whole case, but
also would go through each and every ground of appeal and
based on such facts and the position of law, would analyze
the controlling authority’s order and decision and the manner
in which it has been arrived at and would take up two points
for its consideration, viz., (i) whether the Payment of
Gratuity Act will not apply to the appellant hospital? and
(ii) whether, in any event, the reasonable amount of gratuity
would be Rs.6,473/= on the basis of basic pay of Rs.850/= and
D.A. Rs.270/= per month? Taking up the issues one by one
and applying the facts with the position of law as it is
prescribed under Section 1(3)(b) of the Payment of Gratuity
Act and remarking that the establishment is covered by the
Minimum Wages Act, 1948 and since the hospital is an
‘establishment’ within the meaning of Section 1(3)(b) of the
Payment of Gratuity Act, 1972, and remarking that there is no
distinction made between both these Acts, pertaining to the
meaning of ‘establishment’ and further there is no
classification made under the law between an institution
which is run on commercial basis and a minority institution
which is run on the charitable basis so far as the
applicability of the Act is concerned. Therefore, for the
first point framed, the appellate authority would arrive at
the conclusion holding that the eye hospital run by the
management falls within the meaning of Section 1(3)(b) of the
Payment of Gratuity Act, 1972.
9. Since the above legal question has been solved, easy
conclusions have been arrived at not only going into the
facts of the first respondent having been employed therein
for such period, on such salary and the other emoluments so
as to conclude agreeing with the quantum arrived at by the
controlling authority, thereby dismissing the appeal, but
also confirming the order passed by the controlling
authority, in this regard.
10. Either pertaining to the decision arrived at by the
appellate authority in agreeing with the controlling
authority holding that the petitioner management is one to
which the Payment of Gratuity Act, 19 72 is applicable or
even in arriving at the quantum of such decisions so as to
pass the order impugned, the appellate authority has been
fair and reasonable. It is not only the decision arrived at
in the manner aforementioned, but also the manner in which
the decision has been arrived at by the appellate authority
is beyond question since even on the part of the petitioner,
there is no strong allegation made or established on any
legal lapse such as opportunity, and therefore, the
interference of this Court sought to be made into the order
gs. V.KANAGARAJ,J. passed by the appellate authority which
is impugned herein, is neither necessary nor warranted in the
circumstances of the case resulting in only dismissing the
writ petition being devoid of merits.
In result,
(i) there is no merit in the writ petition and the same
is dismissed as such;
(ii) the order dated 10.3.1998 made in P.G.A. No.37 of
1997 passed by the Deputy Commissioner of Labour and the
appellate authority under the Payment of Gratuity Act, 1972
is hereby confirmed.
However, in the circumstances of the case, there shall be
no order as to costs. Consequently, W.P.M.P. No.24815
of 1998 is also dismissed.
gs.
12.03.2002
To
1. Deputy Commissioner of Labour (Appeals), (Appellate
Authority under Payment of Gratuity Act, 1972) DMS Complex,
Teynampet, Chennai – 6.
2. The Assistant Commissioner of Labour (Controlling
Authority under Payment of Gratuity Act, 1972), DMS Complex,
Teynampet, Chennai – 6.