IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 01.02.2011
CORAM:
THE HONBLE MR.JUSTICE K.CHANDRU
W.P.No.2268 of 2005
and
W.P.M.P.Nos.2522 and 2523 of 2005
The Commissioner,
Coimbatore City Municipal Corporation,
Coimbatore. ... Petitioner
Vs
1. The Appellate Authority,
Joint Commissioner of Labour,
Dr. Sundaram Road
(Back R.T.O. Office),
Coimbatore-18.
2. The Controlling Authority,
Assistant Commissioner of Labour,
Dr. Sundaram Road
(Back R.T.O. Office),
Coimbatore-18.
3. J.Shanmugam
4. The Superintending Engineer,
Coimbatore Electricity Distribution
Circle, Urban, Tatabad,
Coimbatore-641 012.
5. The Chairman,
Tamil Nadu Electricity Board,
Anna Salai,
Chennai-600 002. ... Respondents
Writ Petition under Article 226 of the Constitution of India to issue a Writ of Certiorari, calling for the records of the 2nd respondent pertaining to his proceedings in G.A.No.184/2003 and quash the orders dated 11.11.2003 made in G.A.No.184/2003 and order of the 1st respondent dated 28.10.2004 made in A.G.A.No.26/2004.
For Petitioner : Mr.R.Sivakumar
For Respondents : Mr.G.Murali,
1 and 2 Government Advocate
For respondents : Mr.B.Sekar
4 and 5
For 3rd respondent : No appearance
O R D E R
The petitioner is the Coimbatore Corporation represented by its Commissioner. In this Writ Petition, the petitioner Corporation challenges the order of the Appellate Authority under the Payment of Gratuity Act, 1972, namely, the 1st respondent in AGA.26/2004 wherein and by which he confirmed the order passed by the 2nd respondent Controlling Authority made in G.A.No.184/2003.
2. In the present case, there is no dispute regarding the facts. The admitted facts were that the 3rd respondent was an employee working under the petitioner Corporation and was allotted to the Coimbatore Electricity Distribution Wing of the Corporation. Subsequently, after serving the Corporation, he resigned from the services of the Corporation on 12.4.1993.
3. It was thereafter, the State Government passed an Order in G.O.Ms.No.40, Municipal Administration and Water Supply Department dated 4.2.1999 and entrusted the work of electricity supply carried on by the Corporation with the Tamil Nadu Electricity Board. By virtue of the divesting of the power to Tamil Nadu Electricity Board, the employees working in the Corporation in that department were absorbed by the Tamil Nadu Electricity Board. Therefore, there was no difficulty in respect of those employees whose services were absorbed into services of the Tamil Nadu Electricity Board with respect to their terminal benefits.
4. But in the case of the petitioner, admittedly he was not an employee of the Electricity Board. On the day when the absorption Order came to be passed, the petitioner already had resigned from the services of the Corporation. Therefore, he filed G.A.No.184/2003 before the 2nd respondent Controlling Authority. In that, the petitioner Corporation took the stand that since its entire electricity undertaking was taken over by the Electricity Board, namely, the 4th and 5th respondents and hence the liability to pay the terminal benefits also vest on them.
5. However, the authority found that in the present case the liability to pay gratuity only vests with the petitioner Corporation as his resignation was accepted only by the Corporation. The moment, his resignation was accepted, then under Section 7(3) of the Payment of Gratuity Act, the employer shall arrange to pay the amount of Gratuity within 30 days. It is also stated that in the absence of any statutory transfer of the service of the employees and also fixing the liability on transfer for all the past liabilities, the petitioner who is the employer alone is bound to pay. Any private arrangement in such matters will be hit by Section 14 of the Payment of Gratuity Act. Aggrieved by the order passed by the 2nd respondent dated 11.11.2003, the petitioner Corporation preferred an appeal under Section 7(7) of the Act.
6. The contentions raised in the memo of grounds were that he was already paid his Provident Fund and the Special Provident Fund by the Electricity Board. There was no service records available in respect of the 3rd respondent. As per the Government Order passed by the State Government, the benefits of even a resigned employee has to be paid only by the Electricity Board.
7. The Appellate Authority took up the appeal as AGA No.26/2004 and and after hearing the parties passed a final order dated 28.10.2004 dismissing the appeal. He agreed with the contention of the 3rd respondent that as he had resigned the post on 12.4.1993, the question of Government take over was not there Therefore, the liability in the absence of any law cannot be passed on to the Electricity Board. The Electricity Undertaking was entrusted to the Electricity Board only on 1.11.1994. Even the undertaking by the Board that they will take the past liability towards terminal benefits was based only upon the minutes between the parties and not based on any law. Therefore, on the day when the 3rd respondent resigned i.e. on 12.4.1993, the petitioner Corporation who is an employer is eligible to pay the said amount. Aggrieved by the same, the Writ Petition came to be filed.
8. The Writ Petition was admitted on 28.1.2005. Pending the Writ Petition, an interim stay was granted in W.P.M.P.No.2522 of 2005 and this Court directed the 1st and 2nd respondents not to disburse the amount already in deposit.
9. In the light of the contention raised by the petitioner, two questions arises for consideration.
10. The first question was in the light of the Provident Fund and Special Contribution on the Provident Fund were paid, whether the gratuity can be denied to a workman. That question is no longer res integra. Because the Supreme Court in Katheeja Bai Vs. Superintending Engineer and others reported in (1984) 3 SCC 518 has held that the provident fund is independent of the gratuity and therefore, in the light of Section 14 of the Payment of Gratuity Act, gratuity will have to be paid to the workman.
11. The 2nd contention was based upon the petitioner Corporation having availed an exemption from the State Government from the application of the provision of the Payment of Gratuity by Order in G.O.Ms.No.113, Labour and Employment Department, dated 15.7.2005. It is no doubt true that the State Government had exempted the petitioner establishment from the application of the Payment of Gratuity Act from 11.10.1973. But however, while granting exemption, the State Government had stated that by virtue of the exemption, already settled cases cannot be reopened. It is necessary to refer to the notification which reads as follows:
“In exercise of the powers conferred by sub-section (1) read with sub-section (3) of Section 5 of the Payment of Gratuity Act, 1972 (Central Act 39 of 1972), the Governor of Tamil Nadu hereby exempts the Corporation of Coimbatore from the operation of the provisions of the said Act, subject to the condition that the Corporation of Coimbatore shall not reopen the cases already settled under the provisions of the said Act.
2. The Notification hereby issued shall be deemed to have come into force on and from the 1st October, 1973.”
12. In the present case, the petitioner was directed to pay gratuity by the Controlling Authority on 11.11.2003 which was upheld by the Appellate Authority on 28.10.2004. Therefore, once there was a direction to pay gratuity then in the light of the conditional order passed by the State Government, this case will have to be taken as a settled matter before the exemption Order came to be issued on 15.7.2005.
13. In the light of the above, the Writ Petition filed by the petitioner is misconceived and accordingly will stand dismissed. No costs. Consequently, connected Miscellaneous Petitions are closed. The 3rd respondent is permitted to withdraw the amounts lying in deposit with the 2nd respondent.
01.02.2011
Index : Yes
Internet:Yes
tsi
To
1. The Appellate Authority,
Joint Commissioner of Labour,
Dr. Sundaram Road
(Back R.T.O. Office),
Coimbatore-18.
2. The Controlling Authority,
Assistant Commissioner of Labour,
Dr. Sundaram Road
(Back R.T.O. Office),
Coimbatore-18.
3. The Superintending Engineer,
Coimbatore Electricity Distribution
Circle, Urban, Tatabad,
Coimbatore-641 012.
4. The Chairman,
Tamil Nadu Electricity Board,
Anna Salai,
Chennai-600 002.
K.CHANDRU, J.
tsi
W.P.No.2268/2005
01.02.2011
18.01.2011