2001 JTR(SC) 586
2001 AIR(SC) 1407 ; 2001 AIR(SCW) 1372 ; 2001 3 ALD(SC) 37 ; 2001 43 AllLR 378 ; 2002 1 ALT(SC) 63 ; 2001 2 CLR 298 ; 2001 2 CTC 510 ; 2001 98 FJR 684 ; 2001 89 FLR 844 ; 2001 2 JCR(SC) 197 ; 2001 1 JLJR(SC) 925 ; 2001 4 JT 410 ; 2001 LIC 1396 ; 2001 1 LLJ 1417 ; 2001 2 LLN 613 ; 2001 3 Scale 25 ; 2001 4 SCC 68 ; 2001 SCC(L&S) 646 ; 2001 2 SCR 807 ; 2001 2 SCT 410 ; 2001 2 SLR 283 ; 2001 2 UJ 1339 ; 2001 2 UPLBEC 1389 ; 2001 KHC 1780 ; 2001 3 Supreme 42
2001(3) Supreme 42
SUPREME COURT OF INDIA
(From Andhra Pradesh High Court)
S. Rajendra Babu and S.N. Variava, JJ.
E.I.D. Parry (I) Ltd. -Appellant
versus
G. Omkar Murthy & Ors. -Respondents
Civil Appeal Nos. 5956-5958 of 1999
Decided on 27-3-2001
Counsel for the Parties :
For the Appellant : Narayan B. Shetye, Sr. Advocate, V. Balaji and A.T.M. Sampath, Advocates.
For the Respondents : Ramesh Chandra Mishra, Advocate.
IMPORTANT POINT
In the facts of the case State Act (A.P. Shops and Establishment Act, 1960) applies for the payment of gratuity to the voluntary retirement scheme of the Appellant. Therefore, respondents employees could claim difference between the gratuity received by them under Central Act (Payment of Gratuity Act, 1972) and the State Act.
Act Referred :PAYMENT OF GRATUITY ACT : S.24, S.40(3)
(A) The Payment of Gratuity Act, 1972 (Central Act), particularly Section 24 read with Section 40(3), governs the payment of gratuity to employees, while the Andhra Pradesh Shops and Establishments Act, 1966 (State Act), as amended by the 1988 Actspecifically Section 40(3) and Section 47(5)provides an alternative, more beneficial scheme where gratuity is not payable under the Central Act. The respondents, whose wages exceeded the threshold under the Central Act, were not covered by it and instead became eligible for gratuity under the State Act upon availing the voluntary retirement scheme in 1984. The dispute concerned the difference between the gratuity received under the Central Act and the higher amount payable under the State Act, with the State Act being held more beneficial and operative in this scenario.
(B) The State Act is not repugnant to the Central Act and can operate where the Central Act is unavailable; the Central Act does not override a more beneficial State provision; and an employee is entitled to the benefit of the statute that provides greater relief.
Facts of the case:
The respondents were employees of the appellant from 1958 to 1984, with wages exceeding Rs. 1,600 per month, thus rendering them ineligible for coverage under the Central Act. Upon introducing a voluntary retirement scheme on October 1, 1984, they opted for it and received terminal benefits. Subsequently, they filed petitions under Section 44 of the State Act seeking the difference in gratuity, which was initially granted by the trial court, then dismissed by the appellate authority and the High Court, leading to these appeals.
Findings of Court:
The Central Act is inapplicable due to the wage threshold; the State Act is more beneficial and therefore applicable; and the contentions regarding repugnancy, repeal, or non-application of the State Act are unsustainable.
Issues:
Whether the Central Act prevails over the State Act under Article 254; whether Section 40(3) of the State Act is invalid or repealed; whether the Central Act overrides other enactments; and whether the respondents are entitled to gratuity under the State Act.
Ratio Decidendi:
Where an employee is excluded from the Central Act by its own terms and the State Act provides a more favourable scheme, the State Act applies, and the employee is entitled to gratuity under the more beneficial statute.
Result:
The appeals are dismissed with no costs awarded.
(A) The Payment of Gratuity Act, 1972 (Central Act), particularly Section 24 read with Section 40(3), governs the payment of gratuity to employees, while the Andhra Pradesh Shops and Establishments Act, 1966 (State Act), as amended by the 1988 Actspecifically Section 40(3) and Section 47(5)provides an alternative, more beneficial scheme where gratuity is not payable under the Central Act. The respondents, whose wages exceeded the threshold under the Central Act, were not covered by it and instead became eligible for gratuity under the State Act upon availing the voluntary retirement scheme in 1984. The dispute concerned the difference between the gratuity received under the Central Act and the higher amount payable under the State Act, with the State Act being held more beneficial and operative in this scenario.
(B) The State Act is not repugnant to the Central Act and can operate where the Central Act is unavailable; the Central Act does not override a more beneficial State provision; and an employee is entitled to the benefit of the statute that provides greater relief.
Facts of the case:
The respondents were employees of the appellant from 1958 to 1984, with wages exceeding Rs. 1,600 per month, thus rendering them ineligible for coverage under the Central Act. Upon introducing a voluntary retirement scheme on October 1, 1984, they opted for it and received terminal benefits. Subsequently, they filed petitions under Section 44 of the State Act seeking the difference in gratuity, which was initially granted by the trial court, then dismissed by the appellate authority and the High Court, leading to these appeals.
Findings of Court:
The Central Act is inapplicable due to the wage threshold; the State Act is more beneficial and therefore applicable; and the contentions regarding repugnancy, repeal, or non-application of the State Act are unsustainable.
Issues:
Whether the Central Act prevails over the State Act under Article 254; whether Section 40(3) of the State Act is invalid or repealed; whether the Central Act overrides other enactments; and whether the respondents are entitled to gratuity under the State Act.
Ratio Decidendi:
Where an employee is excluded from the Central Act by its own terms and the State Act provides a more favourable scheme, the State Act applies, and the employee is entitled to gratuity under the more beneficial statute.
Result:
The appeals are dismissed with no costs awarded.
JUDGMENT
Rajendra Babu, J.-In these cases the respondents-employees were in the employment of the appellant between the years 1958 and 1984. On October 1, 1984 voluntary retirement scheme was introduced and the respondents availed of that benefit and left the services after obtaining the terminal benefits as provided under the Payment of Gratuity Act, 1972 (hereinafter referred to as the Central Act ). Thereafter petitions were filed under Section 44 of the Andhra Pradesh Shops and Establishments Act, 1966 (hereinafter referred to as the State Act ) claiming the difference between the gratuity received by them and the gratuity payable under Section 40 of the State Act. Before the Authority under the State Act, three objections were raised that (i) there has been inordinate delay in preferring the claim; (ii) for payment of gratuity the Central Act prevails over the State Act, and (iii) the question whether the gratuity payable under the Central Act is more favourable than the State Act could not be examined by the trial court concerned. The trial court, however, gave relief to the workmen. The appellate authority dismissed all the three appeals. Revision petitions filed before the High Court also stood dismissed. Hence these appeals by special leave.
2. Four contentions are put forth before us, namely, that
(i) The Central Act prevails over the State Act by virtue of Article 254 of the Constitution and Section 40(3) is invalid and the claims are unsustainable;
(ii) Section 40(3) of the State Act stood repealed on the coming into force of the Andhra Pradesh Shops and Establishments Act, 1988 and gratuity became payable under Section 47(5) of the State Act where payment of gratuity is not payable under the Central Act;
(iii) Section 14 of the Central Act overrides other enactments in relation to gratuity, and
(iv) The respondents have been paid gratuity under the Central Act for the period covered and for the balance period of service gratuity is paid under the prevailing trust scheme.
3. At the relevant time when the respondents voluntarily retired from service the definition of employee under Section 2(e) of the Central Act read as not to include employee whose wages exceeded Rs. 1,000/- per mensem while the respondents-employees were all getting wages more than Rs. 1,600/- per mensem and, therefore, the Central Act could not be applied. If that is so, it is certainly permissible for the respondents to have made an application for payment of gratuity under Section 40(3) of the State Act. Further the scheme of the Central Act would indicate that it would not be applicable in cases where the State Act is more beneficial than the Central Act. In this case, the finding is that the State Act is more beneficial than the Central Act. Therefore, the contentions sought to be advanced on behalf of the appellant as to repugnancy or otherwise of the State Act would not arise at all. If both the enactments can co-exist and can operate where one Act or the other is not available then we find no difficulty in making the State Act applicable on the fact situation available as has been done in the present case. Therefore, we find that the contentions raised on behalf of the appellant are unsustainable.
4. Shri Narayan B. Shetye, the learned Senior Advocate appearing for the appellant, submitted that the Central Act is a complete code containing detailed provisions and creates right of payment of gratuity and, therefore, the Central Act should prevail over the State Act. Reliance has been placed on the decision of this Court in State of Punjab v. Labour Court, Jullundur & Ors.1. In that case the issue before the Court was whether for payment of gratuity an application could be made under Section 33C(2) of the Industrial Disputes Act, 1947, and it was held that such an application could not be filed under the said Act. Therefore, this decision cannot be of any assistance to the appellant inasmuch as the question before us is whether the Central Act or the State Act would apply for payment of gratuity.
5. The decision in M.S.R. Murthy v. Arva Somayajula Yogneswara Chenulu2, also is of no use to the appellant inasmuch as the State Act is held not to operate to the extent the Central Act prevails. In the present case, on facts, it is found that the Central Act is not applicable.
6. Therefore, we find no substance in any of the arguments advanced by the appellant. The appeals, therefore, stand dismissed. No costs.
(N.K.R.) Appeal dismissed.
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E.I.D. Parry (I) Ltd. v. G. Omkar Murthy & Ors., 2001(3) Supreme 42 : 2001 (4) JT 410 : 2001 (2) SLR 283 : 2001 LLR 497 : 2001 (1) LLJ 1417: AIR 2001 SC 1407 : (2001) 4 SCC 68 : 2001 (98) FJR 684 : 2001 (89) FLR 844 : 2001 (2) LLN 613 : 2001 (1) SCSLJ 493 : 2001 SCC (L&S) 646 : 2001 (2) UJ (SC) 1339 : 2001 (4) SLJ 215
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