Full Judgment Text
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PETITIONER:
KATHEEJA BAI
Vs.
RESPONDENT:
THE SUPERINTENDING ENGINEER & ORS.
DATE OF JUDGMENT10/05/1984
BENCH:
REDDY, O. CHINNAPPA (J)
BENCH:
REDDY, O. CHINNAPPA (J)
SEN, A.P. (J)
VENKATARAMIAH, E.S. (J)
CITATION:
1984 AIR 1388 1984 SCR (3) 798
1984 SCC (3) 518 1984 SCALE (1)865
ACT:
Tamil Nadu Electricity Board Contributory Provident
Fund Regulation Framed by Tamil Nadu Electricity Board under
Electricity Supply Act 1948-Regulation 37 Whether Special
Contribution to be made by Electricity Board to the
Conbributory Provident Fund of the employees is same as
Gratuity under Payment of Gratuity Act 1972-Whether Payment
of Gratuity under Payment of Gratuity Act debars payment of
Special Contribution to be made under Regulation 37.
Public Interest Litigation-Letter to Judge treated writ
petition.
HEADNOTE:
Regulation 37 of the Tamil Nadu Electricity Board
Contributory Provident Fund Regulations framed by the Tamil
Nadu Electricity Board under the Electricity Supply Act,
1948 provides that the Electricity Board shall credit to a
member’s provident fund account a special contribution
calculated in the specified manner, in addition to the
contribution credited under Regulation 11, if the Board is
satisfied that the service of the member has been good
efficient and faithful and the member has not been dismissed
from service or the member has not been removed from service
in which case the sanction of the Board had to be obtained.
The Payment of Gratuity Act, 1972 which was also
applicable to the Tamil Nadu Electricity Board provided for
the payment of gratuity to employees who would retire after
rendering service for a specified number of years.
The petitioner’s husband retired in 1976 after serving
the Tamil Nadu Electricity Board for about 34 years and died
three months thereafter. The petitioner was paid her
husband’s subscription to the Contributory Provident Fund
and interest and the Electricity Board’s contribution and
interest and also the gratuity under the payment of Gratuity
Act, 1972. The Electricity Board did not pay the Special
Contribution to be made by it to the contributory Provident
Fund under Regulation 37 on the ground that the special
contribution being nothing other than the payment of
gratuity, they could not be asked to pay gratuity twice
over, once under Payment of Gratuity Act and again under
Regulation 37. The petitioner having got no relief from
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anywhere wrote a letter to a Judge of the Supreme Court
which was treated as a writ petition.
Allowing the petition,
799
^
HELD: The Electricity Board cannot avoid payment of the
special Contribution to Provident Fund under their own
Provident Fund Regulations on the pretext that it is akin to
or the same as Gratuity payable under the Payment of
Gratuity Act. In the first place, the Board, in their
Regulations, have themselves labelled the Special
Contribution under Regulation 37 as a Special contribution
to Provident Fund and not as Gratuity. It is not as if they
were unaware of the word ’Gratuity’ and that it meant since
it is found that there is a reference in Regulation 5 to a
Gratuity Scheme of the Tamil Nadu Government which had been
adopted by the Board. The Special Contribution under
Regulation 37 is part of a well thought out Provident Fund
Scheme designed to benefit ’good, efficient and faithful’
employees (borrowing the words from the Regulation itself)
by making annual contributions in addition to the monthly
contributions under Regulation 11. This is what appears from
Regulation 37 itself. There is no justification for first
dubbing it as a gratuity on the ground that it has some of
the known characteristics of gratuity and then proceeding to
deny the employees the befit of it on the ground that the
Board are paying gratuity under the Payment of Gratuity Act.
If the Special Contribution has some common features with
gratuity, it has also distinctive features which distinguish
it from gratuity payable under the Payment of Gratuity Act.
[803B-F]
In view of the finding that Special Contribution under
Regulation 37 is not the same as gratuity under Payment of
Gratuity Act, the argument that the provision for Special
Contribution under Regulation 37 was inconsistent with the
provisions of the Payment of Gratuity Act and therefore the
latter should prevail to the exclusion of the former must
fail. [804H; 805A]
JUDGMENT:
ORIGINAL JURISDICTION: Writ Petition No. 13009 of 1983.
(Under article 32 of the Constitution of India)
Gopal Subra aniam (A.C) for the Petitioner
Dr. Y.S. Chitale, A.V. Rangam and Mrs. Sarla Chandra
for the Respondent.
The Judgment of the Court was delivered by
CHINNAPPA REDDY, J. Smt. Katheeja Bai, is the widow of
Abdul Salam who retired as a Line Inspector, Grade I, in the
employment of the Tamil Nadu State Electricity Board on
31.7.76 and who unfortunately died on 15.10.76. Smt.
Katheeja Bai failed to get from her late husband’s employers
certain amounts which she claimed were due to her husband.
She knocked continuously but in vain, at the doors of the
Regional Provident Commissioner, Madras, Central Provident
Commissioner, New Delhi and the Minister for Labour
Government of India for several years for
800
redress. In sheer desperation she ultimately turned to this
Court as a last resort. Unable to engage a lawyer, she
addressed a letter to a learned judge of the Court setting
forth her grievance. After being processed in the Registry,
the letter was treated as a Writ Petition under Art 32 of
the Constitution. A Rule Nisi was issued and the Tamil Nadu
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State Electricity Board have appeared before us through
counsel. At our request Sri Gopala Subramanyam argued the
case for the widow as amicus curiae. He presented the . case
with understanding and thoroughness and we are grateful to
him, as also to Dr. Chitaley who presented the employer’s
case with his usual fairness.
In exercise of the powers conferred by s.79(c) of the
Electricity Supply Act, 1948, the Tamil Nadu Electricity
Board made the Tamil Nadu Electricity Board Contributory
Provident Fund Regulations. Regulation 3 Provides for this
establishment of a fund known as the Tamil Nadu Electricity
Board Employees’’ Contributory Provident Fund, with effect
from 1.7.57. Regulation 3-A to 3-K provide for the
management and administration of the fund by the Board of
Trustees. Regulation 4 prescribes that the Fund shall be
governed by regulation a i may be in force for the time
being but provides that no addition, alteration or repeal,
of any regulation which may adversely effect a subscriber
shall be retrospective. Regulation 5 provides that all
employees who are eligible for the Contributory Provident
Fund (Tamil Nadu) Scheme and Gratuity Scheme of the
Government of Tamil Nadu except certain categories of
employees with whom we are not concerned shall become
subscribers to the fund on completion of three months
continuous service. Regulation 6 prescribes that an account
shall be opened in the name of each member in which shall be
credited, the member’s subscriptions and interest thereon,
the contributions made by the Electricity-Board to his
account and interest thereon and the pre-existing account
before the Electricity Department was taken over by the
Electricity Board. Regulation 9 provides for subscription to
the fund by members at a the rate of 7-1/2% of pay plus
dearness allowance. Regulation 11 provides for contribution
by the Electricity Board to the account of each member at
the rate of 7% of pay plus dearness allowance. The member’s
subscription along with the Electricity Board’s Contribution
is required to be credited to the individual account of the
member before the 15th of every month. Regulation 37
prescribes that the Electricity Board shall credit to a
member’s Provident Fund account a special contribution
calculated in the specified manner in addi-
801
tion to the contribution credited under Regulation 11, if
the Board is satisfied that the service of the member has
been good, efficient and faithful and the member has not
been dismissed from service or the member has not been
removed from service in which case the sanction of the Board
has to be obtained. In the case of a Class I or Class II
employee who quits service on attainment of the age of
superannuation, he is to be credited, if his service exceeds
18 years with six months pay plus half a month’s pay for
each completed year of service after the 18th but not so is
to exceed, in all, twelve months’ pay or rupees twenty-five
thousand, whichever is less. If the employee’s service does
not exceed 18 years, he is to be credited with half a
month’s pay for each completed year of service so as not to
exceed six months’ pay. In the case of a Class III or Class
IV employees who has attained the age of superannuation
after 15 years’ service, the Electricity Board is required
to credit his account with half a month’S pay for each
completed year of service, but not so as to exceed to 15
months’ pay. If the service is short of 15 years, he is to
be credited with half a month’s pay for each completed year
of service so as not is exceed six months’ pay. It is
provided in Regulation 37 that pay for the purpose of
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reckoning special contribution shall be the pay last drawn
during the last three years of service, whichever is more.
The Board is also empowered to withhold or reduce the
Special Contribution in any particular case.
At this stage, we may refer to s. 12 of the Employees’
Provident Funds, And Miscellaneous Provisions Act, 1952
which prohibits all employer from reducing directly or
indirectly the total quantum of benefits in the nature of
old age pension, gratuity or Provident Fund or Life
Insurance to which the employee is entitled under the terms
of his employment, express or implied, by reason only of his
liability for the payment of any contribution to the fund
(which is defined by s. 2(h) as meaning a Provident Fund
established under the employees’ Provident Fund Scheme
framed under s. 5).
In 1972, Parliament enacted the Payment of Gratuity
Act, 1972 to provide for a scheme for the payment of
gratuity to employees in certain establishments. There is no
dispute that the Act applies to the Tamil Nadu State
Electricity Board. Section 4 of the Act requires payment of
gratuity to an employee who has rendered continuous service
for not less than five years, on the termination of his
employment on superannuation or on retirement or on his
802
death or disablement due to accident or disease. The
employer is required to pay the gratuity to the employee at
the rate of fifteen days’ wages for each completed year of
service or part thereof in excess of six months. The amount
of gratuity is not to exceed 20 months’ wages. The employer
is not required to pay any gratuity to an employee if the
service of the employee has been terminated for any act,
wilful omission or negligence causing any damage or loss to,
or destruction of, property belonging to the employer, or if
the services of the employee have been terminated for
riotous or disorderly conduct or any other act of violence
on his part or if his a services have been terminated for
any act involving moral turpitude provided that such offence
is committed by him in the course of his employment. Section
14 provides that the contribution of the Act shall have
effect notwithstanding anything inconsistent therewith
contained in any enactment other than this Act or in any
instrument or contract having effect by virtue of any
enactment other than the Payment of Gratuity Act.
Abdul Salam, who held a non-pensionable post, retired
on 31.7.76, after a service of 34 years and live months. He
died on 15.10.76 within three months after his retirement.
He was entitled or, in this case his widow was entitled to
the payment of the entire amount standing to his credit in
his Provident Fund account and the gratuity payable under
the Payment of Gratuity Act. The Electricity Board, however,
took the stand that she was entitled to be paid the member’s
subscription and interest, the employer’s contribution and
interest and gratuity but not the special contribution under
Regulation 37 of the Tamil Nadu State Electricity Board
Contributory Provident Fund Regulations. The reason for the
Board’s attitude was that the special contribution Required
to be paid under Regulation 37 was nothing other than
payment of gratuity and that they could not be asked to pay
gratuity twice over, once under the Payment of Gratuity Act
and again under Regulation 37. Since they were ready to pay
the gratuity payable under the Payment of Gratuity Act,
which was more favourable to the employee, they were not
obliged to make payment of the contribution under Regulation
37. We may mention here that the Board has paid to the
widow, the member’s subscription with interest and the
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employer’s contribution with interest but not the special
contribution under Regulation 37. The Board has paid a sum
of Rs. 4275/- towards gratuity under the payment of Gratuity
Act but a sum of
803
Rs. 3167/- is admittedly yet due from the Board towards
gratuity. In the counter affidavit filed on behalf of the
Electricity Board we are not able to find any reason for
non-payment of the balance of gratuity.
We are unable to appreciate how the Electricity Board
can avoid payment of the Special Contribution to Provident
Fund under their own Provident Fund Regulations on the
pretext that it is akin to or the same as Gratuity payable
under the Payment of Gratuity Act. In the first place, the
Board, in their Regulations, have themselves labelled the
Special Contribution under Regulation 37 as a Special
Contribution to Provident Fund not as a Gratuity. It is not
as if they were unaware of the word ’Gratuity’ and what it
meant since we find that there is a reference in Regulation
5 to a Gratuity Scheme of the Tamil Nadu Government which
had been adopted by the Board. The Special Contribution
under Regulation 37 is part of a well thought out Provident
Fund Scheme designed to benefit ’good’ efficient and
faithful employees (we borrow the words from the Regulation
itself) by ranking annual contributions in addition the
monthly contributions under Regulation 11. This is what
appears from Regulation or itself, we see no justification
for first dubbing it as a gratuity on the ground that it has
some of the known characteristics af gratuity and then
proceeding to deny the employees the benefit of it on the
ground that the Board are paying gratuity under the Payment
of Gratuity Act. If the Special Contribution has some common
features with gratuity, it has also distinctive features
which distinguish it from gratuity payable under the payment
of Gratuity Act, For example, one important feature which
discriminates the Special Contribution under Regulation 37
from gratuity under the Payment of Gratuity Act is that
while the Payment of the latter is obligatory and can only
be denied if the employee’s services have been terminated
for his riotous or disorderly conduct or any other act of
violence on his part or any act which constitutes an offence
involving moral turpitude and can also be denied to the
extent of the damage or loss caused by the employee, where
the employee’s services have been terminated for any act,
wilful omission or negligence causing any damage or to loss,
or destruction of property belonging to the employer, the
payment of the former is discretionary and may not be made
if the service of the employee has not been good, efficient
and faithful. The employee has also the discretion to
withhold or reduce the Special Contribution in any
particular case. Of course,
804
the employer cannot arbitrarily claim that the employee’s
service was not good, efficient and faithful, or with-hold
or reduce the Special Contribution in an arbitrary fashion.
Even so, the distinction between the mandate of the Payment
of Gratuity Act and the discretion involved in making the
Special Contribution under Regulation 37 is intelligibly
clear. Another feature which distinguishes the two is that
the benefit of the Payment of Gratuity Act is confined to
persons drawing wages not exceeding Rs. 1000 and does not
extend to persons employed in a managerial or administrative
capacity whereas the Special Contribution under Regulation
37 is not so confined and extends to every employee of the
Board a except casual employees, State or Central Government
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employees employed with the Board on foreign service terms
etc. etc. For the purpose of contribution of Provident Fund
under Regulation 11 or Regulation 37 it makes no difference
that a person is employed in a managerial or administrative
capacity on that he draws wages more than Rs. 1000 per
month. A third feature which marks the two apart is that the
contribution to the Provident Fund whether under Regulation
11 or Regulation 37 becomes part of the Fund established by
Regulation 3 and is to be managed and administered by
trustees under Regulation 3-A to 3-K, whereas the payment of
Gratuity Act does not provide for the Constitution of a fund
to be managed and administered by trustees. In addition to
these broad features, we have the outstanding circumstance
that the Board themselves have described the contribution
under Regulation 37 as a contribution to Provident Fund and
have chosen to include it in their Provident Fund Scheme.
That should conclude the matter.
Dr. Chitaley invited our attention to s. 14 of the
Payment of Gratuity Act, 1972 which provides,
"The provisions of this Act or any rule made
thereunder shall have effect notwithstanding anything
inconsistent therewith contained in an enactment other
than this Act or in any instrument or contract having
effect by virtue of any enactment other than this Act."
He argued that the provision for Special Contribution
under Regulation 37 was inconsistent with the provisions of
the Payment of Gratuity Act and therefore the latter should
prevail to the exclusion of the former. This argument is
dependent on the assumption that the Special Contribution
under Regulation 37 is the same thing as the gratuity
contemplated by the Payment of
805
Gratuity Act. We have held that it is not and the argument,
therefore, fails.
There was then the usual lament that a large number of
employees were involved and, therefore, the cost will be
heavy. We do not understand this argument at all. Does it
mean that beneficent legislations and beneficent schemes
must be confined to small establishments employing a few
workers only ? On the other hand, it is misleading to say
that the cost is heavy. The cost is made to appear heavy
divorced from the size of the establishment. If the
establishment is huge and if a large number of workmen are
employed the total wage bill may appear to be heavy, but is
it really so ? Is it disproportionate to the size of the
establishment, its resources, its revenues and its other
expenditure ? Is the individual wage-bill also very high ?
To talk of heavy cost without reference to other
circumstances is to present an entirely unfaithful picture.
We heed make no further comment.
In the result we direct the respondent Board to pay to
the petitioner the whole of the Special Contribution under
Regulation 37 which was payable to her husband and the
balance of the Gratuity payable under the Payment of
Gratuity Act, part of which we are told has been paid
leaving the sum of Rs. 3167 unpaid. These amounts should be
paid to the petitioner with interest at 15% per annum from
the date on which the amounts fell due. The respondent Board
should also pay a sum of Rs. 2500 to the petitioner towards
compensatory costs. We must add that the case had left us
with the feeling of uneasiness and distress at the plight of
helpless persons like the petitioner whose repeated
representations to those in authority were left uncared for
so the tediously long despite frequent protestations of
social justice.
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H.S.K. Petition allowed.
806