Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.2530 OF 2012
Birla Institute of Technology ….Appellant(s)
VERSUS
The State of Jharkhand & Ors. …Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. On 07.01.2019, this Court placing reliance on the
decision of this Court in Ahmadabad Pvt. Primary
Teachers Association vs. Administrative Officer and
Others (2004) 1 SCC 755, which was brought to the
Signature Not Verified
Digitally signed by
ASHOK RAJ SINGH
Date: 2019.03.07
17:29:15 IST
Reason:
1
Court’s notice by the learned counsel appearing for the
appellant, allowed the appeal and set aside the order
of the High Court.
2. However, after the pronouncement of the order in
this appeal, it came to the notice of this Court that
consequent upon the decision of this Court rendered
in Ahmadabad Pvt. Primary Teachers Association
(supra), the Parliament amended the definition of the
word “employee” as defined in Section 2(e) of the
Payment of Gratuity Act, 1972 by Amending Act No. 47
of 2009 on 31.12.2009 with retrospective effect from
03.04.1997. This amendment was not brought to our
notice while passing the order on 07.01.2019 in this
appeal.
3. This Court, therefore, took up the
suo motu
appeal to its file and directed it to be listed on the
Board. On 09.01.2019 the appeal was accordingly
listed for orders. This Court then stayed its order
dated 07.01.2019 and passed the following order:
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“ On 07.01.2019 this Court delivered the
judgment allowing the appeal and setting
aside the order of the High Court impugned
therein.
Today, we have listed the matter suo
motu . The reason being that during the
course of hearing of the appeal it was not
brought to the notice of the Bench that the
judgment of this Court in Ahmedabad Pvt.
Primary Teachers Association vs.
Administrative Officer & Ors. (2004) 1 SCC
755 on which the reliance was placed for
allowing the appeal necessitated the
Parliament to amend the definition of
“employee” under Section 2(e) of the
Payment of Gratuity Act by Amending Act
No.47 of 2009 with retrospective effect from
03.04.1997.
In other words, though the definition
was amended in 2009 by Act No.47 of 2009,
yet the same was given retrospective effect
from 03.04.1997 so as to bring the amended
definition on Statute Book, from 03.04.1997.
Keeping in view the amendment made
in the definition of Section 2(e), which as
stated above was not brought to the notice of
the Bench, this issue was not considered
though had relevance for deciding the
question involved in the appeal. It is for this
reason, we prima facie find error in the
judgment and, therefore, are inclined to stay
the operation of our judgment dated
07.01.2019 passed in this appeal
The judgment dated 07.01.2019 shall
not be given effect to till the matter is
reheard finally by the appropriate Bench.
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The Registry is directed to list this
matter for rehearing before the appropriate
Bench comprising of Hon’ble Mr.Justice
Abhay Manohar Sapre and Hon’ble Ms.Justice
Indu Malhotra as early as possible.”
4. It is in the light of the aforementioned order, the
matter was listed before this Bench for passing the
appropriate order in the disposed of appeal.
5. We heard the learned counsel for the parties.
Both the parties have also filed their written
submissions.
6. Having heard the learned counsel for the parties
and on perusal of the record of the case including the
written submissions, we are inclined to recall our
order dated 07.01.2019 because, in our view, it
contains an error apparent on the face of the order.
7. The apparent error is that it was not brought to
our notice that the Parliament, consequent upon the
decision of this Court in Ahmadabad Pvt. Primary
Teachers Association (supra), had amended the
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definition of “employee” as defined in Section 2(e) of
the Payment of Gratuity Act by amending Act No. 47 of
2009 with retrospective effect from 03.04.1997. This
amendment, in our opinion, had a direct bearing over
the issue involved in this appeal.
8. What was brought to our notice was only the
decision of this Court rendered in Ahmadabad Pvt.
Primary Teachers Association (supra) by contending
that the issue involved in this appeal remains no
longer res integra and stands answered in appellant’s
favour. We accepted this submission.
9. In our view, the error mentioned above is an error
apparent on the face of the record of the case because
the material, subsequent event, which came into
existence, had a direct bearing over the controversy
involved in this appeal, was not brought to our notice
at the time of hearing the appeal. It is this apparent
error, which led to passing of the order dated
07.01.2019 in favour of the appellant.
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10. In view of the aforesaid discussion, we recall our
order dated 07.01.2019 passed in this appeal. As a
consequence, the appeal (Civil Appeal No. 2530 of
2012) is restored to its original number for its disposal
on merits in accordance with law.
11. We now proceed to decide the appeal afresh on its
merits.
12. This appeal is directed against the final judgment
and order dated 02.04.2008 passed by the High Court
of Jharkhand at Ranchi in LPA No.53 of 2007 whereby
the Division Bench of the High Court dismissed the
LPA filed by the appellant herein and confirmed the
order dated 12.01.2007 passed by the Single Judge of
the High Court in W.P. No.2572 of 2005.
13. The controversy involved in this appeal is a short
one as would be clear from the facts stated infra .
14. The appellant is a premier technical educational
institute of repute in the country. It is known as “Birla
Institute of Technology” (BIT).
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15. Respondent No.4 joined the appellantInstitute as
Assistant Professor on 16.09.1971 and superannuated
on 30.11.2001 after attaining the age of
superannuation.
16. Respondent No.4 then made a representation to
the appellant and prayed therein for payment of
gratuity amount which, according to respondent, was
payable to him by the appellant under the Payment of
Gratuity Act, 1972. The appellant, however, declined
to pay the amount of gratuity as demanded by
respondent No.4.
17. Respondent No.4, therefore, filed an application
before the controlling authority under the Act against
the appellant and claimed the amount of gratuity
which, according to him, was payable to him under the
Act.
18. By order dated 07.09.2002, the controlling
authority (respondent No.3) allowed the application
filed by respondent No.4 and directed the appellant to
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pay a sum of Rs.3,38,796/ along with interest at the
rate of 10% p.a. towards the gratuity to respondent
No.4.
19. The appellant felt aggrieved and filed appeal
before the appellate authority under the Act. By order
dated 15.04.2005, the appellate authority dismissed
the appeal. The appellant felt aggrieved and carried the
matter to the High Court in a writ petition. The High
Court (Single Judge) by order dated 12.01.2007
dismissed the writ petition and upheld the orders of
the authorities passed under the Act. The appellant
then filed Letters Patent Appeal before the Division
Bench against the order passed by the Single Judge.
The LPA was also dismissed by the impugned order
which has given rise to filing of the present appeal by
way of special leave by the appellantInstitute in this
Court.
20. The short question, which arises for
consideration in this appeal, is whether the Courts
8
below were justified in holding that respondent No.4
was entitled to claim gratuity amount from the
appellant (employer) under the Act.
21. Heard Mr. Shambo Nandy, learned counsel for
the appellant and Mr. Anil Kumar Jha, learned
counsel for respondent Nos.13 and Mr. Sunil Roy,
learned counsel for respondent No.4.
22. Having heard the learned counsel for the parties
and on perusal of the record of the case, we find no
merit in this appeal.
23. As mentioned above, the issue in question was
subject matter of the decision rendered in the case of
Ahmadabad Pvt. Primary Teachers Association
(supra). This Court had examined the question in the
light of the definition of the word “employee” defined in
Section 2(e) of the Act as it stood then. The definition
reads as under:
“2. ( e ) ‘employee’ means any person (other
than an apprentice) employed on wages, in
any establishment, factory, mine, oilfield,
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plantation, port, railway company or shop, to
do any skilled, semiskilled, or unskilled,
manual, supervisory, technical or clerical
work , whether the terms of such employment
are express or implied, and whether or not
such person is employed in a managerial or
administrative capacity, but does not
include any such person who holds a post
under the Central Government or a State
Government and is governed by any other
Act or by any rules providing for payment of
gratuity .”
24. This is what was held in paras 22 to 26 of the
decision:
“22. In construing the abovementioned three
words which are used in association with
each other, the rule of construction noscitur
a sociis may be applied. The meaning of each
of these words is to be understood by the
company it keeps. It is a legitimate rule of
construction to construe words in an Act of
Parliament with reference to words found in
immediate connection with them. The actual
order of these three words in juxtaposition
indicates that meaning of one takes colour
from the other. The rule is explained
differently: “that meaning of doubtful words
may be ascertained by reference to the
meaning of words associated with it”. [See
Principles of Statutory Interpretation by
Justice G.P. Singh, 8th Edn., Syn. 8, at p.
379.]
23. The word “unskilled” is opposite of the
word “skilled” and the word “semiskilled”
10
seems to describe a person who falls between
the two categories i.e. he is not fully skilled
and also is not completely unskilled but has
some amount of skill for the work for which
he is employed. The word “unskilled” cannot,
therefore, be understood dissociated from the
word “skilled” and “semiskilled” to read and
construe it to include in it all categories of
employees irrespective of the nature of
employment. If the legislature intended to
cover all categories of employees for
extending benefit of gratuity under the Act,
specific mention of categories of employment
in the definition clause was not necessary at
all. Any construction of definition clause
which renders it superfluous or otiose has to
be avoided.
24. The contention advanced that teachers
should be treated as included in the
expression “unskilled” or “skilled” cannot,
therefore, be accepted. The teachers might
have been imparted training for teaching or
there may be cases where teachers who are
employed in primary schools are untrained. A
trained teacher is not described in the
industrial field or service jurisprudence as a
“skilled employee”. Such adjective generally
is used for an employee doing manual or
technical work. Similarly, the words “semi
skilled” and “unskilled” are not understood
in educational establishments as describing
nature of job of untrained teachers. We do
not attach much importance to the
arguments advanced on the question as to
whether “skilled”, “semiskilled” and
“unskilled” qualify the words “manual”,
“supervisory”, “technical” or “clerical” or the
above words qualify the word “work”. Even if
all the words are read disjunctively or in any
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other manner, trained or untrained teachers
do not plainly answer any of the descriptions
of the nature of various employments given
in the definition clause. Trained or untrained
teachers are not “skilled”, “semiskilled”,
“unskilled”, “manual”, “supervisory”,
“technical” or “clerical” employees. They are
also not employed in “managerial” or
“administrative” capacity. Occasionally, even
if they do some administrative work as part
of their duty with teaching, since their main
job is imparting education, they cannot be
held employed in “managerial” or
“administrative” capacity. The teachers are
clearly not intended to be covered by the
definition of “employee”.
25. The legislature was alive to various kinds
of definitions of the word “employee”
contained in various previous labour
enactments when the Act was passed in
1972. If it intended to cover in the definition
of “employee” all kinds of employees, it could
have as well used such wide language as is
contained in Section 2(f) of the Employees’
Provident Funds Act, 1952 which defines
“employee” to mean “any person who is
employed for wages in any kind of work,
manual or otherwise, in or in connection with
the work of an establishment …”. Nonuse of
such wide language in the definition of
“employee” in Section 2(e) of the Act of 1972
reinforces our conclusion that teachers are
clearly not covered in the definition.
26. Our conclusion should not be
misunderstood that teachers although
engaged in a very noble profession of
educating our young generation should not
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be given any gratuity benefit. There are
already in several States separate statutes,
rules and regulations granting gratuity
benefits to teachers in educational
institutions which are more or less beneficial
than the gratuity benefits provided under the
Act. It is for the legislature to take
cognizance of situation of such teachers in
various establishments where gratuity
benefits are not available and think of a
separate legislation for them in this regard.
That is the subjectmatter solely of the
legislature to consider and decide.”
25. The decision rendered in
Ahmadabad Pvt.
Primary Teachers Association (supra), therefore, led
the Parliament to amend the definition of "employee”
as defined in Section 2 (e) of the Payment of Gratuity
Act by amending Act No. 47 of 2009 on 31.12.2009
with retrospective effect from 03.04.1997.
26. It is clear from the statement of Objects and
Reasons of the Payment of Gratuity (Amendment) Bill,
2009 introduced in the Lok Sabha on 24.02.2009,
which reads as under:
“STATEMENT OF OBJECTS AND REASONS
The Payment of Gratuity Act, 1972
provides for payment of gratuity to
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employees engaged in factories, mines,
oilfields, plantations, ports, railway
companies, shops or other establishment and
for matters connected therewith or incidental
thereto. Clause (c) of subsection (3) of section
1 of the said Act empowers the Central
Government to apply the provisions of the
said Act by notification in the Official
Gazette to such other establishments or class
of establishments in which ten or more
employees are employed, or were employed,
on any day preceding twelve months.
Accordingly, the Central Government had
extended the provisions of the said Act to the
educational institutions employing ten or
more persons by notification of the
Government of India in the Ministry of
Labour and Employment vide number S.O.
1080, dated the 3rd April, 1997.
2. The Hon'ble Supreme Court in its
judgment in Civil Appeal No. 6369 of 2001,
dated the 13th January, 2004, in Ahmedabad
Private Primary Teachers' Association vs.
Administrative Officer and others [AIR 2004
Supreme Court 1426] had held that if it was
extended to cover in the definition of
'employee', all kind of employees, it could
have as well used such wide language as is
contained in clause (f) of section 2 of the
Employees' Provident Funds and
Miscellaneous Provisions Act, 1952 which
defines 'employee' to mean any person who is
employed for wages in any kind of work,
manual or otherwise, in or in connection with
the work of an establishment. It had been
held that nonuse of such wide language in
the definition of 'employee' under clause (e)
of section 2 of the Payment of Gratuity Act,
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1972 reinforces the conclusion that teachers
are clearly not covered in the said definition.
3. Keeping in view the observations of the
Hon'ble Supreme Court, it is proposed to
widen the definition of 'employee' under the
said Act in order to extend the benefit of
gratuity to the teachers. Accordingly, the
Payment of Gratuity (Amendment) Bill, 2007
was introduced in Lok Sabha on the 26th
November, 2007 and same was referred to the
Standing Committee on Labour which made
certain recommendations. After examining
those recommendations, it was decided to
give effect to the amendment retrospectively
with effect from the 3rd April, 1997, the date
on which the provisions of the said Act were
made applicable to educational institutions.
4. Accordingly, the Payment of Gratuity
(Amendment) Bill, 2007 was withdrawn and a
new Bill, namely, this Payment of Gratuity
(Amendment) Bill, 2009 having retrospective
effect was introduced in the Lok Sabha on
24th February, 2009. However, due to
dissolution of the Fourteenth Lok Sabha, the
said Bill lapsed. In view of the above, it is
considered necessary to bring the present
Bill.
5. The Bill seeks to achieve the above
objectives.
NEW DELHI;
The 12th November, 2009”
MALLIKARJUN KHARGE.”
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27. The definition of “employee” as defined under
Section 2(e) was accordingly amended with effect from
03.04.1997 retrospectively vide Payment of the
Gratuity (Amendment) Act, 2009 (No. 47 of 2009)
published on 31.12.2009. The amended definition
reads as under:
“(e) “employee” means any person (other
than an apprentice) who is employed for
wages, whether the terms of such
employment are express or implied, in any
kind of work, manual or otherwise, in or in
connection with the work of a factory, mine,
oilfield, plantation, port, railway company,
shop or other establishment to which this
Act applies, but does not include any such
person who holds a post under the Central
Government or a State Government and is
governed by any other Act or by any rules
providing for payment of gratuity.”
28. In the light of the amendment made in the
definition of the word “employee” as defined in Section
2(e) of the Act by Amending Act No. 47 of 2009 with
retrospective effect from 03.04.1997, the benefit of the
Payment of Gratuity Act was also extended to the
teachers from 03.04.1997.
16
29. In other words, the teachers were brought within
the purview of “employee” as defined in Section 2(e) of
the Payment of Gratuity Act by Amending Act No. 47 of
2009 with retrospective effect from 03.04.1997.
30. The effect of the amendment made in the
Payment of Gratuity Act vide Amending Act No. 47 of
2009 on 31.12.2009 was twofold. First, the law laid
down by this Court in the case of Ahmadabad Pvt.
(supra) was no longer
Primary Teachers Association
applicable against the teachers, as if not rendered, and
Second, the teachers were held entitled to claim the
amount of gratuity under the Payment of Gratuity Act
from their employer with effect from 03.04.1997.
31. In our considered opinion, in the light of the
amendment made in the Payment of Gratuity Act as
detailed above, reliance placed by the learned counsel
appearing for the appellant (employer) on the decision
of
Ahmedabad Pvt. Primary Teachers
Association (supra) is wholly misplaced and does not
17
help the appellant in any manner. It has lost its
binding effect.
32. Learned counsel for the appellant then urged that
the constitutional validity of Amending Act No. 47 of
2009 is under challenge in this Court in a writ
petition, which is pending.
33. Be that as it may, in our view, pendency of any
writ petition by itself does not affect the
constitutionality of the Amending Act, and nor does it
affect the right of respondent No.4 (teacher) in any
manner in claiming gratuity amount from the
appellant(employer) under the Act.
34. It is only when the Court declares a Statute as
being the provisions of the Constitution
ultra vires
then the question may arise to consider its effect on
the rights of the parties and that would always depend
upon the declaration rendered by the Court and the
directions given in that case. Such is not the case here
as of now.
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35. In the light of the foregoing discussion, we find no
merit in this appeal, which fails and is hereby
dismissed with costs quantified at Rs.25,000/
payable by the appellant to respondent No.4(teacher).
………...................................J.
[ABHAY MANOHAR SAPRE]
…...……..................................J.
[INDU MALHOTRA]
New Delhi;
March 07, 2019
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