Heard Sri Ravi Prakash Gupta, learned counsel for the petitioner and Sri Kirti Kar Tripathi learned counsel for opposite party no. 3.
This writ petition filed under Article 226 of the Constitution of India has questioned the correctness of the judgement/order passed by the Controlling Authority in P.G. No. 19 of 2010 on 8.12.2015 whereby the claim of opposite party no. 3 for payment of gratuity to the tune of Rs. 45498/- along with 9% simple interest in the event of default to make the payment within a period of thirty days, was allowed.
The judgment/order passed by the Controlling Authority under Section 7 of the Payment of Gratuity Act, 1972, on being appealed before the appellate authority, has met with the fate of rejection by judgement and order dated 27.1.2017. Hence, this writ petition.
At the very outset, this Court is informed that the Act No. 47 of 2009 i.e. Payment of Gratuity Amendment Act, 2009 has already come to be challenged on the aspect of its validity before the apex court and the proceedings are pending. The issue of the length of service for which the payment of gratuity would be admissible is also said to be engaging attention of the apex court. Thus, while deciding the present writ petition, this Court has to bear the above-mentioned factual position in mind. This Court would note that the admissibility of gratuity to a teacher w.e.f. 3.4.1997 in terms of the Amendment Act, 2009 under no order passed by the apex court is shown to have been put on hold.
On coming to the validity of the impugned judgement/order in the present case, Sri Gupta learned counsel for the petitioner has essentially raised the issue of jurisdiction of the Controlling Authority to entertain the dispute as well as the procedure according to which the proceedings initiated, if any, are to be dealt with.
On the jurisdictional aspect, the contention put-forth by learned counsel for the petitioner is to the effect that unless a dispute is raised before the employer within the meanings of Section 7(1) of the Payment of Gratuity Act, 1972, it would not be open to an aggrieved person to avail the remedy before the Controlling Authority straightaway.
The second submission put-forth by Sri Gupta learned counsel for the petitioner is to the effect that the Controlling Authority exercises the powers of an adjudicatory body and several provisions of Civil Procedure Code are made applicable for regulating the proceeding. Referring to Section 7 (5) of the Payment of Gratuity Act, it is canvassed that once the Controlling Authority is empowered to exercise the powers under C.P.C. for various purposes, to serve the ends of justice between the parties, there is no reason as to why the adjudicatory procedure may not encapsulate the requirement of framing the issues by the Controlling Authority so that the parties are facilitated with an opportunity of leading evidence on the predetermined issues, which in turn would facilitate the adjudication between the parties in a more fair and just manner.
Coming to the case at hand, Sri Gupta learned counsel for the petitioner, drawing attention of this Court to the objection raised before the Controlling Authority, has pointed out that the opposite party no. 3 before approaching the Controlling Authority had not made any application in the prescribed form whatsoever before the employer so as to reap the benefit under Section 7 of the Payment of Gratuity Act, 1972. Moreover, the opposite party no. 3 had retired from service on 30.6.2005 and there was no application for condonation of delay without which a claim would not be entertainable in the year 2010 unless the delay was condoned. Thus, the jurisdictional error attacking the correctness of the judgment/order rendered by the Controlling Authority has been urged on this premise.
Insofar as the issues determinable between the parties are concerned, it is evident from the record that several issues were proposed by the petitioner during pendency of the proceedings and some of them were prayed to be decided as preliminary issues and proceedings in this regard reached to this Court in Writ petition no. 5194(M/S) of 2015, which was decided by order dated 21.9.2015 against which the Special Leave Petition having been filed before the apex court was rejected by an order dated 4.12.2015 with liberty to the petitioner for adducing evidence on all the issues simultaneously.
The grievance that has been argued against the impugned judgment is peculiar for the reason that the issues which allegedly were never framed by the Controlling Authority other than what were proposed, have been adjudicated upon to the disadvantage of petitioner without granting opportunity of leading evidence.
The proposed issues read as under:
"1. Whether the applicant was a 'Teacher' and he was superannuated/retired from the services of the school on ............... ? If so, its effect?
2. Whether at the time when the applicant was retired/superannuated the Payment of Gratuity Act, 1972 was applicable on the teacher? If yes, then why the alleged dispute was raised delayedly after around 4 years?
3. Whether the applicant was an 'employee under the Payment of Gratuity Act, 1972 at time when he was retired/superannuated? If so, its effect?
4. Whether the claim application has been moved belatedly? If so, its effect?
5. Whether the applicant submitted Form-I of the Payment of Gratuity Act? If so, its effect?"
The issues dealt with by the Controlling Authority are reproduced in the judgement/order dated 8.12.15 as under:
"1- D;k oknh&izfroknh esa Jfed lsok;kstd lEcU/k jgk gS?
2- oknh Jfed dh dqy lsok vof/k fdruh gS?
3- oknh Jfed dk vfUre vkgfjr osru D;k Fkk?
4- oknh Jfed ds lsokfuo`Rr dh frfFk dks f'k{kd ij xzsT;qVh Hkqxrku vf/kfu;e 1972 ykxw Fkk A D;k lsokfuo`Rr dh frfFk dks f'k{kd ij xzsT;qVh Hkqxrku vf/kfu;e 1972 ds vUrxZr Employees ¼fu;ksftr deZpkjh½ dh ifjHkk"kk esa vkoRrZ Fkk?
5- oknh Jfed ds i{k esa ns; xzsT;qVh ds Hkqxrku ds lEcU/k es oknh ds vf/kdkj D;k gS?
On the two aspects of the matter, the appellate authority has not expressed any concrete opinion but appreciating the fact that the controversy was essentially addressed after opportunity being afforded to the petitioner, hence, the appellate authority has upheld the order passed by the Controlling Authority.
Learned counsel for the opposite party no. 3 defending the impugned orders has argued that the submissions put-forth by learned counsel for the petitioner are too technical and beyond the scope of Section 7 of the Payment of Gratuity Act for the reason that the making of an application by an affected person for payment of gratuity is not a condition precedent for approaching the appropriate forum constituted under the Act and if the statutory mandate is construed in a manner as has been put-forth by the petitioner, the scope of Section 7(2) of the Payment of Gratuity Act would be rendered nugatory.
Learned counsel for opposite party no. 3 has further argued that the Controlling Authority is not bound by any procedure as is prescribed under C.P.C. for trying a suit but what is relevant is observance of a fair procedure of summary nature addressing the real dispute which the Controlling Authority is bound to observe and nothing beyond.
It is for this reason that the Payment of Gratuity Act according to learned counsel, restricts the application of C.P.C. to a limited extent.
(1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity.
(2) As soon as gratuity becomes payable, the employer shall, whether an application referred to in sub-section (1) has been made or not, determine the amount of gratuity and give notice in writing to the person to whom the gratuity is payable and also to the controlling authority specifying the amount of gratuity so determined.
(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.
(3A) If the amount of gratuity payable under sub-section (3) is not paid by the employer within the period specified in sub-section (3), the employer shall pay, from the date on which the gratuity becomes payable to the date on which it is paid, simple interest at such rate, not exceeding the rate notified by the Central Government from time to time for repayment of long-term deposits, as that Government may, by notification specify: Provided that no such interest shall be payable if the delay in the payment is due to the fault of the employee and the employer has obtained permission in writing from the controlling authority for the delayed payment on this ground.
(4) (a) If there is any dispute to the amount of gratuity payable to an employee under this Act or as to the admissibility of any claim of, or in relation to, an employee for payment of gratuity, or as to the person entitled to receive the gratuity, the employer shall deposit with the controlling authority such amount as he admits to be payable by him as gratuity.
(b) Where there is a dispute with regard to any matter or matters specified in clause (a), the employer or employee or any other person raising the dispute may make an application to the controlling authority for deciding the dispute.
(c) The controlling authority shall, after due inquiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter or matters in dispute and if, as a result of such inquiry any amount is found to be payable to the employee, the controlling authority shall direct the employer to pay such amount or, as the case may be, such amount as reduced by the amount already deposited by the employer.
(d) The controlling authority shall pay the amount deposited, including the excess amount, if any, deposited by the employer, to the person entitled thereto.
(e) As soon as may be after a deposit is made under clause (a), the controlling authority shall pay the amount of the deposit--
(i) to the applicant where he is the employee; or
(ii) where the applicant is not the employee, to the nominee or, as the case may be, the guardian of such nominee or heir of the employee if the controlling authority is satisfied that there is no dispute as to the right of the applicant to receive the amount of gratuity.
(5) For the purpose of conducting an inquiry under sub-section (4), the controlling authority shall have the same powers as are vested in a court, while trying a suit, under the Code of Civil Procedure, 1908 (5 of 1908), in respect of the following matters, namely:--
(a) enforcing the attendance of any person or examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) issuing commissions for the examination of witnesses.
(6) Any inquiry under this section shall be a judicial proceeding within the meaning of sections 193 and 228, and for the purpose of section 196, of the Indian Penal Code (45 of 1860).
(7) Any person aggrieved by an order under sub-section (4) may, within sixty days from the date of the receipt of the order, prefer an appeal to the appropriate Government or such other authority as may be specified by the appropriate Government in this behalf: Provided that the appropriate Government or the appellate authority, as the case may be, may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, extend the said period by a further period of sixty days:
Provided further that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under sub-section (4), or deposits with the appellate authority such amount.
(8) The appropriate Government or the appellate authority, as the case may be, may, after giving the parties to the appeal a reasonable opportunity of being heard, confirm, modify, or reverse the decision of the controlling authority.
The jurisdictional and procedural aspect of the matter can be appreciated better if this Court would glance through the U.P. Payment of Gratuity Rules, 1975.
Rule 10 and 11 for the purpose of this case being relevant, are reproduced below:
"10. Application to controlling authority for direction : Section 7 (4).-(1) If an employer:-
(i) refuses to accept a nomination or to entertain an application sought to be filed under Rules 7, or
(ii) issues a notice under sub-rule (1) of Rule 8 either specifying an amount of gratuity which is considered by the applicant less than what is payable or rejecting eligibility to payment of gratuity, or
(iii) having received an application under rule 7 fails to issue any notice as required under Rule 8 within the time specified therein, The claimant employee, nominee or legal heir, as the case may be, may, within ninety days of the occurrence of the cause for the application, apply in Form 'N' to the controlling authority for issuing a direction under subsection (4) of Section 7 with as many extra copies as are the opposite parties: Provided that the controlling authority may accept any application under this sub-rule, on sufficient cause being shown by the applicant, after the expiry of the specified period.
(2) Application under sub-rules (1) and other documents relevant to such an application shall be presented in person to the controlling authority or shall be sent by registered post acknowledgment due.
11. Procedure for dealing with application for direction: Section 7 (4) (b).-(1) On receipt of an application under Rule 10, the controlling authority shall, by issuing a notice in Form 'O' call upon the application as well as the employer to appear before him on a specified date, time and place, either by himself or through his authorised representative together with all relevant documents and witnesses, if any.
(2) Any person desiring to act on behalf of an employer or employee, nominee or legal heir, as the case may be, shall present to the controlling authority a letter of authority from the employer or the person concerned, as the case may be, on whose behalf he seeks to act together with a written statement explaining his interest in the matter and praying for permission so to act. The controlling authority shall record thereon an order either according his approval or specifying, in the case of refusal to grant the permission prayed for, the reasons for the refusal.
(3) A party appearing by an authorised representative shall be bound by the acts of the representative.
(4) After completion of hearing on the date fixed under sub-rule (1), or after such further evidence, examination of documents, witnesses, hearing an enquiry, as may be deemed necessary, the controlling authority shall record his finding as to whether any amount is payable to the application under the Act. A copy of the finding shall be given to each of the parties.
(5) If the Employer concerned fails to appear on the specified date of hearing after due service of notice without sufficient cause, the controlling authority may proceed to hear and determine the application ex parte. If the applicant fails to appear on the specified date of hearing without sufficient cause, the controlling authority may dismiss the application:
Provided that an order under this sub-rule may, on good cause being shown within thirty days of the said order, be reviewed and the application reheard after giving not less than fourteen days' notice to the opposite party of the date fixed for rehearing of the application."
This Court on a plain reading of Section 7(4) and Rule 8 and 10 of the Act/Rules extracted above would note that the disputes relating to payment of gratuity can broadly be classified into three categories; a) whether the payment of gratuity is payable; b) whether the amount of gratuity has rightly been quantified and c) whether the claimant is the right person to receive the payment. This Court has no hesitation to record that an application under Section 7 (1) for which the statutory form is prescribed, is for the purposes of quantification of a claim which may either be made by the claimant or the process be undertaken by the employer himself under Section 7(2) on the claimant's failure to file an application within the prescribed period. On the aspect of quantification, if a dispute arises between the parties, the same is cognizable before the Controlling Authority for which the proceedings would lie under the Act. The quantification of claim is permissible by the employee and the employer both and it is in the event of any dispute that the jurisdiction of the Controlling Authority would be invoked.
The present case falls in category (a), where the admissibility of the payment of gratuity to a teacher is essentially a subject matter of contest. After the Amendment Act, 2009 was promulgated, the definition of the employee has come to be redefined with a retrospective relief. The petitioner being the employer is already disputing the liability by having challenged the validity of the Amendment Act, 2009, as such, to say that the employee would not be within his right to approach the Controlling Authority unless he makes an application under Section 7 (1) of the Act and that too, when there is complete denial/failure on the part of petitioner to admit or carry out the quantification of claim as per Section 7 (2) of the Act, the submission put forth by the petitioner that the Controlling Authority lacked jurisdiction before the employer was approached, is fallacious. This Court does not see any justification in the submission that the employee in a situation like the one at hand ought to have approached the employer without which the proceedings before the Controlling Authority would not lie. Even the delay in such a situation, would not defeat the proceedings once it is clear that the employer himself has failed to redress the claim of beneficiary to the least extent. In this view of the matter, the argument of the petitioner on the aspect of jurisdiction and delay, fails and the same is hereby rejected. The petitioner has not projected any prejudice on the aspect of quantification by Controlling authority and the payment has been deposited subject to the outcome.
Insofar as the question of framing of issues is concerned, this Court would note that Section 7 (4)(c) clearly postulates that the Controlling Authority shall hold an enquiry after giving opportunity to the parties. The legislative intention is unambiguous on the procedural aspect. The proceedings under the Act are summary in nature and what is essentially necessary is the observance of the fundamental rule of affording fair opportunity. There is no mandate for framing of the issues, thus, it is wrong to contend that failure on the part of the Controlling Authority to set out the issues before commencing hearing of the case being violative of the principles of natural justice would vitiate the decision. Rule 11 further strengthens the case of defence when it clarifies the position of issuing notice, fixing date, time and place. Legally there is no mandate of law for framing of the issues specifically, therefore, setting out the points for determination by the Controlling Authority so as to address the real controversy in the light of evidence on record by itself would not give rise to a ground unless any prejudice for that matter is pleaded and made out. Framing of points for determination rather shows the application of mind by the competent authority. Since a case of prejudice on any score whatsoever is not made out, thus, to argue that the petitioner would have been able to file evidence only after the issues were framed and made known to him prior to the hearing of the case commenced, is nothing but a dilatory tactics to prolong the case for no valid reason.
The case laws placed reliance upon by the learned counsel for the petitioner are also do not lend any support to the petitioner in the present set of facts and circumstances.
In view of above, this Court is of the considered opinion that framing of issues by the Controlling Authority is not mandatory but any point or issue decided by the Controlling Authority is of course open to be challenged on the ground of perversity, provided, the reliable evidence is tendered in the proceedings even upto the appellate stage with the leave of the competent authority. In the present case, the petitioner has not placed reliance upon any material which has gone unnoticed by the Controlling Authority or the appellate authority, hence there is no scope for interference, as such, the consequence of payment in favour of opposite party no. 3 is bound to follow.
In view of the discussion made hereinabove, the writ petition being devoid of merit, is hereby dismissed.
No order as to cost.
Order date: March 28, 2018 MFA