1. Heard Sri Sanjay Kumar Tripathi, learned counsel for the petitioner in the present writ petition and in connected matters and Sri Sudhanshu Narain, learned counsel appearing on behalf of respondent-employee No. 1 here, and on behalf of each of the respondent-employees in connected matters. Learned Standing Counsel has been heard on behalf of respondent Nos. 2 and 3 here and, likewise, on behalf of the State-respondents in the connected writ petitions.
2. The question involved in the present writ petition as well as all other connected matters is whether the Nagar Mahapalika Gorakhpur "Akendriyat - Sevanivratti Labh Viniyam, 1990" framed under Section 458 (1)(f) of the U.P. Municipal Corporations Act, 1959 would prevail in the matter of payment of gratuity to employees of the Nagar Mahapalika, Gorakhpur over the provisions of the Payment of Gratuity Act, 1972?
3. Respondent No. 1, Lal Bahadur Singh was appointed with the Nagar Nigam Gorakhpur on 27.03.1973, as a Safai Supervisor. He retired from the said post upon attaining the age of superannuation on 31.03.2006, completing 33 years of service. He retired from the post of a Safai Supervisor. The respondent was paid gratuity in the sum of Rs. 66,175/-, in accordance with the provisions of Nagar Mahapalika, Gorakhpur "Akendriyat Seva Labh Viniyam 1990" (for short, the 'Regulations'). Respondent no. 1 (for short the 'Employee') claimed that he was entitled to payment of gratuity under the Act that would reckon to a figure of Rs. 1,31,974/-; instead, he had been paid gratuity under the Regulations, in the sum of Rs. 65,175/-. He, therefore, claimed the difference between his entitlement under the Act and the sum paid to him by the petitioner, Nagar Nigam Gorakhpur (for short, the 'Employer') on that count under the Regulations, together with interest @ 12% per annum. The claim of the petitioner to gratuity aforesaid was registered on the file of the Controlling Authority, Payment of Gratuity Act as PG Case No. 56 of 2006. The aforesaid claim was made through an application dated 31.07.2006.
4. The Employers filed written statement, dated 31.03.2007 before the Controlling Authority, taking a case that the Employee had been paid his gratuity in accordance with his entitlement, of course, under the Regulations. It was further urged that the said payment of gratuity falls within the definition of a final settlement, and, as such, no claim for payment of gratuity before the Authority under the Act, is maintainable. It was specifically repudiated by the Employers that gratuity can be claimed by the Employee, in the sum of Rs. 1,31,974/- calculated in terms of the Act. They said that the Employee's entitlement to gratuity is governed by the Regulation, and not the Act.
5. The Controlling Authority by an order, dated 06.02.2008 allowed PG Case No. 56 brought by the employee, and ordered the arrears of gratuity, being a sum of Rs. 66,799.00 with effect from 01.03.2006, to be paid to the employee, alongwith simple interest @ 8% per annum. A sum of Rs. 200/- was awarded in costs. The Employers aggrieved by the order of the Controlling Authority, dated 06.02.2008, filed Civil Misc. Writ Petition No. 23800 before this Court. The aforesaid writ petition was summarily dismissed on 17.03.2009, on ground of there being an equally efficacious alternative remedy available by way of an appeal under the Act, to the Appellate Authority. The Employers, therefore, filed an appeal from the order of the Controlling Authority, dated 06.02.2008, on 19.05.2009, under Section 7(7) of the Act. The aforesaid appeal was registered on the file of the Appellate Authority under the Act, as Appeal No. 1 of 2010. The Employer filed an objection/reply on 22.03.2010, in the appeal last mentioned, carried to the Appellate Authority by the Employee. The Appellate Authority, vide an order dated 24.07.2010, proceeded to dismiss the Employers appeal and affirmed the order of the Controlling Authority, dated 06.02.2008.
6. Aggrieved by the order dated 24.07.2010 passed by the Appellate Authority under the Act and the order dated 06.02.2008 passed by the Controlling Authority, the present writ petition has been filed by the Employers.
7. Here, it would be apposite to detail that all the connected matters have been filed on identical facts by the Employers against their retired employees who have claimed gratuity under the Act, in preference to what they have been paid under the Regulations. Claims of each such employee to a higher sum of gratuity, calculated in accordance with the provisions of the Act, over and above that paid under the Regulations by the Employers, have been allowed together with interest on the arrears of outstanding due on account of the difference. Likewise, in all connected writ petitions, the Employers appeal against the respective determinations made by the Controlling Authority under the Act have been dismissed by the Appellate Authority. This Court may record here that this petition was admitted to hearing on 27.07.2011 and parties have exchanged affidavits. Most of the connected matters too, have been admitted to hearing by orders of various dates. However, fourteen of these writ petitions have not been formally admitted. Nevertheless, identical questions of fact being involved, these petitions too have been heard by consent of learned counsel appearing for the parties. Since all matters connected to this petition, whether admitted or not, are founded on identical questions of facts and law, no pleadings have been exchanged in the connected matters. Those matters, therefore, are being heard and determined on the pleadings here.
8. It would be an exercise in futility to detail facts of each case that would be no more than a repetition, except the essential particulars. The essential particulars relating to the connected matters are depicted in tabular form, hereinunder:- Sl. No. Writ Petition No. Name of Employee Designation Gratuity paid by Employers under the Regulations Gratuity determined and held payable under the Act by the Authorities Gratuity held by the Authorities payable under the Act (substantive sum of difference determined without accretion on account of interest awarded) Date of impugned order passed by the Controlling Authority under the Act Date of impugned order passed by the Appellate Authority under the Act Date of filing the Writ Petition before this Court Date of the order of interim stay and connection to the leading petition Date of admission to hearing 1 64266 of 2010 Hanuman Mishra Clerk 89,100/-
2,47,159/-
1,58,059/-
18.02.2008 24.07.2010 25.10.2010 27.10.2010 27.07.2011 2 64267 of 2010 Budhu Chowkidar 60,225/-
1,27,778/-
67,553/-
06/02/08 24.07.2010 25.10.2010 27.10.2010 27.07.2011 3 64268 of 2010 Shaukat Safai Worker 51,000/-
97,591/-
46,591/-
06/02/08 24.07.2010 25.10.2010 27.10.2010 27.07.2011 4 64269 of 2010 Smt. Meniya Safai Worker 16,219/-
34,528/-
18,309/-
06/02/08 24.07.2010 25.10.2010 27.10.2010 27.07.2011 5 64270 of 2010 Saddar Prasad Khalasi 55,193/-
1,12,915/-
57,722/-
06/02/08 24.07.2010 25.10.2010 27.10.2010 27.07.2011 6 64271 of 2010 Smt. Sumitra Devi Chaprasi 55,192/-
1,00,638/-
45,446/-
06/02/08 24.07.2010 25.10.2010 27.10.2010 27.07.2011 7 64272 of 2010 Shankar Lal Vaxinator 63,937/-
1,28,205/-
64,268/-
24.03.2008 24.07.2010 25.10.2010 27.10.2010 27.07.2011 8 64273 of 2010 Ram Kewal Yadav Chawkidar 61,380/-
1,56,163/-
94,783/-
25.02.2008 24.07.2010 25.10.2010 27.10.2010 27.07.2011 9 14866 of 2011 Ram Dulare Head Clerk 52,161/-
1,45,130/-
92,969/-
29.03.2008 04/11/10 09/03/11 11/03/11 27.07.2011 10 14867 of 2011 Ram Adhar Beldar NIL 91,440/-
91,440/-
06/02/08 04/11/10 09/03/11 11/03/11 27.07.2011 11 14869 of 2011 BhagwaN Das Chaprasi 55,193/-
92,506/-
37,313/-
31.05.2008 04/11/10 09/03/11 11/03/11 27.07.2011 12 14871 of 2011 Smt. Meniya Safai Worker 46,909/-
66,044/-
19,135/-
06/02/08 04/11/10 09/03/11 11/03/11 27.07.2011 13` 14872 of 2011 Smt. Asharfi Devi Beldar Nil 1,10,770/-
1,10,770/-
27.02.2008 04/11/10 09/03/11 11/03/11 27.07.2011 14 16318 of 2011 Ram Adhar Chaukidar 58,410/-
1,25,707/-
67,297/-
06/02/08 04/11/10 15.03.2011 17.03.2011 27.07.2011 15 16321 of 2011 Banshi Pipe Line Khalashi 55,192/-
1,01,196/-
46,004/-
06/02/08 04/11/10 15.03.2011 17.03.2011 27.07.2011 16 16324 of 2011 Smt. Shahiddun Nisha Safai Worker 49,612/-
99,152/ 49,540/-
29.03.2008 04/11/10 15.03.2011 17.03.2011 27.07.2011 17 16325 of 2011 Smt. Sant Raji Devi Beldar Nil 1,02,461/-
1,02,461/-
27.02.2008 04/11/10 15.03.2011 17.03.2011 27.07.2011 18 16328 of 2011 Smt. Zubaida Safai Worker 51,011/-
93769/-
42,758/-
29.03.2008 04/11/10 15.03.2011 17.03.2011 27.07.2011 19 16330 of 2011 Sant Prasad Chaurasiya Pump Driver 59,070/-
88,678/-
29,608/-
06/02/08 04/11/10 15.03.2011 17.03.2011 27.07.2011 20 16331 of 2011 Molhu Beldar 60,225/-
1,26,346/-
66,121/-
06/02/08 04/11/10 15.03.2011 17.03.2011 27.07.2011 21 16333 of 2011 Dinesh Kumar Dhar Dubey Head Clerk 80,850/-
2,23,370/-
1,42,520/-
26.02.2008 04/11/10 15.03.2011 17.03.2011 27.07.2011 22 16334 of 2011 Smt. Vijai Kumari Safai Worker 57,337/-
1,22,098/-
64,761/-
27.02.2008 04/11/10 15.03.2011 17.03.2011 27.07.2011 23 16337 of 2011 Jagdish Gupta Chaprasi 36,800/-
63,267/-
26,467/-
28.05.2008 04/11/10 15.03.2011 17.03.2011 27.07.2011 24 16342 of 2011 Harendra Kumar Pump Driver 66,412/-/-
1,40,905/-
74,993/-
06/02/08 04/11/10 15.03.2011 17.03.2011 27.07.2011 25 16528 of 2011 Satya Narayan Yadav Pump Operator 61,360/-
1,31,113/-
69,733/-
29.03.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 26 16531 of 2011 Gaya Prasad Chaukidar Nil 95,535/-
95,535/-
23.10.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 27 16533 of 2011 Smt. Samjira Devi Beldar Nil 1,05,230/-
1,05,230/-
27.02.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 28 16536 of 2011 Rasool Safai Worker 54,374/-
1,40,732/-
86,358/-
25.02.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 29 16538 of 2011 Shah Mohammad Sweeper 60,225/-
1,20,871/-
60,646/-
06/02/08 04/11/10 16.03.2011 18.03.2011 27.07.2011 30 16539 of 2011 Rasulan alias Rasuliya Safai Worker 55,488/-
1,12,652/-
57,164/-
25.02.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 31 64095 of 2010 Sripat Lal Safai Supervisor 66,412/-
1,44,692/-
78280/-
06. 02.2008 24.07.2010 23.10.2010 26.10.2010 27.07.2011 32 16539 of 2011 Rasulan @ Rasuliya Safair Worker 55,488/-
1,12,,652/-
57,164/-
26.02.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 33 16541 of 2011 Haushla Prasad Shukla Pump Operator 53,793/-
1,04,062/-
50,269/-
06/02/08 04/11/10 16.03.2011 18.03.2011 27.07.2011 34 16542 of 2011 Tribuwan Lal Srivastava Lekha Lipik 75,900/-
1,16,723/-
40,823, 29.03.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 35 16545 of 2011 Nazzi Safai Worker Nil 1,08,571/-
1,08,571/-
31.05.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 36 16546 Of 2011 Smt. Savitri Devi Chaukidar Nil 1,56,780/-
1,56,780/-
23.10.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 37 16549 of 2011 Kranti Jiwan Pump Driver 66,412/-
1,68,600/-
1,02,188/-
19.02.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 38 16550 of 2011 Smt. Abida Khatoon Chaprasi 48,200/-
79,230/-
38,430/-
27.02.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 39 16551 of 2011 Ram Briksh Chaprasi 59,254/-
1,37,160/-
77,906/-
26.02.2008 04/11/10 16/03/11 18.03.2011 27.07.2011 40 16553 of 2011 Smt. Kalindar Devi Beldar Nil 1,05,230/-
1,05,230/-
27.02.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 41 16554 of 2011 Khadim Husain Pump Operator 65,175/-
1,47,971/-
82,796/-
29.03.2008 04/11/10 16.03.2011 18.03.2011 27.07.2011 42 16677 of 2011 Munna Safai Worker 58,410/-
1,26,652/-
68,242/-
18.02.2009 22.11.2010 16.03.2011 18.03.2011 27.07.2011 43 17263 of 2011 Shyam Bahadur Head Rokariya 72,500/-
97,038/-
24,538/-
29.03.2008 04/11/10 23.03.2011 25.03.2011 27.07.2011 44 29821 of 2014 Smt. Ram Rati Devi Operator 59,695/-
1,17,969/-
58,274/-
25.11.2010 25.02.2014 24.05.2014 27.05.2014 Not admitted 45 29824 of 2014 Smt. Munna Safai Karmchari 56,265/-
1,19,838/-
63,576/-
25.11.2010 25.02.2014 24.05.2014 27.05.2014 Not admitted 46 29822 of 2014 Chantha Safai Karmchari 56,000/-
1,00,488/-
44,488/-
25.11.2010 25.02.2014 24.05.2014 27.05.2014 Not admitted 47 29825 of 2014 Smt. Akhtaran Beldar 42,000/-
1,26,046/-
84,046/-
25.11.2010 25.02.2014 24.05.2014 27.05.2014 Not admitted 48 29827 of 2014 Kamar Jahan Fitter 65,175/-
1,30,451/-
65,276/-
25.11.2010 25.02.2014 24.05.2014 27.05.2014 Not admitted 49 29828 of 2014 Tulla Safai Karmchari 60,225/-
1,58,261/-
98,036/-
25.11.2010 25.02.2014 24.05.2014 27.05.2014 Not admitted 50 29830 of 2014 Smt. Roshan Aara Senior Clerk 62,929/-
1,49,252/-
86,323/-
25.11.2010 25.02.2014 24.05.2014 27.05.2014 Not admitted 51 29833 of 2014 Molhu Labour 53,047/-
1,10,090/-
57,043/-
25.11.2010 25.02.2014 24.05.2014 27.05.2014 Not admitted
9. The submission of the learned counsel for the petitioner is that retirement benefits payable to the Employee under the Regulations are more to the Employee's advantage, when compared with gratuity payable under the Act. He submits, therefore, that the Employee is not entitled to claim gratuity calculated in accordance with the Act. It is also urged by Sri Sanjay Kumar Tripathi, learned Counsel for the Employers that under the Regulations, the employees are also entitled to pension, in addition to gratuity. As such, the Regulations are clearly more advantageous to the Employee compared to what his entitlement would be, under the Act. It is argued that the Authorities have not at all taken into account the fact that under the Regulations, the employees are entitled to gratuity and pensionery benefits, not less favourable than benefits obtaining under the Act.
10. It is also argued that the provisions of the Act are not applicable to the Employers as they are a state establishment, incorporated under an Act of the State legislature, that is to say, the U.P. Municipal Corporations Act, 1959 (for short the, 'Act of 1959'). Regulations framed by them in exercise of their statutory powers under Section 548(1)(f), together with the parent statute, have to be regarded as a special law vis-a-vis the Act, in the matter of payment of gratuity. As such, the provisions of the Act would stand excluded by the Regulations framed under the Act of 1959. The two Authorities below, in the submission of Sri Sanjay Kumar Tripathi, have manifestly erred in law, where they failed to notice this exclusion of the Act, by a special statute. It is on the fringes of these thematic submissions that learned counsel for the petitioner has urged that the Appellate Authority has gone wrong in his observation, where he says in the order impugned passed by him that the relevant regulations were not shown to him. It is submitted that the Regulations framed under the Act, relating to payment of gratuity, pension and other benefits, all framed under the Act of 1959, were clearly brought to his notice.
11. There is one submission put forward by Sri Sanjay Kumar Tripathi, that is away from the rest hereinabove recorded. He has urged that the Authorities have calculated gratuity payable to the employee under the Act, by including in the last wages drawn, the sum of money paid towards House Rent Allowance and City Compensatory Allowance. It is his submission that the said allowances could not be included, while determining the last wages drawn for the purpose of calculating gratuity payable under the Act. Learned counsel for the Employers points out that under the Act, 'wages' are inclusive of all emoluments, including Dearness Allowance, but excludes Bonus, Commission, House Rent Allowance, Over Time Wages and any other allowances. This, according to Sri Sanjay Kumar Tripathi, is how wages have been defined under Section 2(s) of the Act, which have to serve as the basis while calculating "15 days wages based on the rate of wages last drawn by the employee", to borrow the phraseology of the statute, under Section 4(2) of the Act. This submission of Sri Tripathi, shall be dealt with, independent of the other submissions in this judgment.
12. Sri Sudhanshu Narain, learned counsel for the Employers on the other hand submits that the question whether the Employee is entitled to gratuity under the Regulations, framed by the Employer in exercise of powers under Section 548(1)(f) of the Act of 1959 or under Section 4(2) of the Act, is no longer res integra in view of the decision of this Court in Nagar Ayukt Nagar Nigam vs. Meraj Ahmad and another1, where precisely the same issue was the one that was raised by the Nagar Nigam, Kanpur. In the aforesaid decision, this Court, while dealing with an identical submission, that stemmed from a case about an exemption for the Nagar Nigam from the provisions of the Act in that case, owning to more favourable terms claimed to be offered by the Nagar Nigam Kanpur, it was held by this Court:
10. Sri Y.S. Sachan, learned Counsel for the petitioner submits that the definition of an employee under the Act, read with section 5 thereof, leads one to the inevitable conclusion that an employee of any establishment, like the petitioner-Nigam who under its rules is entitled to receive gratuity on terms not less favourable than the benefits conferred under the Act, would render such an establishment being exempt from the applicability of the Act. He urges that the Retiral Dues and General Provident Fund Regulation, 1962 framed by the petitioner-Nigam are more favourable to its employees, circumstanced as respondent No. 1, in the matter of entitlement to gratuity than the provisions of the Act, attracting the exemption clause under section 5 of the Act. This Court is afraid that the submission cannot be accepted.
11. On a plain reading of section 2(e) of the Act in applicability of the Act is there only in relation to the such employees of the Central Government or the State Government, who hold a post that is governed by any Act or any Rules providing for payment of gratuity. This Court has no doubt that the question of inapplicability of the Act is very different from exemption from its operation. The Act on its own term is alone inapplicable in case of such persons who hold a post under the Central or a State Government that is governed by an Act or Rules providing for payment of gratuity; no other class of employees has been placed in a category to whom the Act is inapplicable. There is no manner of doubt that the petitioner-Nigam is neither the Central Government or a State Government. It is a Corporation established under a State enactment. Therefore, an employee of the Corporation can never fall in the class to whom the Act may be held inapplicable.
12. Exemption is quite another matter that is dealt with under section 5 of the Act. Section 5 of the Act, reads thus: "5. Power to exempt--
[1] The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act. [2] The appropriate Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act. [3] A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively a date not earlier than the date of commencement of this Act, but no such notification shall be issued so as to prejudicially, affect the interests of any person."
13. Exemption may be sought by any establishment, factory, mine, oilfield etc. and that exemption may be granted by the appropriate Government as defined under section 2(a)(ii). The appropriate Government would mean the State Government. Exemption under section 5(1) of the Act may be granted by the appropriate Government by notification, and subject to such conditions as specified there. In case, employees of such establishment, factory, mine etc. are in receipt of gratuity or pensionary benefits conferred under the services Rules, in order to avail an exemption from the provisions of the Act, an establishment like the petitioner-Nigam have to establish that the State Government by notification have exempted them from the operation of the Act under section 5(1) or under section 5(2) of the Act, in case of a particular employee, or a class of employees. There is no such case much less pleading to show that the petitioner-Nigam has been granted an exemption by the State Government, under section 5(1) of the Act. In the absence of an exemption granted by a notification duly made by the State Government, the mere fact that the terms of gratuity offered by the petitioner-Nigam are more beneficial to an employee like the first respondent here, would not automatically entitle the petitioner to an exemption from the provisions of the Act, by pleading or establishing before the Authority or the Court, the better terms of gratuity available under their service rules. The exemption can come from a notification under section 5 of the Act issued by the appropriate Government alone, and in no other way. That being the case, the petitioner is not entitled to say that exemption from operation of the Act is there merely because they say or can establish before the Authority or this Court that under the Retiral Dues and General Provident Fund Regulation, 1962 (as amended up to date) the terms of gratuity offered to their employees, like the first petitioner, are more beneficial than those available under section 4(2) of the Act.
14. This view of the law accords with the guidance of the Hon'ble Supreme Court in Municipal Corporation of Delhi v. Dharam Prakash Sharma, 1999 (81) FLR 867 (SC), where it was held by their Lordships thus: "2. The short question that arises for consideration is whether an employee of the MCD would be entitled to payment of gratuity under the Payment of Gratuity Act when the MCD itself has adopted the provisions of the CCS (Pension) Rules, 1972 (hereinafter referred to as "the Pension Rules"), whereunder there is a provision both for payment of pension as well as of gratuity. The contention of the learned Counsel appearing for the appellant in this Court is that the payment of pension and gratuity under the Pension Rules is a package by itself and once that package is made applicable to the employees of the MCD, the provisions of payment of gratuity under the Payment of Gratuity Act cannot be held applicable. We have examined carefully the provisions of the Pension Rules as well as the provisions of the Payment of Gratuity Act. The Payment of Gratuity Act being a special provision for payment of gratuity, unless there is any provision therein which excludes its applicability to an employee who is otherwise governed by the provisions of the Pension Rules, it is not possible for us to hold that the respondent is not entitled to the gratuity under the Payment of Gratuity Act. The only provision which was pointed out is the definition of "employee" in section 2(e) which excludes the employees of the Central Government and State Governments receiving pension and gratuity under the Pension Rules but not an employee of the MCD. The MCD employee, therefore, would be entitled to the payment of gratuity under the Payment of Gratuity Act. The mere fact that the gratuity is provided for under the Pension Rules will not disentitle him to get the payment of gratuity under the Payment of Gratuity Act. In view of the overriding provisions contained in section 14 of the Payment of Gratuity Act, the provision for gratuity under the Pension Rules will have no effect. Possibly for this reason, section 5 of the Payment of Gratuity Act has conferred authority on the appropriate Government to exempt any establishment from the operation of the provisions of the Act, if in its opinion the employees of such establishment are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act. Admittedly MCD has not taken any steps to invoke the power of the Central Government under section 5 of the Payment of Gratuity Act. In the aforesaid premises, we are of the considered opinion that the employees of the MCD would be entitled to the payment of gratuity under the Payment of Gratuity Act notwithstanding the fact that the provisions of the Pension Rules have been made applicable to them for the purpose of determining the pension. Needless to mention that the employees cannot claim gratuity available under the Pension Rules."
13. It was, further held by this Court, in relation to the issue of applicability of the Act to the Nagar Nigam, Kanpur in Nagar Ayukt Nagar Nigam vs. Meraj Ahmad (Supra), particularly, taking note of a decision of the Supreme Court in Nagar Ayukt Nagar Nigam, Kanpur vs. Mujib Ullah Khan and another2, thus:
24. The issue relating to the applicability of the Act to the petitioner-Nagar Nigam has been very recently examined by the Supreme Court in Nagar Ayukt Nagar Nigam, Kanpur v. Mujib Ullah Khan and another, MANU/SC/0457/2019 : 2019 (161) FLR 503 (SC) which incidentally is a decision on an Appeal by Special Leave carried by the petitioner-Nigam from the decision of this Court in Nagar Ayukt, Nagar Nigam, Kanpur v. Mujib Ullah Khan (supra) referred to in the earlier part of this judgment. Their Lordships have clearly held the petitioner-Nigam and its employees to be amenable to the Act by virtue of a notification dated 8th January, 1982 issued by the Central Government in exercise of powers under section 1(3)(c) of the Act. The decision aforesaid of their Lordships in Nagar Ayukt, Nagar Nigam, Kanpur v. Mujib Ullah Khan and another (supra) (the Hon'ble Supreme Court's decision) lays down the law in this regard, to which a wholesome and contextual reference finds detail in paragraphs 6, 7, 8, 9, 10, 11 and 12 of the Report, where it is held: "6. The appellant relies upon section 3 of the U.P. Dookan Aur Vanijya Adhishthan Adhiniyam, 1962 (1962 Act) which is to the effect that such Act will have no application to the office of Government or Local Bodies. Therefore, on the strength of such statutory provision, it was argued that the Act would not be applicable in respect of the Municipalities. The appellant is not a factory, mine, oilfield, plantation, port and railway company and that there is no notification as stipulated under Clause (c) of section 1(3) of the Act. Therefore, the employees of the Municipalities are entitled to the gratuity in terms of the Regulations framed in exercise of powers of section 548 of the 1959 Act and not under the Act.
7. On the other hand, learned Counsel for the respondent pointed out that the Central Government has published a notification in terms of section 1(3)(c) of the Act on 8.1.1982 to extend the applicability of the Act to the Municipalities. Thus, the Act is applicable to the Municipalities. The relevant provisions of the Act read as under: "1. Short title, extent, application and commencement.--(1) This Act may be called the Payment of Gratuity Act, 1972. (2) It extends to the whole of India:
Provided that in so far as it relates to plantations or ports, it shall not extend to the State of Jammu and Kashmir. (3) It shall apply to-
(a) every factory, mine, oilfield, plantation, port and railway company;
(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf."
8. A perusal of the above provisions would show that the Act is applicable to : (1) every factory, mine, oilfield, plantation, port and railway company; and (2) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, the said provision has two conditions, viz. (i) a shop or establishments within the meaning of a State law and (ii) in which ten or more persons are employed; and (3) the establishments or class of establishments which Central Government may notify.
9. The appellant is not covered by clauses (a) and (b) of section 1(3) of the Act. Clause (a) is not applicable on the face of the provisions, but even clause (b) is not applicable in view of section 3(c) of the 1962 Act as such Act is not applicable to the offices of the Government or local authorities. The Local Authorities means a municipal committee, district board etc or entrusted with the control or management of a municipal or local fund in terms of section 3(31) of the General Clauses Act, 1897.
10. In terms of the above said section 1(3)(c) of the Act, the Central Government has published a notification on 8.1.1982 and specified Local Bodies in which ten or more persons are employed, or were employed, on any day of the preceding twelve months as a class of establishment to which this Act shall apply. The said notification dated 08.01.1982 reads as under:-- "New Delhi, the 8th January, 1982 NOTIFICATION S.O. No. 239....-In exercise of the powers conferred by clause (c) of sub-section (3) of section 1 of the Payment of Gratuity Act, 1972 (39 of 1972), the Central Government hereby specified "local bodies' in which ten or more persons are employed, or were employed, on any day preceding twelve months, as a class of establishments to which the said Act shall apply with effect from the date of publication of this notification in the Official Gazette. Sd/.
(R.K.A. Subrahmanya) Additional Secretary (F. No. S-70020/16/77-FPG)"
11. We find that the notification dated 8.1.1982 was not referred to before the High Court. Such notification makes it abundantly clear that the Act is applicable to the local bodies i.e., the Municipalities. Section 14 of the Act has given an overriding effect over any other inconsistent provision in any other enactment. The said provision reads as under: "14. Act to override other enactments, etc.--The provisions of this Act or any rule made thereunder 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 this Act."
12. In view of section 14 of the Act, the provision in the State Act contemplating payment of Gratuity will be inapplicable in respect of the employees of the local bodies."
14. It is the Employer's case that they are a Nigam which clearly falls within the definition of "local bodies", envisaged under the Notification, dated 8th January, 1982, issued by the Central Government in exercise of their powers under Clause (c) of sub Section (3) of Section 1 of the Act, referred to in the decision of their Lordships in Nagar Ayukt Nagar Nigam, Kanpur vs. Mujib Ullah Khan and another (Supra). It is not the case of the Employer, pleaded anywhere, that they employ less than ten persons. Since the Employers have not taken that case of employing less than ten persons anywhere, it is reasonably inferable that they employ more than ten hands; their establishment is a Nagar Nigam, where judicial notice may be taken of the fact that an establishment of a local body, like a Nagar Nigam, has a workforce, far stronger in numbers than the figure of ten. Clearly, going by the principle laid down by their Lordships in Nagar Ayukt Nagar Nigam, Kanpur vs. Mujib Ullah Khan and another (Supra), the Employers are an establishment, to whom the provisions of the Act shall apply by virtue of the Notification of 8th January, 1982, issued by the Central Government, under Section 1(3)(c) of the Act. Once the Employers are an establishment, to whom the Act applies, the overriding effect of Section 14, thereafter, would exclude the provisions of the Regulations framed by the Employers, by virtue of their powers under Section 548(1)(f) of the Act of 1959. The inapplicability of the Act of 1959, and a fortiorari, any regulation framed under it, in the matter of payment of gratuity to an employee of the establishment to which the Act is applicable, has been laid down to be the law in Nagar Ayukt Nagar Nigam, Kanpur vs. Mujib Ullah Khan and another (Supra) by the Supreme Court. Incidentally, the said decision relates to para materia Service Regulations of the Kanpur Nagar Nigam, framed by the said Nigam in exercise of powers under Section 548(1)(f) of the Act of 1959, which is the source of power exercised by the Employers, while framing the Regulations, relating to gratuity here. Thus, there can be no doubt that so far as the applicability of the Act and its overriding effect vis-a-vis the Regulations is concerned, the Act works to exclude the Regulations, in the matter of payment of gratuity to the Employee.
15. The Employer has not come up with a case that any kind of exemption has been granted to them by the appropriate Government, which under the Act would mean the State Government, acting under Section 5(1). There is no such case pleaded by the Employers, either before the Authorities below or before this Court. In the absence of a notification by the State Government, issued under Section 5(1) of the Act, the Employer cannot claim exemption from the regime of the Act, in so far as entitlement to gratuity of their employees is concerned, including its calculation and determination. In this view of the matter, it must be held that the provisions of the Act are applicable in the matter of calculation and determination of gratuity payable to the Employee by the Employer, to the exclusion of the Regulations framed under the Act of 1959. Thus, it must be held that the two Authorities below have rightly applied the Act and calculated gratuity payable to the Employee, in accordance with the provisions of the Act.
16. Now, this Court may proceed to consider the other submission of Sri Sanjay Kumar Tripathi, learned counsel for the Employer that the Authorities have calculated gratuity payable to the employee under the Act, by including in the last wages drawn, the sum of money paid towards House Rent Allowance and City Compensatory Allowance, which are not part of the Employee's wages as defined under Section 2(s) of the Act. He submits that once House Rent Allowance and City Compensatory Allowance are not part of wages as defined under Section 2(s) (supra), the last wages drawn cannot be calculated, including those components of the Employee's emoluments, for the purpose of determining the gratuity payable under Section 4(2) of the Act.
17. In this connection, the Court has looked into the written statement filed on behalf of the Employers in PG Case No. 56 of 2008. This case that the last wages drawn for the purpose of calculation of gratuity have been wrongly put forward by the Employee in his claim, annexed as a schedule to his application dated 31.07.2006, has nowhere been pleaded. It is not said on behalf of the Employers that the components of House Rent Allowance and City Compensatory Allowance have been incorrectly included to reckon the sum of last wages drawn by the employee, in his application made to the Controlling Authority. Post the impugned order dated 06.02.2008, passed by the Controlling Authority, the Employers assailed it in appeal under Section 7(7) of the Act. This Court has also carefully looked into the memorandum of the appeal, annexed as Annexure 5 to the writ petition. The memorandum carries as many as nine grounds of appeal. In none of these grounds has a case been raised that the Controlling Authority, while determining the gratuity payable to the employee under Section 4(2) of the Act, has reckoned as part of the wages last drawn for the purpose of calculation of gratuity payable to the employee under Section 4(2) of the Act, any sum of money like House Rent Allowance or City Compensatory Allowance, which does not qualify for wages under the Act. The said plea has been taken for the first time before this Court in paragraph 20 of the writ petition, but not before the two Authorities below. Prima facie from the record, it is not apparent that House Rent Allowance or City Compensatory Allowance has been added to the wages last drawn by the Authorities, while calculating gratuity payable to the employee under Section 4(2) of the Act. The issue, therefore, is a pure question of fact which cannot be permitted to be raised for the first time before this Court in a writ petition.
18. This Court may record here that the same position on facts and the state of pleadings holds true for the other employees, in the connected writ petitions. In the above premises, this Court does not find any good ground to interfere with the impugned orders.
19. In the result, all the writ petitions are dismissed with costs. Interim orders passed, are hereby vacated. Order Date :- 29/08/2019 BKM/-