Case title:
The Cooperative Market Society Limited Bishnah v. Assistant Labour Commissioner & Ors.
Date of Order:
19.02.2024
Bench:
Hon’ble Mr. Justice Sanjeev Kumar
Parties:
Petitioner: 1. The Cooperative Market Society Limited Bishnah, through its Chairman Basant Saini, Age 61 years S/o Sh. Kartar Chand R/o Arnia Tehsil Arnia District Jammu.
Respondent(s): 1. Assistant Labour Commissioner (Authority under Payment of Gratuity Act, 1972), Behind Shakuntla Theatre, B.C.Road, Jammu
2. Chaman Lal Sharma S/o Sh. Gian Chand Sharma R/o Village Karyal Brahmana Tehsil Bishnah District Jammu
3. Central Bank of India, Branch Office Bishnah, Through its Branch Manager.
4. S.H.O., Police Station, Bishnah, District Jammu
SUBJECT:
The Hon’ble High Court of Jammu & Kashmir and Ladakh (hereinafter referred to as ‘the High Court’ or ‘the Court’) dealt with a Writ Petition filed under Article 226 of the Constitution regarding the grant of a gratuity award. The petitioner challenged the order stating that they were not given a fair chance to present their case which is violative of the principles of justice. The High Court allowed the petition partially, quashing the attachment order and dismissing the challenge against the gratuity award.
IMPORTANT PROVISIONS:
The Constitution of India, 1950:
- Article 226
The Payment of Gratuity Act, 1972 (the Act):
- Section 7(4)
- Section 7(7)
- Section 8
OVERVIEW:
- The Controlling Authority under the Act, granted respondent No. 2 a gratuity award of a sum of Rs. 5,02,740/- on 21st September 2019, under the directive that in the event the gratuity sum is not deposited within 30 days, the amount shall become recoverable along with compound interest @15% per annum.
- The petitioner challenged the order and subsequently, the impugned order was dismissed on 07.07.2020.
- The Controlling Authority issued an order on 27.08.2020 due to non-payment of gratuity award, whereby the application filed by the petitioner-Society was attached.
- The petitioner has filed a petition contesting the order of the Controlling Authority regarding the gratuity award and the subsequent attachment of the petitioner’s office before the High Court.
ISSUES RAISED:
- Whether the writ petition is maintainable?
- Whether it was within the jurisdiction of the Controlling Authority to award gratuity?
ARGUMENTS ADVANCED BY THE PETITIONER:
- The order dated 21.09.2019 was ex-parte. The petitioner was deprived of the opportunity to argue regarding the gratuity award.
- Issuing an order attaching the petitioner’s office was beyond the jurisdictional powers of the Controlling Authority.
- The Controlling Authority’s powers are limited to issuing a certificate of recovery and the process of recovery.
ARGUMENTS ADVANCED BY THE RESPONDENT:
- The petition is non-maintainable as an alternative statutory remedy of appeal before the Appellate Authority established by the government already exists.
- It is necessary to provide a certificate from the Controlling Authority that indicates that an amount equal to the required gratuity has been deposited directly before the Appellate Authority for the appeal to be entertained.
- The filing of the instant petition is an attempt to circumvent the necessity of making a pre-deposit prior to approaching the Appellate Authority. The pre-deposit is essential and indispensable for the Appellate Authority to entertain the appeal.
JUDGEMENT ANALYSIS:
- The High Court observed that under the Gratuity Act an appeal lies before the Appellate Authority against the gratuity award passed by the Controlling Authority.
- It stated that it is mandated that the appeal be filed within 60 days accompanied by a certificate from the Controlling Authority which confirms the award deposit.
- The remedy provided under Section 7(7) of the Act cannot be bypassed to avoid making the necessary pre-deposit due to its statutory nature.
- The appellant must either produce a certificate from the Controlling Authority that indicates a payment of the deposit.
- Relying on the ruling of Badri Nath Koul v. UT of Jammu & Kashmir and Ors, the Court highlighted the significance of the pre-deposit provision in securing the gratuity amount during the process of appeal.
- It was held that a pre-deposit was fundamental to consideration of appeal by Appellate authority.
- The Court asserted that the employer cannot circumvent the procedure prescribed under Section 7(7) by approaching the High Court to avoid paying the pre-deposit amount, concurring with the respondent.
- The High Court reaffirmed that the remedy provided under the Act must be pursued by the Appellant and matters concerning the entitlement to gratuity are subject to determination by the competent authority.
- However, the Court observed that the Controlling authority had failed to provide the petitioner a fair opportunity to present their case, and found merit in the petitioner’s argument.
- Subsequently the attachment order was quashed provided that the Controller was not prevented from following the due process to recover, if any, outstanding gratuity amount.
CONCLUSION:
The High Court accordingly dismissed the Writ Petition filed by the petitioner challenging the award of gratuity granted by the Controlling Authority under the Payment of Gratuity Act. It highlighted the statutory nature of the remedy of the appeal before the Appellate Authority, stating that the payment of the pre-deposit was a pre-requisite for appeal consideration. The order of attachment, however, was quashed on the grounds of procedural irregularities. The Court further stated that the Controller had the right to pursue recovery proceedings for any outstanding amounts as outlined in section 8 of the Act. The Court mandated the release of Rs. 3 Lakhs to be deposited by the petitioner with the registry in favour of respondent no. 2, subject verification and identification.
