LEARNING MADE EFFICIENT
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Birla Institute of Technology V/s The State of Jharkhand & Ors.

“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.

Case name:Birla Institute of Technology V/S The State of Jharkhand & Ors.
Case number:Civil Appeal No.2530 Of 2012
Court:The Supreme Court Of India
Bench:Abhay Manohar Sapre Indu Malhotra
Decided on:March 07, 2019
Relevant Act/Sections:The Payment of Gratuity Act, 1972
  • BRIEF FACTS AND PROCEDURAL HISTORY:

PROCEDURAL HISTORY:

  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 Court’s notice by the learned counsel appearing for the appellant, allowed the appeal and set aside the order of the High Court.
    1. 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.
    1. This Court, therefore, suo motu took up the 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:

“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. 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.”

  • 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.

BRIEF FACTS

  1. The appellant is a premier technical educational institute of repute in the country. It is known as “Birla Institute of Technology” (BIT) 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. 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. 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.
  2. 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 pay a sum of Rs.3,38,796/along with interest at the rate of 10% p.a. towards the gratuity to respondentNo.4.
  3. 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.
  4. 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 appellant Institute in this Court.

ISSUE BEFORE THE COURT:

Whether the Courts below were justified in holding that respondent No.4 was entitled to claim gratuity amount from the appellant (employer) under the Act.

RATIO OF THE COURT

  • 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. 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. 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. 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. Primary Teachers Association (supra) was no longer 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.
    • In 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 help the appellant in any manner. It has lost its binding effect. 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.
  • DECISION HELD BY COURT:

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).

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