2023 LLR 293
KARNATAKA HIGH COURT
Hon'ble Mr. C.M. Poonacha, J.
W.P. No. 2925/2022 (L-PG), Dt/ 4-1-2023
A.M. Rajashekaraiah s/o Late A.M. Malappa
vs.
The Secretary, Department of Labour, Bangalore & Ors.
A. PAYMENT OF GRATUITY ACT, 1972 Section 4(2) Physical Education Teacher Scope of Employee was not paid gratuity on his retirement He moved application before Controlling Authority under the Act for releasing his gratuity which was allowed with interest Management filed appeal against order of Controlling Authority after depositing ordered amount Contention of management was that arraying the Principal of the College as a party was bad since he was not having any financial powers, nor he was appointing authority of the employee, and representative of the Management of College ought to have been made as a party Management filed application to bring the necessary party on record Petitioner opposed the application Application was allowed Matter was remanded to Controlling Authority for fresh adjudication Petitioner-employee has challenged orders of Appellate Authority in Writ Petition Respondent Nos. 1 to 3 opposed the writ petition Petitioner filed application seeking permission to withdraw amount deposited by management subject to result of Writ Petition Held, arraying Principal of College as a party and not Management can be said to be a technical one Management was aware of the proceedings initiated by Petitioner Management did not take any steps before the Controlling Authority to put-forth its say Amount ordered has been deposited Management is represented by the Principal in appeal Though Principal does not have any financial powers and that the Committee manages the College is required to be made as a party to the proceedings Appeal itself is filed by Management Even in application filed before Appellate Authority, Appellant therein, instead of impleading the relevant party has filed the application to direct the employee to bring necessary party on record But in the said application, the necessary party is not disclosed Only in affidavit filed by Principal it is stated that the Institute is run by Kalpatharu Institute of Technology by its Committee Hence, it is clear that the only object behind it is to, on one pretext or the other, drag on the legal proceedings solely to delay payment of gratuity of the Petitioner who is being driven from pillar to post to claim dues which he was statutorily entitled to Case is a classic one for exercise of the extraordinary discretionary jurisdiction contained under Article 226 of the Constitution for granting of suitable relief/s Stand of management is to be deprecated Contentions of Management are rejected Writ petition is allowed. Paras 11 to 15
B. INTEREST Section 7(3) and 7(3A) Held, when gratuity is not paid within 30 days from due date, the employer is liable to pay interest If employer has obtained due permission in writing from Controlling Authority for delayed payment on the ground of default of the employee, only then the interest may be avoided Accordingly, employer is directed to pay gratuity amount with interest @ 10% per annum from due date up to date of payment within four weeks. Paras 16 to 18
For Petitioner: Mr. M.C. Basavaraju, Advocate.
For Respondents No. 1 to 3: Mr. G.M. Chandrashekar, AGA
For Respondent No. 4: Mr. Kantharaja V., Advocate.
IMPORTANT POINTS
ORDER
C.M. Poonacha, J. 1. The above Writ Petition is filed seeking for the following reliefs:
(i) Issue a writ in the nature of writ of certiorari quashing the impugned order passed on the application (I.A.No. 1/2021) in appeal bearing No. SAKAAA/BAN-1/PGA(A)/CR-20/2020-21 dated 23/12/2021 passed by the second respondent vide Annexure L to this writ petition and the impugned order passed on the appeal bearing No. SAKAAA/BAN-1/PGA(A)/CR-20/2020-21 dated 20/01/2022 passed by the second respondent vide Annexure M to this writ petition by dismiss the application (I.A. No. 1/2021) as well as the appeal filed by the fourth respondent by confirming the order passed by the third respondent and
(ii) Pass any order/s or relief/s as this Hon'ble Court deems fit to grant under the facts and circumstances of the case in the interest of justice and equity.
2. It is the case of the Petitioner that he was selected and appointed as a Physical Education Teacher by Respondent No. 4-Kalpatharu Institute of Technology on 19.11.1986 and he retired from service on 31.08.2018. As on the date of retirement, the Petitioner had put in 32 years of continuous service with Respondent No. 4 and at the time of retirement, he was working as a Physical Education Director. The last drawn pay of the Petitioner was ` 44,288/- and Dearness Allowance was ` 4,428/- ; that after his retirement since the Petitioner was not paid the gratuity amount by the Respondent No. 4, he made a representation on 18.09.2018 as also a legal notice dated 27.10.2018. Since the gratuity amount was still not paid, the Petitioner filed an application before Respondent No. 3 Controlling Authority seeking for release of gratuity amount together with interest. Respondent No. 3 Controlling Authority vide order dated 26.11.2020, partly allowed the application and directed the Respondent No. 4 to pay an amount of ` 8,99,372/- together with interest @ 10% per annum from 03.11.2018 till the date of deposit.
3. Respondent No. 4 deposited the amount as ordered by the Controlling Authority and filed an Appeal before the Respondent No. 2-Appellate Authority challenging the Order passed by the Controlling Authority. In the Appeal, the primary contention was that, before the Controlling Authority the Principal of the College was arrayed as a party and that the Principal, not having any financial powers, the representative of the Management of the College ought to have been made as a party. In the said appeal an application was also filed by the Appellant therein to bring the necessary party on record. The said application was opposed by the Petitioner by filing objections. However, Respondent No. 2 Appellate Authority vide order dated 23.12.2021,
allowed the application. Thereafter, vide order dated 20.01.2022, allowed the appeal and remanded the matter to the Controlling Authority for fresh adjudication. Being aggrieved, the present Writ Petition is filed.
4. The relief sought for in the above Writ Petition is opposed by Respondent Nos. 1 to 3 State of Karnataka by filing statement of objections as well as by Respondent No. 4 which has also filed its statement of objections. The Petitioner has also filed Application I.A. 1/2022 seeking to permit the Petitioner to withdraw the amount deposited by Respondent No. 4 subject to result of the Writ Petition. The Respondent No. 4 has also filed statement of objections to I.A.1/2022.
5. In the statement of objection, Respondent No. 4 has contended inter alia that, it is the Principal who has been arrayed as a party and that the College is run by a Committee; that the Principal is not the appointing authority and the Principal cannot take any decision/s regarding financial issues; that the proper and necessary parties have not been arrayed in the proceedings before the Controlling Authority and hence, seeks for dismissal of the Writ Petition.
6. Learned counsel for the Petitioner reiteraties the case put forth by the Petitioner and contends that Respondent No. 4 has not disputed the essential aspects like Pay, Dearness Allowance and service of the Petitioner that are necessary for calculation of the gratuity of the Petitioner; that only technical objections are sought to be raised to prolong the litigation and the claim of the Petitioner on its merits is not disputed by the Respondent No. 4. It is contended by the Petitioner in I.A. 1/2022 that he has performed the marriage of his daughter on 11.02.2017 and spent a huge amount of more than ` 12,00,000/- by borrowing loan from a Co-operative Bank and the Petitioner used to pay a monthly installment of ` 39,857/- towards repayment of the loan and the Petitioner having retired from service on 31.08.2018, is unable to repay the principal loan amount and the Petitioner is depending on the gratuity amount for clearing the said loan; that the Petitioner has also availed the financial assistance from other private financial institutions for his day to day maintenance.
7. It is further contended that the question as to whether a Teacher-employee would fall within the meaning of section 2(b) of the Gratuity Act (for short the Act')' is covered by the judgment Hon'ble Supreme Court in the case of Birla Institute of Technology v. State of Jharkhand and others , (2019) 4 SCC 513. Hence seeks for grant of relief sought for in the Writ Petition as well as in I.A. 1/2022.
8. Learned counsel for Respondent No. 4 reiterates the stand taken in the statement of objections and submits that the Petitioner is not put to any hardship since the Appellate Authority has remanded the matter to the Controlling Authority for adjudication of the matter in accordance with law and challenge to a remand order is not liable to be entertained. Hence, he seeks for dismissal of the Writ Petition.
9. I have heard the contentions of the parties and perused the material on record. The questions that arise for my consideration are:
(i) Whether the relief sought in the Writ Petition is liable to be granted ?
(ii) Whether the relief sought for in I.A. No. 1/2022 is liable to be granted ?
10. The relevant facts are undisputed inasmuch as, the Petitioner was employed as a Physical Education Teacher with Respondent No. 4 from 19.11.1986 and retired from service on 31.08.2018 as a Physical Education Director; that the Basic Pay of the Petitioner was ` 44,188/- and the Dearness Allowance was ` 4,428/-; that the Petitioner has not been paid the gratuity amount and was constrained to approach the Controlling Authority on 03.11.2018 by filing an application. The Controlling Authority vide its order dated 26.11.2020, directed the Respondent No. 4 to pay a sum of ` 8,99,372/- as gratuity together with interest @ 10% per annum from 03.11.2018 till the date of deposit.
11. The Controlling Authority has rightly appreciated the essential facts for the purpose of considering the claim of gratuity as contemplated under section 2(s) of the Act and has calculated the gratuity amount by applying the formula under section 2(s) of the Act, i.e., Wages x number of years of service x 15/26 and held that the gratuity payable to the Petitioner is ` 8,99,372/-. The Controlling Authority has awarded interest @ 10% per annum from 03.11.2018 i.e. the date of application filed before the Controlling Authority till the date of deposit.
12. It is forthcoming that the only objection raised by Respondent No. 4 is that the Principal was arrayed as a party instead of the Management, the Respondent No. 4 has not disputed, the quantum of wages to be taken as well as the calculation amount made by the Controlling Authority for the gratuity amount payable.
13. The defence taken by Respondent No. 4 that the Principal of Respondent No. 4 arrayed as a party and not the Management can be said to be a technical one inasmuch as the Principal was notified of the proceedings before the Controlling Authority and has entered appearance and contested the same. It is to be presumed that the Management of Respondent No. 4 was aware of the proceedings initiated by Petitioner for payment of gratuity and the Management did not take any steps before the Controlling Authority to put forth its say. The said presumption is required to be made since pursuant to the order of the Controlling Authority, the amount ordered to be paid by Respondent No. 4 together with interest has been deposited before the Controlling Authority before the Appeal was filed.
14. It is relevant to note that in the Appeal filed before the Appellate Authority, the Respondent No. 4 is shown as Management of Kalpatharu Institute of Technology' and thereafter, shown as represented by its Principal. It is further surprising to note that the Appellant in the said Appeal filed an application to implead necessary party on record' in the Appeal. Hence, it is to be noticed that Respondent No. 4 although contended before the Controlling Authority that the Principal does not have any financial powers and that the Committee manages the College is required to be made as a party to the proceedings, the Appeal itself is filed by the Management. Further, even in the application filed before the Appellate Authority, the Appellant therein, instead of impleading the relevant party has filed the application to direct the Respondent No. 1 to bring the necessary party on record'. But in the said application, who the necessary party is not stated. It is only in the affidavit filed by the Principal of the Institution that it is stated that the Institute is run by Kalpatharu Institute of Technology, Tiptur headed by its Committee. Hence, it is clear by the manner in which the Respondent No. 4 has contested the proceedings, its only object is to, on one pretext or the other, drag on the legal proceedings solely to delay the payment of gratuity of the Petitioner.
15. From the manner in which the proceedings initiated by the Petitioner is sought to be contested by Respondent No. 4, it is clear that the Petitioner is being driven from pillar to post to claim dues which he was statutorily entitled to. The present case is a classic one for exercise of the extraordinary discretionary jurisdiction contained under Article 226 of the Constitution for granting of suitable relief/s. The stand of Respondent No. 4 in driving the Petitioner from pillar to post to claim his retirement benefits which the Petitioner is statutorily entitled to receive, is to be deprecated.
16. Section 7(3) of the Act clearly specifies that the gratuity is liable to be paid within 30 days from the date of superannuation. Section 7(3A) of the Act specifies that if the gratuity is not paid by the employer as contemplated under sub-section (3) of section 7 of the Act, the employer is liable to pay interest. The only stipulation which exempts the employer from paying interest is contemplated in the proviso to sub-section (3A) of section 7 of the Act, i.e., due to fault of the employee and if the employer has obtained permission in writing from the Controlling Authority for the delayed payment on the said ground. The position as stipulated in section 7 of the Act has been reiterated by the Hon'ble Supreme Court in the case of H. Gangahanume Gowda v. Karnataka Agro Industries Corpn Ltd ., (2003) 3 SCC 40.
17. The contention of the Respondent No. 4 that Principal has been arrayed as a party and is not the appointing authority and the representative of the Management is required to be made a party is ex-facie liable to be rejected insofar as Petitioner is concerned, inasmuch as it is an inter se issue between the various persons who represent the employer of the Petitioner. The said contention of Respondent No. 4 is required to be rejected also keeping in mind the manner in which the proceedings initiated by the Petitioner has been contested before the Controlling Authority, Appellate Authority as well as in the present Writ Petition. Vide relief sought for in I.A. 1/2022 the Petitioner has sought for permission to withdraw the amount deposited by the Respondent No. 4 before the Controlling Authority. The Petitioner has placed on record the financial difficulties as already noticed above and has also placed on record the loan statement of the cooperative society.
18. In view of the aforementioned facts situation and the settled proposition of law as noticed above, the questions framed for consideration is liable to be answered in the Affirmative in favour of the Petitioner and the relief sought for in the Writ Petition as well as in I.A. 1/2022 is liable to be granted.
19. Hence, I proceed to pass the following:
ORDER
(i) Writ Petition is allowed.
(ii) The orders dated 23.12.2021 and 20.01.2022 passed by Respondent No. 2 Appellate Authority are set aside.
(iii) The order dated 26.11.2020 passed by the Controlling Authority in case No. 106/2018-19 is modified to the extent of directing Respondent No. 4 College to pay the gratuity amount of ` 8,99,372/- together with interest @ 10% per annum from 30.09.2018 up to the date of payment.
(iv) Respondent No. 1 Controlling Authority shall release the amount deposited by Respondent No. 4 forthwith to the Petitioner.
(v) Respondent No. 4 shall deposit the balance amount payable to the Petitioner in terms of this order within four weeks from the date of receipt of a copy of this order.
No costs.