DHANSAI SAHU versus STATE OF CHHATTISGARH & ORS. on 21 January 2020

Conclusion

O R D E R

1. Leave granted.

2. The moot question involved in this appeal is: whether the servicerendered as daily-wager before being regularized and given the statusFof a regular Government servant, can be reckoned, so as to invoke theprovisions of the Payment of Gratuity Act, 1972 (for short, “the 1972Act”) after the age of superannuation and retirement as StateGovernment employee?

3. The High Court of Chhattisgarh, Bilaspur (for short, “the HighGCourt”) relying on the definition of “employee” in Section 2(e) of the1972 Act, has taken the view that the provisions of the 1972 Act have noapplication to a person who holds a post under the State Governmentand is governed by any other Act and in particular, the Chhattisgarh CivilServices (Pension) Rules, 1976 (for short, “the 1976 Rules”).

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4. The appellant would, however, rely on the recent decision ofthis Court in Netram Sahu vs. State of Chhattisgarh & Anr.[1], dealingwith the similar argument by the appellant therein, who was appointedas a daily-wager and after working for 22 years, came to be regularizedon work charge establishment but was denied gratuity, because on theday when he attained the age of superannuation, he was holding the postunder the State Government. Indeed, the Court was called upon toanswer the issue in identical situation, but it is obvious from theobservations in paragraph 14 of the reported decision that no provisionof either the 1972 Act or the 1976 Rules was brought to the notice of theCourt, which would disentitle the appellant therein from claiming thegratuity or for that matter, any provision prohibiting the appellant thereinfrom taking benefit of his long and continuous service period of 22 yearswhich he had rendered prior to being regularised. Notably, this Courthad dealt with the judgment of the High Court in the case of NetramSahu vs. State of Chhattisgarh & Ors.[2], which in turn had relied on theexposition of this Court in the case of Bharat Sanchar Nigam Ltd.,Jammu vs. Teja Singh[3] (unreported decision) and also the principleunderlying the exposition in Secretary, State of Karnataka & Ors. vs.Umadevi (3) & Ors.[4]. However, none of the above decisions has beenreferred to while answering the issue by this Court in Netram Sahu(supra @ F.N. 1).

5. In the case of Teja Singh (supra), the coordinate Bench oftwo Judges of this Court considered the claim of a person who was anemployee as a daily-rated Mazdoor with a Central Government ownedCorporation. He was recruited in the year 1973 and regularized witheffect from 11.8.1986 and eventually superannuated on 30.8.1989. This Court was pleased to set aside the relief of gratuity given to that personby the Central Administrative Tribunal and the High Court. In otherwords, the coordinate Bench of this Court opined that a daily-ratedMazdoor who has been regularized but did not have qualifying service interms of the service rules for extending retiral benefits to him, would notbe entitled for payment of gratuity under the 1972 Act. In other words,the subsequent decision in Netram Sahu (supra @ F.N. 1) is in conflictwith the said principle stated in the unreported decision of this Court.

1 (2018) 5 SCC 430 (two-Judge Bench)

2 Decided on 1.8.2014 in Writ Appeal No. 240/2014 (2014 SCC OnLine Chh 159)

3 Decided on 16.1.2009 in Civil Appeal No. 292/2009 (two-Judge Bench)

4 (2006) 4 SCC 1

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A6. Reverting back to Section 2(e) of the 1972 Act, the same in nouncertain terms provides that if a person holds a post under the CentralGovernment or a State Government and is governed by any other Act orby any rules providing for payment of gratuity, the provisions of the 1972Act will have no application. The respondents are relying on the provisionsof the 1976 Rules applicable to the post held by the appellant after beingBregularised on 1.9.2008. The said rules provide for grant of pension andgratuity. “Gratuity” has been defined in Rule 3(i) to include “ServiceGratuity” payable under sub-Rule (1) of Rule 43; “Death-cum-RetirementGratuity” payable under sub-Rule (1) of Rule 44 and; “ResiduaryGratuity” payable under sub-Rule (2) of Rule 44 of the stated Rules (theC1976 Rules). Rule 5 deals with regulations of claims of pension/gratuityor family pension, Rule 13 predicates that the service of a Governmentservant shall not qualify unless his duties and pay are regulated by theGovernment or under conditions determined by the Government andRule 16 envisages counting of service on contract for a specified period.

Obviously, these Rules were not brought to the notice of this Court in theDcase of Netram Sahu (supra @ F.N. 1). We may also notice the decisionof the High Court of Karnataka at Bangalore in the case of AssistantExecutive Engineer CNNL vs. The Deputy Labour Commissioner& Appellate Authority, Bangalore & Ors.[5], which has taken the viewthat where provision for payment of gratuity is made in the service RulesEapplicable to the person holding a post, his claim for gratuity must bedecided on the basis of such Rules and not by invoking the provisions ofthe 1972 Act.

7. Ordinarily, we would have proceeded to decide the matter onthe construct of the relied upon Rules, but as noted above, the expositionFby the coordinate Bench of two Judges of this Court in the unreporteddecision of Teja Singh (supra) will also have to be taken note of and toobserve judicial propriety, we deem it appropriate to refer the issue underconsideration to be considered by a larger Bench of three Judges.Accordingly, the Registry is directed to place the file of the presentmatter before Hon’ble the Chief Justice for constitution of a larger Bench.G

Divya Pandey

Matter referred to larger Bench.

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5 Decided on 4.9.2012 in W.P. No. 15856/2012 and connected matters