SR. SUPERINTENDENT OF POST OFFICES versus GURSEWAK SINGH & ORS. on 15 March 2019

1. Leave granted in both the special leave petitions.

2. A common question of law arises in both the appeals whichBare being disposed of by a common judgment. The facts in Sr.Superintendent of Post Offices v. Gursewak Singh & Ors. are beingconsidered as the lead case.

3. The present Civil Appeal has been filed against the Orderdated 01.12.2017 passed by a Division Bench of the Punjab & HaryanaCHigh Court at Chandigarh in LPA No. 1612 of 2017.

4. The factual matrix of the case, briefly stated, is as under:

4.1. On 26.06.1991, Respondent No. 1 was engaged as aGramin Dak Sewak i.e. an Extra-Departmental Agent,to work on a part-time basis in the Postal Department atFaridkot, Punjab.

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4.2. In 2014, Respondent No. 1 voluntarily resigned fromthe said part-time job. On 28.08.2014, the Departmentaccepted the resignation, and Respondent No. 1 wasdischarged with immediate effect.

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4.3. Respondent No. 1 approached the Controlling Authority-cum-Assistant Labour Commissioner, Central Jalandhar,seeking gratuity under the Payment of Gratuity Act, 1972(herein after referred to as “the 1972 Act”).

4.4. The Appellant – Department took the stand thatFRespondent No. 1 was not entitled to ex-gratia gratuityunder the Gramin Dak Sewak (Conduct & Engagement)Rules, 2011 as he had voluntarily resigned from the job.The Controlling Authority-cum-Assistant LabourCommissioner, Central Jalandhar, vide OrderGdated 21.09.2015, allowed the claim of RespondentNo. 1 and directed the Department to pay an amount ofRs. 1,06,021/- along with Interest @ 10% p.a. from28.08.2014.

4.5. The Department filed an Appeal u/S. 7(7) of the 1972Act, against the Order dated 21.09.2015 before theDeputy Chief Labour Commissioner (Central) KendriyaSadan, Chandigarh.

The Appellate Authority vide Order dated 17.05.2016dismissed the Appeal filed by the Appellant –Department, and upheld the Order dated 21.09.2015passed by the Controlling Authority-cum-AssistantLabour Commissioner, Central Jalandhar.

4.6. The Department filed C.W.P. No. 11412 of 2017 beforethe Punjab & Haryana High Court at Chandigarh underArticle 226/227 of the Constitution against the Orderdated 17.05.2016.

The learned Single Judge vide Oder dated 23.05.2017dismissed the Writ Petition filed by the Department relyingupon earlier judgments passed by the same High Courtin Senior Superintendent of Post Officers, JalandharDivision, Jalandhar v. Darshan Ram (through LRs)& Ors.[1]and Senior Superintendent of Post Officersv. Smt. Sham Duiari & Ors.[2]

4.7. The Department challenged the Order dated 23.05.2017passed by the Single Judge by way of LPA No. 1612of 2017 before the Punjab & Haryana High Court atChandigarh.

The division bench of the Punjab & Haryana HighCourt at Chandigarh on 01.12.2017, dismissed the LPAfiled by the Department on the ground that SLPs filedagainst the earlier judgments had been dismissed by thisCourt. As a consequence, the judgment of the learnedSingle Judge did not warrant interference.

4.8. The Department has filed the present Appeal to challengethe Judgment and Order dated 01.12.2017 passed by adivision bench of the High Court.

5. We have heard the learned ASG Mr. Vikramjit Banerjee forthe Appellant – Department. Mr. Bharat Sangal, Advocatewas appointed as Amicus Curiae vide Order dt. 10.12.2018 to represent 12014 (9) SCT 120 (DB)

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Athe interest of the Respondents who did not appear, despite service beingeffected on them.

We have perused the pleadings and written submissionsfiled by both parties.

6. The issues which arise for consideration are as follows:

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6.1. Whether a Gramin Dak Sewak is an ‘employee’ as perSection 2(e) of the 1972 Act, and is entitled to paymentof Gratuity under this Act?

6.2. Whether a Gramin Dak Sewak is eligible for paymentof Gratuity under the 2011 Rules upon voluntaryresignation?

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7. The learned ASG appearing on behalf of the Departmentsubmitted that :

7.1. The Gramin Dak Sewaks constitute a uniqueDdepartment of posts. The persons working as GraminDak Sewaks are not regular departmental employeesbut “extra-departmental agents”, who work on a parttime basis for a few hours every day; and, have anindependent source of livelihood. They are permitted towork upto the age of 65 years.

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7.2. The Gramin Dak Sewaks are governed by the 2011Rules, which form a complete and separate codeproviding for the recruitment, gratuity, conduct, anddisciplinary proceedings of Gramin Dak Sewaks.

The terms and conditions of their engagement aregoverned by Rule 3-A of the 2011 Rules, which reads asunder :

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“3-A Terms and Conditions of Engagement

(i) A Sevak shall not be required to performduty beyond a maximum Period of 5 hoursin a day; G

(ii) A Sevak shall not be retained beyond 65years of age; H

(iii) A Sevak shall have to give an undertakingAthat he has other sources of income besidesthe allowances paid or to be paid by theGovernment for adequate means oflivelihood for himself and his family;

(iv) A Sevak can be transferred from one postBunit to another post/unit in public interest;

(v) A Sevak shall be outside the Civil Service ofthe Union;

(vi) A Sevak shall not claim to be at par with theCCentral Government employees;

(vii) Residence in post village/deliveryjurisdiction of the Post Office within onemonth after selection but before engagementshall be mandatory for a Sevak:; D

Failure to reside in place of duty for GDSBPM & within delivery jurisdiction of thePost Office for other categories of GraminDak Sevaks after engagement shall betreated as violative of conditions ofengagement and liable for disciplinaryaction under Rule 10 of the Conduct rules,requiring removal/dismissal; E

(viii) Post Office shall be located in theaccommodation to be provided by GraminDak Sevak Branch Postmaster suitable forFuse as Post Office premises;

(ix) Combination of duties of a Sevak shall bepermissible;”

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A reading of Rule 3-A(iii) of the 2011 Rules, makes itabundantly clear that a Gramin Dak Sewaks must have anindependent means of livelihood. The Gramin Dak Sewaksare engaged on a part-time basis for a maximum of 3 to 5

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hours a day. Rule 3-A(v) and (vi) stipulate that a GraminDak Sewak shall be outside the Civil Service of the Union,and shall not claim to be at par with the servants of theGovernment.

7.3. It was further submitted on behalf of the Appellant –Department that the part-time employment of Gramin DakSewaks is governed by a separate scheme, since they do notform part of the regular cadre, and cannot be treated to be inthe main service or class of service. Gratuity is payable tothem in accordance with the Gramin Dak Sewak (Conduct& Engagement) Rules, 2011.

Rule 6(1) of the 2011 Rules provides for payment of exgratia gratuity to Gramin Dak Sewaks. Rule 6(13) of the2011 Rules provides that no gratuity is payable to a GraminDak Sewak, if he resigns from the agency on his own, excepton medical grounds.

Rule 6(1) and (13) of the 2011 Rules read as under :

“(1) Payment of ex-gratia gratuity. – The question ofgrant of some kind of purely ex gratia monetary grantto ED Agents working in the Indian Posts andTelegraphs Department on termination of their serviceshas been under consideration for a long time. It hasbeen decided as follows :-

1. ED Agents as defined in P & T Extra DepartmentalAgents (Conduct and Service) Rules, 1964, whoseservices are terminated otherwise than (i) forunsatisfactory word or (ii) as a measure ofdisciplinary action or (iii) in consequence of theirbeing appointed in a regular post under the P & TDepartment, may be sanctioned monetary grantstermed as ‘Gratuity’, provided that they have put innot less than ten years of continuous satisfactoryservice as Ed Agents.”

“(13) No gratuity to ED Agent who quits the agency onhis own. – The question of extending the benefit of grantof ex gratia gratuity to ED Agents who have to resignon account of circumstances beyond their control was taken up with the Ministry of finance. It has beendecided that no ex gratia gratuity will be paid to EDAgents in such cases.It is, therefore, clarified thataccording to the present orders, gratuity is payable onlyif the services of an ED Agent are terminated inconsequence of an action of the department, subject totheir fulfillment of the other prescribed conditions andthat no gratuity is payable if an ED Agent quits theagency on his own. The services of an ED Agent shouldnot be terminated when he himself quits the job. In suchcases, an order permitting the ED Agent to quit theservices on his own should be issued so that the ordermay not be construed as an order of termination ofservice.“

8. Mr. Bharat Sangal, learned Amicus Curiae, representedthe interest of the Respondents before this Court. The learned Counselinter alia submitted that :

8.1. The Payment of Gratuity Act, 1972 applies to every placedefined as an ‘establishment’ within the meaning of anylaw for the time being in force in a state.

To determine the applicability of the Payment ofGratuity Act, 1972 it must be seen whether the place isdefined as an establishment under the law applicable tothe State. Reliance was placed on the judgment of Stateof Punjab v. Labour Court Jalandhar[3]wherein thisCourt held that an establishment falling within thedefinition of Section 2(ii)(g) of the Payment of WagesAct, 1936 would be covered by the Payment of GratuityAct, 1972.

It was contended that the Postal Department is anestablishment within the meaning of the term used inSection 2(ii)(g) of the Payment of Wages Act, 1936 andthe 1972 Act, would be applicable to its employees.

8.2. Section 1(3) of the 1972 Act, provides for payment ofgratuity to employees of every factory, mine, oilfield, 3(1980) 1 SCC 4

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plantation, port, railway company, shop or establishment.Section 1(3) of the 1972 Act reads as under :

“1.Short title, extent, application andcommencement.-

(3) It shall apply to-

(a) every factory, mine, oilfield, plantation, portand railway company; (b) every shop or establishment within themeaning of any law for the time being in force inrelation to shops and establishments in a State, inwhich ten or more persons are employed, or wereemployed, on any day of the preceding twelvemonths;

(c) such other establishments or class ofestablishments, in which ten or more employeesare employed, or were employed, on any day ofthe preceding twelve months, as the CentralGovernment may, by notification, specify in thisbehalf.”

8.3. It was further submitted that Section 14 of the 1972Act, specifically provides that the Act would apply“notwithstanding anything inconsistent therewithcontained in any other enactment”.Section 14 of the 1972 Act reads as under :

“14. Act to override other enactments, etc.—

The provisions of this Act or any rule madethereunder shall have effect notwithstandinganything inconsistent therewith contained in anyenactment other than this Act or in any instrumentor contract having effect by virtue of anyenactment other than this Act.”

8.4. Section 4(1)(b) of the 1972 Act provides that gratuitywould be payable to an employee even on his resignation.Thus, any rule barring payment of gratuity to an employee who resigns, would be contrary to Section 14 read withSection 4(1)(b) of the 1972 Act.

8.5. It was further submitted that the Department of Posts,Gramin Dak Sewak (Conduct and Employment) Rules,2001 were superseded and replaced by the Departmentof Posts, Gramin Dak Sewak (Conduct andEngagement) Rules, 2011.

Under the amended 2011 Rules the term “employmentappointment” has been replaced by “engagement”. Theamended Rule 6 pertains to payment of ex gratia Gratuityto Gramin Dak Sewaks.

9. The first issue to be determined is whether a Gramin DakSewak is an ‘employee’ as per Section 2(e) of the 1972 Act, and isentitled to payment of Gratuity under this Act?

9.1. Section 1(3)(b) of the 1972 Act applies to every‘establishment’ within the meaning of “any law” for thetime being in force.

This Court in State of Punjab v. Labour CourtJalandhar[4]has held that there is no reason for limitingthe meaning of the expression ‘law’ in Section 1(3)(b) ofthe 1972 Act.

The Postal Department is as an establishment underSection 2(k) of the Indian Post Office Act, 1898 whichreads as under :

“2. Definitions.-

(k) the expression “Post Office” means thedepartment, establishedfor the purposes ofcarrying the provisions of this Act into effect andpresided over by the Director General.”

The Indian Post Office Act, 1898 would fall underthe expression ‘law’ in Section 1(3)(b). Consequently,the Post & Telegraphs Department would be anestablishment under the 1972Act.

9.2. Section 4(1) of the 1972 Act, provides for payment ofGratuity to an employee on the termination of his 4(1980) 1 SCC 4

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employment, subject to the condition that he must haverendered a minimum of 5 years’ continuous service.

Section 4(1) of the 1972 Act reads as under :

“4. Payment of Gratuity.-

(1) Gratuity shall be payable to an employee onthe termination of his employment after he hasrendered continuous service for not less than fiveyears,- (a) on his superannuation, or (b) on his retirement or resignation,

(c) on his death or disablement due to accidentor disease:

Provided that the completion of continuous serviceof five years shall not be necessary where thetermination of the employment of any employeeis due to death or disablement:

Provided further that in case of death of theemployee, gratuity payable to him shall be paidto his nominee or, if no nomination has been made,to his heirs, and where any such nominees or heirsis minor, the share of such minor, shall bedeposited with the Controlling Authority who shallinvest the same for the benefit of such minor insuch bank or other financial institution, as maybe prescribed, until such minor attains majority.

Explanation.- For the purposes of this section,disablement means such disablement asincapacitates an employee for the work which hewas capable of performing before the accidentor disease resulting in such disablement.”

9.3. Section 4 of the 1972 Act, states that “Gratuity shallbe payable to an employee”.

SR. SUPTD. OF POST OFFICES v. GURSEWAK SINGH[INDU MALHOTRA, J.]

The term ‘employee’ is defined by Section 2(e) ofthe 1972 Act, as under :

“2. Definitions.- In this Act, unless the contextotherwise requires,- (e) “employee” means any person (other than anapprentice) who is employed for wages, whetherthe terms of such employment are express orimplied, 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 to which this Actapplies, but does not include any such personwho holds a post under the Central Governmentor a State Government and is governed by any other Act or by any rules providing for paymentof gratuity;”

Section 2(e) of the 1972 Act, however specificallyexcludes persons who are governed by any Act, or Rules providing forpayment of Gratuity.

9.4. Section 2(e) of the 1972 Act excludes persons whohold a post with the Central or State Government andare governed by any other Act or rules providing forpayment of gratuity.

Gramin Dak Sewaks are engaged as ExtraDepartmental Agents, a post governed by the 2011Rules.[5] These Rules have a separate provision forpayment of Gratuity to the Extra Departmental Agents. A Gramin Dak Sewak is not an “employee” underthe 1972 Act. The first issue is answered accordingly.10. The second issue is whether a Gramin Dak Sewak is eligiblefor payment of Gratuity upon voluntary resignation under the 2011 Rules?

10.1. The 2011 Rules provide that Gramin Dak Sewaks areExtra-Departmental Agents, who are outside the CivilService of the Union, and shall not claim to be at par 5Superintendent of Post Officers v. PK Rajamma; (1997) 3 SCC 94See also Union of India v. Kameshwar Prasad; (1997) 11 SCC 650

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with the Central Government Employees. The ExtraDepartmental Agents are engaged by the Departmentof Posts & Telegraphs to cater to the postal requirementsin the rural and remote areas. The system avails theservices of schoolmasters, shopkeepers, landlords, andsuch other persons in a village who have a reasonablestandard of literacy, and adequate means of livelihood,and can therefore assist the Department on a part-timebasis by way of gainful avocation, to provide service tothe rural communities for their postal requirements.

Rule 3-A(i) of the 2011 Rules provides that theGramin Dak Sewaks shall not be required to performduties beyond a maximum period of 5 hours a day. Thisshows the avocational nature of the service.

Rule 6(1) of the 2011 Rules provides for paymentof gratuity to Gramin Dak Sewaks. However, Rule6(13) states that no Gratuity is payable if an ExtraDepartmental Agent quits the agency on his own.

10.2. In the present case, Respondent No. 1 tendered hisresignation in 2014. The Appellant – Departmentaccepted his resignation vide letter dated 28.08.2014.The Order dated 28.08.2014 accepting the resignationof Respondent No. 1 reads as under :

“ The unconditional resignation dated nilsubmitted by Sh. Gursewak Singh from the postof GDSBPM Assa Butter in a/c with Bariwala SOis hereby acceptedwith immediate effect.

Usual charge Reports should be sent to allconcerned.

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THE SUPDT OF POST OFFICESFARIDKOT DIVISIONFARIDKOT – 151203 “(emphasis supplied)

The Order was passed under Rule 6(13) permittingRespondent No. 1 to quit the services of the Gramin DakSewak as per his voluntary resignation.

As a consequence of his resignation, Respondent No. 1Abecame disentitled from the payment of Gratuity under thestatutory 2011 Rules applicable to Gramin Dak Sewaks. Thesecond issue is answered accordingly.

11. The Impugned Orders passed by the High Court in both theAppeals are hereby set-aside.

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We acknowledge the valuable assistance provided by thelearned Amicus Curiae Mr. Bharat Sangal in representing the interestof the Respondents.

Pending applications in both the Appeals, if any, are dismissed.

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The Appeals are allowed accordingly.

Nidhi Jain

Appeals allowed.

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