BIRLA INSTITUTE OF TECHNOLOGY versus THE STATE OF JHARKHAND & ORS. on 7 January 2019

BIRLA INSTITUTE OF TECHNOLOGY

v.

THE STATE OF JHARKHAND & ORS.

(Civil Appeal No. 2530 of 2012)

JANUARY 07, 2019

[ABHAY MANOHAR SAPRE AND INDU MALHOTRA, JJ.]

Payment of Gratuity Act, 1972 – s.2(e) – Employee – Appellantis a premier technical educational institute of repute in the country– Respondent no.4 joined the appellant-Institute as AssistantProfessor and on superannuation claimed gratuity – Entitlement ofrespondent no.4 to gratuity – Held: The issue involved in the instantappeal is no longer res integra and was decided in Ahmadabad Pvt.Primary Teachers Association, wherein it was held that since a teacheris not an employee under s.2(e) of the Act, he has no right to invokethe provisions of the Act for claiming gratuity under the Act fromhis/her employer – In view of this principle of law, respondent No.4,who was also a teacher and worked with the appellant as such,was not eligible to claim gratuity amount from the appellant underthe Act.

Allowing the appeal, the Court

HELD: 1. The question that had arisen for considerationin the case of Ahmadabad Pvt. Primary Teachers Association wasas to whether “Teacher” could be regarded as an “employee”under Section 2(e) of the Act and, if so, whether he/she is entitledto claim gratuity amount from his employer in accordance withthe provisions of the Act. The two-Judge Bench examined thisquestion in detail. Justice D.M. Dharmadhikari speaking for theBench held that a teacher is not an employee within the meaningof the expression “employee” as defined under Section 2(e) ofthe Act and hence he/she is not entitled to claim any gratuityamount from his employer under the Act. Reading this principleof law laid down by this Court, respondent No.4, who was also ateacher and worked with the appellant as such, was not eligibleto claim gratuity amount from the appellant (BIT) under the Act.[Paras 12, 13, 14 and 16][304-C-E; 308-A-B]

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302SUPREME COURT REPORTS

[2019] 1 S.C.R.

AAhmadabad Pvt. Primary Teachers Association v.Administrative Officer and Others (2004) 1 SCC 755 :[2004] 1 SCR 470 – relied on.

2. The High Court though took note of the decisionrendered in the case of Ahmadabad Pvt. Primary Teachers BAssociation but erred in distinguishing it on the ground that it isapplicable only to the primary teachers working in primary schoolsand since the case at hand is not a case of a primary teacher, ithas no application to this case. The High Court failed to see thatthis Court had examined the expression “teacher” qua theexpression “employee” defined in Section 2(e) of the Act andCthen held that “teacher” is not an employee within the meaningof Section 2(e) of the Act. While laying down the law, this Courtdid not make any distinction between the teachers inter se andnor made any distinction as to in which type of educational institutethe teacher is working for determining his entitlement to claimDthe gratuity under the Act. The view taken by the High Courtwas not in conformity with the law laid down by this Court in thecase of Ahmadabad Pvt. Primary Teachers Association. It was basedon incorrect reading of this Court’s decision and, therefore, itdeserves to be set aside [Paras 17, 19, 20][308-B-C, E-F]

Case Law Reference

E[2004] 1 SCR 470relied onPara 12

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2530

of 2012.

From the Judgment and Order dated 02.04.2008 of the High Courtof Jharkhand at Ranchi in LPA No. 53 of 2007.F

Shambo Nandy, Ms. N. Annapoorani Advs. for the appellant.

Anil Kumar Jha, Sunil Roy, Advs. for the respondents.

The Judgment of the Court was delivered by

ABHAY MANOHAR SAPRE, J. 1. This appeal is directedGagainst the final judgment and order dated 02.04.2008 passed by theHigh Court of Jharkhand at Ranchi in LPA No.53 of 2007 whereby theDivision Bench of the High Court dismissed the LPA filed by the appellantherein and confirmed the order dated 12.01.2007 passed by the SingleJudge of the High Court in W.P. No.2572 of 2005.

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2. The controversy involved in this appeal is a short one as wouldbe clear from the facts stated infra.

3. The appellant is a premier technical educational institute ofrepute in the country. It is known as “Birla Institute of Technology”(BIT).

4. Respondent No.4 joined the appellant-Institute as AssistantProfessor on 16.09.1971 and superannuated on 30.11.2001 after attainingthe age of superannuation.

5. Respondent No.4 then made a representation to the appellantand prayed therein for payment of gratuity amount which, according torespondent, was payable to him by the appellant under the Payment ofGratuity Act, 1972 (for short called “The Act”). The appellant, however,declined to pay the amount of gratuity as demanded by respondent No.4.

6. Respondent No.4, therefore, filed an application before thecontrolling authority under the Act against the appellant and claimed theamount of gratuity which, according to him, was payable to him underthe Act.

7. By order dated 07.09.2002, the controlling authority (respondentNo.3) allowed the application filed by respondent No.4 and directed theappellant to pay a sum of Rs.3,38,796/- along with interest at the rate of10% p.a. towards the gratuity to respondent No.4.

8. The appellant felt aggrieved and filed appeal before the appellateauthority under the Act. By order dated 15.04.2005, the appellate authoritydismissed the appeal. The appellant felt aggrieved and carried the matterto the High Court in a writ petition. The High Court (Single Judge) byorder dated 12.01.2007 dismissed the writ petition and upheld the ordersof the authorities passed under the Act. The appellant then filed LettersPatent Appeal before the Division Bench against the order passed bythe Single Judge. The LPA was also dismissed by the impugned orderwhich has given rise to filing of the present appeal by way of specialleave by the appellant-Institute in this Court.

9. The short question, which arises for consideration in this appeal,is whether the Courts below were justified in holding that respondentNo.4 was entitled to claim gratuity amount from the appellant (employer)under the Act.

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10. Heard Mr. Shambo Nandy, learned counsel for the appellantand Mr. Anil Kumar Jha, learned counsel for respondent Nos.1-3 andMr. Sunil Roy, learned counsel for respondent No.4.

11. Having heard the learned counsel for the parties and on perusalof the record of the case, we find merit in this appeal.

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12. As rightly argued by the learned counsel for the appellant, theissue involved in this appeal remains no longer res integra and is decidedby this Court in Ahmadabad Pvt. Primary Teachers Association vs.Administrative Officer and Others (2004) 1 SCC 755 in favour ofthe appellant.

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13. The question arose for consideration in the case ofAhmadabad Pvt. Primary Teachers Association (supra) as to whether“Teacher” could be regarded as an “employee” under Section 2(e) ofthe Act and, if so, whether he/she is entitled to claim gratuity amountfrom his employer in accordance with the provisions of the Act.

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14. The two-Judge Bench examined this question in detail. JusticeD.M. Dharmadhikari speaking for the Bench held that a teacher is notan employee within the meaning of the expression “employee” as definedunder Section 2(e) of the Act and hence he/she is not entitled to claimany gratuity amount from his employer under the Act. In other words, itEwas held that since a teacher is not an employee under Section 2(e) ofthe Act, he has no right to invoke the provisions of the Act for claiminggratuity under the Act from his/her employer.

15. It is apposite to quote the reasoning of Their Lordships inparas 20 to 26 of the judgment which reads as under:

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“20. An educational institution, therefore, is an“establishment” notified under Section 1(3)(c) of thePayment of Gratuity Act, 1972. On behalf of the MunicipalCorporation, it is contended that the only beneficial effectof the notification issued under Section 1(3)(c) of the Act of1972, is that such non-teaching staff of educationalinstitutions as answer the description of any of theemployments contained in the definition clause 2(e), wouldbe covered by the provisions of the Act. The teaching staffbeing not covered by the definition of “employee” can getno advantage merely because by notification “educational G

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institutions” as establishments are covered by theprovisions of the Act.

21. Having thus compared the various definition clauses ofthe word “employee” in different enactments, with dueregard to the different aims and objects of the various labourlegislations, we are of the view that even on plainconstruction of the words and expression used in thedefinition clause 2(e) of the Act, “teachers” who are mainlyemployed for imparting education are not intended to becovered for extending gratuity benefits under the Act.Teachers do not answer description of being employeeswho are “skilled”, “semi-skilled” or “unskilled”. Thesethree words used in association with each other intend toconvey that a person who is “unskilled” is one who is not“skilled” and a person who is “semi-skilled” may be onewho falls between the two categories, meaning he is neitherfully skilled nor unskilled. The Black’s Law Dictionarydefines these three words as under:

“Semi-skilled work.—Work that may require somealertness and close attention, such as inspecting itemsor machinery for irregularities, or guarding property orpeople against loss or injury.

Skilled work.—Work requiring the worker to usejudgment, deal with the public, analyze facts and figures,or work with abstract ideas at a high level of complexity.

Unskilled work.—Work requiring little or no judgment,and involving simple tasks that can be learned quicklyon the job.”

22. In construing the abovementioned three words whichare used in association with each other, the rule ofconstruction noscitur a sociis may be applied. The meaningof each of these words is to be understood by the companyit keeps. It is a legitimate rule of construction to construewords in an Act of Parliament with reference to words foundin immediate connection with them. The actual order ofthese three words in juxtaposition indicates that meaningof one takes colour from the other. The rule is explained AB

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differently: “that meaning of doubtful words may beascertained by reference to the meaning of words associatedwith it”. [See Principles of Statutory Interpretation by JusticeG.P. Singh, 8th Edn., Syn. 8, at p. 379.]

23. The word “unskilled” is opposite of the word “skilled”and the word “semi-skilled” seems to describe a personwho falls between the two categories i.e. he is not fullyskilled and also is not completely unskilled but has someamount of skill for the work for which he is employed. Theword “unskilled” cannot, therefore, be understooddissociated from the word “skilled” and “semi-skilled” toread and construe it to include in it all categories ofemployees irrespective of the nature of employment. If thelegislature intended to cover all categories of employeesfor extending benefit of gratuity under the Act, specificmention of categories of employment in the definition clausewas not necessary at all. Any construction of definitionclause which renders it superfluous or otiose has to beavoided.

24. The contention advanced that teachers should betreated as included in the expression “unskilled” or“skilled” cannot, therefore, be accepted. The teachersmight have been imparted training for teaching or theremay be cases where teachers who are employed in primaryschools are untrained. A trained teacher is not describedin the industrial field or service jurisprudence as a “skilledemployee”. Such adjective generally is used for an employeedoing manual or technical work. Similarly, the words “semi-skilled” and “unskilled” are not understood in educationalestablishments as describing nature of job of untrainedteachers. We do not attach much importance to thearguments advanced on the question as to whether“skilled”, “semi-skilled” and “unskilled” qualify the words“manual”, “supervisory”, “technical” or “clerical” or theabove words qualify the word “work”. Even if all the wordsare read disjunctively or in any other manner, trained oruntrained teachers do not plainly answer any of thedescriptions of the nature of various employments given in the definition clause. Trained or untrained teachers are not“skilled”, “semi-skilled”, “unskilled”, “manual”,“supervisory”, “technical” or “clerical” employees. Theyare also not employed in “managerial” or “administrative”capacity. Occasionally, even if they do some administrativework as part of their duty with teaching, since their mainjob is imparting education, they cannot be held employedin “managerial” or “administrative” capacity. The teachersare clearly not intended to be covered by the definition of“”employee.

25. The legislature was alive to various kinds of definitionsof the word “employee” contained in various previouslabour enactments when the Act was passed in 1972. If itintended to cover in the definition of “employee” all kindsof employees, it could have as well used such wide languageas is contained in Section 2(f) of the Employees’ ProvidentFunds Act, 1952 which defines “employee” to mean “anyperson who is employed for wages in any kind of work,manual or otherwise, in or in connection with the work ofan establishment …”. Non-use of such wide language inthe definition of “employee” in Section 2(e) of the Act of1972 reinforces our conclusion that teachers are clearlynot covered in the definition.

26. Our conclusion should not be misunderstood thatteachers although engaged in a very noble profession ofeducating our young generation should not be given anygratuity benefit. There are already in several States separatestatutes, rules and regulations granting gratuity benefitsto teachers in educational institutions which are more orless beneficial than the gratuity benefits provided underthe Act. It is for the legislature to take cognizance ofsituation of such teachers in various establishments wheregratuity benefits are not available and think of a separatelegislation for them in this regard. That is the subject-mattersolely of the legislature to consider and decide.”

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16. Reading the aforementioned principle of law laid down by thisCourt, we have no hesitation in holding that respondent No.4, who wasalso a teacher and worked with the appellant as such, was not eligible toclaim gratuity amount from the appellant (BIT) under the Act.

17. In our opinion, the High Court though took note of the decisionBrendered in the case of Ahmadabad Pvt. Primary TeachersAssociation (supra) but erred in distinguishing it on the ground that it isapplicable only to the primary teachers working in primary schools andsince the case at hand is not a case of a primary teacher, it has noapplication to this case.

C18. In our view, the High Court failed to read last line of Para 24quoted above wherein this Court has held in clear terms that “teachers”are clearly not intended to be covered by the definition of“employee”. The High Court was, therefore, not justified in making adistinction between the “teachers working in the primary schools” andthe “teachers working in other educational institutions”.D

19. In other words, the High Court failed to see that this Courthad examined the expression “teacher” qua the expression “employee”defined in Section 2(e) of the Act and then held that “teacher” is not anemployee within the meaning of Section 2(e) of the Act. While layingdown the law, this Court did not make any distinction between the teachersEinter se and nor made any distinction as to in which type of educationalinstitute the teacher is working for determining his entitlement to claimthe gratuity under the Act.

20. We cannot, therefore, concur with the view taken by the HighCourt, which in our view, is not in conformity with the law laid down byFthis Court in the case of Ahmadabad Pvt. Primary TeachersAssociation (supra). It is based on incorrect reading of this Court’sdecision and, therefore, it deserves to be set aside.

21. We, however, make it clear that we have examined the caseat hand only in the light of the provisions of the Act, which were akin toGthe facts of the case in Ahmadabad Pvt. Primary TeachersAssociation (supra).

22. In case there is any other State Act or Scheme in force, whichextends any benefit to the employees of the Institute only then respondentNo.4 would be at liberty to take benefit of such Act/Scheme in accordanceHwith law.

BIRLA INSTITUTE OF TECHNOLOGY v. THE STATE OFJHARKHAND [ABHAY MANOHAR SAPRE, J.]

23. As a result, the appeal succeeds and is accordingly allowed.The impugned order is set aside. As a consequence, the application madeby respondent No.4 before the controlling authority under the Act againstthe appellant is dismissed as not maintainable.

Devika Gujral

Appeal allowed.

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