NETRAM SAHU versus STATE OF CHHATTISGARH & ANR. on 23 March 2018

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[2018] 3 S.C.R. 682

SUPREME COURT REPORTS[2018] 3 S.C.R. 682

[2018] 3 S.C.R.

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NETRAM SAHU

v.

STATE OF CHHATTISGARH & ANR.

(Civil Appeal No. 1254 of 2018)

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MARCH 23, 2018

[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]

Payment of Gratuity Act, 1972 – s.2(e) r/w s.2A – Qualifiedservice – Appellant rendered 22 years as daily wager and 3 yearsas regular work charge employee i.e. he was regularised 3 yearsCprior to his retirement – Whether appellant can be said to haverendered qualified service i.e. continuous service as specified ins.2(e) r/w s.2A so as to make him eligible to claim gratuity as providedunder the Act from the State – Held: Appellant actually renderedtotal service for a period of 25 years and the State actuallyDregularized his services – Having regularized the services, theappellant became entitled to claim its benefit for counting the periodof 22 years regardless of the post and the capacity on which heworked for 22 years – Once the State regularized the services ofthe appellant while he was in State services, the appellant becameentitled to count his total period of service for claiming the gratuityEamount subject to his proving continuous service of 5 years asspecified under s.2A of the Act which, in this case, the appellanthas duly proved – The statute being a welfare legislation meant forthe benefit of the employees, who serve their employer for a longtime, it is the duty of the State to voluntarily pay the gratuity amountFto the appellant rather than to force the employee to approach theCourt to get his genuine claim.

Allowing the appeal, the Court

HELD: In the circumstances appearing in the case, it wouldbe the travesty of justice, if the appellant is denied his legitimateGclaim of gratuity despite rendering “continuous service” for aperiod of 25 years which even, according to the State, wereregularized. The question as to from which date such serviceswere regularized was of no significance for calculating the totallength of service for claiming gratuity amount once the services H

were regularized by the State. It was indeed the State who took22 years to regularize the service of the appellant and went ontaking work from the appellant on payment of a meager salary ofRs.2776/- per month for 22 long years uninterruptedly and onlyin the last three years, the State started paying a salary ofRs.11,107/- per month to the appellant. Having regularized theservices of the appellant, the State had no justifiable reason todeny the benefit of gratuity to the appellant which was his statutoryright under the Act. It being a welfare legislation meant for thebenefit of the employees, who serve their employer for a longtime, it is the duty of the State to voluntarily pay the gratuityamount to the appellant rather than to force the employee toapproach the Court to get his genuine claim. It is reallyunfortunate that the genuine claim of the appellant was beingdenied by the State at every stage of the proceedings up to thisCourt and dragged him in fruitless litigation for all these years.[Paras 17, 18, 19] [687-A-E]

Secretary, State of Karnataka & Ors. v. Umadevi (3) &Ors, (2006) 4 SCC 1 : [2006] 3 SCR 953 –held inapplicable.

Firm Kaluram Sitaram v. The Dominion of IndiaAIR 1954 Bombay 50 – approved.

Case Law Reference

[2006] 3 SCR 953 held inapplicablePara 15

AIR 1954 Bombay 50approvedPara 18

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1254of 2018.

From the Judgment and Order dated 01.08.2014 of the High Courtof Chhatisgarh at Bilaspur in WA No. 240 of 2014.

Kiran Kumar Jaipuriar, Anshuman Shrivastava, Advs. for theAppellant.

Aniruddha P. Mayee, A. Selvin Raja, Avnish M. Oza, Advs. forthe Respondents.

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AThe Judgment of the Court was delivered by

ABHAY MANOHAR SAPRE, J. 1. This appeal is directedagainst the final judgment and order dated 01.08.2014 passed by theHigh Court of Chhattisgarh at Bilaspur in Writ Appeal No.240 of 2014whereby the Division Bench of the High Court dismissed the appealBfiled by the appellant herein and affirmed the judgment and order dated16.12.2013 passed by the Single Judge of the High Court in WritPetition(L) No.178 of 2013 by which the Single Judge allowed the petitionpreferred by the respondents herein and set aside the orders of theControlling Authority and Appellate Authority by which the claim of theappellant herein of gratuity for the period from 01.04.1986 to 23.05.2008Cwas allowed.2. Few relevant facts need mention to appreciate the shortcontroversy involved in the appeal.

3. The appellant was appointed as daily wager on 01.04.1986 byDthe Water Resources Department of the State of Chhattisgarh and wasattached to the office of SDO (E/M) Light Machinery Tubewell & GageSub-Division Sakri, P.S. Charkarbhata, District Baster (CG).Subsequently, the services of the appellant were regularized on workcharge establishment to the post of Pump Operator by order datedE06.05.2008. After attaining the age of superannuation, the appellant retiredon 30.07.2011.

4. The appellant was, however, not paid the gratuity amount bythe State which, according to him, was payable to him after his retirement.Therefore, the appellant filed an application before the ControllingFAuthority under the Payment of Gratuity Act, 1972 (hereinafter referredto as “the Act”) and prayed for payment of gratuity amount to him inaccordance with the provisions of the Act.

5. By order dated 27.03.2012, the Controlling Authority allowedthe application and held that the appellant is entitled to claim gratuityGamount from the State for the services rendered by him. It was furtherheld that the appellant has in all rendered 25 years and 3 months ofservice (22 years and 1 month as daily wager and 3 years and 2 monthsas regular work charge employee) and hence rendered the requiredyears of qualified service as per the requirements of the Act.

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6. The State felt aggrieved and filed appeal before the specifiedAppellate Authority under the Act. By order dated 30.01.2013, theAppellate Court dismissed the appeal filed by the State and affirmed theorder of the Controlling Authority.

7. The State pursued the matter and filed Writ Petition No.178/2013 against the order passed by the Appellate Authority in the HighCourt of Chhattisgarh at Bilaspur. The Single Judge of the High Court,by order dated 16.12.2013 allowed the writ petition and set aside theorders of the Controlling Authority and the Appellate Authority.

8. The appellant herein (employee) felt aggrieved by the order ofthe Single Judge and filed writ appeal before the Division Bench. Byimpugned judgment, the Division Bench dismissed the appellant’s appealand upheld the order passed by the Single Judge, which has given rise tofiling of the appeal by way of special leave by the employee concernedin this Court.

9. The short question, which arises for consideration in this appeal,is whether the High Court (Single Judge/Division Bench) was justifiedin holding that the appellant (employee) was not entitled to claim gratuityfrom the State (respondent herein) for the services rendered by him orin other words, the question arises for consideration is whether theappellant can be held to have rendered qualified service, i.e., continuousservice as specified in Section 2(e) read with Section 2A of the Act soas to make him eligible to claim gratuity, as provided under the Act, fromthe State.

10. Heard Mr. Kiran Kumar Jaipuriar, learned counsel for theappellant and Mr. Aniruddha P. Mayee, learned counsel for therespondents.

11. Having heard the learned counsel for the parties and on perusalof the record of the case, we are inclined to allow the appeal and whilesetting aside the orders of the High Court (Single Judge and DivisionBench) restore the orders of the Controlling Authority and AppellateAuthority.

12. It is not in dispute that the appellant has actually rendered thetotal service for a period of 25 years 3 months, i.e., from 01.04.1986 to30.07.2011 to the State. It is also not in dispute that the appellant’s serviceswere regularized by the State by order dated 06.05.2008, i.e., much A

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Aprior to the appellant attained the age of superannuation. It is also not indispute that the appellant’s 25 years and 3 months period of servicesatisfied the rigor of the expression “continuous service” as defined underSection 2-A of the Act.

13. The submission of the learned counsel for the respondent-BState was that the appellant could not be held eligible to claim the gratuityamount because out of the total period of 25 years of his service, heworked 22 years as daily wager and only 3 years as regular employee.It is for this reason, the learned counsel urged that the appellant couldnot be said to have worked continuously for a period of 5 years as providedunder the Act so as to make him eligible to claim gratuity.C

14. We do not agree with this submission of learned counsel forthe respondent-State for more than one reason. First, the appellant hasactually rendered the service for a period of 25 years; Second, the Stateactually regularized his services by passing the order dated 06.05.2008;Third, having regularized the services, the appellant became entitled toDclaim its benefit for counting the period of 22 years regardless of thepost and the capacity on which he worked for 22 years; Fourth, noprovision under the Act was brought to our notice which disentitled theappellant from claiming the gratuity and nor any provision was broughtto our notice which prohibits the appellant from taking benefit of his longand continuous period of 22 years of service, which he rendered prior toEhis regularization for calculating his continuous service of five years.

15. In our considered opinion, the High Court committed an errorin placing reliance on the decision of this Court in Secretary, State ofKarnataka & Ors. vs. Umadevi(3) & Ors., (2006) 4 SCC 1 to denythe relief of grant of gratuity to the appellant. In the case at hand, theFHigh Court should have seen that the services of the appellant wasactually regularized by the State and, therefore, the law laid down inUmadevi(supra) could not be relied on. Indeed, even the decision ofUmadevi (supra) makes a distinction in cases and where the servicesstand regularized, the ratio of Umadevi to deny the relief would notapply.G

16. In our considered opinion, once the State regularized theservices of the appellant while he was in State services, the appellantbecame entitled to count his total period of service for claiming the gratuityamount subject to his proving continuous service of 5 years as specifiedunder Section 2A of the Act which, in this case, the appellant has dulyHproved.

17. In the circumstances appearing in the case, it would be thetravesty of justice, if the appellant is denied his legitimate claim of gratuitydespite rendering “continuous service” for a period of 25 years whicheven, according to the State, were regularized. The question as to fromwhich date such services were regularized was of no significance forcalculating the total length of service for claiming gratuity amount oncethe services were regularized by the State.

18. It was indeed the State who took 22 years to regularize theservice of the appellant and went on taking work from the appellant onpayment of a meager salary of Rs.2776/- per month for 22 long yearsuninterruptedly and only in the last three years, the State started payinga salary of Rs.11,107/- per month to the appellant. Having regularizedthe services of the appellant, the State had no justifiable reason to denythe benefit of gratuity to the appellant which was his statutory rightunder the Act. It being a welfare legislation meant for the benefit of theemployees, who serve their employer for a long time, it is the duty of theState to voluntarily pay the gratuity amount to the appellant rather thanto force the employee to approach the Court to get his genuine claim.

19. In view of the foregoing discussion, we cannot agree with thereasoning and the conclusion arrived at by the High Court which is legallyunsustainable. It is really unfortunate that the genuine claim of theappellant was being denied by the State at every stage of the proceedingsup to this Court and dragged him in fruitless litigation for all these years.

20. Indeed, this reminds us of the apt observations made by theChief Justice M.C. Chagla (as he then was) in the case of Firm KaluramSitaram vs. The Dominion of India (AIR 1954 Bombay 50). Thelearned Chief Justice in his distinctive style of writing while deciding thecase between an individual citizen and the State made the followingpertinent observations:

“Now, we have often had occasion to say that when the Statedeals with a citizen it should not ordinarily reply ontechnicalities, and if the State is satisfied that the case ofthe citizen is a just one, even though legal defences may beopen to it, it must act, as has been said by eminent Judges,as an honest person.”

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A21. These observations apply in full force against the State in thiscase because just case of the appellant was being opposed by the Stateon technical grounds. As a consequence, the appeal succeeds and isallowed. Impugned judgment/order passed by the High Court (SingleJudge and Division Bench) are set aside and the orders of the ControllingAuthority and Appellate Authority are restored with cost of Rs.25,000/-Bpayable by the State to the appellant. Cost to be paid by the State alongwith the payment of gratuity amount.

22. The respondent-State is directed to release/pay the gratuityamount as determined by the Controlling Authority within three monthsto the appellant.

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Devika Gujral

Appeal allowed.

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