MANU/TN/1420/1996
Equivalent/Neutral Citation: 1998(3)LLN414(Mad.), 1998LLR1078
IN THE HIGH COURT OF MADRAS
W.P. No. 2135 of 1987
Decided On: 12.06.1996
Mettur Beardsell Limited Vs. Regional Labour Commissioner
Hon'ble Judges/Coram:
S.M. Abdul Wahab, J.
JUDGMENT
S.M. Abdul Wahab, J.
1 . This writ petition is for a writ of certiorari to quash the order dated 31 December
1986 in P.G. Appeal No. 58 of 1986 on the file of the first respondent. The case of the
petitioner is on 23 December 1977 the third respondent was appointed as salesman and
he was assigned to the thread division. From 1 January 1983. Mettur Textiles (Private).
Ltd. came to be known as Mettur Textiles. Thus the third respondent became an
employee of the Mettur Textiles from 1 January 1983. According to the petitioner, he
ceased to be an-employee of Mettur Textiles, Ltd., with effect from 31 December 1982.
On 31 January 1983 the third respondent resigned from the services and relieved on the
said date. He was getting Rs. 1,335 as monthly salary. Since, according to the third
respondent, his basic salary crossed Rs. 1,000 with effect from 10 November 1982. He
made a claim on 3 March 1983 for gratuity from Mettur Textiles. Having failed in his
attempt to get gratuity from Mettur Textiles, he preferred a claim on 14 February 1985
against Mettur Beardsell, the petitioner herein. The claim was after a delay of two years
and one month. The claim was resisted by the petitioner on the ground that he ceased
to be an employee with them from 31 December 1982. Further, he was not employed
for a period of five years on a wage not exceeding. Rs. 1,000. Hence, on these grounds
the claim of the third respondent must be rejected. The claim was entertained by the
second respondent in P.G. Application No. 49 of 1985 under S. 7(4) of the Payment of
Gratuity Act. But it was dismissed on 15 April 1986 on the ground that he was not an
employee for a period of not less than five years on wages not exceeding Rs. 11000
within the meaning of explanation 2(e) of the Payment of Gratuity Act.
2 . As against the said order, the third respondent preferred an appeal to the first
respondent under S. 7(7) of the Payment of Gratuity Act in P.G. Appeal No. 58 of 1986.
On 31 December 1986 the first respondent passed orders holding that the third
respondent's wages crossed Rs. 1,000 only on 10 November 1982 and he had put in
four years 10 months and 18 days service. Hence there was continuous service under S.
2A of the Payment of Gratuity Act. He must be deemed to have completed continuous
service of five years. In the said view the first respondent allowed the appeal of the
third respondent. Therefore, the petitioner has preferred this writ petition under Art.
226 of the Constitution of India.
3. The third respondent filed a counter. In the counter he has mainly stated that he has
produced documentary evidence to show that from 23 November 1977 to 4 November
1982 he was paid less than Rs. 1,000 and the contention that five years calendar service
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is necessary is untenable. He also contended that the transfer of service from the
petitioner to Mettur Textiles did not cut his length of service. Further his resignation
was accepted only by the writ-petitioner, as is evidenced by Exhibit P-5.
4. Now I will examine the contentions raised by the learned counsel for the petitioner.
Section 2(e) of the Payment of Gratuity Act was as follows, before the amendment;
"'employee' means any person (other than an apprentice) employed on wages,
not exceeding one thousand rupees per mensem, in any establishment, factory,
mine, oil field, plantation, port, railway company or shop, to do any skilled,
semiskilled, or unskilled, manual, supervisory, technical or clerical work,
whether the terms of such employment are express or implied, but does not
include any such person who is employed in a managerial or administrative
capacity, or who holds a civil post under the Central Government or a State
Government or who is subject to the Air Force Act, 1950 the Army Act, 1950 or
the Navy Act, 1957."
5 . Section 2A defines continuous service. According to this section, if an employee
renders continuous service for a period of 240 days in a year he will be deemed to have
continued in service for one year. This deeming provision contained in S. 2A must be
applied in interpreting the period of five years mentioned in S. 4(1). Section 2(b) also
supports this interpretation because as per the said section completed year of service
means continuous service for one year. Therefore, these provisions are emphatic in
stating that if the employee serves continuously for a period of 240 days in a year, he
must be deemed to have continuously served for one year. In this case admittedly the
third respondent has served for 4 years, 10 months and 18 days. 10 months and 18
days service is definitely more than 240 days. Therefore when the third respondent was
relieved from service he has thus completed five years of service. In the decision
reported in Surendra Kumar Verma v. Central Government Industrial Tribunal-cum-
Labour Court, New Delhi, and Another MANU/SC/0316/1980 : 1980 (2) LLN 456, their
Lordships have observed as follows, in Para. 13, at page 462:
"... It is sufficient for the purpose of S. 25B(2)0.1 (i.e. that he has actually
worked for not less than 240 days. It is no longer necessary for a workman to
show that he has been in employment during a preceding period of twelve
calendar months in order to qualify within the terms of S. 25B..."
6 . The learned counsel for the petitioner relied upon a case reported in P. Raghuvulu
and Sons v. Additional Labour Court (1985 (1) LLN 612). A Single Judge of the Andhra
Pradesh High Court has held the service rendered for 4 years and 11 months and 10
days will not enable an employee to avail gratuity. The said case arises under the
Andhra Pradesh Shops and Establishments Act, 1966. The question was whether as per
Cl. (d) of explanation to S. 40(1) of the Andhra Pradesh Shops and Establishments Act,
1966. Providing for treating a fraction of a year exceeding six months as a year and a
fraction of a year less than six months as not a year. The contention that was accepted
by the learned Judge was that the aforesaid explanation applies only for calculating the
period for which gratuity is payable and not applicable to the qualifying period of years.
The learned judge has probably relied upon the words, "for which gratuity is to be
given," in S. 40(1) of the Andhra Pradesh Shops and Establishments Act, 1966. But this
decision is not applicable to our case because as stated above the definitions of "one
year," "completed year," "continuous year," under Ss. 2(a), 2(b) and 2(c) go to show
that whenever year is mentioned in the enactment, it must be taken as the year defined
in the aforesaid provisions. Another contention raised by the learned counsel for the
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petitioner is that the petitioner-company ceased to exist after it was merged with Mettur
Beardsell, Ltd., with effect from 1 January 1983. But this contention is untenable
because at the time of entering into partnership the petitioner has not taken any
undertaking from the employees that they will become employees of the new
partnership firm Mettur Textiles, and cease to be employees of the Mettur Beardsell, Ltd.
But, as found earlier the third respondent was relived only by the petitioner. Therefore,
I am not convinced with the contentions raised by the learned counsel for the petitioner.
Hence the writ petition fails and it is dismissed. However, there will be no order as to
costs.
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