N. Sivadasan v. The Appellate Author...

Raju, J.

The above Writ Appeal has been filed against the order of a learned Single Judge of this Court dated 20.9.1991 in W.P No. 6587 of 1983 (since reported in 1992 II L.L.J, 794 (N. Sadasivan v. A.A under Payment of Gratuity Act, Madras) where under the learned Single Judge was pleased to dismiss the writ petition filed by the appellant seeking for a writ of certiorarified mandamus to call for and quash the proceedings of the first respondent relating to the payment of gratuity in Appeal No. 30/80 dated 31.10.1990 confirming the order of the second respondent - Controlling Authority in P.G Case No. 252/79 dated 5.12.1979, in so far as those orders denied receiving of full gratuity and consequently to direct the third respondent - management to pay the petitioner a sum of Rs. 247.50 towards the balance of gratuity award.

2. Though the sum involved is negligible, the principle involved for consideration is an important one and that being the position, the appellant has pursued the matter before us and it becomes necessary also for this Court to adjudicate on the issues. The relevant factual claims necessary for the determination of the issues raised before us are not in serious controversy. As noticed by the Controlling Authority under the Payment of Gratuity Act, 1972 (hereinafter referred to as “the Act”), the parties agreed about the period of services of the appellant as six years in the third respondent-Institution and it was further agreed that the appellants' last drawn wages was Rs. 45/- per month and that the appellant was supplied with food and in respect of the employees, who did not avail the facility of taking food, the cash equivalent to the food was paid to such persons in cash. The cash equivalent to the food value per month is claimed to be Rs. 82.50 and therefore, the claim of the appellant was that his total emoluments should be treated as Rs. 127.50 per month for the purpose of the Act. The second respondent-Controlling Authority under the Act by his proceeding dated 5.12.1979 while computing the gratuity has directed the exclusion of the value of the food equivalent in a sum of Rs. 82.50 per month and arrived at the gratuity amount to be paid only taking into account the last drawn wages paid to the appellant in cash of Rs. 45/- with reference to the service of six years. The appeal filed against the said order of the second respondent also came to be rejected by the appellate authority - first respondent. Hence, the appellant filed W.P No. 6587 of 1983 for the relief noticed supra.

3. The learned Single Judge was of the view that the definition of “wages” under Section 2(s) of the Act does not permit taking into account of the cash equivalent to the food and tiffin value supplied to the appellant and in construing the scope of the definition of “wages” under the Act, the definition of “wages” contained in Section 2(13-A) of the Tamil Nadu Catering Establishments Act, 1958 will have no relevance or application. In other respects, the learned Single Judge also was not inclined to apply the principles laid down in some of the decisions of Courts, of course rendered in the context of different legislations, though relating to the relationship of labour arid management. The learned Single Judge therefore concurred with the view taken by the authorities below and rejected the writ petition. Hence, the above writ appeal.

4. Ms. Anna Mathew, learned counsel appearing for the appellant contended that the definition of “wages” as contained in Section 2(13-A) of the Tamil Nadu Catering Establishments Act, 1958, ought to have been taken into account for appreciating and interpreting the scope of the word “wages” in Section 2(s) of the Act and that the decision in The Delhi Cloth and General Mills Co. Ltd. v. The Workmen (AIR 1970 SC. 919), which related to the period prior to the Act, when the payment of gratuity was not covered by the statutory provisions but was based on different settlements or awards would have no relevance and therefore ought not to have been relied upon. Argued the learned counsel further that the Act in question being a beneficial legislation with a social object to secure the worker at the fag end of his carrier some benefits, a very liberal and constructive approach should have been adopted to perpetuate the said object and to fulfill the policy underlying the same and that the construction placed by the learned Single Judge has the effect of defeating the very object of the legislation.

5. Per contra, Mr. A. Subramania Iyer, learned counsel appearing for the third respondent-Management while reiterating the stand taken before the learned Single Judge and adopting the reasons assigned by the learned Single Judge, strenuously contended that the construction placed by the learned Single Judge conforms to the words used and the language employed in Section 2(s) of the Act and the same does not call for any interference in this appeal.

6. We have carefully considered the submissions of the learned counsel appearing on either side. The Act in question was enacted by the Parliament to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oil-fields, plantations, ports, railway companies, shops and other establishments in order to ensure a uniform pattern of payment of gratuity to the employees throughout the country unlike the then existing different formula and yardsticks applied depending upon the terms of awards and settlements, in force in any particular industry or establishment or any State law taking care of such situations as prevailing in some of the States. With the enactment of the Act, the gratuitous nature of the same ceased and far from being a mere matter of gift, it has come to stay as an entitlement which the employee concerned was said to have earned and to which he became entitled to as a matter of right subject to the terms and conditions prescribed therefor in the law itself. The definition of “wages” as contained in Section 2(s) of the Act is as follows:

“wages” means all emoluments which are earned by an employee while on “duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house-rent allowance, overtime wages and any other allowance.”

No doubt the Tamil Nadu Catering Establishments Act, 1958 is a State legislation enacted by the Tamil Nadu State legislature, but it uniformly applies to regulate the conditions of work and service in catering establishments in the State of Tamil Nadu. By Tamil Nadu Act 29 of 1975, a specific provision was introduced by inserting to Section 2 of the Tamil Nadu Catering Establishments Act, sub-section (13-A) defining “wages” to mean the basic wages, dearness allowance, the cash equivalent of the meals and tiffin supplied to the employees free of charge and the value of any other amenity or of service or of any concessional supply of foodgrains or other articles which can be computed in terms of money, but does not include a bonus. With the enactment of the Tamil Nadu Catering Establishments Act, 1958 and at any rate with the definition of the word “wages” for the purpose of the said Act as noticed above, an employee in a catering establishment in the State of Tamil Nadu becomes statutorily entitled to claim the cash equivalent of the meals and tiffin supplied to him free of charge as part of wages payable to him. The provisions of the said Act are very much binding and governing the relationship of the appellant as also the third respondent and regulate the service conditions of the employee. While that be the position, it becomes necessary to consider as to whether the definition of “wages” in Section 2(s) of the Act could be construed in such a manner as not to take within its fold the wages paid or payable to an employee under the Tamil Nadu Catering Establishments Act, particularly when the employee in question, whose gratuity has come up for determination, is an employee governed by and falls within the meaning of the Tamil Nadu Catering Establishments Act, 1958.

7. The learned Single Judge has taken the view that the definition contained in the Tamil Nadu Catering Establishments Act will have no application to the interpretation to be placed on Section 2(s) of the Act in question. In our view, the fact that the Payment of Gratuity Act is a Central enactment or that the Tamil Nadu Catering Establishments Act, 1958 is a State enactment, will not be of much significance if the ultimate aim and object of those legislations are taken into consideration, namely the amelioration of the conditions of the worker at the end of his service career. If the Tamil Nadu Catering Establishments Act, 1958 regulates the conditions of service of employees in a catering establishment in the State of Tamil Nadu, the Payment of Gratuity Act, 1972 insofar as such workers governed by the provisions of the Tamil Nadu Catering Establishments Act, 1958, are concerned also takes care of the entitlement of an employee at the end of his service career. Though it cannot be legitimately said that the definition of “wages” in Sectipn 2(s) of the Act has to be interpreted in the same manner the interpretation placed upon the word “wages” is defined under Section 2(13-A) of the Tamil Nadu Catering Establishments Act, 1958, the entirety of the emoluments, which becomes payable to a worker in catering establishment by virtue of Section 2(13-A) of the Tamil Nadu Catering Establishments Act would equally squarely fall within the ‘definition of “wages” in the Act which defined it to mean all emoluments which are earned by an employee while on duty…” There is no justification whatsoever to construe Section 2(s) of the Act in any different manner so as to exclude the entire wages earned by an employee governed by the provisions of the State Act. Consequently, we are unable to share the views subscribed to by the learned Single Judge in this regard,

8. Even otherwise, “wages” when defined to mean as comprehending all emoluments which are earned by an employee while on duty or on leave in accordance with the terms arid conditions of his employment and which are paid or payable to him, the sum total of all payments, perquisites and advantages or gains arising from such employment, except those that are specifically excluded in the definition of “wages” would fall within the definition of “wages”. As rightly contended for the appellant by the learned counsel, the legislation in question being a beneficial legislation with a purpose and spirit underlying the same a purposive construction to perpetuate the intention to fructify the beneficial purpose must be adopted, instead of taking a literal view of certain words alone ignoring the spirit behind the same. The decision in The Delhi Cloth and General Mills Co.'s case, (AIR 1970 S.C 919) (supra), on which reliance has been placed by the learned Single Judge will have no application whatsoever in construing a statutory provision, particularly when the principle laid down by the Apex Court in the said decision was not in construing the statutory entitlement under Section 2(s) of the Act.

9. In this case, it is matter of record that the free supply of food or equivalent value is a term of contract in the agreement between the parties and that such of those employees in the very establishment of the third respondent, who do not factually take their food or tiffin were, as a matter of fact, paid the money or cash equivalent therefor. If that be the position, the aggregate in respect of such person would take within its fold for the purpose of the Act such amount too. It would be anomalous to take into account or not the said money value or cash equivalent of the food and tiffin depending upon merely the fortuitous circumstance as to whether a particular employee has consumed food or tiffin or has received the cash value without consuming such food articles.

10. Apart from the above conclusion of ours, our attention has also been drawn to an unreported decision of a learned Single Judge of this Court dated 30.10.1996 in W.P No. 11003 of 1987, wherein S.M Abdul Wahab, J.while construing Section 2(s) of the Act held that in the case of employees of hotels and restaurants in as much as the employer has to supply free food and tiffin, the money equivalent of the same will form part of the “wages” and that has to be taken into account for the purpose of calculating gratuity, under the Act, This view taken by the learned Single Judge accords with our view.

11. For all the above reasons, we are unable to agree with the view taken by the learned Single Judge. The order of the learned Single Judge is hereby set aside and the writ appeal is allowed. The writ petition is allowed as prayed for. There will be no order as to costs.

KA/CH/VCS