wp23552021 b091eddd

12. Mr. Singhavi took a slew of exceptions to the impugned order. Firstly, Mr. Singhavi would urge, the Appellate Authority did not appreciate the factual context in a correct perspective and proceeded to non-suit the workmen by relying upon the decision of this Court in the case of Cummins (supra), though it does not govern the facts of the case at hand. The impugned order, according to Mr. Singhavi, singularly lacks consideration apart from the reproduction of the observations of this Court in the case of Cummins (supra). Secondly, the crucial element of ONGC being an employer within the meaning of Section 2(f)(i) of the Gratuity Act was not at all considered. This led to vitiation as the decision of this Court in the case of Cummins (supra) was in the context of the definition of the employer contained in Sub-clauses (ii) and (iii) of Section 2(f).

13. Thirdly, Mr. Singhavi would urge, the decision of this Court in the case of Cummins (supra) which forms the basis of the impugned order and the sheet anchor of the defence of ONGC does not lay down a correct position in law. Taking the Court through the judgment in the case of Cummins (supra) Mr. Singhavi would urge that having noted that under the provisions of Section 21(4) of the Contract Labour Act, 1970 a principal employer is liable to pay the gratuity in the event of default by the contractor, this Court proceeded on an incorrect premise that the remedy of the workmen was not under the provisions of the Gratuity Act but under the Payment of Wages Act, 1936 or Section 33-C of the Industrial Disputes Act, 1947. Mr. Singhavi strenuously submitted that it is well settled that the Gratuity Act is a Code in itself and to enforce the payment of gratuity recourse to the provisions of other enactments is impermissible. To bolster up this submission, Mr. Singhavi placed a strong reliance on the decision of the Supreme Court in the case of State of Punjab vs. Labour Court, Jullunder and others[2]. 2(1980) 1 Supreme Court Cases 4.

14. Fourthly, Mr. Singhavi would urge, the enunciation by this Court in the case of Cummins (supra) that the Controlling Authority under the Gratuity Act has no jurisdiction to decide who the “employer” is, overlooks the purport and effect of the amended definition of “employee” under Section 2(e) of the Gratuity Act. It was submitted that if the amended definition of “employee” under Section 2(e) is read in conjunction with the definition of “employer” under Section 2(f)(i) of the Gratuity Act, the liability of ONGC to pay the gratuity becomes absolutely clear.

15. Lastly, in the facts of the case, according to Mr. Singhavi, the determination that only the contractor is liable to pay the gratuity causes serious prejudice to the workmen, as, indisputably, ONGC had utilized the services of the petitioners through various contractors. Since the gratuity is payable only upon cessation of employment and for every completed year of service and a part thereof in excess of six months, as provided under Section 4(2) of the Gratuity Act, the last contractor cannot be made liable to pay the gratuity for the entire service tenure. At any rate, the Gratuity Act casts a dual responsibility on the principal employer and contractor to discharge the obligation under the said Act, urged Mr. Singhavi.

16. Ms. Deshpande, the learned Counsel for the petitioners in WP/2355/2021, WP/1724/2021 and WP/1826/2021, while supplementing the submissions of Mr. Singhavi, laid emphasis on the fact that ONGC squarely falls within the definition of “employer” under sub-clause (i) of Clause (f) of Section 2 of the Gratuity Act. ONGC had not contested the fact that it is an oil field belonging to and under the control of the Central Government. Failure to consider this material distinction resulted in the application of the decision in the case of Cummins (supra) to the facts of the instant case, submitted Ms. Deshpande. It was further urged that liability to pay gratuity under MoU dated 29th December, 2000 arrived at between ONGC and Trade Unions has not been put in contest. Under Clause 5.E.[7] ONGC had agreed to evolve a Group Gratuity Policy through Insurance Agencies which would cover the contract workmen for the purpose of gratuity benefit as per the Payment of Gratuity Act. This factor was also not adequately considered by the Appellate Authority. Thus, according to Ms. Deshpande, the Appellate Authority misdirected itself in setting aside a well reasoned order of the Controlling Authority by wrongly applying the decision in the case of Cummins (supra) to the facts of the cases as hand.

17. As against this, Mr. Paryani, the learned Counsel for ONGC, submitted that no interference is warranted in the impugned orders. The decision of this Court, according to Mr. Paryani, in the case of Cummins (supra) sets the controversy at rest and is on all fours with the facts of the case at hand. It was urged, with a degree of vehemence, that the concept of “principal employer” is completely alien to the payment of Gratuity Act. The definition of “principal employer” contained in the Contract Labour Act, 1970 cannot be imported while determining liability of an employer under the Gratuity Act. The Controlling Authority had fallen in error in importing the concept of principal employer and the said mistake was rightly corrected by the Appellate Authority in view of the enunciation of law in the case of Cummins (supra).

18. Mr. Paryani would urge that it is the test of “the person having ultimate control”, which bears upon the liability to pay the gratuity. In the case at hand, according to Mr. Paryani, the said test is not fulfilled qua ONGC as it was only the contractor who had the ultimate control and, thus, liable to pay the gratuity under the Act. It was further urged that under the provisions of the Gratuity Act the Controlling Authority has no jurisdiction to adjudicate upon the liability of the principal employer, even if it is assumed that ONGC was the principal employer.

19. In any event, in view of the terms of the goodwill package especially Clauses 2.[3] and 5.3, the petitioners, having accepted the benefits under the goodwill package scheme with a clear understanding that it was in full and final settlement of their past or future claims/demands of whatsoever nature, are precluded from claiming gratuity under the Gratuity Act. It was further urged that gratuity is clearly excluded from the definition of ‘wages’ under the Payment of Wages Act, 1936. Looked at from any perspective, according to Mr. Pariyani, ONGC cannot be fastened with the liability to pay the gratuity, either in law or on the facts of the case.

20. Ms. Sayyed, the learned Counsel for ONGC in WP/1724/2021 and WP/1826/2021 also supported the impugned order. It was submitted that as enunciated in the case of Cummins (supra) the domain of the Controlling Authority is limited to enquire into the questions which are necessary for the administration of the provisions of the Gratuity Act, namely, whether applicant is an employee, whether the opponent is an employer and whether the conditions for entitlement to gratuity are satisfied, and, if yes, the quantum thereof. The Controlling Authority has no jurisdiction to decide the question as to who the employer is.

21. Ms. Sayyed reiterated that even though it is an admitted fact that ONGC was the principal employer of the petitioners yet ONCG cannot made liable as an “employer” under the provisions of Section 2(f) of the Gratuity Act. An endeavour was made to draw home the point that even reliance on sub-clause (i) of Clause (f) of Section 2 is of no assistance to the petitioners as it does not define the employer qua the employees of the contractor. Ms. Sayyed sought to supplement the submissions of Mr. Paryani by canvassing a submission that the principal employer was not statutorily liable to pay the amount paid by it under the goodwill package, which were in the nature of ex gratia.

22. The aforesaid submissions now fall for consideration.

23. To begin with, it may be apposite to note and keep in view uncontroverted facts. It is incontestible that ONGC had been availing the services of the workmen through contractors for rendering specialized services in areas which are not prohibited under the Contract Labour Act, 1970. Indisputably, ONGC has employed the workmen through a number of contractors, few of whom are co-respondents in the respective petitions. The fact that the petitioners in each of the petitions have rendered services for a number of years and, at any rate, for the period required to be eligible to claim gratuity under the Gratuity Act, has not been seriously controverted. The status of ONGC as “principal employer” qua the petitioners also seems to be not put in contest though the implication thereof in the matter of liability to pay gratuity is at the heart of the controversy. It is not in dispute that the cessation of employment occurred upon acceptance of goodwill package by the contract workmen, which was professedly floated to ensure industrial peace in the backdrop of the then subjudice industrial dispute. Equally indisputable is the fact that ONGC had entered into the settlement with the representative unions in respect of the demands of the contract workmen and under the MoU dated 29th December, 2000, it was agreed that an effort would be made to evolve a group gratuity policy through insurance agency, which would cover the contract workmen for the purpose of gratuity benefit as per the Gratuity Act.

24. In the backdrop of the aforesaid facts, before appreciating the rival submissions, a reference to the relevant provisions of the Gratuity Act may be necessary. Section 2(e) which came to be substituted by Act No.47/2009 defines “employee” as under: “Section 2(e) “employee” means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are express or implied, 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 Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity;]”

25. Clause (f) of Section 2 defines “employer” as under: “Section 2(f) “employer” means, in relation to any establishment, factory, mine, oilfield, plantation, port, railway company or shop—

(i) belonging to, or under the control of, the Central

Government or a State Government a person or authority appointed by the appropriate Government for the supervision and control of employees, or where no person or authority has been so appointed, the head of the Ministry or Department concerned,

(ii) belonging to, or under the control of, any local authority, the person appointed by such authority for the supervision and control of employees or where no person has been so appointed, the chief executive officer of the local authority,

(iii) in any other case, the person, who, or the authority which, has the ultimate control over the affairs of the establishment, factory, mine, oilfield, plantation, port, railway company or shop, and where the said affairs are entrusted to any other person, whether called a manager, managing director or by any other name, such person;”

26. Under Section 4(1) of the Act, gratuity shall be payable to an employee in the eventualities enumerated therein, which includes termination of employment upon retirement or resignation, under Clause (b), if the employee has rendered continuous service for not less than five years. Sub-section (2) of Section 4 prescribes the formula for computation of gratuity. Section 4(3) stipulates that the amount of gratuity payable to an employee shall not exceed certain limits and thus puts a cap on the amount payable towards gratuity. Section 4(5) provides that nothing in the said section shall affect the right of an employee to receive better terms of gratuity under, “any award or agreement or contract with the employer”.

27. Section 7 contains a fasciculus of provisions for determination of amount of gratuity. In the event of any dispute the Controlling Authority is empowered under Section 7(4)(c) to determine the dispute as to the admissibility of any claim for gratuity and/or quantum thereof. The said determination is subject to an appeal before the Appellate Authority under Section 7(7). Section 14 of the Act contains a non-obstante clause and gives overriding effect to the provisions of the Act or any Rule made thereunder notwithstanding anything inconsistent therewith contained in any enactment other than the said Act or any instrument or contract having effect by virtue of any enactment other than the said Act.

28. At this juncture, a reference to the provisions of the Contract Labour Act, 1970 may also be necessary. Under Section 2(h) wages defined therein is to have the meaning assigned to it in Clause (6) of Section 2 of the Payment of Wages Act, 1936. Section 21(4) which casts an obligation on the principal employer to make payment of wages provides that, in case the contractor fails to make payment of wages within the prescribed period or makes short payment, then the principal employer shall be liable to make payment of wages in full or the unpaid balance due, as the case may be, to the contract labour employed by the contractor and recover the amount so paid by the contractor either by deduction from any amount payable to the contractor under any contract or as a debt payable by the contractor.

29. In the context of the controversy, a reference to the definition of “wages” under the Payment of Wages Act, 1936 may also be apposite. The relevant part of the definition of “wages” thereunder reads as under: “5[(vi) “wages” means all remuneration (whether by way of salary, allowances or otherwise) expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes- (a) any remuneration payable under any award or settlement between the parties or order of a Court; (b) any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period;

(c) any additional remuneration payable under the terms of employment (whether called a bonus or by any other name);

(d) any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions but does not provide for the time within which the payment is to be made; (e) any sum to which the person employed is entitled under any scheme framed under any law for the time being in force; but does not include— ……... (6) any gratuity payable on the termination of employment in cases other than those specified in sub-clause (d)].”

30. In the light of the aforesaid statutory provisions, the controversy at hand primarily revolves around the question as to whether ONGC satisfies the description of the employer, qua the petitioners – contract workmen, within the meaning of the Gratuity Act. As the impugned order is based on the decision of this Court in the case of Cummins (supra) and the submissions were also canvassed in the context of the correctness or otherwise of the enunciation therein, it may be appropriate to immediately notice the facts in the case of Cummins (supra) and the decision thereon.

31. In the case of Cummins (supra) the petitioner therein had initially entered into the contract with Dattatraya Vetal, the Proprietor of, “Industrial Cleaning Services” as a contractor to provide cleaning services at the petitioners factory at Pune. The said contract was terminated with effect from 31st December,

1984. The cleaning services, however, were continued by Mr. M. A. Pathak in the same proprietary name by taking over the business. Mr. Pathak agreed to continue the employment of all the then existing 74 employees, employed by Mr. Vetal. An agreement was executed between Mr. Vetal and Mr. Pathak on 1st January, 1985 inter alia providing for payment of gratuity to the employees engaged for cleaning service in the petitioners factory by Mr. Pathak. A Trust was created for the said purpose in the name of, “Industrial Cleaning Services Employees Group Gratuity cum Life Assurance Trust”.

32. Later on, industrial dispute arose. Eventually a MoU was reached between the petitioner and the Union. The workmen appointed through the contractor submitted letters of resignation to Industrial Cleaning Services – respondent No.1 and joined the petitioner as its workmen. Thereupon a claim for payment of gratuity was laid before the Controlling Authority, initially against respondent No.1 and, subsequently, the petitioner came to be joined as a party to the said proceedings. The Controlling Authority thereafter determined the amount of gratuity and directed the petitioner to pay the same to the workman.

33. In the backdrop of the aforesaid facts, the petitioner assailed the order of the Controlling Authority principally on the ground that the Controlling Authority had no power to adjudicate, who the employer of the contract workmen was. A learned Single Judge of this Court, after an elaborate consideration of the provisions of the Gratuity Act ruled that, in the facts of the said case, respondent No.1 therein or its partner had the ultimate control over the affairs of the said establishment and therefore respondent No.1 alone could be termed as an employer in relation with the establishment. This Court was also of the view that there was no reason to import the definition of, “principal employer”, into Clause (f) of Section 2 of the Gratuity Act. Adverting to the decision of the Supreme Court in the case of Ahmedabad Pvt. Primary Teachers’ Association vs. Administrative Officer and others[3], this Court held that it was impermissible to import the wide definition of the term employee in the other enactments like Employees’ Provident Funds Act, 1952 in the Gratuity Act. The legislature advisedly did not use these templates or introduce the concept of “principal employer” in the definition of “employer” in Clause (f) of Section 2 and there was no reason why this dichotomy between a contractor and a principal employer should be imported into the definition of “employer” under the Gratuity Act. In the process, this Court distinguished the decisions of the Madras High Court in the cases of Superintending Engineer, 3(2004) 1 Supreme Court Cases 755. Mettur Thermal Power Station, Mettur vs. Appellate Authority Joint Commissioner of Labour, Coimbatore[4] and Madras Fertilisers Ltd. vs. Controlling Authority under Payment of.

34. Since considerable submissions were canvassed on the observations of this Court in the case of Cummins (supra), to retain emphasis and correctly appreciate the enunciation therein, the observations in paragraphs 9 to12 are extracted below: “9. Coming now to the merits, the person liable to pay gratuity must be an "employer" as defined in Clause (f) of Section 2. Just as the employee is a person employed for wages in, or in connection with the work of, an establishment, to which the Gratuity Act applies, the employer must be a person, who had the ultimate control over the affairs of the establishment. It is not disputed that the employees, with whom we are concerned in the present case, were employed in the firm of respondent No.1. It is this firm, which is the establishment for the purposes of gratuity so far as these employees are concerned. It is respondent No.1 or its partners who had the ultimate control over the affairs of this establishment and it is respondent No.1 who alone could be termed as an employer in relation to the establishment. Respondent no.1 may be carrying on business at its own business premises or at the factory of the Petitioner. That is quite besides the point. The authority in its impugned order seems to have proceeded on the footing that in the present case, all Applicants were working inside the factory premises of the Petitioner and never on the premises of respondent No.1 and that the employer in respect of these workmen was accordingly the Petitioner who had ultimate control over the affairs of the factory. This reasoning is essentially fallacious in that it disregards that as far as the Applicants are concerned, the establishment in which the Applicants were employed was the establishment of respondent No.1, though they may be physically working at another establishment as part of their 42012(III) CLR 242. 52003(1) LLJ Madras 325. duties with the former establishment. The mere fact that they were designated to work inside the factory premises of the petitioner does not make the factory premises an "establishment" as far as these employees are concerned. The Authority was not right in holding that for deciding the liability of gratuity under the provisions of the Gratuity Act, it was immaterial as to who was the immediate employer of the Applicants or that the employer in respect of any person, who works inside factory premises, is the occupier of the factory premises.

10. Mr. Naik for Respondent No.1 suggests that though Respondent No.1 was the contractor who had engaged the Applicants as employees, it is the Petitioner who was the principal employer. He refers in this connection to the definition of 'principal employer' under the Contract Labour Act. There is no reason to import the definition of 'principal employer' in Clause (f) of Section 2 of the Gratuity Act. The Supreme Court in the case of Ahmedabad Primary Teachers' Association vs. Administrative Officer (2004) 1 SCC 755 considered the definition of ‘employee’ in clause (e) of Section 2 of the Gratuity Act. Definitions of the word "employee" in diverse labour enactments including the Employees' Provident Funds Act, 1952 were cited before the Court and the Court was urged to construe the word "employee" in clause (e) of Section 2 of the Gratuity Act widely and include teachers within it. The Supreme Court rejected the wide construction suggested in that case, holding that the "legislature was alive to various kinds of definitions of the word "employee" contained in various previous labour enactments when the Act (i.e. the Gratuity Act) was passed in 1972. If it intended to cover in the definition of 'employee' all kinds of employees, it could have as well used such wide language as is contained in section 2(1) of the Employees' Provident Funds Act, 1952 which defines 'employee to mean 'any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment...........Nonuse of such wide language in definition of 'employee' in section 2(e) of the Act of l972 reinforces our conclusion that teachers are clearly not covered in the definition." Even here, the legislature whilst defining the word "employer" in the Gratuity act, had before it various templates of definitions of "employer" in different labour law legislations including the concept of "principal employer" under the Contract Labour Act. It advisedly did not use these templates or introduce the concept of "principal employer" in the definition of "employer" in clause (e) of Section 2. The Contract Labour Act envisages 'contract labour' as a workman employed in connection with the work of an establishment where he is hired in or in connection with the work of an establishment by or through a contractor. The Contract Labour Act defines both "contractor" and "principal employer" in relation to the "establishment". An 'establishment' implies any place where any industry, trade, business, manufacture or occupation is carried on. A 'contractor' in relation to such establishment is a person who undertakes to produce a given result for the establishment through contract labour or who supplies contract labour for any work of the establishment, whereas a 'principal employer' in relation to the establishment is a person responsible for the supervision and control of the establishment. There is no reason why this dichotomy between a contractor and a principal employer should be imported into the definition of "employer" under the Gratuity Act. The Gratuity Act simply refers to an "establishment" and an "employee" as a person employed in or in connection with such establishment and an "employer" as a person having the ultimate control over the affairs of the establishment. The 'establishment' contemplated under these definitions is any business establishment which employs the employee. That establishment is obviously the firm of Respondent No.1 here, and not the factory of the Petitioner.

11. Mr. Naik relies on Section 21 of the Contract Labour Act and submits that in any event, the responsibility to pay 'gratuity' as part of 'wages' is on the 'principal employer' as defined under the Contract Labour Act and the Petitioner as such principal employer is bound to pay the gratuity to the concerned workmen even if they be employed by the contractor. In other words, the argument is that, if not under the Gratuity Act, the liability to gratuity can certainly be fastened unto the Petitioner under the Contract Labour Act. That may be so. Still, this liability does not arise under the Gratuity Act and there is certainly no jurisdiction or authority in the Controlling Authority to determine whether any liability could be fastened unto the Petitioner under Section 21 of the Contract Labour Act as the principal employer under that Act. That would require the Authority to embark on an inquiry as to whether Respondent No.1 is a 'contractor' and the Petitioner is a 'principal employer' within the meaning of that Act and whether gratuity as 'wages' is payable and not paid by Respondent No.1 within the meaning of that Act. These inquiries are foreign to the Controlling Authority operating under the Gratuity Act and determining matters specified in Clause (a) of sub-section (4) of Section 7 thereof. As I have noted above, the matters to be determined by the Authority are simply the following:

(i) Whether the applicant is an "employee" as defined in clause (e) of Section 2 of the Gratuity Act, (ii) Whether the opponent is an "employer" as defined in clause (f) of Section 2, (iii) Whether the conditions for entitlement to receive gratuity under sub- section (1) of Section 4 of the Gratuity Act are satisfied, and (iv) What is the quantum of such gratuity and interest thereon, if any, having regard to subsections (3), (4) and (5) of Section 7 of the Gratuity Act. Non-payment of wages, or of gratuity as part of wages, may invite an action under Section 15 of the Payment of Wages Act read with Section 21 of the Contract Labour Act or alternatively, under Section 33-C of the Industrial Disputes Act. In either case, the Authority under the Gratuity Act is not the forum.

12 Mr. Naik relies on the judgments of Madras High Court in the cases of Superintending Engineer, Mettur Thermal Power Station, Mettur vs. Appellate Authority Joint Commissioner of Labour, Coimbatore, 2012(III) CLR 242 and The Management of Cruickshank and Company Ltd. vs. The Appellate Authority under Payment of Gratuity Act, 1991, MANU/TN/7635/2006 in support of his contention that when a contractor who engages workmen does not pay the amount of gratuity to workers engaged by him, by virtue of Section 21(4) of the Contract Labour Act, the principal employer is liable to pay all dues including the amount of gratuity to the contractor's workers. The Madras High Court relying on Section 21(4) of the Contract Labour Act has affirmed the liability of the principal employer to pay gratuity to contractor's workers. There is no dispute about the principal employer's liability to pay gratuity to contractor's workmen under Section 21(4) of the Contract Labour Act. The point is, whether the Controlling Authority acting under the Gratuity Act has the jurisdiction to enforce this liability, which arises under Section 21(4) of the Contract Labour Act. There is no discussion in the Madras judgments referred to above on this point. Apparently, this point was not even argued in those cases. The existence of such jurisdiction may, however, be said to be implicit in those judgments. The earliest of Madras High Court judgments on this point brought to my notice is the case of Madras Fertilisers Ltd. vs. Controlling Authority under Payment of Gratuity Act, 2003 (I) LLJ Madras 325. In that judgment, the Madras High Court considered whether gratuity is excluded from the definition of wages under clause (vi) of Section 2 of the Payment of Wages Act by reason of the exclusion contained in sub-clause (6) thereof. The definition of wages in Clause (vi) of Section 2 of that Act includes in sub-clause (d), "any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions but does not provide for the time within which the payment is to be made." Sub-clause (6), however, excludes "any gratuity payable on the termination of employment in cases other then those specified in subclause (d)." The court held that on a correct reading of subclause (6), it was clear that gratuity would be excluded from the wages only if such gratuity was not covered in subclause (d). The Court reiterated that the plain meaning of the clause would be that where any sum was payable on termination of employment of the person under any law (in this case, the Payment of Gratuity Act), it would be covered under sub-clause (d), and therefore, excluded from the operation of sub-clause (6) and would amount to "wages". Based on this conclusion, the Court further held that once this construction was accepted, it was clear that it would be the responsibility of the principal employer under Section 21(4) of the Contract Labour Act to make the payment of gratuity to the contractor's workmen and thereafter to recover the same from the contractor, since the initial responsibility to make payment of gratuity lied with the contractor. It is not clear as how the Madras High Court proceeded to thereafter consider the power of the Controlling Authority under the Gratuity Act to order such payment against the principal employer within the jurisdiction conferred to it under clause (c) of sub-section (4) of Section 7 of the Gratuity Act. The judgment of Madras Fertilisers Ltd. seems to have been followed by that court in the later cases of the Superintending Engineer, Mettur Thermal Power Station and The Management of Cruickshank and Company Ltd. (supra). Even these later cases do not consider the further question as to whether the authority under the Gratuity Act can determine the liability of the principal employer within the meaning of Section 21(4) of the Contract Labour Act read with definition of "wages" in clause (vi) of Section 2 of the Payment of Wages Act. I am of the view that this aspect of the matter was not, in terms, decided by the Madras High Court but insofar as it can be said to be implicit in those decisions, I am in respectful disagreement with that implicit conclusion. Section 7 of the Gratuity Act, which provides for the jurisdiction of the Authority to determine the amount of gratuity, makes it clear that it deals with eligibility of a person "for payment of gratuity under this Act" (see, subsection (1) of Section 7); that the disputes that the Authority decides are "with regard to any matter or matters specified in Clause (a)" of sub-section (4) of Section 7 (See, clause (b) of Section 7(4)); that clause (a) specifies matters including the liability of the "employer" as defined under the Gratuity Act to pay gratuity and interest (see, sub-sections (3) and (3A) of Section 7). As I have explained above, there is no scope for determining liability of any other person to pay gratuity by virtue of any other law insofar as the Authority under the Gratuity Act is concerned.” (emphasis supplied)

35. Evidently, this Court has proceeded on the premise that the principal employer’s liability to pay gratuity to contractors workmen under Section 21(4) of the Contract Labour Act, 1970 cannot be disputed. However, the Controlling Authority, acting under the Gratuity Act, has no jurisdiction to enforce the said liability which arises under Section 21(4) of the Contract Labour Act. In the view of this Court, non-payment of wages, or of gratuity as part of wages, may invite an action under Section 15 of the Payment of the Wages Act, 1936 read with Section 21 of the Contract Labour Act or, alternatively, under Section 33-C of the Industrial Disputes Act, 1947. In either case, the Authority under the Gratuity Act is not the forum. Mr. Singhavi was at pains to urge that this enunciation is not in consonance with the settled legal position. I will advert to this aspect a little later.

36. First and foremost, I deem it appropriate to examine the question as to whether the aforesaid enunciation covers even sub-clause (i) of Clause (f) of Section 2 of the Gratuity Act. I have noted the facts in the case of Cummins (supra) in a little detail, on purpose. Incontrovertibly, the petitioner therein was not an establishment which could be termed to be belonging to or under the control of the Central Government or a State Government. Secondly, there was an express agreement between the previous contractor and the successor contractor that the liability to pay the gratuity to the contract workmen would be that of the successor contractor. Evidently, these facts are absent in the cases at hand. In contrast, there is material to indicate that ONGC had agreed to make a provision for gratuity of the contract workmen for the purpose of gratuity benefit as per the Gratuity Act.

37. In the context of the aforesaid distinguishing facts, I find substance in the submission of Mr. Singhavi that in the case of Cummins (supra) this Court was not primarily concerned with the definition of employer in sub-clause (i) of Clause (f) of Section 2 of the Gratuity Act. The observations of this Court, extracted above, also indicate that this Court has applied the test of, “ultimate control over the affairs of the establishment”. That test finds mention in sub-clause (iii) of Clause (f), which defines an employer in the cases not covered by Clauses (i) and

(ii) as the person who or the authority which has the ultimate control over the affairs of the establishment. Applying the aforesaid test, Cummins enunciated that even if the workmen therein were working inside the factory premises of the petitioner therein, the employer in respect of those workmen was the contractor. It was thus held that the mere fact that those workmen were designated to work inside the factory premises of the petitioner did not make the “factory premises” an “establishment” as far as those employees were concerned.

38. The aforesaid observations, if construed in the context of the facts of the case in the case of Cummins (supra), in my considered view, cannot be applied with equal force to the case of an employer, which is covered by sub-clause (i) of Clause (f) of Section 2 of the Gratuity Act.

39. This leads me to the enunciation in the said case that the definition of principal employer under the Contract Labour Act cannot be imported to the determination under the Payment of Gratuity Act. At the outset, it must be noted that once it is held that ONGC is covered under sub-Clause (i) of Section 2(f) and satisfies the description of the “employer” therein, this question does not strictly arise for determination in this case.

40. The proposition that while construing the provisions of an enactment, it may not be appropriate to import the definition of identical terms, defined in another enactment, cannot be disputed. It is quite possible that the legislature designedly uses an expansive or restrictive definition of an identical term, in a given enactment so as to advance the object sought to be achieved by that particular enactment. In such a situation, it is impermissible to construe a particular term in one enactment by importing the definition of the same term in another enactment.

41. This Court, in the case of Cummins (supra), while supporting its view sought to draw support from the decision of the Supreme Court in the case of Ahmedabad Primary Teachers’ Association (supra). The Supreme Court, in the case of Ahmedabad Primary Teachers’ Association (supra) while enunciating that teachers were not entitled to claim gratuity as they did not fall within the definition of employee as contained in Section 2(e) of the Gratuity Act (as it then stood), enunciated as under: “25. The legislature was alive to various kinds of definitions of the word “employee” contained in various previous labour enactments when the Act was passed in 1972. if it intended to cover in the definition of “employee” all kinds of employees, it could have as well used such wide language as is contained in Section 2(f) of the Employees’ Provident Funds Act, 1952 which defines “employee” to mean “any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment ….”. Non-use of such wide language in the definition of “employee” in Section 2(e) of the Act of 1972 reinforces our conclusion that teachers are clearly not covered in the definition.”

42. It is necessary to note that the aforesaid judgment of the Supreme Court in the case of Ahmedabad Primary Teachers’ Association (supra) necessitated an amendment in the definition of “employee” under Section 2(e) of the Gratuity Act. The statement of object and reasons of the Payment of Gratuity (Amendment) Act, 2009, refers to the aforesaid decision of the Supreme Court and states that keeping in view the observations of the Hon’ble Supreme Court, it was proposed to widen the definition of “employee”, under the said Act in order to extend the benefit of gratuity to teachers. Resultantly, pursuant to the said amendment, Clause (e), as extracted above, came to be substituted. “Employee” under Section 2(e) is now defined to mean any person other than an apprentice, who is employed for wages, in any kind of work, manual or otherwise, in or in connection with the work of a factory etc., but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity. The definition of employee has thus been expanded.

43. A profitable reference in this context can be made to a decision of the Supreme Court in the case of Birla Institute of Technology vs. State of Jharkhand and others[6] wherein after adverting to the aforesaid pronouncement of the Supreme Court in the case of Ahmedabad Primary Teachers’ Association (supra) and the subsequent amendment in the definition of employee under Section 2(e) of the Gratuity Act, it was held that the decision in the case of Ahmedabad Primary Teachers’ 6(2019) 15 Supreme Court Cases 586. Association (supra) stood statutorily overruled and the law laid down in the said case, was no longer applicable against the teachers, as if not rendered, and, second, the teachers were held to be entitled to claim amount of gratuity under the Gratuity Act from their employer with effect from 3rd April, 1997.

44. If the expansive definition of the employee under Section 2(e) is read in juxtaposition with the Sub-clause (i) of Section 2(f) of the Gratuity Act, it would be rather difficult to hold that the definition of employer does not cover within its fold ONGC over which the Central Government exercises control.

45. A submission was sought to be canvassed on behalf of the respondents that even if it is admitted that ONGC was the principal employer and liable to pay the wages under Section 21(4) of the Contract Labour Act, 1970, in the event of default on the part of the contractor, the Controlling Authority under the Gratuity Act had no jurisdiction to direct the principal employer to pay the gratuity as it cannot enter into the determination as to who the employer was. A strong reliance was placed on an observations of this Court in Cummins that even if the liability of the principal employer to pay the gratuity was held to exist, the remedy lay before the forums other than the authorities under the Payment of Gratuity Act. In Cummins this Court indicated, resort can be had to the provisions contained in Payment of Wages Act, 1936 or, in the alternative, to Section 33-C of the Industrial Disputes Act, 1947.

46. Mr. Singhavi countered by forcefully canvassing a submission that the aforesaid course is not open as the Gratuity Act is a complete Code in itself. Reliance placed by Mr. Singhavi on the decision of the Supreme Court in the case of State of Punjab (supra) in support of the aforesaid submission, seems impeccable. In the case of State of Punjab (supra) the respondents were employed as work-charged employees on a construction project, with the Government of Punjab. Upon being rentrenched, they claimed gratuity and other benefits. As the claim was disputed the employees approached the Labour Court under Section 33-C of the Industrial Disputes Act. The Labour Court held that the employees were entitled to gratuity. The challenge to the said decision in the High Court did not succeed. Before the Supreme Court it was, inter alia, contended that the employees were not entitled to apply under Section 33- C(2) of the Act and should have, if at all, applied under the provisions to the Gratuity Act.

47. The Supreme Court found substance in the said contention and held that the proceedings for the payment of gratuity due under the Gratuity Act must be taken under that Act and not under any other enactment. In the process, the Supreme Court analysed the provisions of the Gratuity Act to hold that it enacts a complete Code containing detailed provisions covering all the essential features of a scheme for payment of gratuity. The observations of the Supreme Court in paragraphs 6 to 8 are instructive and hence extracted below. “6. The third contention raised by the appellant is that the employee respondents were not entitled to apply under section 33-C(2) of the Industrial Disputes Act, 1947 for payment of the gratuity, and should have, if at all, applied under the provisions of the Payment of Gratuity Act. It is urged that the Payment of Gratuity Act is a self-contained code incorporating all the essential provisions relating to payment of gratuity which can be claimed under that Act, and its provisions impliedly exclude recourse to any other statute for that purpose. The contention has force and must be accepted. A careful perusal of the relevant provisions of the Payment of Gratuity Act shows that Parliament has enacted a closely knit scheme providing for payment of gratuity. A controlling authority is appointed by the appropriate Government under section 3. and Parliament has made him responsible for the administration of the entire Act. In what event gratuity will become payable and how it will be quantified are detailed in section 4. Section 7(1) entitled a person eligible for payment of gratuity to apply in that behalf to the employer. Under section 7(2), the employer is obliged, as soon as gratuity becomes payable and whether an application has or has not been made for payment of gratuity, to determine the amount of gratuity and inform the person to whom the gratuity is payable specifying the amount of gratuity so determined. He is obliged, by virtue of the same provision, to inform the controlling authority also, thus ensuring that the controlling authority is seized at all times of information in regard to gratuity as it becomes payable. If a dispute is raised in regard to the amount of gratuity payable or as to the admissibility of any claim to gratuity, or as to the person entitled to receive the gratuity, section 7(4) (a) requires the employer to deposit with the controlling authority such amount as he admits to be payable by him as gratuity. The controlling authority is empowered. Under section 7(4)(b), to enter upon an adjudication of the dispute, and after due inquiry, and after giving the parties to the dispute a reasonable opportunity of being heard, he is required to determine the amount of gratuity payable. In this regard, the controlling authority has all the powers as are vested in a court while trying a suit under the Code of Civil Procedure, 1908 in respect of obtaining evidentiary material and the recording of evidence. The amount deposited by the employer with the controlling authority as the admitted amount of gratuity will be paid over by the controlling authority to the employee or his nominee or heir. Section 7(7) provides an appeal against the order of the controlling authority under section 7(4) to the appropriate Government or such other authority as may be specified by the appropriate Government in that behalf. The appropriate Government or the appellate authority is empowered under section 7(8), after giving the parties to the appeal a reasonable opportunity of being heard, to confirm, modify or reverse the decision of the controlling authority. Where the amount of gratuity payable is not paid by the employer with in the prescribed time, the controlling authority is required by section 8, on application made to it by the aggrieved person, to issue a certificate for that amount to the Collector. The Collector, thereupon, is empowered to recover the amount of gratuity, together with compound interest thereon at the rate of nine per cent per annum from the date of expiry of the prescribed time, as arrears of land revenue, and pay the same to the person entitled thereto.

7. It is apparent that the Payment of Gratuity Act enacts a complete code containing detailed provisions covering all the essential features of a scheme for payment of gratuity. It creates the right to payment of gratuity, indicates when the right will accrue, and lays down the principles for quantification of the gratuity. It provides further for recovery of the amount, and contains an especial provision that compound interest at nine per cent per annum will be payable on delayed payment. For the enforcement of its provisions, the Act provides for the appointment of a controlling authority, who is entrusted with the task of administering the Act. The fulfillment of the rights and obligations of the parties are made his responsibility, and he has been invested with an amplitude of power for the full discharge of that responsibility. Any error committed by him can be corrected in appeal by the appropriate government or an appellate authority particularly constituted under the Act.

8. Upon all these considerations, the conclusion is inescapable that Parliament intended that proceedings for payment of gratuity due under the Payment of Gratuity Act must be taken under that Act and not under any other. That being so, it must be held that the applications filed by the employee respondents under section 33-C(2) of the Industrial Disputes Act did not lie, and the Labour Court had no jurisdiction to entertain and dispose of them. On that ground, this appeal must succeed.” (emphasis supplied)

48. In view of the aforesaid exposition of law, the submission on behalf of the respondents that even if the principal employer is held liable to pay gratuity the said determination cannot be made by the controlling authority under Section 7 of the Gratuity Act, banking upon the aforesaid observations of this Court in the case of Cummins (supra) does not merit acceptance. The Controlling Authority under Section 7(4)(c) is empowered to enter upon an adjudication of the dispute and after due enquiry and opportunity of hearing to the parties to the dispute, determine the question of admissibility of gratuity and the quantum thereof and direct the “employer” to pay the amount of gratuity. I find it rather difficult to accede to the submission that the question as to “who is the employer” is beyond the purview of enquiry and determination by the Controlling Authority if all the disputes which might arise as regards the liability to pay the gratuity are to be determined by the authorities under the Gratuity Act and by no other forum.

49. In the instant case, in my considered view, the Appellate Authority lost sight of the distinctive features of the facts of the cases at hand. As noted above, the decision in the case of Cummins (supra) was rendered in a completely different fact situation. Though there was a commonality of the jural relationship of principal employer and contract workmen, yet, the similarity stopped at that. The Appellate Authority ought to have posed unto itself the question as to whether ONGC satisfied the description of “employer” within the meaning of

50. This takes me to the second ground of challenge of the petitioners having been precluded from claiming gratuity under the terms of Goodwill Package Scheme. The Controlling Authority was of the view that there was no material to indicate that whether gratuity was included in the benefits made available under the Goodwill Package Scheme and in the absence of such “clarity/special or separate order” the legal dues/benefits available under a special statute like the Gratuity Act cannot be denied to the workman.

51. A two-pronged submission was canvassed on behalf of the respondents. One, in view of the express terms of Goodwill Package Scheme the workmen agreed not to claim any benefit apart from the lumpsum compensation made available thereunder. Special emphasis was laid on the following clauses of the Goodwill Package Scheme. “2.3. Goodwill Package amount (inclusive of all statutory or otherwise due payments) equivalent to two months wages shall be computed on basic wage/base wage and dearness allowance only, taking average of basic wage/base wage and dearness allowance drawn during the period of last three calendar months by the concerned workers of contractors/direct employees and shall be in full discharge of all past and future claims whatsoever including any claims as may be conceived under any law or otherwise.

5.3. It is further agreed and understood by and between the parties that acceptance of benefits under the Goodwill Package by the concerned workers of contractors shall be in full and final settlement of all their past or future claims/demands of whatsoever nature as may be conceived under any law arising out of their engagement/nonengagement in the establishment of ONGC through the Contractors or otherwise.

52. Evidently, the aforesaid clauses provide that the workers agreed and understood that the payments under the Goodwill Package Scheme were in full and final settlement of all their claims under any enactment. That poses the question: whether such a contractual provision, even if taken at par, impinges on the statutory entitlement to gratuity?

53. The nature of gratuity assumes significance. Gratuity connotes a payment made without any consideration - a gratuitous payment to an employee who has rendered services for a definite period before superannuation, otherwise termination or death. It represents a sum paid as and by way of a financial security to tide over after effects of cessation of employment. It is a welfare measure. The Gratuity Act, 1972 is a social security legislation. The provisions of the Act are required to be construed to advance the object of ensuring social and economic security to the employees.

54. A profitable reference in this context can be made to a judgment of the Supreme Court in the case of Maniben Maganbhai Bhariya vs. District Development Officer Dahod and ors.7, wherein the nature of gratuity and the object of the Gratuity Act, 1972 were expounded as under: “7. Act, 1972 on the genre of statutes like The Minimum Wages Act, Employees State Insurance Act, etc. is a welfare measure to secure social and economic justice to employees to assist them in old age and to ensure them a decent standard of life on retirement.

8. Derived from a Latin word ‘Gratuitas’, the term Gratuity means a ‘Gift’. In the industrial sector, gratuity is considered as a gift from the employers to their employees. Gratuity is a limp sum payment paid by an employer to the employee for his/her past dedicated services. It is a gesture to appreciate the efforts of a person towards the betterment, development and prosperity of an establishment and that is the reason for which gratuity is considered tobe a social security, and with passage of time, it has become a statutory obligation on the part of employers.

9. Thus, gratuity, as a social welfare legislation, its effective implementation is of paramount importance to fulfill the legitimate expectation of the employees. So far as the unorganized sectors are concerned, these Acts have been pillars in social security and laid the foundation for improvement in standards of living of the employees.”

55. The provisions contained in Section 4(5) and (6) underscore the inviolability of the statutory right to gratuity. Sub-section (5) of Section 4 provides that nothing in the said section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer. It implies that if a better provision is made under any award or agreement or contract with the employer, the employee cannot be deprived of a claim to such better dispensation under any award or contract. Sub-section (6) of Section 4 again emphasises that withholding gratuity is not permissible under any circumstances other than those specifically provided therein. Clause (a) of Sub-section (6) provides for forfeiture all the gratuity to the extent of loss or damage to the employer by an employee whose services have been terminated for any act, willful omission or negligence causing any damage or loss to, or destruction of, property belonging to an employer to the extent of damage or loss so caused. Under Clause (b) the gratuity payable to an employee may be wholly or partially forfeited if the services of such employee have been terminated for his riotous or disorderly conduct or any act of violence or for any act which constitutes an offence involving moral turpitude, provided such offence is committed by him in the course of his employment. These clauses by their very nature are required to be construed strictly. They underscore the legislative intent that an employee cannot be deprived of gratuity unless his case falls within the aforesaid exceptions, which represent a close ended category.

56. Section 14 of the Act which gives overriding effect to the provisions of the Act and the Rules framed thereunder also constitutes an answer to the submission sought to be canvassed on behalf of the respondents. If properly construed, Section 14 prohibits contracting out from or waiver of the benefits admissible under the Gratuity Act. I am, therefore, impelled to hold that the endeavour of ONGC to contest the entitlement of the petitioner to gratuity by resorting to the aforesaid terms in the Goodwill Package Scheme does not merit acceptance.

57. Another submission sought to be canvassed on behalf of the respondent was that, the liability to pay wages under Section 21(4) of the Contract Labour Act, 1970, even if assumed to exist, does not extend to the payment of gratuity as gratuity is expressly excluded from the definition of “wages” under the Payment of Wages Act, 1936. The submission is required to be stated to be repelled. Under Section 2(vi)(6) “wages” does not include any gratuity payable on the termination of the employment in cases other than those specified in sub-clause (d), which reads as under: “2(vi)(d) any sum which by reason of the termination of employment of the person employed in payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions but does not provide for the time within which the payment is to be made.”

58. Evidently, what is excluded under Clause (vi)(6) is gratuity payable on the termination of an employment otherwise than under sub-clause (d). I find substance in the submission of Mr. Singhavi that the exclusionary Clause (6) of the definition of wages contemplates gratuity which is of an ex gratia character and payable over and above the gratuity which is required to be statutorily paid under the payment of Gratuity Act as Subclause (d) expressly includes within the definition of wages any sum which by reason of the termination of employment by the person is payable under any law. It would be contextually relevant to note that Section 4(1) of the Gratuity Act in terms provides that gratuity shall be payable to an employee on the termination of his employment (after he has rendered the continuous services for the specified period) in the eventualities stipulated therein. I am thus not persuaded to agree with the aforesaid submission on behalf of ONGC that the petitioners are otherwise not entitled to recover gratuity from ONGC.

59. Having dealt with the rival submissions, this Court in exercise of plenary writ jurisdiction must look at the substance of the matter and where justice of the case lies. The petitioners rendered services as contract workmen to ONGC in excess of 15 years, on an average. The petitioners services were so utilized through different contractors. The contractors changed but the principal employer remained constant. ONGC had entered into a MoU to make a provision to extend the gratuity benefit to the contract-workmen. In this setting of the matter, if the submission on behalf of ONGC is to be accepted, the contractor through whom the services of the petitioner were being used on the date of the cessation of employment, would alone be the person liable to pay the gratuity for the entire service tenure and that would bring in the element of the liability of the last contractor to pay gratuity even in respect of the past service for which the contract employees were not employed by him. Such liability can only be fastened either under a statutory obligation or contractual stipulation. No statutory prescription to cover such liability could be pressed into service by the ONGC. Nor the Court finds any such contract between last contractor and the predecessor contractors, or for that matter, between the last contractor and ONGC. In contrast, in the case of Cummins (supra), the successor contractor had incurred an obligation pursuant to a contract with the predecessor contractor, to pay gratuity.

60. The conspectus of aforesaid consideration is that the Appellate Authority was in error in setting aside the order passed by the Controlling Authority fastening the liability on ONGC to pay gratuity. Petitions thus deserve to be allowed.

61. Hence, the following order:: O R D E R:

(i) The petitions stand allowed.

(ii) Impugned orders passed by the Appellate Authority in each of the petitions stand quashed and set aside.

(iii) The orders passed by the Controlling Authority in each of the petitions stand restored.

(iv) Rule made absolute.

(v) In the circumstances, there shall be no order as to costs.