STATE OF PUNJAB Vs. LABOUR COURT JULLUNDUR
LAWS(SC)-1979-10-31
SUPREME COURT OF INDIA (FROM: PUNJAB & HARYANA)
Decided on October 16,1979

STATE OF PUNJAB Appellant
VERSUS
LABOUR COURT,JULLUNDUR Respondents

JUDGEMENT

R. S. Pathak, J. - (1.) In this appeal by special leave the State of Punjab appeals against the judgment and order of the High Court of Punjab and Haryana refusing to quash an order under Section 33-C (2) of the Industrial Disputes Act, 1947 for payment of gratuity to the respondents under the Payment of Gratuity Act, 1972.
(2.) The Hydel Department of the Government of Punjab had undertaken a Project described as the "Hydel Upper Bari Doab Construction Project". The respondents Nos. 2 to 8 were employed as work-charged employees. On completion of the work assigned to them they were retrenched, and retrenchment compensation was paid to them. The employee respondents claimed that they were also entitled to gratuity, bonus and certain other allowances and benefits. The gratuity was claimed under the Payment of Gratuity Act, 1972. The claim being disputed, the respondents applied under Section 33-C (2) of the Industrial Disputes Act, 1947 to the Labour Court, Jullundur. The Labour Court made an order dated April 30, 1975 that the employee respondents were entitled to the gratuity claimed by them but not to bonus and the other allowance and benefits. A writ petition filed by the appellant has been dismissed in limine by the High Court of Punjab and Haryana.
(3.) In this appeal, the learned Additional Solicitor-General contends on behalf of the appellant that the Payment of Gratuity Act, 1972 cannot be invoked by the respondents because the Project does not fall within the scope of S. 1 (3) of that Act. Section 1 (3) provides that the Act will apply to: "(a) every factory, mine, oilfield, plantation, port and railway company; (b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months; (c) such other establishment or class of establishments, in which ten or more employees are employed, or were employed on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf." According to the parties, it is clause (b) alone which needs to be considered for deciding whether the Act applies to the Project. The Labour Court has held that the Project is an establishment within the meaning of the Payment of Wages Act, Section 2 (ii) (g) of which defines an "industrial establishment" to mean any 'establishment in which any work relating to the construction, development or maintenance of buildings, roads, bridges or canals, or relating to operations connected with navigation, irrigation or the supply of water, or relating to the generation, transmission and distribution of electricity or any other form of power is being carried on." It is urged for the appellant that the Payment of Wages Act is not an enactment contemplated by Section 1 (3) (b) of the Payment of Gratuity Act. The Payment of Wages Act, it is pointed out, is a central enactment and Section 1 (3) (b), it is said, refers to a law enacted by the State Legislature. We are unable to accept the contention. Section 1 (3) (b) speaks of "any law for the time being in force in relation to shops and establishments in a State". There can be no dispute that the Payment of Wages Act is in force in the State of Punjab. Then, it is submitted, the Payment of Wages Act is not a law in relation to "shop and establishments". As to that, the Payment of Wages Act is a statue which, while it may not relate to shops, relates to a class of establishments, that is to say, industrial establishments. But, it is contended, the law referred to under Section 1 (3) (b) must be a law which relates to both shops and establishment, such as the Punjab Shops and Commercial Establishments Act, 1958. It is difficult to accept that contention because there is no warrant for so limiting the meaning of the expression 'law' in Section 1 (3) (b). The expression is comprehensive in its scope, and can mean a law in relation to shops as well as, separately, a law in relation to establishments, or a law in relation to shops and commercial establishments and a law in relation to non-commercial establishments. Had Section 1 (3) (b) intended to refer to a single enactment, surely the appellant would have been able to point to such a statute, that is to say, a statute relating to shops and establishments, both commercial and non-commercial. The Punjab Shops and Commercial Establishment Acts does not relate to all kinds of establishments. Besides shops, it relates to commercial establishments alone. Had the intention of Parliament been, when enacting Section 1 (3) (b), to refer to a law relating to commercial establishments, it would not have left the expression 'establishments' unqualified. We have carefully examined the various provisions of the Payment of Gratuity Act, and we are unable to discern any reason for giving the limited meaning to Section 1 (3) (b) urged before us on behalf of the appellant. Section 1 (3) (b) applies to every establishment within the meaning of any law for the time being in force in relation to establishments in a State. Such an establishment would include an industrial establishment within the meaning of Section 2 (ii) (g) of the Payment of Wages Act. Accordingly, we are of opinion that the Payment of Gratuity Act applies to an establishment in which any work relating to the construction, development or maintenance of buildings, roads, bridges or canals, or relating to operations connected with navigation, irrigation or the supply of water, or relating to the generation, transmission and distribution of electricity or any other form of power is being carried on. The Hydel Upper Bari Doab Construction Project is such an establishment, and the Payment or Gratuity Act applies to it.;


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