PORBANDAR NAGAR PALIKA Vs. V G PATEL CONTROLLING AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT 1972

JUDGEMENT

(1.) The sole question which falls for determination in this writ petition is whether the provisions of the Payment of Gratuity Act 1972 (hereinafter referred to as the Act) apply to a local authority constituted and functioning under the provisions of the Gujarat Municipalities Act 1963 and the question arises in the context of the facts stated hereinafter.

(2.) The Porbandar Nagar Palika the petitioner herein is a local authority which employs a staff of several persons of different competence for discharging its functions and duties. Respondents Nos. 2 to 8 were in the employment of the Petitioner and all of them except respondent No. 8 have retired on attaining the age of superannuation. Respondent No. 8 has given up his job by tendering resignation. The said respondents were entitled to gratuity and they accordingly made a claim in that behalf. The petitioner was of the view that the rules relating to gratuity contained in the Bombay Civil Services Rules as then in force which were adopted by it as a scheme for payment of gratuity to its own staff continued to apply notwithstanding the enactment of the Act and it accordingly determined and paid the amount of gratuity to respondent Nos. 2 to 7 calculated at the rate of the last basic salary drawn by the employee concerned for fifteen days of each completed year of service subject to the calling of the aggregate of fifteen salaries. The claim of respondent No. 8 to gratuity was however negatived on the ground that he had not completed the qualifying period of service namely twenty five years. According to the respondents after the enactment of the Act the scheme for payment of gratuity framed by the petitioner stood abrogated having regard to the provisions of sec. 14 and they therefore contended that under sec. 4 they were entitled to gratuity at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned for every completed year of service or part thereof in excess of six months subject to the maximum of twenty months wages and that respondent No. 8 was also entitled to gratuity in that he had completed the qualifying period of service namely five years. On the petitioners expressing its inability to accept the stand-point of the concerned respondents the dispute was carried before respondent No. 1 who is appointed as the controlling authority under sec. 3 and whose function it is under sec. 7 to determine disputes of such nature. Respondent No. 1 passed various orders which are appended collectively as Annexure B to the petition upholding the claim of the concerned respondents and issued directions to the petitioner to pay the excess amount found payable to each respondent in accordance with the provisions of the Act. The various notices containing the requisition are appended collectively as Annexure C to the petition. The present petition was therefore filed challenging the orders at Annexure B and the notices at Annexure C.

(3.) The sole ground on which the impugned orders and notices are challenged is that the Act does not apply to the establishment of a local authority and that therefore the direction to pay gratuity to respondents Nos. 2 to 8 calculated in the manner provided in the Act was ultra vires. Before dealing with the contentions canvassed before us in support of this ground it would be useful to notice briefly the relevant provisions of the Act.