IN THE YEAR 2019, WHILE WORKING AS DEPUTY CHIEF LABOUR COMMISSIONER

(CENTRAL),DHANBBAD, I HAD DELIVERED A GRATUITY APPEAL DECISION AS APPELLATE AUTHORITY

UNDER PAYMENT OF GRATUITY ACT,1972. THE CONTROLLING AUTHORITY AND R L C (C), RANCHI,
HAD DISMISSED THE APPLICATION WITHOUT TAKING EVIDENCE AND CROSS-EXAMINATION. THIS
BEING THE POSITION, I WAS COMPELLED TO TAKE EVIDENCE AND CROSS-EXAMINATION AND
DELIVERED THE DECISION IN FAVOUR OF THE EX-EMPLOYEE. THE EMPLOYER MOVED THE HON’BLE
HIGH COURT OF JHARKHAND AT RANCHI BY FILING A WRIT PETITION. I AM REPRODUCING BOTH THE
JUDGMENTS .HOPE THE ESTEEMED READERS WOULD LIKE THE POST.

IN THE HIGH COURT OF JHARKHAND AT RANCHI

W.P. (L) No. 5431 of 2019

Heavy Engineering Corporation Limited, through the its Chairman-cum-Managing Director, registered
office at Plant Plaza Road, Dhurwa, Ranchi … …Petitioner

-Versus-

1. The Union of India through Deputy Chief Labour Commissioner (Central), Dhanbad

2. The Regional Labour Commissioner (Central), Ranchi, office at E-191, Sector-II, HEC Colony, Dhurwa,
Ranchi

3. Sri Pandu Topno, S/o late Bucha Topno, R/o New Kalyanpur, C/o Karu Toppo, Road No.6, Hatia,
Ranchi

4. Sri Suresh Singh, Contractor, M/s Dhurwa Takniki Shramik Sahyog Samiti Ltd., office at DT 2563 (T),
Dhurwa, Ranchi … … Respondents

CORAM: THE HON’BLE MR. JUSTICE DR. S.N.PATHAK (Through Video Conferencing)

For the Petitioner : Mr. Mukesh Kumar, Advocate.

For the Respondent Nos.1 & 2 : Mrs. Nitu Sinha, Advocate

For the Respondent No.3 : Mr. Pradeep Kumar Prasad, Advocate

For the respondent No.4 : Mr. Arvind Kumar Singh, Advocate

CAV on 20.08.2020 Pronounced on 11.11. 2020

Dr. S.N. Pathak, J. :

The petitioner has approached this Court for quashing /setting aside the order dated 11.07.2019
(Annexure-5) passed by the Deputy Chief Labour Commissioner (Central ), Dhanbad (respondent No.1),
who is an Appellate Authority under the Payment of Gratuity Act, 1972, whereby and whereunder a
direction was issued upon the petitioner to pay the Gratuity to the respondent No.3.
2. The case of the petitioner lies in a narrow compass. The petitioner, M/s Heavy Engineering
Corporation Limited (hereinafter referred to as ‘HEC’ ) is a company registered under Section 617 of the
Indian Companies Act, 1956 and is a Government of India Undertaking. The petitioner-HEC in order to
get its work done, engages different contractors through various Manpower Samities. One such Samiti is
the present one operated by the Respondent No.4. The contractors of the said Samiti keep on changing
from time to time after holding internal elections, but the name and style of the Samiti remains the
same. The respondent No.3, (Pandu Topno) was a workman of one of such Samities run by respondent
No.4. The respondent No.3 joined the services as Fitter under respondent No.4 and after attaining the
age of 60 years, he superannuated on 31.03.2012. Thereafter, he approached the petitioner as well as
respondent No.4 for payment of gratuity, but no heed was paid. Aggrieved by the same, he filed an
application on 30.04.2013 before the Controlling Authority in Form-N under Rule 10 (1) of the Payment
of Gratuity Rules, 1972 for a direction upon the petitioner-HEC and respondent No.4 for determination
of amount payable towards gratuity and making payment thereof to him and vide order dated
22.09.2017, the Controlling Authority rejected the claim of the respondent No.3. Aggrieved by the same,
he preferred an Appeal before the Deputy Chief Labour Commissioner (Central), Dhanbad, and vide
order dated 11.07.2019, Appeal of the respondent No.3 was allowed and a direction was issued upon
the petitioner-HEC to pay the Gratuity to the respondent No.3 along with 10 % interest from 01.04.2012
till date of payment. Aggrieved by the impugned appellate order, the petitioner-HEC has been
constrained to knock the door of this Court, challenging the appellate order dated 11.07.2019.

3. Mr. Mukesh Kumar, learned Counsel for the petitioner-HEC assailed the impugned order on the
ground that there is no employer-employee relationship between the Petitioner and Respondent no. 3
as he was appointed/engaged by the Contractor i.e. respondent No.4 for carrying out the work of
Petitioner-HEC and as such, the petitioner is not responsible for payment of gratuity. He further
submitted that Appellate Authority also failed to consider the evidences produced by respondent No.3
wherein, he had stated that he was appointed on 01.11.1983 in HMBP Unit under M/s Ghasis Oraon,
Contractor and also worked under different contractors in the establishment of petitioner-HEC, but he
was not paid his Gratuity by his employers i.e. Contractors and as such, employer-employee relationship
between the petitioner and Respondent no. 3 does not exist. He further submitted that since the
respondent No. 3 was appointed by the Contractor on contractual basis and there was no control and
supervision of the petitioner-HEC over the respondent No.3-workman, the petitioner-HEC cannot be
held liable to pay the gratuity amount to the workman appointed by the Contractor/s. Learned counsel
further submitted that the workman did not produce any chit of paper /document in support of his
claim or even appointment letter issued by the petitioner-HEC Management. Learned counsel places a
Circular issued by Addl. Central P.F. Commissioner-II (CAIU), wherein it is stipulated that a large number
of employees were being hired on Contract Basis by various Principal Employers including Government
Departments, PSUs etc. for their business activities. Those contract employees are not being provided
Social Security benefits under the EPF which they are entitled too and a clear cut direction was given to
all PSUs to ensure compliance thereof. As the respondent No.4 has already been paid EPF contribution,
which was being deducted by the HEC Trust and as such, payment of admissible Gratuity is the
responsibility of the Contractor by whom the respondent No.3 was engaged. To buttress his argument,
learned counsel for the petitioner placed heavy reliance on the following judgments of different Hon’ble
High Courts as well as Hon’ble Apex Court :

I. Cummins (I) Ltd. Vs. I. C. Services, reported in 2017 3 Mh. L.J. 294.

II. Cominco Binani Zinc, Ltd. Vs. Pappachan, reported in (1989) 1 KLT
page 6

III. Managing Director, Hassan Cooperative Milk Producer’s Society

Union Limited Vs. Assistant Regional Director, Employees’ State
Insurance Corporation reported in (2010) 11 SCC 537

4. Per contra counter-affidavits have been filed.

5. Mr. Pradeep Kumar Prasad, learned counsel for the respondent No.3 vehemently opposed the
contention of the learned counsel for the petitioner and submitted that there is no illegality or infirmity
in the impugned Appellate Order. He further submitted that the payment of Gratuity Act says that
‘employee means any person save and except apprentice’. The respondent No.3 worked under the
supervision and control of the Principal Employer i.e. petitioner-HEC as the registers and records were
being maintained by the HEC Ltd. and also the amount of Provident Fund was being deposited in
Provident Fund Account of HEC Ltd.. He further submitted that the respondent no. 3 retired from
services after attaining the age of superannuation as per Rule of HEC Ltd.-petitioner. He further
submitted that the certificate issued by the Samiti proves that the respondent No.3 had worked from
01.11.1983 to 31.03.2013.

6. Mr. Arvind Kumar Singh, learned counsel appeared on behalf of the respondent No.4 and submitted
that respondent No.4 is only an instrumentality of the writ petitioner and all the liability to pay the
wages, P.F., Gratuity etc. are with the writ petitioner. He further submitted that respondent No.3 was
not the workman of the answering respondent rather he was a person, deployed by the Samiti to work
under the writ petitioner-HEC Ltd. The writ petitioner-HEC Ltd. by treating these workmen as its
employee extends them a number of benefits such as allotment of quarter etc. He further submitted
that the bills of wages are prepared by the writ petitioner-HEC Management and after deducting the
amounts against PF, ESI and HRA, the same is transferred into the account of Samiti/Contractor. The
Samiti/Contractor in its turn pays the entire salary/wages to the concerned workman as per the bills
prepared by the writ petitioner-Management. He lastly submitted that all the liability against PF,
Gratuity etc., lies with the writ petitioner-HEC, the respondent No.4 only gets 2.75 to 3.75 percent of the
wages paid to the labour/workmen from the petitioner and this payment are used by the Samiti for its
proper functioning and as such, there is no illegality or infirmity in the impugned order.

7. Mrs. Nitu Sinha, learned counsel appearing on behalf of the Union of India supported the order
passed by the Appellate Authority.

8. Be that as it may, having gone through the rival submissions of the parties and on perusal of the
records, it appears that the respondent No.3 namely, Pandu Topno admittedly retired on attaining the
age of superannuation from the services of petitioner-Management. The questions involved in this writ
application is whether the respondent No.3 is employee of the petitioner-Management or the man of
the Contractor and whether the respondent No.3 is entitled for payment of Gratuity by the petitioner-
Management or by the Contractor/Samiti. Before assigning cogent reasons for payment of gratuity, it
would be proper to look into the relevant provisions of Gratuity Act, which reads as follows:

Section 1 (3) of the Payment of Gratuity Act, 1972 :- it shall 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 of the preceding twelve months;

(c) Such other establishments 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.

The above definition of establishment, does not, certainly excludes the contractor’s establishment
from the purview of payment of Gratuity Act, 1972. So the Contract Labourers are also covered under
the Act.

9. So far as the contention the learned counsel for the petitioner-HEC that there was no direct
relationship of employer and employee between the contract worker and the principal employer is
concerned, the Section 2 (e) of Payment of Gratuity Act, 1972 clarify the issue, which reads as under:

‘Employee’ means any person (other than apprentice) employed on

wages in any establishment, factory, mine, oilfield, plantation, port,
railway company or shop to do any skilled, semi skilled or unskilled,
manual supervisory, technical or clerical work, whether the terms of
such employment are express or implied, and whether or not such
person is employed in a managerial or administrative capacity, but does
not include any such person who holds a post under the Central
Government or a State Government and is governed by any act or by
any rules providing for payment of gratuity.

10. Further, the definition of ‘worker’ as defined under Section 2 (1) of Factories Act, 1948 reads as
follows:-

‘Worker’ means a person employed, directly or by or through any

agency (including a contractor) [emphasis supplied by me] with or 5
without the knowledge of the principal employer, whether for
remuneration or not, in any manufacturing process or in cleaning any
part of the machinery or premises used for a manufacturing process, or
in any other kind of work incidental to, or connected with, the
 manufacturing process, or the subject of the manufacturing process but
does not include any member of the armed forces of the Union.

The above definition of ‘worker’ even includes a contract worker, who is a worker for the purpose
and also under Factories Act, 1948.

11. The Hon’ble Apex Court in case of Indian Petrochemical Corporation Ltd. Vs. Shramik Sena,
reported in (1999) 83 FLR 74, has held that ‘ the contract workers working in the canteen of the factory
would be the employees/workers of the Principal Employer for the purpose of Factories Act, 1948’.

12. Further, the Hon’ble Apex Court in case of Mangalore Ganesh Beedi Workers & Ors. Vs. Union of
India, reported in AIR 1974 SC 1832, has held thus:

“ In cases where the manufacturer or trade mark holder himself

employs labour there is direct relationship of master and servant and,
therefore, liability is attracted by reason of that relationship. There
cannot be any question of unreasonableness. In the second category,
the manufacturer or treademark holder engaged contract labour
through a contractor and he becomes the Principal employer. Though
such labour may be engaged by contractor with or without the
knowledge of the manufacturer or trademark holder, this contract
labour is engaged for the principal employer, who happens to be the
trade mark holder or the manufacturer. The liability arises by reason
of contract labour engaged by or on behalf of the principal
employer….”

13. The Hon’ble Apex Court in case of Pepsico India Holding (P) Ltd. Vs. Grocery Market & Shops
Board, reported in (2016) 4 SCC 493, on the point of contractual labourers who were employed through
Contractors, are entitled for terminal benefits as such as provident fund and gratuity has observed that:

19. Taking a cue from the Objects and Reasons for this piece of social legislation and from the well-
known doctrine of construing such legislation in an expansive manner to further the object of welfare
legislation of the kind mentioned hereinabove, and not to stultify such object, we hold that the Bombay
High Court cannot be faulted in its reasoning. It must also not be forgotten that the object of the 1970
Scheme is not only to provide work to both employer and employee but also to provide amenities and
benefits to registered workers. These amenities and benefits are to be provided by the Board to
employees by charging the employer with a levy which cannot exceed 50% of the total wage bill of the
employer without the prior approval of the State Government. We are told that in the present case the
levy amount is 41%, which is utilised not only to look after the health of the workers, but also to give
them terminal benefits such as provident fund and gratuity provided for by Clause 43 of the 1970
Scheme.

20. It was further submitted by Shri Cama that on a conjoint reading of the definitions of “employer”,
“principal employer” and “worker” contained in Sections 2(3), (7), (12), as the two societies are
contractors employing contract labour for and on behalf of the appellant Company’s purchasers, the
appellant Company cannot be said to be the “principal employer” who is liable to be registered under
the 1969 Act. We are afraid that this contention does not lie in the mouth of the appellant Company. By
an application made for registration under the 1969 Act dated 11-10-1996, in Column 7 which reads as
follows:

“7. Are you employing workers through contractors? If so, state the
name of the contractors.”

the Company has specifically mentioned two cooperative societies and

one other contractor thereby admitting that it actually employed
about 30 workers itself through contractors.

22. Similarly, in the writ petition filed before the High Court, the
appellant Company’s own pleading in Para 8 is that the appellant
registered itself with Respondent 2 Board under pressure of the Board
believing that the Act and the Scheme were applicable. It was granted
Registration No. 4516. Further, in proceedings under the Act against
the Company it admitted that it pleaded guilty for not having
registered itself. This being the state of facts before us, we cannot
characterise the State Government’s finding in its Order dated 24-6-
2008 as even incorrect, let alone perverse. As pointed out above, in
Para 6 of its Order, the State Government specifically arrived at a
finding that mathadi work was carried out in the Company by two
cooperative societies who had the work done by employing workers
and got compensated by the appellant Company. This being the case,
there is no factual foundation for Shri Cama’s argument that it is the
appellant’s purchasers and not the appellant Company itself that is the
principal employer under the Act.

23. One other contention of Shri Cama needs to be noticed. ShriCama

argued before us that the 1969 Act being inconsistent with the
Contract Labour (Regulation and Abolition) Act, 1970 would be
repugnant to the said Act and therefore invalid under Article 254 of
the Constitution. He candidly admitted that no such ground had been
raised or argued before the High Court, but asked that the Supreme
Court allow him to raise this plea as it is a pure question of law. We
are afraid that this is not possible for the reason that even if Shri Cama
were to be correct in his submission that the Central Parliamentary Act
of 1970 would impliedly repeal the 1969 State Act, yet Section 30(1) of
the said Act provides that despite the provisions of the 1970 Act being
allegedly inconsistent with the 1969 State Act, yet if contract labour
employed in an establishment are entitled to benefits which are more
 favourable to them than those to which they would be entitled under
the 1970 Act, the contract labour shall continue to be entitled to more
favourable benefits, notwithstanding that they also receive benefits in
respect of other matters under the Central Parliamentary Act. This
being the case, it was incumbent upon the writ petitioner not only to
take up the plea of repugnancy and implied repeal but also to state as
a fact that what the workmen would be entitled to under the 1969
State Act would not be as beneficial as what they would be entitled to
under the 1970 Central enactment. This would then give the
respondent Board, in turn, an opportunity of either admitting or
denying this factual averment. There being no pleading to this effect in
the writ petition before the High Court, it is clear that it is not possible
for us to accede to Shri Cama’s request to go into the argument on
repugnancy and implied repeal. 14. In view of the aforesaid discussion,
the argument advanced by the learned counsel for the petitioner-
Management that the respondent No.3 was not a direct employee of
the company and as such, they are not liable to pay the gratuity
amount as there was no relationship of employee and employer, is not
accepted to this Court as there is certainly indirect relationship of
employer and employee between the Principal Employer and the
Contract workers.

15. Further, the provident fund contributions of the workmen were being deposited in the PF Account
of HEC Ltd. as also registers and records were maintained by petitioner-HEC Ltd. and respondent No.3
has been superannuated on attaining the age of 60 years though a contract labourer has no retirement
age according to the Contract Labour (R & A) Act, 1970, these are the sufficient grounds for holding that
the principal employer of the respondent No.3 is petitioner-HEC Ltd. and as such, the contract between
the society and the principal employer is just a paper arrangement.

16. As a cumulative effect of the aforesaid rules, guidelines and judicial pronouncement, this Court is
in full agreement with impugned Appellate Order dated 11.07.2019. There is no illegality or infirmity in
the impugned Appellate Order. The contention of the learned counsel for the petitioner-Management is
not at all accepted to this Court and judgment relied upon by him does not come to his rescue as the
same are based on different facts. There is no merit in the instant case. Accordingly, the instant writ
petition stands dismissed.

17. As a result thereof, the petitioner-Management is directed to pay the gratuity amount and interest
as determined by the Appellate Authority vide its order dated 11.07.2019 to the respondent No.3-
workman, within a period of eight weeks’ from the date of receipt of a copy of this order.

18. In view of the disposal of the writ petition, pending I.A., if any, alsostands disposed of.

19. No order as to costs.

 [ Dr. S. N. Pathak, J.]

BEFORE THE DEPUTY CHIEF LABOUR COMMISSIONER (CENTRAL), DHANBAD &

APPELLATE AUTHORITY UNDER THE PAYMENT OF GRATUITY ACT, 1972.

GRATUITY APPEAL NO.03/2018-A.7

(Arising out of Decision dated 22.09.2017 in Gratuity Application No.36 (23)/2013.RLC(R) of the Controlling Authority under Payment of
Gratuity Act,1972 & Regional Labour Commissioner(C), Ranchi)

Sri PanduTopno,

c/oKaruToppo,

New Kalyanpur Road, No.6,

PO:Hatia,Dist:Ranchi-834003. APPELLANT

Vrs.

The Chairman-cum-Managing Director,

Heavy Engineering Corporation Limited,

PO: Dhurwa,Dist:Ranchi-834003. RESPONDENT NO.1

Sri Suresh Singh, Contractor,

M/s DhurwaTaknikiShramikSahyogSamiti Ltd.,

DT-2563(T), PO: Dhurwa,

Dist : Ranchi-834004. RESPONDENT NO.2

APPEARANCE:
ShriR.K.Sinha, Advocate. Counsel for Appellant

Sri Naveen Mohan Kumar,Advocate. Counsel for Respondent No.1

Sri BikashKumar,Advocate. Counsel for Respondent No.2

Present:

AJAYA KUMAR SAMANTARAY

APPELLATE AUTHORITY UNDER PAYMENT OF GRATUITY ACT,1972 AND

DEPUTY CHIEF LABOUR COMMISSIONER (CENTRAL),DHANBAD .

DECISION DATED 11TH JULY, 2019

This appeal has been preferred by the Appellant under sub-section (7) of Section 7 of the
Payment of Gratuity Act, 1972, wherein the order of the Controlling Authority under the Payment of
Gratuity Act, 1972 and Regional Labour Commissioner(Central), Ranchi (hereinafter called CA for
brevity) has been assailed.

The submission of the Appellant being that he filed a gratuity claim for payment
of gratuity amount of Rs.1,58,541.40 before the Controlling Authority and the Regional Labour
Commissioner(C), Ranchi but his claim has been dismissed by him. Aggrieved by the order of the
Controlling Authority, the instant appeal has been filed. In the Memorandum of Appeal, the following
grounds have been urged which are reproduced verbatim:-

…..2….

1. That the Appellant joined the service as Fitter under the Respondent No.2, M/s Dhurwa Takniki
Shramik Sahyog Samiti Ltd., Dhurwa, Ranchi on 01.11.1983 and superannuated on 31.03.2012.
2. That after superannuation on 31.03.2012, he approached the aforesaid contractor and the
Principle Employer i.e. Respondent No.1 for payment of gratuity. The Appellant follow up the
matter many times but neither the payment was made nor any reply given to him.
3. That in view of above situation, Appellant had not alternative but to file the claim before the
Controlling Authority on 30.4.2013.
4. That the contractor filed the show cause on 10.4.2017 i.e. after expiry of four years from the date
of filing the case.
5. That Sri Suresh Singh, President of the Samittee has stated that no work order has been issued in
the name of Suresh Singh rather it was issued in the name of D.T.Shramik Sahyog Samiti.
6. That the Appellant considered it necessary to look into agreement signed between the Principal
Employer and the contractor in order to arrive at the obligation of the parties. Accordingly, the
Appellant filed an application before the Controlling Authority on 11.6.2013 to direct the
Principal Employer to submit the copy of the agreement executed by the Principal Employer and
contractor. Neither the contractor nor the Principal Employer filed the work order/agreement
issued to the contractor.
7. That the stand of Principal Employer as stated in the show cause is as follows:
“The Principal Employer cannot be held responsible for payment of gratuity.”
8. That the stand taken by the Principal Employer is neither fair nor responsible nor legal in
ABSENCE OF THE TERMS AND CONDITIONS STIPULATED IN THE AGREEMENT
EXECUTED BETWEEN THE PRINCIPAL EMPLOYER AND THE CONTRACTOR AND
NEITHER PARTIES HAS FILED THE AGREEMENT AND ORDER HAS BEEN PASSED
BY THE CONTROLLING AUTHORITY IN ABSENCE OF KNOWLEDGE OF THE
OBLIGATION OF THE CONTRACTOR AND THE PRINCIPAL EMPLOYER.
9. That the Controlling Authority adjudicated the case and passed order on 22.9.2017 and the order
received by the Appellant on 18.10.2017. The Controlling Authority dismissed the claim of the
Appellant.
10. That in the light of the above facts and circumstances specially the order of the Controlling
Authority, this appeal is filed before your honour to pass appropriate order which may be fair and
reasonable.
11. That the facts admitted by the Respondent No.1 & 2 and the Appellant are given below:
A. The Appellant was an employee of Respondent No.2 under the Contract Labour(Regulation
and Abolition) Act, 1970.
B. And the Heavy Engineering Corporation Ltd., the Respondent No.1 is the Principal
Employer.
…..3…..
C. The delay in filing of the claims before the Controlling Authority has been condoned.
D. During the entire service period i.e. from 01.11.1983 to 31.3.2012 (28 years and 4 months),
following papers/documents remained the same and the contract changed from time to time
but “Samiti” did not change. Similarly following papers did not change.
 i) CPF A/C No.2041
ii) Gate Pass-2041.
12. That the following are the grounds in this case:
A. That the Controlling Authority failed to decide the case without knowing the obligation of
parties i.e. THE PRINCIPAL EMPLOYER AND THE CONTRACTOR.
B. That the Controlling Authority failed to note that ‘DHURWA TAKNIKI SHRAMIK
SAHYOG SAMITI IS IN EXISTENCE FOR MORE THAN DECADES.
C. That the Controlling Authority failed to consider the legal status of the Samiti and the
Contractor, Suresh Singh.
D. That the Controlling Authority failed to consider whether Suresh Singh is responsible to pay
the gratuity or the Samiti, because person/officer bearer may come and go but the
organization remains.
E. That the Controlling Authority failed to appreciate that contractor comes and goes with the
knowledge of the Principal Employer without completing 5 years.
F. If the said state of affair is continuing with full knowledge of the parties and the same is
illegal.
G. The only inference in the given situation is that the parties are not to intend to pay amount of
gratuity. Thus, the agreement is void on the ground of impossibility under section 56 of the
Contracts Act. In the light of the above position, there is no Agreement between the parties
and the employee/workers who worked under the control and supervision of the Principal
Employer, shall be deemed to be the employee of the Principal Employer for all purpose.
H. The Controlling Authority did not consider it relevant to pursue the case of the SAIL and
other Model Employers who have ignored the technicality and passed the order for payment
of amount of gratuity.
I. The Controlling Authority failed to consider the object of the Payment of Gratuity Act, 1972,
welfare legislation in the evening of the life of retired employees.
J. That the Controlling Authority failed to consider the legal status of “M/S DHURWA
TAKNIKI SHRAMIK SAHYOG SAMITI LTD” AND SURESH SINGH, PRESIDENT OF
SAID SAMITI. As already stated, neither the contract documents nor the constitution/By-
laws of the samiti was placed before the Authority. No photo copy/copy of the work order
was filed before the Authority.

…..4…..
 Under the facts and circumstances of the case, it is humbly prayed that your this Authority be be
pleased to admit this appeal and call the records of the case from the court below, issue notice to
the Respondents and after hearing of and perusal of the records and looking to provisions of the
Act, a welfare legislation, your honour be pleased to set aside the order dated 22.09.2017 passed
by the Controlling Authority.

Contrary to the submissions of the Appellant, the Respondent No.1, Heavy Engineering
Corporation Ltd. submits the following :-

1. That the present appeal is neither maintainable in the eye of law or facts.
2. That the present appeal is totally misconceived wherein the appellant could not appreciate the
actual provision of law as well as the Payment of Gratuity Act, 1972 and further plea, grounds
and facts are not applicanle at the appellate stage jurisdiction under the payment of Gratuity Act,
1972.
3. That the appellant never engaged/employed by M/s HEC Ltd. thus not standing any relation
between employer and employee between the appellant and answering Respondent No.1. This
facts also categorically admitted by the appellant before your honours court during proceeding of
this appeal on 23.2.2018.
4. That other legal basic point also involving in this appeal is that on what condition gratuity
becomes payable to an employee ? It is crystal clear that gratuity become payable to an employee
on the termination of his employment and not earlier, by way of superannuation, retirement,
resignation or death or disablement due to accident or disease. Therefore, the right to the payment
of gratuity arises only on the fulfilment of statutory conditions and termination of the
employment in any of the five legal facts incorporated above.

5. It is humbly submitted that the claim of appellant for seeking payment of gratuity is not
sustainable in the eye of law as well as the provision of Payment of Gratuity Act.

6. That it is also admitted fact that there is no any employer and employee relation ever existed
between Respondent No.1 and appellant. HECL is only Principal Employer.

7. That the claim of appellant does not come under the purview of Payment of Wages Act, 1936 not
including bonus and gratuity in the terms of wages as per definition U/S 2(rr) of I.D.Act, 1947 as
well as U/S 2(VI) of Payment of Wages Act, 1936.
 8. That Respondent No.1 has no any manner concerned with settlement/condition between
contractor Suresh Singh and appellant. HECL never issued any appointment letter or
retirement/superannuation letter to appellant as alleged in his appeal, hence, the HECL is not
responsible to pay any gratuity amount to the appellant.

9. That the appellant is not eligible for payment of gratuity as because he had not completed five
years of continuous service which is defined U/S 2A of the Payment of Gratuity Act but the
appellant was not worked continuous service of five years for his contractor.

10. That other law point involving in this appeal is that whether Gratuity Act is applicable to contract
labour ?and whether it is applicable to fixed tenure contractual labour by contractor ? Answers is
negative as because applicant is only contract labour as defined under the Contract Labour Act,
which provides them/him to special status under the contract labour Act and hence he is eligible
only for the benefits specified under the CL(R&A)Act which is not eligible for gratuity and
bonus.
In regards to tenure contractual engagement he i.e. appellant is also not eligible for
gratuity for the reason that the events on when and in what situation of gratuity is payable under
the Act are “resignation or retirement, death, superannuation, termination. Expiry of tenure of
engagement by the contractor is not defined and any criteria for payment of gratuity therefore it
would not be payable in any circumstances as laws clearly laid down in the Act.
It is crystal clear that neither employment letter ever issued to applicant nor any
superannuation/termination/retirement letter issued in favour/in the name of the applicant by
Respondent No.1.
So HEC Ltd. is not responsible and liable to pay any gratuity amount to the appellant, no
one can jump outside the provisions of law which are laid down in CL(R&A)Act as well as the
Payment of Gratuity Act.
11. That the appellant is contract labour of contractor of Suresh Singh if any engagement done by
Suresh Singh(Contractor) this matter relates between contractor and appellant.
12. That grounds taken by appellant in this appeal is not legal, sound and to be rejected in limine.
13. That the contention of appeal of the appellant clearly shows that PanduTopno was employee of
contractor Suresh Singh and he was also under direct supervision and control of contractor.
HECL is only Principal Employer and company is not liable to pay any gratuity amount to the
appellant as per section 20 and 21 of CL(R&A)Act.
14. That as per contention made in para 1, the appeal of appellant is matter of record.
15. That contention made in para 2A, B of appeal of appellant is not correct, appellant never joined in
the company of HECL and he is employee of contractor, Suresh Singh. Appellant is approaching
Respondent No.1 without any legal basis and other contentions are matter of record.
16. That contention made in para No.3 of the appeal of the appellant is not correct, hence it is
categorically denied by Respondent No.1.
17. That the contention made para 4 of appeal is about stand of Def.No.1 , which is sound in
accordance with law legally correct.

18. That contention made in para No.5 of appeal of appellant, which is not correct as such
categorically and specifically denied.
19. That contention made in para 6 of appeal is about finding of Controlling Authority, finding of
Controlling Authority is as per law, well discussed, justified.
20. That contention made in para 7 of appeal is prayer from the appellate authority which is not
accordance with law.
21. That the contention made in para 8 is matter of record, it is correct that appellant who is contract
labour of Suresh Singh. Sri Topno worked since 1.11.1983 under the control and supervision of
his contractor Suresh Singh as alleged in his appeal, appellant has to prove strict proof thereon.
22. That grounds taken by appellant in para 9 of this appeal is not legal, sound as per provision of
Payment of Gratuity Act as well as CL(R&A)Act and it to be dismissed in limine.
Gratuity is payable only in cases where the alleged worker works at least 240 days in a
year. The appellant was not in continuous service within the meaning of section 2A of the
P.G.Act.
23. That entire grounds also itself indicates that appellant is claiming his gratuity amount from his
employer Suresh Singh(contractor)SAMITI as because he himself admitted in his pleading that
contractor was his only employer.
Having grounds taken in the appeal of the appellant is also not correct, false,
misconceived and misleading, hence empathically denied by the HECL.
24. That the save and except what has been specifically admitted in this objection of memo of
appeal/objection, contrary allegation made in the memo of appeal are emphatically denied by
answering defendants/Opp. No.1 and the appellant is put to strict proof thereon.
25. That there is devoid of merit in this appeal of appellant and it is fit case of dismissal.
26. That the order of the RLC(C),Ranchi is justified, legal and there is no illegality and infirmity in
that order.
 27. That judgement cited by appellant do not explain the similar circumstances to the instant case and
also no applicable in this appeal.
28. That Respondent No.1 has reserved the right to file, add and amend in this objection cum
rejoinder or to file supplementary statement as and when required.
Under above facts circumstances it is therefore prayed that your honour would be pleased
to reject the appeal of the appellant.

The Submissions of the Respondent No.2, Suresh Singh, Contractorare reproduced

verbatim :-

1. That the present appeal is not at all maintainable either in fact or in law.
2. That there is no cause of action as alleged by the appellant.
3. That para 1 of the memorandum of appeal submitted by the appellant is matter of record and the
learned Controlling Authority has dismissed his claim of gratuity of Rs.1,58,541.60 on 22.9.2017.
4. That so far as para 2 of memorandum of appeal is concerned, in this connection it is respectfully
submitted that Sri PanduTopno was joined his service under Respondent No.1 and he never
joined his service under the Respondent No.2, Suresh Singh,Contractor.
5. That it is further submitted that appellant has to give strict proof regarding date of joining of his
service on 1.11.1983 to 31.3.2012 which is very much contradictory filed by one affidavit dated
21.2.2018 along with several documents marked as Annexure-1, 2,3 & 4 which is the matter of
record.
6. That the appellant clearly and specifically stated by his affidavit in para 3 he worked under
Respondent No.1, HECL, it is settled principal of law those fact admitted need not be proved
under the provision of section 58 of the Evidence Act, 1872.
7. That appellant submitted affidavit along with various documents marked as Annexure-1,2,3& 4
which has not been issued by the Respondent No.2 as a contractor and appellant has failed to file
a single chit of a paper to show he was worker of the Resp.No.2 from the date of joining of his
service and he has not been submitted any such documentary evidence in support of this
contention.
8. That Resp.No.2 did not get any work order from HECL before the month of January, 2008 and
Resp.No.2 started work as avail labourer to the HMBP/HECL, Ranchi from the month of January,
2009 but it was not continued upto end of the service of Sri PanduTopno, which was learned
Controlling Authority correctly officiated and findings that Resp.No.2 started period of work by
the HMBP/HECL from January, 2009 as such as per the fact of law rightly dismissed the
grievances of claim of gatuity of the appellant.
9. That it is vey much clear contractor of the appellant in the year 1990 was Sri GhasiaOraon which
is admitted fact w.e.f. 01.06.1988 page No.2 in the appalication form of Membership of
contributory/Provident Fund bearing CPF/PPF A/C No.2041 where respective signature of
worker contractor Sri GhasiaOraon and Trustee Secretary and plant head executive of M/s HECL
putted on dt.9.2.1990 in said application form of page No.2.
10. That it is respectfully further submitted that during the service of Sri PanduTopno in the
year 2007 name of his contractor is Sri Hakim Naj which has to be provide by putted their
respective signature of the contractor in place of Contractor’s signature and by the worker and
Plant Head of HECL and by the Secretary of Trustee Committee of HECL dated 19.6.2007 on
other Membership application form of Contributory Provident Fund bearing said PF A/C
No.2041 so that grievances of appellant is totally false, baseless and not binding upon the
resp.no.2 that it is further submitted that Resp.No.2 is a commission agent he used to avail
labourer to HMBP/HECLand issued by a single cheque every month for credit to the bank account
of workers and for which said SAMITI earns as commission only 2.5% to 3.75% of the amount
of wages of the said workers.
11. That learned Controlling Authority correctly finding the starting period of work to Suresh Singh,
contractor by the HECL from January, 2008, which has provide appellant had work under him
from 04 years only which is mentioned in order page No.3 of the order application
No.36/23/2013-RLC(R) order passed by the learned Controlling Authority under the P.G.Act,
1972 and as per law point of view dismissed his grievances of claim for payment of gratuity.
12. That it is further submitted that as per para No.4 of the 2 ndpara and para No.8 on the written
objection to the memo of appeal filed by Resp.No.1, HECL, Sri K.Kishore, Manager Law,HECL
and clearly mentioned appellant engaged by contractor but not under/with the contractor and
appellant had not completed continuous service of 5 years by the said contractor under the
Dhurwa Takniki Shramik Sahyog Samiti Ltd., Dhurwa Ranchi which is fact and true.
For this entire episode it is crystal clear work period of the contractor Sri Suresh
Singh Resp.No.2 at the time of end of the service of appellant, Sri PanduTopno dated 31.3.2012
completed only 4 years only from the starting period of January, 2008 by the record of HECL and
as per provision of section 4 of the Payment of Gratuity Act, 1972 gratuity claim is not admissible
in case of his superannuation of employee of continuous service not less than 5 years.
And it is further that Resp.No.2 has no function relating to the joining of workers as well
as matter of ESI, PPF, PF, gratuity, allowance, reimbursement of voucher, bill or any other
benefit death, retirement and resignation of workers
The contractor has prayed to dismiss the appeal filed by the appellant.
Impression of this Authority:

On considering the rival submissions, this Authority intends to say that every one intends
to extract cheap labour and derive advantage therefrom. It must not be forgotten that the society, which
was the contractor engaged the contract workers including the Appellant for the core work of HEC Ltd.
The work was of perennial nature though not prohibited under Section 10(1) of the Contract
Labour(R&A)Act, 1970. In fact, such works were being done by the regular employees of HEC Ltd.
Since HEC Ltd. is in financial doldrum, it has preferred to engage contract workers since last 20 years or
more. We are aware of the fact that usually contract labours are engaged in work of shorter duration in the
jobs like civil construction and project related work but over the years, the employer, in order to extract
cheap labour, prefer to engage contract workers. That does not mean that the Principal Employers should
be permitted to suck the blood of contract workers by ignoring their social security. When it comes to
payment of social security benefits the parties turned a deaf ear.

The contractor/s say/s as follows :

01. That they (the contractor/s) is/are merely commission agent/s. They get certain
percentage on the bill as commission.

02. That whatever amount they get, is paid to the contract workers.

03. That being mere commission agents-cum-contractors they cannot bear the burden of
paying gratuity.

The Principal Employer/s say/s as follows :

01. That the Principal Employer cannot pay gratuity as there exists no direct relationship of
employer and employee between the contract workers and the Principal Employer.

02. That there being no direct relationship of employer and employee, the Principal
Employer cannot be compelled to pay gratuity to the contract labourers.

On the basis of the above statements of the contractor as well as the Principal Employer,
can it be said that the contract labourers cannot get gratuity? In my considered and well thought
views, the Authorities should make endeavour to find out the answer to this question from the
following.

THE CONSTITUTIONAL APPROACH :

It is an established fact that our constitution is the Supreme law of the land which is
considered as the bed rock of all the legislations our country. Labour legislations in our country
have been enacted keeping in view the Fundamental Rights Part and Directive Principles of State
Policy part of the Constitution. While dealing with the subject gratuity we should not forget that
gratuity is paid to an employee on 04 eventualities as follows:
 i) Retirement or Superannuation
ii) Death of the employee
iii) Disablement of an employee
iv) Resignation of the employee
.
There is an underlying philosophy behind each of the above eventualities, which are as
follows :

i) Retirement or Superannuation : When an employee retires or superannuates, he/she

suffers from loss of regular income. An employee retires or superannuates from services
on attaining 58 or 60 years. At this advanced age, a person usually does not get any
employment. He/she has to survive even after his/her retirement/superannuation. At this
critical juncture of loss of regular salary/wage income, the gratuity received by an
employee helps him/her to earn his/her livelihood.

ii) Death : When an employees dies, his/her family members are left at lurch due to loss of
income of the earning member of the family. At his critical juncture, the amount of
gratuity comes as a solace to the bereaved family.

iii) Disablement : When an employee suffers from disablement he/she become unable to do
the work in the establishment. As a result of this, the earning member suffers from loss of
income and does not remain in a position to maintain his family. At that time provident
fund and gratuity come to his/her rescue to certain extent to overcome the difficulties.

iv) Resignation : When an employee resigns from the services of the establishment after
rendering at least 05 years of services he/she becomes eligible to get gratuity as per the
provisions of the Act. This is a reward for the long and meritorious services rendered to
an establishment.

If we analyze the eventualities/situations (i) to (iii) we will find out that the above
eventualities/situation fall under Article 21 of the Constitution which is as follows :

Article 21 : Protection of life and personal liberty – No person shall be deprived

of his life or personal liberty except according to procedure established by law.

At the light of the above constitutional provisional we should not forget that life includes
the concept of livelihood. The Hon’ble Supreme Court of India in the case of
NarendraKumarvrs. State of Haryana, said that “right to livelihood is an integral facet of the
right to life” [JT (1994) 2 SC 94].

The employee, who retires or superannuates from the services of an establishment cannot
earn his/her livelihood without resources. Similarly an employee, who dies while in services,
leaves his / her family at lurch and such family members have a Right to Life which cannot be
ensured without livelihood.
 Let us come to issue of the contract workers. At times, the Principal Employers
discontinue the services of contractors and take new contractors. The new contractor/s may or
may not engage the old contract worker. If the old contract labourers have worked under the old
contract, can we say that such contract labourers are not eligible to get gratuity? We are of the
employment potential in our country. The population of our country has exceeded one billion but
the resources at our disposal is very limited and job opportunity for the citizens is also limited
due to yearly increase in population. The contract labourers, who are disengaged, are not in a
position to get job immediately. Such contract workers suffer from loss of income and this loss
of income becomes an impediment to earn livelihood. If gratuity to such workers is denied, it
would amount to infringement of Article 21. Can it be done in a civilized society, which is
governed by rule of law? Can any Principal Employer take away the fundamental right to life
under the pretext that there was no direct relationship of employer and employee between the
contract workers and the principal employer? The answer to this question, in my personal
opinion, would be a loud “NO”.

Article – 14 : This Article speaks about “equality before law”. The language of this Article is as
follows :

“The State shall not deny to any person equality before the law or the equal
protection of the laws within the territory of India.”

The esteemed readers may ask a question here viz. as to how this Article is relevant in
this context. The answer is as follows :

Suppose, some contract labourers were engaged in a private sector establishment which is
within the UnionState of India. The Private Sector establishment has its own employees who are
eligible to get gratuity as per the provisions of Payment of Gratuity Act. The contract labourers
who work in that private sector establishment usually work in the said private sector
establishment through/under the contractor. Such workers also do not work for the contractor but
under the contract for the private sector establishment. In such a satiation, can we say that there
should be different treatment for the private sector establishment employees and the contract
labourers working in the said establishment? If it is done, will it not violate the clause of equal
protection of law or equality before law? Can the State be a silent spectator to this unequal
treatment?

If the establishment is in Public Sector, It itself comes under “Other Authorities” under
Article 12 of the Constitution. The Public Sectors are also described as instrumentalities or
agencies of the State. Can such other authority/agency/instrumentality venture to infringe the
fundamental rights of equality before law to the contract workers? Can the contract workers of
the public sector be denied gratuity when the Public Sector’s own workers are eligible to get
gratuity?

THE LEGAL APPROACH

Under legal approach, it is intended to refer to Section 1 (3) of payment of Gratuity Act,
1972 which reads as follows :
It shall 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 of the preceding twelve months;

(c) Such other establishments 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.

The above definition of establishment, does not, certainly excludes the contractor’s
establishment from the purview of payment of Gratuity Act, 1972. So the Contract Labourers are
also covered under the Act.

Section 2 (e) of Payment of Gratuity Act, 1972 : This Section defines employees. The
Principal Employer/s argue/s that since there was no direct relationship of employer and
employee between the contract workers and the Principal Employer, the Principal Employer has
no obligation to pay gratuity to contract workers. In this connection, it would be quite pertinent
to reproduce the Section, which reads as follows :

“employee” means any person (other than an apprentice) employed on wages in

any establishment, factory, mine, oilfield, plantation, port, railway company or
shop, to do any skilled, semi skilled or unskilled, manual, supervisory, technical
or clerical work, whether the terms of such employment are express or implied,

and whether or not such person is employed in a managerial or administrative

capacity, but does not include any such person who holds a post under the Central
Government or a State Government and is governed by any Act or by any rules
providing for payment of gratuity.

In law/s know that there is a concept called parimateria which means same or similar
situation. When any of the provisions in any law is not so clear or ambiguous, we resort to the
principle of parimateria to compare the particular provisions under other laws . For example,
there are some contract workers working in a factory. The Principal Employer (factory) says that
there is no direct relationship of employer and employee between the contract workers and the
Principal Employer (factory). In such a situation, we can refer to the definition of “worker” as
defined under Section 2 (1) of Factories Act, 1948 which reads as follows :

“Worker” means a person employed, directly or by or through any

agency(including a contractor) [italicized by me for emphasis] with or without
the knowledge of the principal employer, whether for remuneration or not, in any
manufacturing process or in cleaning any part of the machinery or premises used
for a manufacturing process, or in any other kind of work incidental to, or
 connected with, the manufacturing process, or the subject of the manufacturing
process but does not include any member of the armed forces of the Union.

The above definition of “worker” even includes a contract worker who is a worker for the
purpose and also under Factories Act, 1948. If the factory could be an establishment, can we say
that the workers in such factory cannot be covered under Payment of Gratuity Act, 1972? While
defining the term employee worker, resource could be taken to other statute like Employees
Provident Fund and Misc. Provisions Act, 1952 [Section 2 (f)] and Section 2 (9) of Employees
State Insurance Act, 1948 [Section 2 (9)]. Both the enactments include contract workers within
the purview of “employee”. This being so, it cannot be said that contract workers are not eligible
to get gratuity. The fact being that if the contract labourers are eligible to be covered under
Provident Funds and Misc. Provisions Act, 1952 and Employees State Insurance Act, 1948, as to
how such contract labourers could not be covered under Payment of Gratuity Act, 1972! All the
enactments are social welfare legislations, which aim at ensuring welfare and social security to
the working class. Can those enactments be interpreted differently? If this is done, the very
purpose of such social welfare legislation shall be defeated.

Coming to the submissions of the Principal Employer that there is no direct relationship
of employer and employee, the following arguments could be advanced :

(a) There is no direct relationship of employer and employee between the contract labourers
and the Principal Employer but there is certainly indirect relationship of employer and
employee between the Principal Employer and the contract workers.

(b) The Payment of Gratuity Act, 1972 does not say that if there is an indirect relationship
between the Principal Employer and the Contract workers, the contract workers would
not be employees within the meaning of Section 2(e) of the Act.

(c) The Payment of Gratuity Act, 1972 says that employee means any person. This “any
person” is a broader term, which includes even a contract worker.

…..13…..

(d) The Payment of Gratuity Act, 1972 has specifically excluded only apprentices from the
purview of the Act but not contract labourers.

THE JUDICIAL APPROACH

On April 9, 2001, a Learned Division Bench of the Hon’ble High Court of Rajasthan, in
DBCSA Nos. 93 and 94/2001, has interpreted the term “employee” as defined under Section 2(9)
of Employee State Insurance Act 1948. The Hon’ble Court has ruled that the term “employee” is
not confined to those within a factory but extended as well to those engaged in work incidental
or preliminary to that of an establishment. (italicized by me for emphasis).

On August 4, 1999 a learned full bench of the Hon’ble Supreme Court of India, in the
case of Indian Petrochemical Corporation Ltd vrs. ShramikSena [1999 (83) FLR 74] ruled that
the contract workers working in the canteen of the factory would be the employees/workers of
the Principal Employer for the purpose of Factories Act, 1948. If this is so, in my opinion, the
Principal Employer has certainly got a liability to pay gratuity to the contract workers.

The Honourable High Court of Madras, in the case of Dhakshinamurthy S vrs. Deputy
Commissioner of Labour (Appeals), Appellate Authority under Payment of Gratuity Act, 1972,
Chennai &others(2003-I-LLJ-32), has ruled that “the principal employer is liable to pay gratuity
to contract labour”. In this judgment, of the Hon’ble High Court has referred to a judgment of the
Honourable Supreme Court of India in the case of Mangalore Ganesh Beedi Workers and Others
vrs. Union of India [AIR 1974 SC 1832]. The relevant portion is reproduced below :

“In cases where the manufacturer or trade mark holder himself employs labour there is
direct relationship of master and servant and, therefore, liability is attracted by reason of
that relationship. There cannot be any question of unreasonableness. In the second
category, the manufacturer or trademark holder engaged contract labour through a
contractor and he becomes the Principal Employer. Though such labour may be engaged
by a contractor with or without the knowledge of the manufacturer or trademark holder,
this contract labour is engaged for the principal employer, who happens to be the trade
mark holder or the manufacturer. The liability arises by reason of contract labour engaged
for or on behalf of the principal employer…..”

As far as the provisions of Payment of Gratuity Act, 1972 is concerned; I have no

hesitation to say that the contract labourers are certainly covered under Act since those contract
workers work for the Principal Employer though under or through a contractor. Such workers are
not engaged to do the own work/job of a contractor. What is material being that ‘for whom the
work is done’ and not ‘under whom the contract labourers work’. If the service of contract
labourers is availed by the establishment of the Principal Employer, the contract labourers, at
least shall be deemed to be the workers of the Principal Employer.

THE IMPRESSION OF THIS AUTHORITY :

The Payment of Gratuity Act,1972 came into force from the year 1972.At that time
engagement of contract labourers was not at the same scale as it is now. If I am not wrong, the
engagement of contract labourers by various organizations has gathered momentum in the
1990s.While enacting the Contract Labour (R & A) Act,1970; the legislature did not foresee a
situation at that point of time that the contract labourers working in an establishment would
continue to work for more than 5 years in the same establishment/organization. In addition, while
enacting Payment of Gratuity Act,1972; the legislature did not forsee such a situation at that time
that contract labourers,one day, would claim gratuity.This is due to the fact that the contract
works or jobs are comparatively of shorter duration and the legislature never foresee a situation
that the contract labourers will work for more than 5 years in any establishment.In view of the
same, gratuity to contract labourers was not thought of. Since there is no provision of payment of
gratuity to contract labourers under the Act, the authorities cannot fold their hands and blame the
draftsman (of the statute) for not incorporating this proviso under the Act.This situation reminds
me a very beautiful quote of Lord Denning in Seaford Court Estate vrs Asher: [1949] 2 KB
481,which is as follows:

“Whenever a statute comes up for consideration it must be remembered that it is not

within human powers to foresee the manifold sets of facts which may arise, and,
even if it were, it is not possible to provide for them in terms free from all ambiguity.
The English language is not an instrument of mathematical precision. Our literature
would be much the poorer if it were. This is where the draftsmen of Acts of
Parliament have often been unfairly criticized. A judge, believing himself to be
fettered by the supposed rule that he must look to the language and nothing else,
laments that the draftsmen have not provided for this or that, or have been guilty of
some or other ambiguity. It would certainly save the judges trouble if Acts of
Parliament were drafted with divine prescience and perfect clarity. In the absence of
it, when a defect appears a judge cannot simply fold his hands and blame the
draftsman. He must set to work on the constructive task of finding the intention of
Parliament, and he must do this not only from the language of the statute, but also
from a consideration of the social conditions which gave rise to it, and of the mischief
which it was passed to remedy, and then he must supplement the written word so as
to give "force and life" to the intention of the legislature. That was clearly laid down
by the resolution of the judges in Heydon's case , and it is the safest guide to-day.
Good practical advice on the subject was given about the same time by Plowden in
his second volume Eyston v Studd. Put into homely metaphor it is this: A judge
should ask himself the question: If the makers of the Act had themselves come
across this ruck in the texture of it, how would they have straightened it out? He must
then do as they would have done. A judge must not alter the material of which it is
woven, but he can and should iron out the creases.”

The above apart, interpretation of social welfare legislation concept must be adhered to
in such a situation. The relevant quotes are as follows:

“The social legislations must be interpreted harmoniously and if in spite of such

harmonious construction/interpretation if any doubt or ambiguity exists or any doubt
arises, the courts and the tribunals should adopt the principles of beneficent
construction. In case there are equivocal terms or ambiguous sentences, a benefit of
doubt should be given to the subject and against the legislature which has failed to
explain itself” (AIR 1944 Lahore 422)

In this context it would also be quite pertinent to refer to a citation of the Hon’ble Supreme Court which
is as follows:

“In course of construing material provisions of a social legislation, if two views are
reasonably possible, the court should prefer the view which helps the achievement of
the object of the legislation. If the words used in a legislation are capable of a narrow as
well as broad construction, each construction being reasonably possible, and it appears
that the broad construction would help the furtherance of the object, than it would be
necessary to prefer the said construction. The rule postulates that there is competition
between the two constructions, each one of which is reasonably possible.The rule does
not justify the straining of the words or giving an unnatural or unreasonable meaning to
 them just for the purpose of introducing a broader construction”. (AIR 1965 SC 1076 at
p 1080 = 1965-I-LLJ-473)

SOCIAL SECURITY LEGISLATION APPROACH :

Another strong argument, which can be advanced in favour of contract workers for gratuity
being the social security legislation approach viz. now-a-days, by and large, all the contractors’
establishments are covered under Employees Provident Fund and Miscellaneous Provisions
Act,1952.The contractors recover EPF and FPF contributions from the wages of the contract workers and
contribute equal amount towards provident fund of the workers. The payment of Gratuity Act,1972 is
also a social welfare or social security legislation like Provident Fund Act,1952.If the provident fund
contribution by the contractor could be reimbursed by the Principal Employer to the Contractor, why
not gratuity ? It is the sole responsibility of the Principal Employer to take care of the gratuity of the
contract labourers while floating the tender.It may also be noted that in notified areas where the
industry and factories are set up or working,ESI contribution is also mandatory. Applying this maxim,
gratuity to contract labourers is also mandatory and a Principal Employer cannot absolve itself from the
responsibility of payment of gratuity to the contract workers.

In view of what been discussed by me hereinbefore, I am of the considered view that the
contract workers, at the sunset hours of their lives cannot be left at lurch in the face of unmindful and
feeble arguments advanced by the Pricnipal Employers and the contractors. Since the contract workers
work in the establishments of the Principal Employers and provide services to the Principal Employers,
the Principals Employers are liable to re-imburse gratuity like re-imbursement of statutory wages,
bonus, ESI contributions and EPF and Pension contributions since gratuity is a post retirement social
security benefit.

While conclude various approaches and making out a case for gratuity for the contract workers, I
would like to reproduce a small couplet which has been coined by me and comes to my mind
while penning this judgment.

The Sovereign has made the Laws’

To remove the social anomalies and flaws;
Law stands on the citadel of norms,
None should venture to deform its forms;
Though bind law is not kind
The benefits flowing from a law cannot be taken away
By anybody without application of conscience and mind;
Law aims at ensuring rights, liberty and equality
None can take away a life of quality;
Law is temporal not chimerical
Tampering with the temper of law shall prove fatal,

GOING INTO THE CASE :

On perusal of the case-file of the Controlling Authority, this Authority found that the
Controlling Authority has not taken proper evidence of the parties and this has throttled the
course of justice.In fact, I could have remitted back the case to the Controlling Authority but
since he does not know his job and a Steno dependent Officer, I thought it appropriate to take
fresh evidence so that the poor helpless, hapless and faceless worker, who has been toiling for
last 5 years, can get justice and a feign smile can come on his dry lips.
Evidence of Shri Suresh Singh,Contractor :

The Contractor, Shri Suresh Singh (Secretary of the Society) , on 23/02/2018, deposed before
this Authority that Shri PanduTopno has worked for more than 5 years in presence of ShriNavin
Mohan, learned Counsel for HEC Ltd.Shri Suresh Singh was cross-examined by Shri R N
Sinha,learned Counsel for the Appellant.It has been revealed that, Shri Suresh Singh had issued
an employment certificate to Shri Pandu Topno, the Appellant wherein it has been mentioned
that the Appellant worked for more than five years in the said society.Shri Suresh Singh
corroborated that he has signed the Employment Certificate.

Shri Suresh Singh,Respondent No.1 has further deposed that the Principal Employer, HEC Ltd
was depositing the wages of the workers minus Provident Fund in the account of the society and
it (HEC Ltd) was depositing the EPF and Pension contribution in HEC Provident Fund Trust
Account.This amply proves that the contract was just a paper arrangement, it was ruse or
camouflage.The same has been happening for years together since the society was formed. The
Society, who was the contractor, was getting a paltry commission on the wage bill. Under such a
situation, how can the society pay huge amount of gratuity to the workers.For this sorry and
sordid state of affairs, the Principal Employer, HEC Ltd should be held responsible. It is the duty
of HEC Ltd to re-imburse the amount of gratuity as it was depositing the employees’ and
employer’s contribution to Provident Fund. It cannot say that it has only the responsibility of
payment of provident fund.

On 1 March 2019 Shri Suresh Singh was cross-examined.On 23/03/2018, Shri Suresh Singh
deposed on 23/03/2018 that in a year the workers were getting work for 7 to eight months and all
the Registers and records were being maintained by HEC Ltd.But on 5/10/2018, when he was
cross-examined by the learned Counsel for Respondent No.2 HEC Ltd, Shri Suresh Singh
deposed that he was getting work for 160 to 170 days which clearly proves that HEC Ltd has
influenced him as it intends to absolve itself from the payment of gratuity.Due to variation in his
statements this Authority declared him hostile.However, Shri Suresh Singh deposed that Shri
Pandu Topno was working in the society before he came to the society as Secretary.It is Shri
Suresh Singh’s statement that Shri Pandu Topno worked under him for more than 5 years as
revealed from the certificate issued by him.

THE CONCLUSION:

However, on 10th July ShriNavin Mohan, learned Counsel for HEC Ltd vehemently and
forcefully argued that there was no employer-employee relationship between ShriPanduTopno
and HEC Ltd, HEC Ltd has not been given adequate opportunity in the proceedings and there is
no dues outstanding on HEC Ltd from the Appellant or the Society but he had no answer to the
depositions that the registers and records were being maintained by HEC Ltd and Provident
Fund was being deposited in HEC Ltd’s PF Trust A/c. This proves that the contract between the
Society and the Principal Employer was sham and just a paper arrangement. I fail to understand
as to how the provident contribution of a contract worker can be deposited in the PF A/c of HEC
Ltd, the Principal Employer !!! To my little knowledge, there is no such provision under EPF
and Miscellaneous Provisions Act,1952 .In my considered and well thought view, HEC Ltd is
liable to pay gratuity like contribution of EPF and Pension Fund in the A/c of HEC Ltd.I have no
hesitation to say that after taking work for years together, now, HEC Ltd has been harassing the
poor worker. A contract labourer has no retirement age according to Contract labour (R&A)
Act,1970 but Shri PanduTopno has been retired on attaining the age of 60 years which is
the retirement age for the employees of HEC Ltd.

In view of what have been discussed hereinbefore,I proceed to pass the following orders:

THE VERDICT :

1.The Appeal filed by Shri Pandu Topno succeeds and the same is allowed.

2.The order of the Controlling Authority is set aside.

3.HEC Ltd is directed to pay Rs,1,58, 542.00 towards gratuity to Shri Pandu Topno through the
Society.

4.HEC Ltd is also directed to pay interest @ 10% on the gratuity from 1 April 2012 till the date
of payment.

Given under my hand and seal on this 11th day of July, 2019.

(AJAYA KUMAR SAMANTARAY)

APPELLATE AUTHORITY UNDER PAYMENT OF GRATUITY ACT,1972 AND
DEPUTY CHIEF LABOUR COMMISSIONER (CENTRAL),DHANBAD
……………………………………………………………………………………………………………

REGISTERED

Government of India
Ministry of Labour and Employment,
Office of the Deputy Chief Labour Commissioner (Central)
DHANBAD : 826003
No.PG/(03)/2019-A.7 Dated : 11.07.2019

Forwarded to :-

1. Sri PanduTopno, C/o Karu Toppo, New Kalyanpur Road, No.6, PO:Hatia, Dist:Ranchi-834003.

2. The Chairman-cum-Managing Director,Heavy Engineering Corporation Limited, PO: Dhurwa,

Dist: Ranchi - 834003.

3. Sri Suresh Singh, Contractor,M/s Dhurwa Takniki Shramik Sahyog Samiti Ltd., DT-2563(T),
 PO: Dhurwa, Dist : Ranchi-834004.

4. The Regional Labour Commissioner(C), Ranchi and Controlling Authority

with reference to PG Application No.36 (23)/2013.RLC(R).