In a batch of civil appeals filed before the Supreme Court to consider whether the employees of Heavy Water Plant, Department of Atomic Energy, Government of India (HWP) are covered by the provisions of the Payment of Gratuity Act, 1972 (Gratuity Act), a Bench comprised of Justice Pankaj Mithal and Justice S.V.N. Bhatti agreed with the impugned order and dismissed the civil appeals.
The present appeal arose from a common judgment dated 21-06-2023 wherein it was declared that employees of HWP are not covered by the definition of Section 2(e) of the Gratuity Act. On 01-05-1969, the Government issued an Office Memorandum to constitute a Board to administer the Heavy Water Production Projects of the Department of Atomic Energy (DoAE). The HWP in Tuticorin was one of the Heavy Water Boards established by the DoAE.
On 25-07-2014, a pension payment order in favour of a retired employee was issued under the CCS (Pension) Rules, 1972. The sum payable under the Gratuity Act and CCS (Pension) Rules is less than the sum payable under the Gratuity Act. This led to the filing of an application before the Controlling Authority under the Gratuity Act. The Controlling Authority held that the Gratuity Act applied to the employees of HWP, and a direction was issued to pay the difference.
HWP challenged the said order by filing an appeal before the Deputy Chief Labour Commissioner, which was dismissed. Thereafter, HWP assailed the orders before the High Court by way of writ petitions, which were dismissed, prompting the filing of a writ appeal. HWP also filed writ petitions challenging the Controlling Authority’s subsequent orders. The Madras High Court allowed the said writ appeals and the petitions.
The Court stated that the applicability or inapplicability of the Gratuity Act depends on whether the employee comes within the inclusive or exclusive definition, which is dependent on jurisdictional facts. The Court perused Section 2(e), and it was stated that the exclusionary clause, if read by applying the golden rule without a further test, excludes employees of the Central and State Governments from the meaning of ‘employee’ under the Gratuity Act. It also excluded a person who is governed by any other act. The Court said that a person who is governed by any other Act, or governed by any Rules providing the payment of gratuity, would not come within the ambit of the definition under the Gratuity Act.
Further, the Court said that since its inception, a board had been constituted to manage the HWPs of the DoAE. It was noted that the retired employees admitted that HWP was not incorporated under the Companies Act, was not a recognised PSY, and did not function as a government company.
It was stated that, for gratuity, the larger and comprehensive establishment of atomic energy facilities by the Central Government is not replaced by a narrow construction of the functional freedom granted to the Heavy Water Projects Board or individual Heavy Water Plants. The Court held that the character of HWP was that of an adjunct of the DoAE.
Thus, it was held that the employees fell within the exclusionary clause of Section 2(e) of the Gratuity Act, and as a result, Sections 5 and 14 are not attracted in deciding the applicability of the Gratuity Act to HWP employees. Lastly, the Court stated that it was in agreement with the impugned order and dismissed the civil appeals.
Appearances:
For Petitioner(s) – Mr. Shrutanjay Bhardwaj, Mr. Raghunatha Sethupathy B (AOR), Mr. Siddhi Nagwekar, Ms. Haripriya Padmanabhan (Sr. Adv), Mr. K. Paari Vendhan (AOR), Mr. Aayushman Aggarwal
For Respondent(s) – Mr. S.D. Sanjay (A.S.G.), Ms. Arunima Diwedi, Mr. Rajeev Ranjan, Mr. Dharmendra Kumar Pandey, Mr. Raman Yadav, Mr. Saurabh Kumar Kaushik, Mr. Amrish Kumar (AOR), Mr. Raj Bahadur Yadav (AOR), Mr. Gurmeet Singh Makker (AOR)
