M.L. Dudhat, J.
1. The present writ petition is preferred against the order dated 30th of October, 1982, passed in Appeal No. 13 of 1982 by the Regional Labour Commissioner (Central) Bombay and Appellate Authority for Maharashtra, Goa, Daman and Diu under the payment of Gratuity Act, 1972 (hereinafter referred to for the sake of brevity 'the Appellate Authority) confirming the decision of the Controlling Authority and Assistant Labour Commissioner (Central) II Bombay, dated 31st March, 1982, in Application No. B. ALC-II/36(6)/81. Few facts germane to this petition are as under:
2. The petitioner is a public limited company incorporated under the Companies Act. The petitioner-company has establishment in Bombay. It is specifically contended by the petitioner company that its establishment at Bombay is covered by the provisions of Shops and Establishment Act, 1948, and registered as a 'Commercial Establishment' thereunder. The petitioner further contended that the Bombay Establishment of the petitioner has on branches in any other State Respondent No. 1 was in the employment of the petitioner as its aforesaid Bombay establishment since 1942 and retired on 1st October, 1980, after completing 38 years of service. respondent No. 1 was paid towards his gratuity dues Rs. 11, 960.00.
3. Thereafter, by his letter dated 16th of March, 1981, respondent No. 1 demand Rs. 22,600.00 as gratuity and requested the company to pay the aforesaid amount after deducting the earlier payment of Rs. 11,960.00 made towards his gratuity. On 4th of May, 1981, respondent No. 1 filled in Form No. 1 under Rule 7(1) of the Payment of Gratuity (Maharashtra) Rules, 1972, wherein he claimed Rs. 1,750.00 as difference in the gratuity which he was entitled to get after deducting the amount already paid to him by the petitioner company. The petitioner company filed its reply to the said form on 14th May, 1981, wherein the petitioner company admitted a claim of Rs. 720.00 due to him over and above the payment of the amount of Rs. 11,90.00 already paid to him by the petitioner-company. On 11th of June, 1981, respondent No. 1 applied in Form 'N' under Rule 10(1) to the Controlling Authority of the State of Maharashtra in which he based his claim as calculated in Form No. 1 dated 4th of May, 1981. The petitioner company challenged the contentions of respondent No. 1 by its written statement dated 24th of August, 1981.
4. The aforesaid application was withdrawn by respondent No. 1 from the Controlling Authority on 17th September, 1981. On the same day i.e. on 17th September, 1981, respondent No. 1 filed a fresh application before the Controlling Authority of the central Government claiming Rs. 10,504.00 and ultimately demanded actual payment of Rs. 3,544.30 after deducting an amount of Rs. 11,960.00 already paid to him by the petitioner-company. The said application was challenged on various grounds by the petitioner-company in its written statement dated 23rd December, 1981.
5. After hearing both the sides, the Controlling Authority i.e. respondent No. 2 allowed the said application made by respondent No. 1 and ordered the petitioner-company to pay the amount of Rs. 3,544.30 towards gratuity to respondent No. 1. Being aggrieved by the aforesaid decision the petitioner-company preferred an appeal before the Appellate Authority i.e. respondent No. being Appeal No. 13 of 1982. respondents No. 3 by its decision dated 30th October, 1982, confirmed the finding of respondent No. 2. Against the aforesaid decision the petitioner-company has preferred the present petition.
6. Mr. Shrikrishna, the learned Counsel, appearing on behalf of the petitioner-company challenged both the decisions confining his argument only on two grounds. Firstly he contended that in the present case the Central Government is not the appropriate Government and, therefore both respondent Nos. 2 and 3 i.e. Controlling Authority and the Appellate Authority have no jurisdiction to deal with this matter. According to him, on the interpretation of various provisions of the Gratuity Act, it is clear that the present case falls within the residuary category under section 2(a)(ii) of the Payment of Gratuity Act, 1972, and, therefore, the appropriate Government in the facts of the present case is the State Government and not the Central Government. Section 2(a) of the said Act runs thus :
'2(a) 'appropriate Government' means,---
(i) in relation to an establishment :---(a) belonging to, or under the Control of, the Central Government.
(b) having branches in more than one State,
(c) of a factory belonging to, or under the control of, the Central Government,
(d) of a major port, mine, oilfield or railway company, the Central Government,
(ii) in any other case, the State Government.'
7. After going through the aforesaid definition of the appropriate Government, it appears that in a given case the issue of appropriate Government will have to be decided in relation to an establishment. If an establishment belongs to or is under the control of Central Government, then the appropriate Government under section 2(a)(i) of the said Act will be the Central Government. Obviously, the present case does not fall within the aforesaid section. If the establishment has branches in more than one State, then under section 2(a)(i)(b) the appropriate Government would be the Central Government. Admittedly, in the present case thee establishment at Bombay where respondents No. 1 was serving is an establishment registered under section 2(4) of Bombay Shops and Establishment Act, 1948, as a commercial establishment and the said commercial establishment has no branches in any other State. Therefore, this section is also not applicable to the establishment in the present case. It is also obvious that Clauses (c) and (d) of section 2(a)(i) are also not applicable in the present case as the present establishment in not under the control of the Central Government or railway company. Therefore, in order to decide the issue of appropriate Government with references to the commercial establishment of the company in question, one has to fall back upon the residuary clause viz, section 2(a)(ii). This means that the company's establishment does not fall within any of the clauses of section 2(a)(i) viz. Clauses (a), (b), (c) and (d), but clearly falls within the residuary clause of section 2(a)(ii) of the said Act. Therefore, the appropriate Government in the present case on the bare interpretation of the said section 2(a) is the State Government and not the Central Government.
8. The learned Counsel for the petitioner contended that inspite of the aforesaid position, both the lower authorities have given their finding that the appropriate Government in the present case is the Central Governments and not the State Government. While deciding this issue of appropriate Government, the Controlling Authority in paragraph 6 of its judgement relied on the annual report and observed that the same indicates that the company has branches in different states. The Controlling Authority further observed that the establishment operates in the same name in all the States and there is only one Board of Directors in all the units in the Country and the services of the Executives are transferable from one unit to another throughout the country. I am sorry to observe that the Controlling Authority has completely mis-interpreted the evidence before him. It is true that the petitioner-company is a manufacturing company and has factories and establishments all over India. However, in the present case, as I have already pointed out earlier, to decide the issue of appropriate Government, one has only to refer to the establishment under consideration and since the establishment where respondent No. 1 was serving is an establishment registered under the Shops and Establishment Act having no branches anywhere in India, there is no question of coming to the conclusion that the petitioner company comes within the purview of section 2(a)(b) of the said Act and, therefore, the appropriate Government is the Central Government.
9. The Appellate Authority in its judgment also confirmed the findings of the Controlling Authority in deciding the issue of appropriate Government. Both the authorities have lost sight of the fact that for deciding the issue of appropriate Government, one has to follow the definition under the section 2(a) of the said Act and the definition of appropriate Government under section 2(a) is in relation to establishment and the ownership or control of the company over the said establishment is of no consequence in deciding the issue of appropriate Government. Incidence of the Act is quo to the factory, shop, commercial establishment and the word 'establishment' has been used independently of factory, mines, oil-fields, plantations etc.
10. The learned Counsel for the petitioner also cited certain authorities which support his contention. In Jeevanlal (1929) Limited v. Controlling Authority under the Payment of Gratuity Act : (1982)ILLJ86Mad . In that case the petitioner-company challenged the order of the Controlling Authority of the State Government for payment of gratuity. It was argued that the petitioner-company was an all India concern and while it has its registered office at Calcutta, it has branch offices and factories at Calcutta, Bombay and Madras and the sales offices (branches) at Delhi, Hyderabad and Cochin. Hence, it was argued that since the petitioner had branches in more than one State, the appropriate Government under section 2(a) was only the Central Government and not the State Government and, therefore, the Controlling Authority of the State Government Tamil Nadu had no jurisdiction to deal with the application filed by one of its employees. After considering the arguments and case laws cited on this point, the Madras High court came to the conclusion that the appropriate Government is the Government of Tamil Nadu and not the Central Government. The said High Court held that the factory at Madras will fail only under section 2(a)(ii) viz. in any other case, the State Government. The facts of this case and the decision in this case clearly support the argument advanced by the learned Counsel on behalf of the petitioner company. The aforesaid decision of Madras High Court was confirmed by the Supreme Court in : (1984)IILLJ464SC , in the aforesaid decision at paragraph 15 the Supreme Court observed :
'It would appear that the definition of appropriate Government in section 2(a)(1) in relation to an establishment makes a distinction between establishments and factories. In relation to an establishment belonging to, or under the control of, the Central Government and of a factory belonging to or under the control of the Central Government the appropriate Government is the Central Government. But the Central Government is the appropriate Government only in relation to an establishment having branches in more than on State. There is no like provision made in relation to such an establishment having factories in different States. We fell that the point relating to the jurisdiction of the Controlling Authority under section 3 of the Act does not really arise.'
The aforesaid observations confirming the earlier decision of the Madras High Court clearly supports the petitioner company's case. The petitioners company has cited one more authority on this point. In Neyveli Lignite Corporation Ltd. v. J. Satagopan : (1979)IILLJ163Mad . In this case a similar issue was before the High Court of Madras and the Court in para 10 observed :
'In section 1(3) as well as section 2(e) and (f) the word 'establishment' has been used disjunctively in juxtaposition to the word 'factory, mine oilfield, plantation etc.' Merely because the preamble contains the words 'or other establishment' and section 2(a) affords scope for the word 'establishment' being prefixed to the words 'of a factory' occurring in sub-clause (c) and 'of a major port, mine, oilfield, or railway company' accruing in sub- clause (d), it is not possible to hold that the Legislature intended to enlarge the meaning of the words 'factory, major port, mine, oilfield, etc. etc. be tacking on the word 'establishment' to them.'
The Court further held that this reference is inescapable. After going through the aforesaid authorities which support the petitioner-company. I have come to the conclusion that the appropriate Government in the present case is the State Government and not the Central Government and, therefore, both respondents Nos. 2 and 3 had no jurisdiction to decide the application filed by respondent No. 1.
11. The learned Counsel for the petitioner-company has also assailed the decision of the lower authorities viz. respondent Nos. 2 and 3 on the ground of method of calculation. It was contended on behalf of the company that while calculating one day wage, the lower authorities divided monthly wage by 22 days instead of 26 day. The Controlling Authority divided the monthly wage by 22 days on the reasoning that the concerned employee was working only for 22 days, Saturdays and Sundays being holidays. For coming to the said conclusion, the Controlling Authority also relied on the decision in Shri Digvijiay Woollen Mills Ltd. v. Shri Mahendra Prataprai Buch : (1980)IILLJ252SC , equivalent to : (1980)IILLJ252SC . In fact, the learned Counsel on behalf of the petitioner submitted that even the Supreme Court in the aforesaid judgment in para 5 has not decided that monthly wage is to be divided by 22 days, but since that was followed by the Gujarat High Court, the Supreme Court observed---
'but the manner of calculating gratuity payable under the Act to the employee the work for 26 days a month followed by the Gujarat High Court cannot be called perverse. It is not necessary to consider whether another view of possible.'
12. In view of the above, the petitioner-company before the lower authorities contended that the monthly wage must be divided by 30 days and not 26 days. However, in view of the recent amendment to the Gratuity Act, the learned Counsel contended that the petitioner-company is going to confine its argument only to the extent of challenging the decision of dividing monthly wage by 22 days instead of 26 days in this respect he further relied on the observations of the Supreme Court in the aforesaid decision in Jeevanlal's case in : (1984)IILLJ464SC of its judgment the Supreme Court concurred with its earlier decision in Shri Digvijay Woollen Mills Ltd. and observed that while arriving at the figure of daily wage, any other view then dividing the monthly wage by 26 days is not necessary and, therefore, declined to interfere with the same under Article 136.
13. In view of this position, I am of the opinion that while arriving at daily wage in the present case, monthly wage must be divided by 26 days and not by 22 days as is done by both the lower authorities. In support of this calculation the learned Counsel also drew my attention to the recent amendment to section 4(2) of the Gratuity Act of 1972 wherein the legislature has clearly amended the said provisions. As per this amendment in order to arrive at the figure of daily wage, monthly wage is to be divided by 26 days. The learned Counsel also pointed out that thought this amendment has come much subsequently till inference can be drawn about the intention of the legislature that the intention of the legislature was to be divided monthly wage by 26 days. Since it was not clear, the legislature clarifies the position after the Supreme Court decision and dispelled the confusion. Since I have already come to the conclusion after interpreting the earlier two Supreme Court decisions that the daily wage will have to be arrived at by dividing 26 days as monthly wage, I would refrain from discussing further on this point argued and agitated by the learned Counsel on behalf of the petitioner-company. In view of the above, in the present case while arriving at the figure of daily wage, in the calculation made at paragraph 18 of the judgment of respondent No. 2 instead of dividing the monthly wage by 22 days, the same ought to have been dividing the monthly wage by 26 days. In view of the aforesaid findings both the decisions of the lower authorities viz. the impugned order dated 30th October, 1982, passed by the respondent No. 3 as also the order dated 31st of March, 1982, passed by respondent No. 2 are set aside. The petition is accordingly allowed. Rule made absolute with no order as to costs.