1. The petitioners, the Bombay Gas Public Limited Company, challenge in this writ petition an order dated 4th November, 1987 passed by the Controlling Authority under the Payment of Gratuity Act, 1972, granting to the 1st respondent gratuity with interest as set out in that order.
2. The 1st respondent joined the services of the petitioner is June 1950. He worked as a fitter upto 29th July, 1981 when the employees of the petitioners went on a flash strike. This strike was declared as an illegal strike under Section 25, subsection (1) of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 by the Labour Court under its order dated 24th August 1981. Thereafter the Company has not carried on any business. It declared a closure on 26th December, 1983. The dispute in connection with the closure is still pending in Court.
3. According to the 1st respondent he attained the age of superannuation on 17th March 1987. He filed on application on 8th April 1987 for payment of gratuity under Section 4 of the Payment of Gratuity Act, 1972. This application was resisted by the petitioners on the ground that the application was not signed by the applicant - workman and that as the applicant participated in an illegal strike which commenced on 29th July, 1981, as a result of which the Company suffered heavy losses, the applicant was not entitled to any payment of gratuity. The company also challenged the amount of the last drawn wage of the petitioner, which, the company said was Rs. 34.27 and not Rs. 34.50. The petitioners also contended that as the closure had been declared from 26th December 1983 there was no question of paying any gratuity for the period after the closure.
4. The Controlling Authority, being the Labour Court of Bombay, granted gratuity to the workman from the date of his joining service till the date of the commencement of illegal strike. The Court also directed 9% compound interest on the said amount from 1st June, 1987.
5. Under Section 7, sub-section (7) of the Payment of Gratuity Act, 1972, any person aggrieved by an order under sub-section (4), may within 60 days from the date of the receipt of the order, prefer an appeal to the appropriate Government or such other authority as may be specified by the appropriate Government in this behalf. The appellate authority in the present case is the industrial Court. The petitioner did not prefer any appeal from the impugned order under this provision. No explanation was given for not availing this alternative remedy. In these circumstances I do not see any reason why I should exercise my discretion under Article 227 of the Constitution to entertain a challenge to that order. On this ground alone the petition is liable to be dismissed. (See in this connection State of U.P. v. Mohammad Nooh, reported in (AIR) 1958 SC. 86, Titaghur Paper Mills Co. Ltd. and anr. v. State of Orissa and anr., reported in : [1983]142ITR663(SC) and Jethsur Surangbhai v. State of Gujarat, reported in : 1984CriLJ162 ).
6. On merits the petitioners contend that in view of the provisions under Section 4(6) of the said Act the 1st respondent is not entitled to any gratuity. Section 4(6) of the said Act is as follows :
'4(6) Notwithstanding anything contained in sub-section (1). -
(a) the gratuity of an employee whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused :
(b) the gratuity payable to an employee may be wholly or partially forfeited -
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the course of his employment'.
7. Under sub-clause (a) of above sub-section an employee whose services have been terminated for any act, wilful omission or negligence, causing any damage or loss to, or destruction of, property belonging to the employer is liable to have his gratuity forfeited to the extent of the damage. In the present case no material has been brought on record to show that the services of the 1st respondent were terminated or that they were terminated for any act, wilful omission or negligence causing damage, loss or destruction of the petitioners' property. Nor is the extent of such damage, attributable to the 1st respondent, quantified anywhere. The petitioners have merely said that their employees, by going on an illegal strike, have caused a heavy loss to the petitioner company. There is no order of termination which is on record. It was contended by the petitioners that an order of termination is not necessary. The services may be terminated by even an act of omission on the part of the management. Be that as it may, the provisions of Section 4(6)(a) do not come into operation unless there is a termination on the grounds set out in that sub-section. The statutory provision for forfeiture of gratuity must be construed strictly. In the absence of such a termination the employee does not forfeit his right to gratuity.
8. Mr. Cama. learned counsel for the petitioner, relied upon a decision of Supreme Court in the case of The Management of Tournamulla Estate v. Workmen reported in 1973 II LLJ-24. In that case, the workman was chargesheeted for riotous and disorderly behaviour for having assaulted a tea maker. The workman was dismissed and his gratuity was forfeited. The Supreme Court applied the principles laid down in the case of Delhi Cloth and General Mills Co. Ltd. v. Workmen reported in : (1969)IILLJ755SC and held that in such a case when the concerned workman was guilty of this kind of misconduct he forfeited his right to gratuity. It also quoted Section 4(6)(b) of the Payment of Gratuity Act, which had by then come into operation and observed that the principles laid down in the case of the Delhi Cloth and General Mills Co. Ltd. (supra) had been incorporated in the statute itself. This case has no application here because, in the present case I have not been shown any order of dismissal for riotous or disorderly conduct or any act of violence, not is there even an order of termination.
9. In the case of Oriental Textile Finishing Mills. Amritsar v. Labour Court, Jullunder and ors., reported in : (1971)IILLJ505SC the services of 30 workmen who were on illegal strike were terminated by the company without any enquiry. The management justified its action before the tribunal. The tribunal held that there was a persistent and obdurate refusal by the workmen to join duty notwithstanding the fact that the management had done everything possible to persuade them and had given them an opportunity to come back to work but the workmen had without sufficient cause, refused. The Court held that the workmen were guilty of misconduct which would justify termination of their services. This case also does not help the petitioner because the case does not deal with forfeiture of gratuity. Secondly, in the case before the Supreme Court the services of the workmen had been terminated by an order of termination.
10. It was also submitted by Mr. Cama that the 1st respondent abandoned service. Even here the employer is required to give notice to the workman to resume service and if the workman does not resume, the employer can terminate the services of the employee. No record is produced before me to show that this was done. In the case of Gaurishankar Vishwakarma v. Eagle Spring Industries Pvt. Ltd. and ors., reported in 1988 (1) CLR 38 a Division Bench of this High Court had held that it is now well settled that even in a case of abandonment of service the employer has to give notice to the workman calling upon him to resume duty and also to hold an enquiry before terminating his services on that ground. Nothing is produced before me to show that this has been done. I, therefore, need not consider whether in the case of such a termination the provisions of Section 4(6) of the Payment of Gratuity Act, 1972 are attracted or not.
11. In the present case the Labour Court has granted gratuity for the period up to the date of the illegal strike on the ground that the workman has not done any work thereafter. Neither side has challenged denial of gratuity for any subsequent period. Hence I need not go into that question. No other contention is raised before me.
12. The Labour Court has granted 9% compound interest on the amount of gratuity from 1st June, 1987. The 1st respondent applied for gratuity on 8th April, 1987. Under Rules 7 and 8 of the Payment of Gratuity (Maharashtra) Rules. 1972. The employee who is eligible for payment of gratuity has to apply, ordinarily within 30 days from the date the gratuity became payable. Within 15 days of the receipt of the application the employer has to carry out the various steps as set out in Rule 8 and pay gratuity as set out in Rule 9.
13. Under Section 7, sub-section (3) of the Act the employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable. Section 7(3A) provides for payment of simple interest on the amount of gratuity, if it is not paid by the employer within the period specified in sub-section (3). Sub-section (3A) was introduced for the first time only by the Amending Act 22 of 1987, which came into operation on 12th August, 1987. Thus the present application has been made before coming into operation of the Amending Act. The benefit of sub-section (3A) cannot therefore be given to the 1st respondent. In any case the 1st respondent could not have obtained an order for compound interest under sub-section (3A).
14. The Supreme Court in the case of Charan Singh v. Birla Textiles and Anr., reported in : (1989)ILLJ250SC has held that Section 7(3A) is prospective in its application any not retrospectively. This however, does not affect the right of the 1st respondent to claim compound interest from the date of issue of the certificate for that amount under Section 8 of the Payment of Gratuity Act, 1972. Under this section if the amount of gratuity is not paid by the employer the Controlling Authority shall, on an application made by the aggrieved person, issue a certificate for the amount to the Collector who shall recover the same together with compound interest as set out therein. In the present case Section 8 certificate has been issued on 27th January, 1988. Hence the petitioner will be entitled to the benefit of Section 8.
15. It is submitted by Mr. Cama that the petitioners have in their possession record to establish that the services of the employees who had gone on illegal strike were terminated and that this termination was such as would attract the provisions of Section 4, sub-section (6) of the said Act. He has also said that applications from a number of other employees for payment of gratuity are pending before the Labour Court. In these pending cases it will be open to the petitioners, if they are so entitled in law, to produce such record before the Controlling Authority in order to establish their case. In the present case since no such record was produced it is not possible for me to hold under Article 227 that the provisions of Section 4, sub-section (6) are attracted. The order of the Controlling Authority is upheld, save and except that the petitioner will be entitled to compound interest only as per the provisions of Section 8 of the said Act.
16. Save as aforesaid, the Rule is discharged. In the circumstances there will be no order as to costs.
17. The full amount as per the order has already been deposited in this Court. On the application of the petitioner there will be a stay on the recovery of the amount for a period of 4 weeks from today.