R.J. Kochar, J.
1. Heard the learned advocates for the parties. Rule. By consent Rule is made returnable forthwith in view of the nature of the Petitions which are being disposed of at this stage itself.
2. The Petitioners, the Head Mistress of Fatimadevi English High School and the Trustees and the Secretary of Lucy Education Society, are aggrieved by the impugned Judgment and Order passed by the Appellate Authority under the Payment of Gratuity Act, 1972 in Appeals filed by the respondent-Teachers against the Order dated December 29, 2000 passed by the Controlling Authority under the Act.
3. The respondent-Teachers having put in total service of 39 years, 38 years and 34 years respectively in the School, stood superannuated on May 5, 1997, January 31, 1998 and September 20, 1999 respectively. According to them, they were entitled to get gratuity but on failure of the Petitioners to pay they approached the Controlling Authority for the purpose of getting gratuity. It appears that the Controlling Authority computed the gratuity on the basis of the Circular issued by the Education Department of the Bombay Municipal Corporation and directs to pay the same to the teachers to the tune of Rs. 49,830/-, Rs. 61,660/- and Rs. 49,830/- respectively. The Controlling Authority also allowed interest at the rate of 10% from the date of filing of the applications.
4. The Respondents-Teachers were not satisfied with the decision of the Controlling Authority, and therefore, they approached the Appellate Authority contending that they were entitled to get gratuity in accordance with the Payment of Gratuity Act, 1972 which would prevail upon the Circular issued by the Bombay Municipal Corporation for entitlement and computation of the amount of gratuity. The Appellate Authority accepted the contentions of the Teachers and allowed their Appeals and directed the Petitioners to pay gratuity under the Payment of Gratuity Act, 1972 which he computed in the impugned order. He also allowed simple interest at the rate of 10% p.a. from the date of Gratuity becoming payable, i. e. the date of superannuation.
5. Shri Shah, the learned advocate for the Petitioners has assailed the impugned order of the Appellate Authority on the ground that the Petitioners School is an aided Municipal School and therefore, is required to follow the rules framed by the Corporation in respect of payment of gratuity. He further submitted that the teachers were paid gratuity in accordance with the B.M.C. Grant-in-Aid Rules. He further submitted that the Payment of Gratuity Act 1972 was not applicable to the Petitioners School as it is not governed by the said Act as it is not an establishment within the meaning of Bombay Shops and Establishments Act, 1948 (for short 'the Shops Act') as contemplated under Section 1(3)(b) of the Payment of Gratuity Act. According to Shri Shah the School is not an 'establishment' to which the Shops Act is applicable. He also submitted that even the teachers do not satisfy the definition of 'employee' under the Payment of Gratuity Act. Shri Shah further pointed out that whatever aid for gratuity was given by the Corporation they can pay or disburse that amount only towards the Gratuity. Shri Shah further submitted that the Petitioners Trust being an Educational Institution was registered under the Societies Registration Act, 1866 and, therefore, it cannot be said to be an establishment within the meaning of the Shops Act. It has been recognised by the Corporation under the Grant-in-Aid Code. Shri Shah further submits that the Trust has also received an exemption under Section 80-G(5) of the Income Tax Act. He also points out that the Educational Institution and the School, both are exempted from the provisions of the Shops Act under Section 4 read with Schedule II Entry 6-F. According to Shri Shah, therefore, the teachers were not entitled to get gratuity under the Payment of Gratuity Act and the Petitioners were not liable to make payment of gratuity under the said Act. Their liability is restricted under the Grant-in-Aid Code which governs their financial affairs viz., the remuneration of the teachers including gratuity.
6. Ms. Trivedi, the learned advocate for the Respondent teachers has strongly supported the order of the Appellate Authority. She has relied on a Notification dated April 3, 1997 issued by the Central Government in exercise of its powers under Section 1(3)(c) whereunder the Payment of Gratuity Act is made applicable to the educational institutions. According to her therefore it is futile for the petitioners to say that theirs being an educational institution is not governed by the Payment of Gratuity Act. The said Notification reads as under:
'Payment of Gratuity Act, 1972: Notification under Section 1(3)(c):
Applicability of Act to Educational Institutions.
Notification F.No.S-42013/1/95-S.S.II dated April 3, 1997.
In exercise of the power conferred by clause (c) of Sub-section (3) of Section 1 of the Payment of Gratuity Act, 1972 (4 of 1972), the Central Government hereby specifies the educational institutions in which 10 or more persons are employed, or were employed on any day of the preceding 12 months, as a class of establishment to which the said Act shall apply with effect from the date of publication of this Notification provided nothing contained -in this Notification shall affect the operation of the notification of the Ministry of Labour No. 5.0.259 dated January 8, 1982'.
7. Ms. Trivedi has drawn my attention to the definition of 'commercial establishment' given in Section 2(4) of the Shops Act. She submits that the present educational institution is admittedly registered under the Societies Registration Act, 1866 and such a society has been specifically included in the definition as a commercial establishment. The definition also includes a charitable or other trust whether registered or not. According to her, therefore, the present educational institution that is the trust and the School both are within the purview of the Shops Act and, therefore, they squarely fall within the initial zone of applicability given under Section 3-A of the Payment of Gratuity Act. According to her even in the absence of the specific notification issued under Section 1(3)(c) of the Act the educational institution and the school stand per se covered under the Payment of Gratuity Act. To remove all the doubts and controversy the Central Government has issued the aforesaid specific notification to bring in the net of the Payment of Gratuity Act, the educational institutions. The learned advocate has relied on the following Judgments:
1. Premlata Digambar Raodeo v. Principal, St. Phelomine's Convent High School, Nasik and Ors. : (1997)IILLJ1050Bom .
2. General Education Academy, Chembur, Mumbai v. Smt. Sudha Vasudeo Desai and Ors. : (2001)IILLJ273Bom .
Shri Shah has relied on the following judgments:
1. Ruth Soren v. Managing Committee, East I.S.S.D.A. and Ors. : (2001)ILLJ165SC .
2. Sethsoorajmal Jalan Balke Vidyalaya (Secondary School) and Anr. v. Controlling Authority and Ors. : (2001)ILLJ1249Cal .
3. H.E. Education Society, Bharkheda, Bhopal v. Appellate Authority : (2001)ILLJ691MP .
There is no dispute in respect of the notification issued by the Central Government under Section 1(3)(c) of Payment of Gratuity Act to apply the provisions of the P.G. Act to the educational institutions. Shri Shah himself has fairly produced the said notification. In view of the said notification there is absolutely no doubt that the present educational institution - the trust and the School are squarely and specifically brought under the net of the P.G. Act. The petitioners, therefore, cannot escape from the applicability of the Act and, therefore, they cannot avoid the liability to pay gratuity to their teachers under the provisions of the P.G. Act. It is futile and absurd to say that the petitioners are covered by the circular issued by the Corporation in respect of the gratuity under the Grant-in-Aid Code and that legislative mandate cannot override the said circular which has to perforce yield to the notification issued by the Central Government under Section 1(3)(c) of the Act to apply the Payment of Gratuity Act to the educational institutions like that of the Petitioners. It would be open for the Petitioners to demand additional Grant-in-Aid from the Corporation for the purpose of payment of gratuity in view of the said notification and the Corporation would certainly be bound to comply with the said legislative mandate in respect of gratuity payable to the teachers employed in the Schools recognised by the Corporation under the Grant-in-Aid Code. The Corporation cannot defy the legislative mandate by not making additional grant in aid to the schools to meet the increased liability in respect of payment of gratuity under the P.G. Act, 1972.
8. There is absolutely no substance in the submission of Shri Shah that the petitioners are exempted from the provisions of the Shops Act and, therefore, they do not fall within the definition of establishment even under the Act. The Petitioners are included in the definition of commercial establishment given by the Shops Act which reads as under:
'2. Definitions: In this Act, unless there is anything repugnant in the subject or context, -
1. ................
2. ................
3. ................
4. 'Commercial establishment' means an establishment which carries on, any business, trade or profession or any work in connection with, or incidental or ancillary to, any business, trade or profession (and includes establishment of any legal practitioner, architect, engineer, accountant, tax consultant or any other technical or professional consultant and also includes) a society registered under the Societies Registration Act, 1866 (XXI of 1866), and a charitable or other Trust, whether registered or not, which carries on (whether for purposes of gain or not) any business, trade or profession or work in connection with or incidental or ancillary thereto but does not include a factory, shop, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment.'
Admittedly the Petitioners' Trust is registered under the Societies Registration Act, 1866 and therefore, it squarely falls within the above definition. There is no doubt that Schedule II of the Act gives exemption to the establishments pertaining to any kind of educational activities as indicated at Entry 6-F of Schedule II. That does not mean that the petitioners have ceased to be establishment or commercial establishment within the meaning of the Act, They continued to be the establishment under the Act but they are exempted from the provisions of the said Act. Unless and until one is covered by the enactment it cannot be said that one is exempted from the provisions of such enactment The Petitioners certainly are establishments and, therefore, they were exempted from the provisions of the Shops Act. The Payment of Gratuity Act does not say that it would apply to the establishments which are governed by the Shops Act. It only indicates that an establishment within the meaning of that Act would be covered by the P.G. Act. The Petitioners squarely fall within the meaning of the establishment given under the Shops Act. It, therefore, cannot be said that merely because there is exemption from the provisions of the Shops Act they have ceased to be establishments. However, if they cease to be such establishment they will also cease to get exemption from the said Act. If any establishment satisfies the meaning given under the Shops Act, it will surely attract Section 1(3)(b) and 1(3)(c) of the P.G. Act which read as under:
'1. Short title, extent, application and commencement -
(3) It shall apply to -
(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 day 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.'
Considering from any angle the Petitioners School escapes from the clutches of the P.G. Act, either Section 1(3)(b) or 1(3)(c). Even if it slips through Section 1(3)(b), Section 1(3)(c) will not allow it to slip further from the provisions of the Act.
9. Furthermore our Division Bench in the case of Premlata (supra) has specifically held that the educational institution is an establishment covered by the Payment of Gratuity Act. The Judgments relied on by the learned advocate for the Petitioners do not apply in the present case. Before the Supreme Court the definition of establishment under Bihar Shops and Establishments Act, 1953 was under question. It was not a case of Payment of Gratuity Act but it was a case of termination of a teacher from the educational institution and he had challenged the same under Section 26(2) of the said Act. Even the Judgment of the Calcutta High Court in the case of Seth-Soorajmal Jalan (supra) will not apply in the present case. A learned single Judge of that High Court has held that a teacher was not an employee within the meaning of Payment of Gratuity Act though the educational institution was an establishment. It appears that attention of the learned Judge was not drawn to the notification issued by the Central Government to apply the Payment of Gratuity Act to the educational institutions. Similarly the judgment of the Madhya Pradesh High Court also is not of any assistance to Shri Shah, as the questions before the learned Judges was whether the teacher could be called on employee. In my Judgment in the case of General Education Academy, Chembur, Mumbai v. Smt. Sudha Vasudeo Desai and Ors. (supra). I have discussed the whole issue at great length and have concluded that teacher is an employee entitled to get Gratuity. I still continue to hold the same view.
10. We also cannot lose sight of very crucial aspect in the present matters. There is no dispute that the Petitioners are governed by the Maharashtra Employees of Private Schools (Conditions of Service) Regulations Act, 1977. The definition of employee given in this enactment should clear all the doubts in any corner that a teacher is an employee under the said Act. It has been statutorily declared by the legislature that a teacher is an employee. If that is so he is certainly protected by the Payment of Gratuity Act also. As an employee employed in the establishment called educational institution is certainly entitled to get the benefits of gratuity under the Payment of Gratuity Act. Under the MEPS Act Rules have been framed and Rule 28(2) also provides for payment of gratuity to the teachers.
11. Shri Shah for the petitioners tried to submit that the educational institution is neither a commercial establishment nor is an industry, and therefore, this class of establishment should be treated differently from the ordinary commercial avocations. I entirely agree with his submissions and I have also no doubt in my mind that imparting of education is in the nature of mission or a noble vocation. I have also no doubt that a teacher educates children, he moulds their character, builds up their personality and makes them fit to become responsible citizens. I further entirely agree that the children grow under the care of teachers. No one would have two opinions in this regard except when the time comes for making a sacrifice in favour of the teachers in the form of gratuity to be paid to them as a return for their holding the torch of the noble mission high. We tend to forget the aforesaid ideal when a teacher is superannuated and is denied gratuity. We further forget that even the teachers who are the noble missionaries have their own families, have their own children, they also have to impart education to their own children and to grow them as good citizens and to build their characters and for that purpose they also have to pay tuition fees besides, the expenses for marriages of their daughters and sons. All the aforesaid items cannot be purchased without hard cash in the hands of the teachers who have hardly any legitimate source of livelihood after they reach the age of superannuation. The Petitioners as educational institution ought not to have been reluctant to contribute their mite to the retiring teachers by way of making payment of gratuity accompanied by good garland of farewell.
12. I, therefore, do not find any substance in these petitions. The Appellate Authority has rightly come to the conclusion that the Payment of Gratuity Act is applicable to the educational institution of the Petitioners' establishment. I do not find any illegality and infirmity in the said judgment and order of the Appellate Authority granting the full amount of gratuity to the teachers payable under the said Act with simple interest at the rate of 10% p. a. from the date of the gratuity becoming payable. If the teachers were entitled to get gratuity on the date of their superannuation and if they were denied the same they are also entitled to get interest on the said amount of unpaid gratuity. The Appellate Authority has provided only 10% simple interest though under the Act 15% compound interest is provided for. Since the Petitioners are an educational institution running the school I am not inclined to enhance the term of interest in any manner. Rule in all the three Petitions is discharged. No order as to costs.