http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 2  

CASE NO.: Appeal (civil) 5956-5958  of  1999

PETITIONER: E I D  PARRY (I) LIMITED

       Vs.

RESPONDENT: G. OMKAR MURTHY & ORS.

DATE OF JUDGMENT:       27/03/2001

BENCH: S. Rajendra Babu & S.N. Variava

JUDGMENT:

J  U  D  G  M  E  N  T RAJENDRA BABU,  J. : L...I...T.......T.......T.......T.......T.......T.......T..J

   In  these  cases the respondents-employees were  in  the employment of the appellant between the years 1958 and 1984. On   October  1,  1984   voluntary  retirement  scheme   was introduced  and the respondents availed of that benefit  and left  the services after obtaining the terminal benefits  as provided   under   the  Payment  of   Gratuity   Act,   1972 (hereinafter  referred to as the Central Act].  Thereafter petitions  were filed under Section 44 of the Andhra Pradesh Shops  and Establishments Act, 1966 (hereinafter referred to as  the  State  Act] claiming the difference  between  the gratuity  received  by them and the gratuity  payable  under Section 40 of the State Act.  Before the Authority under the State  Act, three objections were raised that (i) there  has been  inordinate  delay in preferring the claim;   (ii)  for payment  of gratuity the Central Act prevails over the State Act,  and  (iii) the question whether the  gratuity  payable under  the Central Act is more favourable than the State Act could  not  be examined by the trial court  concerned.   The trial  court,  however,  gave relief to  the  workmen.   The appellate  authority  dismissed  all   the  three   appeals. Revision  petitions  filed before the High Court also  stood dismissed.  Hence these appeals by special leave.

   Four contentions are put forth before us, namely, that

   (i)  The  Central  Act prevails over the  State  Act  by virtue  of Article 254 of the Constitution and Section 40(3) is invalid and the claims are unsustainable;

   (ii)  Section  40(3) of the State Act stood repealed  on the  coming  into  force  of the Andhra  Pradesh  Shops  and Establishments  Act, 1988 and gratuity became payable  under Section  47(5) of the State Act where payment of gratuity is not payable under the Central Act;

   (iii)  Section  14  of the Central Act  overrides  other enactments in relation to gratuity, and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 2  

   (iv)  The respondents have been paid gratuity under  the Central  Act  for  the period covered and  for  the  balance period  of  service  gratuity is paid under  the  prevailing trust scheme.

   At  the  relevant time when the respondents  voluntarily retired  from  service  the definition of  employee  under Section  2(e)  of  the Central Act read as  not  to  include employee  whose wages exceeded Rs.  1,000/- per mensem while the  respondents-employees were all getting wages more  than Rs.   1,600/-  per  mensem and, therefore, the  Central  Act could  not  be  applied.   If that is so,  it  is  certainly permissible  for the respondents to have made an application for  payment  of gratuity under Section 40(3) of  the  State Act.   Further the scheme of the Central Act would  indicate that it would not be applicable in cases where the State Act is  more beneficial than the Central Act.  In this case, the finding  is  that the State Act is more beneficial than  the Central  Act.   Therefore,  the  contentions  sought  to  be advanced  on  behalf  of the appellant as to  repugnancy  or otherwise  of the State Act would not arise at all.  If both the enactments can co-exist and can operate where one Act or the  other  is not available then we find no  difficulty  in making  the  State  Act  applicable on  the  fact  situation available  as has been done in the present case.  Therefore, we  find  that  the  contentions raised  on  behalf  of  the appellant are unsustainable.

   Shri  Narayan  B.  Shetye, the learned  Senior  Advocate appearing  for the appellant, submitted that the Central Act is  a  complete  code  containing  detailed  provisions  and creates  right  of payment of gratuity and,  therefore,  the Central Act should prevail over the State Act.  Reliance has been placed on the decision of this Court in State of Punjab v.   Labour  Court, Jullundur & Ors., 1980 (1) SCR 953.   In that case the issue before the Court was whether for payment of  gratuity  an  application could be  made  under  Section 33-C(2)  of  the Industrial Disputes Act, 1947, and  it  was held  that such an application could not be filed under  the said  Act.   Therefore,  this  decision  cannot  be  of  any assistance  to the appellant inasmuch as the question before us  is whether the Central Act or the State Act would  apply for payment of gratuity.

   The  decision  in  M.S.R.  Murthy  v.   Arva  Somayajula Yagneswara Chenulu, 1985 LAB I.C.  189, also is of no use to the  appellant  inasmuch  as the State Act is  held  not  to operate  to  the  extent the Central Act prevails.   In  the present  case, on facts, it is found that the Central Act is not applicable.

   Therefore,  we find no substance in any of the arguments advanced  by  the appellant.  The appeals, therefore,  stand dismissed.  No costs.