CASHEW DEVELOPMENT CORPORATION Vs. SAROJI AMMA

JUDGEMENT

(1.) IN all these original petitions the Kerala State Cashew Development Corporation (for short 'the Corporation') figures as the petitioner (s ). Brief facts necessary for the disposal of the original petitions are as follows:

(2.) A number of cashew factories originally, owned by various persons were taken over by the State of Kerala and handed over to the Corporation from July 6, 1988 by a notification issued under Section 4 of the Kerala Cashew Factories (Acquisition) Act, 1974. Along with the factories, the workers therein were taken over by the Corporation. After such taking over, the workers have been retiring from time to time on attaining the age of superannuation. The question arose as to who is to pay the gratuity due to the workers under the Payment of Gratuity Act, 1972 (Act 39 of 1972) and the Rules. The Corporation took the stand that they are liable to pay only that portion of the gratuity as is relatable to the period subsequent to July 6, 1988, whereas the case set up by the workers is that inasmuch as the Corporation has taken over the factory along with the workers, the liability to pay the entire gratuity is that of the Corporation. The owners of the factory supported the aforesaid stand of the workers which has been upheld by the Controlling Authority and the Appellate Authority under the Act which was affirmed by a learned single Judge and later by the Division Bench of this Court. Aggrieved by the judgment of this Court, the Corporation moved the Hon'ble Supreme Court in Civil Appeal Nos. 8115 and 8365-66 of 1995 arising out of S. L. P. (C) Nos. 6036/1993, 7509/1994 and 8203/1994. The Hon'ble Supreme Court disposed of the matter in the following terms:

(3.) THE question that falls for consideration is whether the Corporation is liable to pay only that portion of the gratuity as is relatable to the period between July 6, 1988, the date of taking over and May 12, 1994, the date on which the Supreme Court declared the take over as null and void, or whether the Corporation is liable to pay the entire gratuity regardless of the length of service rendered by the workers under them. According to the Corporation, the employees are entitled to get the gratuity only for the period they worked under the Corporation. If this argument is accepted, the Corporation will have no liability to pay gratuity in respect of workers who have put long years of service and retired during the take over period, since the liability of the Corporation will be confined only for the limited period under which they were in control of the factories. The Corporation has a further case that they ought not to have been burdened with the liability for payment of gratuity to the workers for the services rendered by them under the owners. It was also submitted that the Corporation does not legally come within the definition of the term "employees" and therefore the orders passed by the Controlling Authority and the Appellate Authority under the Act fastening them with the liability to pay gratuity to the workers is unsustainable. Yet another contention advanced by the Corporation is that having regard to the unequivocal declaration of the Hon'ble Supreme Court that the taking over of the factories by the Government and management by the Corporation as null and void, the liability of the Corporation was only in respect of the recurring labour dues while the factories were in its custody and not to pay any gratuity. According to the Corporation, the gratuity is to be fixed depending on the duration of the employment under them. In that view, they would contend that it has no liability to pay gratuity to the workers for their past services rendered under the respective owners. The specific case pleaded by the Corporation is that since the liability for payment of gratuity arises only once when the employee is superannuated taking into account the entire service of the employees, the major part of which was under the owners in which case their liability can be restricted to the period during which the employee worked under it. In the aforesaid view, the orders passed by the statutory authorities, fixing the entire liability on the Corporation cannot be legally sustained. Per contra, it was contended by the owners that the factories were acquired as per Section 3 of the Act with effect from July 6, 1988 and that the factories have since been vested with the Corporation under Section 8 of the Act. The owners have ceased to be employees of the factories with effect from the date of vesting viz. July 6, 1988. Reliance is also placed on Section 10 of the Act which stipulates that all workers who come under the rainbow of the Industrial Disputes Act are all statutorily transferred to the Corporation and they continue their employment under the Corporation until their services are duly terminated. According to the owners, as per the definition of the expression "employer" specified in Section 2 (f) of the Payment of Gratuity Act as one who has ultimate control of the affairs of the factory at the time when cause of action originated, viz. superannuation, the Corporation was the employer and in that view, by virtue of Section 4 (2) of the said Act determination and fixation of liability for payment of gratuity can be legally passed against the Corporation only.