PRASHANTA KUMAR CHATTERJEE Vs. STATE OF WEST BENGAL

JUDGEMENT

(1.) The present writ petition has been filed by challenging the judgment and decision of the Appellate Authority under the Payment of Gratuity Act dated 26th of August, 1988 (In Re. M/s. Alliance Mills (Lessees) Pvt. Ltd. v. Prashanta Kumar Chatterjee and others) by reversing the decisions of the Controlling Authority, Barrackpore. There is a prayer for consequential reliefs to command the respondent No. 4 to pay the petitioner a sum of Rs. 17,596.85 with accrued interest. It is stated in detail that the petitioner was employed as a Clerk, under M/s. Alliance Jute Mill Co. Ltd., in or about 1944. The petitioner is alleged to have drawn his last Salary to the tune of Rs. 1,220/- per month and claimed to be an Industrial Worker within the meaning of the Industrial Disputes Act. The original company had two different divisions, known as "South Mills" and "North Mills". It is further stated that on or about November 4, 1968, the management of the aforesaid "South Mill under the Original Company" declared Closure of the said mill. The said mill remains closed for a period of 22 months. By a Tripartite agreement, described as "Memorandum of Settlement", dated August 19, 1970, the respective rights of the management and the workmen were incorporated for running of the industry. It was agreed that all liabilities in respect of all workmen who may be employed by the intending lessees except those who were the permanent or provident fund members of the company while in employment of the company will be of the intending Lessees and with the expiry or determination of the termination their lease such workmen shall be entitled to notice and compensation as provided in section 25 FF of the Industrial Disputes Act from the intending Lessees and the Company shall not be liable to accept the continuity of Service of such newly appointed workmen or to take them in employment. There we other various terms and conditions protecting the rights of the management and the workmen. The grievance of the petitioner is that or about September 1, 1985, the petitioner, after having rendered 42 years of continuous service was so superannuated. Therefore, on or about September 17, 1985, the petitioner upon the compliance of the provisions of the Payment of Gratuity Act, 1972 and the Rules framed thereunder and in exercise of the power conferred under subsection (1) of section 7 of the Payment of Gratuity Act, 1972, filed his claim in Form 'I', inter alia, claiming a sum of Rs. 28,153.85 at the rate of 15 days wages against each year of service. It is alleged that the said application in Form No. "I" was admittedly received by the respondent No. 4. The respondent No. 4 in violation of the sub-rule (1) of Rule 8 of the West Bengal Payment of Gratuity Rules, 1973, failed and neglected to inform the petitioner in Form "M" that is notice admitting or rejecting of the payment of Gratuity. The petitioner, however, filed an application on 20th December, 1985 for direction before the respondent No. 2, the Controlling Authority under case No. B 3624/G-1/86/ALC praying for a necessary order to direct the management to pay the petitioner a sum of Rs. 28,153.85 as Gratuity. The said application was forwarded to the Respondent No. 4 with a direction to file a statement. The Respondent No. 4 filed its written statement. The Controlling Authority after heating both sides, upheld the continuity of the petitioner's service and rejected the stand of the respondent No. 4 that the Respondent No. 4 has no liability prior to August 5, 1970 and as such the petitioner is not entitled to Gratuity prior to September 13, 1970 and there is no liability to Respondent No. 4. The Controlling Authority duly considered all the aspects and after adjustment of the payment as already received by the petitioner, directed to the respondent No. 4 to make payment of a sum of Rs. 17,596.85. Being aggrieved by and/or dissatisfied with the said order dated June 12, 1987, the respondent No. 4 preferred an appeal. The Appellate Authority has reversed the decision of the Controlling Authority holding, inter alia, that the employees concerned are entitled to payment of Gratuity from the respective date of employment under the appellant and not from their date of payment under the lessor. It was clarified that the employees shall be entitled to payment of Gratuity for the full period of continuous service under the lessee company from the date of the operation of Mill by them.

(2.) The petitioner has challenged the said decision by filing the present writ petition on the ground that the Appellate Authority failed to appreciate the impact of section 25FF of the Industrial Disputes Act and it should have held that the petitioner is entitled to the benefit of the continuous service as stipulated under section 2A of the Payment of Gratuity Act, 1972. The specific grievance of the petitioner is that the Transferee Company cannot avoid the liability of the transferor company and upon proper construction of the Memorandum of Settlement dated August 19, 1970 should have appreciated that the continuity of service of the employees under the claim as made by the petitioner cannot be defeated. It is placed on record that in view of the fact that no new standing order is enforced in the mill, and it was basically stipulated in the Tripartite settlement that the employment of the workmen would be governed by the self same standing orders and the standing order itself provides that notwithstanding the change in the event of the transfer of the ownership and/or the management of the mill, the workmen shall remain unaffected as regard continuity of service and as such the Appellate Authority should have held that the Controlling Authority was justified in issuing the directions.

(3.) The writ petition is opposed by the Respondent No. 4. It is placed on record that the tripartite settlement is a settlement under the Industrial Disputes Act arrived at, in course of Conciliation Proceedings and it deals with the liabilities and obligations of the Lessee who took on lease the machinery and certain other accessories in the factory from the erstwhile owner, the lessor company vis-a-vis the workmen employed in the said Factory. The lessor company took upon itself with regard to certain specific obligations until the date of execution of the lease and shifted the liability for the sub-sequent period to the lease on the lessee company. It is made clear that in the said tripartite settlement neither the lessor nor the lessee has my liability in respect of the periods which are specifically excluded by the said settlement. The said tripartite settlement was arrived at in course of Conciliation proceedings under the provisions of the Industrial Disputes Act and the same is binding not only on the actual parties to the Industrial Dispute but also on the heirs, successors or assigns of the employer on the one hand and all the workmen in the establishment. It is, however, claimed that the Tripartite Settlement has not taken away any statutory right of the workmen. It is made clear that such rights and claims would be paid in any event either by the lessor or by the lessee whose liability to make such payment, is specific clauses of the lease. It is highlighted that the lessee company had given employment to some of the employees who appeared to have had employment prior to the lease. The lessee company has never denied the payment of the gratuity to the employees employed by it on execution of the lease. On the contrary, the lessee company had offered payment and/or is still agree-able to pay Gratuity to its employees whatever amount is payable since they had taken the assets of the company on lease for running a fresh business. They claim that "there is no break in service" cannot be contended on the face of the Tripartite Settlement. The terms of the Tripartite Settlement clearly provide that the lessee would give employment to such persons, as may be required, who might have been in employment with the lessor. It is no where provided that there will be a continuation of service of the workman to be employed by the lessee company. It is claimed that the lessee company is the employer within the meaning of sub-section (f) of section 2 of the Payment of Gratuity Act, 1972, only with effect from the date they started operation of the South Mill Factory, that is from 13.9.1970 and they have ultimately controlled only with effect from 13.9.1970 in relation to the factory of the South Mill and not earlier than that. According to the said respondent, the South Mill was closed down from 4.11.68 to 12.9.70 that is for a period of nearly two years and in the said memorandum of settlement dated 19.8.70 to which the workmen were parties, the fact of closure of the South Mill Factory and the owner's inability to re-open it was accepted by the workmen represented by their Trade Unions. All other allegations of the writ petitioners have been denied. The impugned order has been supported as being lawful and justified.