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M/S Postal Industrial Co-Operative Society Ltd. v. State Of U.P. & Others - WRIT - C No. 35270 of 2007  RD-AH 13396 (2 August 2007)
Court No. 21
Civil Misc. Writ Petition No. 35270 of 2007
M/s Postal Industrial Cooperative Society Ltd., Civil Lines, Aligarh Vs. State of U.P. & Others
Hon. Arun Tandon, J.
Heard learned counsel for the parties.
Petitioner, M/s Postal Seals Industrial Cooperative Society Ltd. is a society duly registered under the provisions of Societies Registration Act, 1860 having its registered office at Alligarh within the territory of Uttar Pradesh. The said society has entered into an agreement with the Union of India for manufacture of postal seals. Respondent nos. 4 and 5 were employed as workmen in the said society and were admittedly paid for the work discharged by them, at piece rate basis.
Respondent nos. 4 and 5 filed applications under the provisions of Payment of Gratuity Act, 1972 before the Prescribed Authority, as notified by the State Government, namely, Deputy Labour Commissioner, Agra Region, Agra. The applications were registered as Application Nos. 23 and 29 of 2003. The applications were rejected under order dated 24th September, 2005. Respondent nos. 4 and 5, workmen not being satisfied, filed separate appeals under the provisions of Payment of Gratuity Act, 1972 before the appellate authority, which were numbered as Appeal Nos. 03 of 2006 and 04 of 2006 respectively. Both the appeal have been clubbed together and decided under common order dated 28th July, 2006. The appellate authority has recorded that respondent nos. 4 and 5 are entitled to the gratuity in terms of the payment of Gratuity Act, 1972 and the employers have been directed to ensure payment thereof accordingly.
This order of the appellate authority so passed is being challenged by the petitioner-employers by means of the present writ petition on the following grounds:
(a) Under terms and conditions of the agreement, entered into between the registered society and the Union of India, a copy whereof has been enclosed as Annexure-1 to the writ petition, the competent authority is the Central Government of India and therefore, nomination of the Controlling Authority/ Prescribed Authority under the Payment of Gratuity Act, 1972 with reference to Section- 2(2) has necessarily to be made by the Central Government. Therefore, the Deputy Labour Commissioner nominated by the State Government has no jurisdiction to try the applications.
(b) The agreement provides for an arbitration clause, and therefore, the workmen should have approached the Arbitrator appointed under the said agreement.
(c) Lastly it is contended that respondent nos. 4 and 5 are share holders of the registered society and they had transferred their shares in favour of their sons. Such persons necessarily do not answer the description of workmen and therefore, not entitled to payment of gratuity.
I have heard learned counsel for the parties and have gone through the records of the present writ petition.
All the contentions raised on behalf of petitioner are totally misconceived and are being dealt with hereunder point wise.
With regard to the first objection that Central Government is the competent authority in terms of the agreement entered into between the registered society and the Union of India, this Court may record that such agreement shall not in any way effect the provisions of Payment of Gratuity Act. Agreement is a bilateral settlement of terms between the parties qua the contract for manufacture of postal seals. Such bilateral terms will not in any way dilute the statutory provisions of the Payment of Wages Act. Even otherwise this Court may record that the Central Government has been declared to be competent authority under the agreement only for the issues which arises out of such agreement of manufacturing of postal seals between the parties. The declaration of the Central Government as the Competent Authority under the agreement has no bearing on the issues with qua the competent authority referable to the Payment of Gratuity Act. It is on record that the petitioner society is duly registered under the State of Uttar Pradesh as cooperative society. It is also not in dispute that it answers the description of an industry and therefore, the State Government is competent to appoint a Controlling Authority under the provisions of Payment of Gratuity Act, which had been so done by authorising the Deputy Labour Commissioner, to exercise such powers. Consequently it cannot be said that the Deputy Labour Commissioner had no jurisdiction to entertain and decide the applications filed by respondent nos. 4 and 5. Ground no. (1) is accordingly rejected.
Ground no. 2:
With regard to the ground no.2 that the agreement entered into between the registered society and the Union of India, provides for an arbitration clause, and therefore, the workmen should have approached the Arbitrator appointed under the said agreement., this Court may record that the provisions of the agreement providing for appointment of Arbitrator will have no application qua the dispute covered by the statutory provisions of Payment of Gratuity Act, 1972. Moreover the agreement, which is entered into between the Union of India and registered society can have no effect on the legal rights of an individual workman qua his dues against the society. The agreement entered into between the registered society and Union of India cannot bind nor effect the individual workmen, so far as his entitlement to gratuity under the statutory provisions of Payment of Gratuity Act, 1972 are concerned. Consequently no arbitration can be made nor can be entered into in respect of dispute pertaining to the Payment of Gratuity to the workman employed in the petitioner society. Ground no.2 is accordingly rejected.
Ground no. 3:
With regard to the ground no.3, this Court may record that share holders in cooperative society can have a dual capacity, first that of share holder and second in the capacity of a workman, both are entirely distinct and rights to the person under these two different capacities, can be enforced separately in accordance with the provisions applicable. Consequently transfers of share holding will have no bearing on the issue of Payment of gratuity to the workmen concerned.
Learned counsel for the petitioner has referred to the judgment of the Hon'ble Supreme Court of India in the case of National Textile Corporation Vs. Additional Labour Commissioner & Others reported in 1987 (54) FLR 299, the facts of the said case are clearly distinguishable and the judgment relied upon has absolutely no bearing on the controversy at hand. Similarly the judgement relied upon in the case of M/s Bharat Pumps and Compressor Ltd. Vs. Regional Laobur Commissioner (Central) and Appellate Authority (under Payment of Gratuity Act) Kanpur & Others reported in 2003 (97) FLR 221 deals with the issue of controlling authority with regard to a Corporation owned by the Union of India, the facts of aforesaid case also have no application, vis-a-vis the dispute in hand. As already noticed herein above, it may be again recorded that the petitioner society has its registered office at Lucknow and is not owned by the Union of India.
In view of the aforesaid, there is no illegality or infirmity in the order impugned, so as to warrant any interference under Article 226 of the Constitution of India.
The writ petition is accordingly dismissed.
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