The Chandarlapadu Large Size Coop.Credit Society Ltd v. The Appellate Authority under sec.53

A.P.Shops&Establishments Act,1988& Asst. Commr.of Labour, Vijayawada, Krishna Dist. And 2 others .....RESPONDENTS ORDER: Seeking to quash the order of the 1st respondent dated 31.08.2002, passed in A.P.S.E/Appeal No.1 of 2000, the present writ petition is filed. It is the case of the petitioner society that the 3rd respondent worked as an Accountant in the petitioner society and retired on 30.06.1998 and the petitioner society paid an amount of Rs.4,000/- towards Gratuity as per the provisions made under Service Regulation No.15 of the Provisions of Special Bye-laws relating to Service Conditions of the employees of the petitioner Society. Being aggrieved, the 3rd respondent has filed an application before the 2nd respondent under Section 50 of A.P.Shops & Establishment Act, 1988 (for short ‘the Act’) in A.P.S.E.Case No.11 of 2000 and the 2nd respondent, by order dated 04.12.2001, directed the petitioner society to pay gratuity/service compensation of Rs.43,335/- after deducting Rs.4,000/- already paid, leave salary two months i.e.

Rs.5,410/- and compensation amounting to Rs.4,87,450/- being ten times value of the reliefs claimed. Aggrieved by the said order, the petitioner society preferred an appeal before the 1st respondent in A.P.S.E./Appeal No.1 of 2000 and the same was dismissed confirming the order the 2nd respondent. The petitioner society is running on loss of Rs.50,67,455-98 ps as per the Audit Report for the year 1998-99. The A.P.Shops and Establishment Act, 1988 has no application to the employees working in the petitioner Society. Challenging the order of the 1st respondent, the present writ petition is filed. Heard the learned counsel on either side. The learned counsel for the petitioner contended that as per the special byelaws relating to service conditions of the employees working in the petitioner society, the 3rd respondent is entitled for only a maximum of Rs.4,000/- towards gratuity and this aspect has not been considered by both 1st and 2nd respondent authorities and therefore, the findings are perverse.

On the other hand, the learned counsel appearing for the 3rd respondent contended that under Section 47(3) of the A.P.Shops & Establishment Act, the petitioner is entitled for service compensation, which is a statutory one and the case falls within the meaning of Sec.47(3) of the Act. Before the original authority the 3rd respondent filed an application under Section 51 of the Act, seeking for service compensation. On considering the evidence on record, the original authority directed the petitioner society to pay the service compensation for 35 years service rendered by the 3rd respondent. Challenging the same, the petitioner filed an appeal before the appellate authority and the appellate authority dismissed the same confirming the order of the original authority, against which the present writ petition is filed. The scope of judicial review is very much circumscribed. Unless the findings of the authorities are based upon no evidence or perverse, normally this Court will not interfere with such findings.

The contention of the learned counsel for the petitioner that when the 3rd respondent was paid the gratuity as per the byelaws, the question of payment of any service compensation under the A.P.Shops and Establishment Act, does not arise. He also contended that under Section 116(c) of A.P.Cooperative Societies Act, 1964 the monetary benefits have to be restricted and as per the said section the petitioner is entitled only for Rs.4,000/- towards gratuity. The said contention is raised for the first time before this Court. In any view of the matter there is no evidence with regard to profits and losses of the petitioner society prior to 1998. Therefore, the contention of the learned counsel for the petitioner that the depending upon the profits the petitioner is entitled for gratuity or service compensation is unacceptable in the absence of any pleadings and evidence. The contention of the learned counsel for the petitioner is that as per para-15 of the Byelaws when a person rendered service for over 30 years, he is entitled for the payment of gratuity subject to the maximum of Rs.4,000/- and that amount has already paid to the 3rd respondent.

The byelaws of the petitioner society have no statutory force and hence the contention of the learned counsel for the petitioner cannot be accepted. Section 47 of the A.P.Shops & Establishment Act, 1988 is overriding the statutory provisions. It is not dispute before this Court that the A.P.Shops & Establishment Act, 1988 governs service conditions of the 3rd respondent. Section 47(3) of the said Act reads as follows: Section 47: Conditions for terminating the services of an employee, payment of service compensation retirement, resignation, disablement, etc., and payment of subsistence allowance for the period of suspension: termination, Section 47 (3):

Every employee who has put in a continuous service of not less than one year shall be eligible for service compensation amounting to fifteen days average wages for each year of continuous employment, (i) on voluntary cessation for his work after completion of 60 years of age, (iii) on his resignation, or (ii) on physical or mental infirmity duly certified by a Registered Medical Practitioner or (iv) on his death or disablement due to accident or disease; Provided that the completion of continuous service of one year shall not be necessary where the termination of the employment of an employee is due to death or disablement; Provided further that in case of death of an employee, service compensation payable to him shall be paid to his nominee or if no nomination has been made to his legal heir.

The above provision makes it clear that when an employee has put in a continuous service of not less than one year is entitled for compensation amounting to 15 days average wages for each year of continuous employment.