CSI Mission Hospitals Dharapuram v. Joint Commissioner of Labour & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 10.02.2011CORAM:THE HON’BLE MR. JUSTICE K.CHANDRUW.P.Nos.3907 to 3909 of 2004CSI Mission HospitalsDharapuramErode District 638 656rep.by its AdministratorMr.John Wessly .. Petitioner in all W.Ps.Vs.1.The Appellate Authority under thePayment of Gratuity Act, 1972Joint Commissioner of LabourCoimbatore 2.Controlling Authority under thePayment of Gratuity Act, 1972 Asst.Commissioner of LabourSalem 636 007 .. Respondents 1 & 2 in all W.Ps.3.Vasantha Kumari .. Respondent 3 in W.P.3907/20044G.Jayapackiam .. Respondent 3 in W.P.3908/20045Marthal Williams .. Respondent 3 in W.P.3909/2004 Prayer in W.P.No.3907/2004:Petition under Article 226 of theConstitution of India praying for a Writ of Certiorari and quash theorder dated 25.8.2003 passed by the 1st respondent in AGA 39 of 2002confirming the order dated 26.2.2002 passed by the 2nd respondent inG.A.No.72 of 2000.Prayer in W.P.No.3908/2004:Petition under Article 226 of theConstitution of India praying for a Writ of Certiorari and quash theorder dated 12.8.2003 passed by the 1st respondent in AGA 37 of 2002confirming the order dated 26.2.2002 passed by the 2nd respondent inG.A.No.73 of 2000.Prayer in W.P.No.3909/2004:Petition under Article 226 of theConstitution of India praying for a Writ of Certiorari and quash theorder dated 25.8.2003 passed by the 1st respondent in AGA 38 of 2002 https://hcservices.ecourts.gov.in/hcservices/ confirming the order dated 26.2.2002 passed by the 2nd respondent inG.A.No.86 of 2000.For Petitioner in all W.Ps :: Mr.Gupta For Respondents in all W.Ps:: Mr.R.Murali, G.A for R1 & R2 No appearance for R3O R D E RThe petitioner in all the three Writ Petitions is the CSIMission Hospitals, Dharapuram. They have challenged the orderspassed by the 1st respondent, the appellate authority under thePayment of Gratuity Act, 1972 made in AGA Nos.39, 37 and 38 of 2002respectively.2. The Writ Petitions were admitted on 25.2.2004. Pending theWrit Petitions, an interim direction was granted by this Courtdirecting the 2nd respondent not to disburse the amounts in favour ofthe contesting 3rd respondent. The said interim order came to be madeabsolute on 9.7.2010. 3. The 3rd respondents are admittedly employees of the petitionermanagement, who are running a Mission Hospital at Dharapuram. The 3rdrespondent in each of the Writ Petitions moved the ControllingAuthority under the Payment of Gratuity Act, 1972, i.e., the 2ndrespondent claiming gratuity for the period of service rendered bythem. The Controlling Authority took up their cases in G.A.Nos.72,73 and 86 of 2000. Before the authority, it was agreed that themanagement of the CSI Mission Hospital is willing to pay gratuity asper the Resolution of the Sub Committee dated 27.1.1985. But, thenthe gratuity will be paid on 50% of the last drawn basic pay. Eventhough the contesting respondents were eligible to gratuity offeredby the management since they are continuing to occupy the quartersowned by the petitioner management, they have withheld the amountspayable towards damages for the unauthorised occupation of thequarters. 4. In their evidence given by the workmen before the ControllingAuthority, they have stated that they are not the tenants of thepetitioner management and the quarters were not allotted in theirnames. In any event, the gratuity cannot be withheld on the groundof refusal to vacate the quarters. As regards the contention of 50%of last drawn wage, it was contended that gratuity had to be paid https://hcservices.ecourts.gov.in/hcservices/ only in terms of the Act and wages will have to be calculated asprovided under the Act. 5. The authority accepting the stand of the contestingrespondents computed the gratuity ranging various amounts by itsfinal order. As against the same, the petitioner management filedappeals under Section 7(7) of the Payment of Gratuity Act, 1972 afterdepositing the amount computed by the Controlling Authority. For thefirst time before the appellate authority, an additional ground wasraised, namely that the petitioner is a 'charitable trust' andtherefore it cannot be held to be an establishment coming within themeaning of Section 2(f) of the Payment of Gratuity Act, 1972. Merefact that the CSI Mission Hospital has decided to have a scheme forgratuity will not make them liable to pay gratuity under the Act. 6. The 1st respondent appellate authority took up those appealsand issued Notices to the contesting respondents. They have alsofiled an appropriate counter statements before the appellateauthority. The petitioner hospital filed a rejoinder dated 'nil'(November 2002) and reiterated their submission. They also reliedupon a judgment of the Calcutta High Court reported in (1993) 3 LLJ(Supplement) 404. The appellate authority however by his order dated25.8.2003 rejected their contention. The authority held that the Actapplies to all establishments covered under Section 1(3)(b) of thePayment of Gratuity Act and the reference made to Section 2(f) is amisnomer where the term 'employer' was also defined. He also heldthat the denial of gratuity on ground of overstaying the quarterscannot be accepted either for withholding or denying gratuity.Support was drawn from the judgment of the Delhi High Court inTexmaco Limited vs. Roshan Singh and others reported in (2001) 2 LLJ1982. Challenging this order, the Writ Petition was filed as notedalready.7. After the Writ Petition was filed, the petitioner also filedan additional typed set containing a Certificate issued by the IncomeTax Department dated 29.5.1992 to the effect that Church of SouthIndia Trust Association is a charitable Trust (CSITA) and consistsof 20 Dioceses and 4 institutions. Under them, there are the variousunits, which include hospitals, schools, colleges, homes run by themunder the respective jurisdiction. They were declared to be acharitable and non-profit making organisation registered underSection 25 of the Companies Act.8. Therefore, the only question that arises for consideration iswhether the petitioner establishment being a charitable trust isexempted under the provisions of Payment of Gratuity Act? https://hcservices.ecourts.gov.in/hcservices/

9. Under Section 1(3)(a) of Payment of Gratuity Act, 1972, theAct applies to every factory, mine, oil field, plantation, port andrailway company. Under Section 1(3)(b), the Act applies to every shopor establishment within the meaning of any law for the time being inforce in relation to shops. Under Section 1(3)(c), if anyestablishment wherein ten or more persons are employed, if notifiedby the Central Government, then to such establishments, the Actapplies.10. The Supreme Court while interpreting Section 1(3)(b) ofPayment of Gratuity Act, 1972 in State of Punjab vs. Labour Court,Jullundur and others reported in 1980 (1) SCC 4, has held that theterm "law" found under the Section not only relate to shops andestablishments but also applies to every establishment within themeaning of any law for the time being in force in relation toestablishments in a State. 11. A Division Bench of this Court in the case of the Managementof SIET Women's College, Madras vs. Mohamed Ibrahim and othersreported in 1992 (1) LLJ 91 has held that in relation to a privateCollege run by a minority institution, since the Provident Fund Actapplies to it, it is also an establishment covered by Section 1(3)(b)of the Payment of Gratuity act.12. Apart from the wider definition of an establishment providedunder Section 1(3)(b) of the Act, the Central Government has alsopower to notify other establishments under Section 1(3)(c) of theAct. The Central Government by a statutory order No.2218 dated22.8.1997 under Sec.1(3)(c) of the Payment of Gratuity Act hadissued the following notification:"S.O.2218. In exercise of the powers conferred byclause © of sub-section (3) of section 1 of the Payment ofGratuity Act, 1972 (39 of 1972), the Central Governmenthereby specifies the trusts or societies, registered underthe Societies Registrtion Act, 1860 (21 of 1860) or underany other law with respect of societies for the time beingin force in any State, in which ten or more persons areemployed or were employed for wages on any day of thepreceding 12 months as a class of establishmetns to whichthe said Act shall apply with effect from the date ofpublication of this notification in the Official Gazette."13. The contention that a particular institution is acharitable institution is not relevant for the purpose ofdetermining the coverage under the Act. The Act applies https://hcservices.ecourts.gov.in/hcservices/ only if any Institution is covered by the provisions of theAct, notwithstanding the nature of activities or thephilanthropical services rendered by them.14. It must be noted that the Supreme Court vide its judgment inChristian Medical College Hospital Employees Union vs. ChristianMedical College, Vellore reported in AIR 1988 SC 37 has held that"those rights which are enforced through the several pieces of labourlegislation in India have got to be applied to every workmanirrespective of the character of the management."15. It was also held by a learned Judge of this Court inManagement of Good Samaritan Rural Development Project vs.T.A.Ramaiah and others reported in (2003) 1 LLN 378 that evencharitable institutions are covered by the provisions of the Act.16. In view of the above, no fault can be found with the orderpassed by the appellate authority. Hence all the three WritPetitions will stand dismissed. No costs. The connectedMiscellaneous Petitions are closed. In view of the dismissal of theWrit Petitions, the contesting respondents are entitled to withdrawthe amounts lying in deposit with the 2nd respondent.ajrSd/Asst.Registrar/true copy/Sub Asst.RegistrarTo1.The Joint Commissioner of LabourThe Appellate Authority under thePayment of Gratuity Act, 1972Coimbatore 2.The Asst. Commissioner of LabourControlling Authority under thePayment of Gratuity Act, 1972 Salem 636 007+ 1 cc to Mr.Govt.Pleader Sr.10048+ 3 cc to Mr.Pupta and Ravi Sr.10116, 117, 119W.P.Nos.3907 to 3909 of 2004VS (CO)RRI/4.3.2011