Employers are jointly and severally liable for payment of gratuity to employee

District Cooperative Central Bank Ltd. Vs Controlling Authority under Payment of Gratuity Act 1972 & Assistant Commissioner of Labour (Andhra Pradesh High Court)

Conclusion: Appellant-bank was jointly and severally liable for payment of the amount of gratuity to the applicant-employee alongwith the existing employer i.e.,  Primary Agricultural Cooperative Society Limited as per the provisions of Payment of Gratuity Act as the expression ‘employer’ in Section 2(f) of the Payment of Gratuity Act read with Section 13 (2) of the General Clauses Act, 1897, would include ‘employers’.

Held: The issue arose for consideration was appellant-bank had been held liable to pay the gratuity of 1,08,758/- to Sri S.V.N Rao jointly with the Primary Agricultural Cooperative Society Limited, appellant was not being the employer and the Rao was not being its employee. Sri S.V.N Rao in P.G.Case No.1 of 2003, initially filed the application against the Primary Agricultural Cooperative Society Limited for payment of gratuity of Rs.1,29,709/-. Later on, he submitted supplemental application on 11.2004 and added the appellant bank as opposite party No.2 in P.G.Case. Applicant was not under the administrative control and discipline of appellant bank but was governed by the regulations framed by the Registrar of Cooperative Societies and the pay structure or the service conditions were not governed by appellant bank. The question was whether the Gratuity Act,1972 was applicable to Mr. Rao or not and whether the Opposite Parties 1 & 2 were liable to Pay Gratuity to the applicant or not? It was held that the Controlling Authority had recorded finding that appellant was the employer which was based on consideration of the available evidence on record. No evidence was led before the Controlling Authority by the appeallant bank neither oral nor documentary in support of the plea taken before the Authority. The finding on relationship of employer and employee was a finding of fact and being based on evidence on record, which could not be shown to be suffering from any perversity or any other infirmity on such other permissible grounds, this Court was not inclined to interfere with such finding of fact in the exercise of writ jurisdiction. The High Court did not find anything in the Payment of Gratuity Act, repugnant in the subject or context of Section 2(f) to hold that the expression ‘employer’ used, singularly, would not include the plural i.e. ‘employers’. The Court was of the considered view that the expression ‘employer’ in Section 2(f) of the Payment of Gratuity Act read with Section 13 (2) of the General Clauses Act, 1897, would include ‘employers’. Thus, the order passed by the Controlling Authority, directing the assessee jointly and severally for payment of the amount of gratuity to the applicant Mr. Rao. 

FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT

Heard Sri V. Padmanabharao, learned counsel, representing Sri Suragani Vijaya Kumar, learned counsel for the petitioner. None appeared for the 2^nd and the 3^rd respondents to argue the matter.

Please become a Premium member. If you are already a Premium member, login here to access the full content.