writ petition no.39434 of 2013 (l-pg) c/w w.p.nos.14083...

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 3RD DAY OF AUGUST 2017

BEFORE

THE HON'BLE MR. JUSTICE ASHOK B. HINCHIGERI

WRIT PETITION No.39434 OF 2013 (L-PG) C/W

W.P.Nos.14083/2011, 29691-29694/2011,

44827-44830/2011, 1163/2012, 51033/2012,

51034/2012, 51035/2012, 2145/2013

37434/2013, 49523/2013, 10429-10436/2014,

38497/2014, 43321/2015, 43322/2015

W.P.No.39434/2013

BETWEEN:

Sarvodaya Education Trust, Rep. by its Secretary,

Virajpet – 571 218,

Virajpet taluk, Kodagu district. ... Petitioner

(By:Sri Vijaya Kumar, Advocate) AND:

1. The Union of India,

Represented by its Secretary, Department of Ministry of Law & Justice,

Government of India, 4th floor, ‘A’ Wing Shastri Bhavan, New Delhi.


Represented by its Secretary, Department of Labour & Employment,

Government of India, Rafi Marg, New Delhi – 110 001.

R

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3. The Controlling Authority & the

Assistant Labour Commissioner, Camp. Madikeri, Chikkamagalur Division,

Chikkamagalur – 577 101.

4. Dr.T Dinesh Chandra, Aged about 55 years,

S/o S T Das Tanikele, R/o Puttur,

Dakshina Kannada – 574 201. …Respondents

(By: Sri H.Jayakar Shetty, C.G.S.C. for R1 & R2; Sri T.L.Kiran Kumar, A.G.A., for R3;

Sri B.S.Basavaraju, Advocate for R4)

This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to declare Section 2(1) of the Payment of Gratuity (Amendment) Act, 2009, as unconstitutional

in so far as it relates to giving retrospective effect to the payment of Gratuity (Amendment) Act, 2009, vide Annexure – F

issued by the 1st respondent and etc.

W.P.No.14083/2011

BETWEEN:

Karnataka Unaided Schools Management’s Association

A Registered Society Represented by its President G S Sharma

Age 85 years

No.9, V V Road, V V Puram, Bangalore – 560 004. ... Petitioner

(By:Sri K.V.Dhananjay, Advocate) AND:

1. The Union of India, Represented by its Secretary, Ministry of Labour and Employment,

Shram Shakti Bhavan, New Delhi – 110 001.

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2. Assistant Labour Commissioner (Central),

Shram Sadan, 3rd Cross, 3rd Main, 2nd Phase, Yeshwanthpur Industrial Suburb

Tumkur road, Bangalore – 560 022

3. State of Karnataka, Represented by its Principal Secretary,

Department of Labour, Karmika Bhavan, Bannerughatta road,

Bangalore – 560 029. …Respondents

(By: Sri Krishna S. Dixit, A.S.G. for R1 and R2;

Sri T L Kiran Kumar, A.G.A. for R3 )

This writ petition is filed under Articles 226 and 227 of the

Constitution of India praying to issue a judicial declaration that the retrospective operation (prior to 31-Dec-2009) of the

Payment of Gratuity (Amendment) Act, 2009 operates unreasonably, arbitrarily and harshly in respect of private

unaided Educational institutions in the State of Karnataka and is therefore, in violation of the constitutional right secured to private unaided educational institutions in terms of Articles 14 against arbitrary state action and in terms of 19(1)(g) to

protection against unreasonable restriction in the matter of administration of their affairs and etc. W.P.Nos.29691 - 29694/2011

BETWEEN:

1. Management of Independent CBSE Schools Association Karnataka,

No.9:1, 13th Main, J Block, Kankadasanagara, Bettahalli,

3rd Stage, Mysore, By its General Secretary Mr.M.Srinivasan.

2. Management Association of Schools Karnataka,

(Schools affiliated to CISCE) Regd. Office, New Horizon Public School,

100 ft road, Indiranagar, Bangalore – 560 008 By its Chairman Mohan.

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3. Gifted Education & Research Foundation

Also known as Innovative International School No.175, GEAR Road, Doddakannelli,

Bangalore – 560 035. By its Chairman Mr.M.Srinivasan.

4. Delhi Public School

11, K M Kanakapura Road, Bikaspura Road, Konnanakunte cross,

Bangalore – 560 002 By its Board of management

Mr.Mansoor Ali Khan ... Petitioners

(By:Sri S.Basavaraj, Advocate) AND:

1. Union of India, Through Secretary, Ministry of Law & Justice, Government of India, 4th Floor,

A-Wing, Shastri Bhawan, New Delhi.

2. Ministry of Labour and Employment

Through its Secretary Rafi Marg, New Delhi. …Respondents

(By:Sri Krishna S. Dixit, A.S.G.)

These writ petitions are filed under Articles 226 and 227 of

the Constitution of India praying to declare Sub-Section (2) of Section 1 of the Payment of Gratuity (Amendment) Act, 2009, as

unconstitutional for giving retrospective effect to the payment of Gratuity (Amendment) Act, 2009, copy as per Annexure – E and

etc.

W.P.Nos.44827-44830/2011

BETWEEN :

1. CBSE, ICSE and State Private Schools

Management Association, Mysore Division (CISPMAM)

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Regd. Office Jnanasarovara International

Residential School, Bannur Road, Mysore. By its Secretary, Aged major.

2. Jnanasarovara Education Trust (R), Represented by its President

3. Manasarowar Pushkarini Vidyashrama Represented by its Secretary.

4. Kautilya Vidyalaya

Ayyajayyana Hundi, Dattagalli Mysore Taluk, Mysore – 23.

Represented by its Chairman Mr.R.Raghu ... Petitioners

(By: Sri S.Basavaraj, Advocate)

AND:


Through Secretary, Ministry of Law & Justice, Government of India, 4th floor

Shastri Bhawan, New Delhi.

2. Ministry of Labour and Employment, Through its Secretary,

Rafi Marg New Delhi. …Respondents

(By: Sri Krishna S. Dixit, A.S.G.)

These writ petitions are filed under Articles 226 and 227 of

the Constitution of India praying to declare sub-section (2) of Section 1 of the Payment of Gratuity (Amendment) Act, 2009, as

unconstitutional for giving retrospective effect to the payment of Gratuity (Amendment) Act, 2009, vide Annexure – B and etc.

W.P. No.1163/2012

BETWEEN:

Vidya Shankari Education Society ®, No.478, 14th main, SBM Colony,

Bangalore – 50 Represented by Mr.Mariyappa, President. ... Petitioner

(By: Sri A.C.Balaraj, Advocate)

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AND:

1. The State of Karnataka,

Represented by its Secretary to Government, Department of Labour, Karmika Bhavan,

Bangalore.

2. The Assistant Labour Commissioner and Controlling Authority

Under the payment of Gratuity Act, 1972, Bangalore Division-2, Karmika Bhavan

Bannerghatta Road, Bangalore – 560 029.

3. The Special Tahsildar, Office of the Tahsildar,

Bangalore South Taluk, Mahaveer Complex 5th Floor, Kempegowda road, Bangalore – 560 009.

4. Smt.V.Rajamma, Major,

R/o No.11/48, 2nd Floor, Backside house, 14th Main, SBM Colony, Bangalore – 50. … Respondents

(By: Sri T.L.Kiran Kumar, A.G.A. for R1 to R3;

Sri L.Harish Kumar, Advocate for R4)

This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the impugned order dated

11.1.2011 passed by the 2nd respondent marked as Annexure – B and remand the proceedings in favour of the 2nd respondent

for fresh disposal on affording reasonable opportunity to the

petitioner herein and etc.

W.P.No.51033/2012 BETWEEN :

Sri Siddartha Education Society,

SSIT Campus, Maralur, Tumkur – 572 105, Represented by its Secretary. ... Petitioner

(By: Sri Chandrakanth R. Goulay, Advocate)

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AND:

1. Union of India,

Department of Ministry of Law & Justice, Government of India, 4th floor, ‘A’ Wing

Shastri Bhavan, New Delhi – 110 011, Represented by its Secretary.

2. Union of India,

Department of Labour & Employment, Government of India,

Rafi Marg, New Delhi – 110 011, Represented by its Secretary.

3. The Controlling Authority and Assistant Labour Commissioner,

Bangalore Division – 1, Rajanna Road Peenya First Stage, Tumkur Road

Bangalore – 560 058.

4. Sri M M Rajendra Prasad, S/o M P Mallaiah, No.25, First Main Road, Vinayaka Nagara,

Tumkur – 572 103. …Respondents

(By: Sri Krishna S.Dixit, A.S.G. for R1 and R2;

Sri T L Kiran Kumar, A.G.A. for R3; Sri G.S.Balagangadhar, Advocate for R4)

This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to declare Sub-Section (2) of Section 1 of the Payment of Gratuity (Amendment) Act, 2009, as unconstitutional

for giving retrospective effect to the payment of Gratuity (Amendment) Act, 2009, copy as per Annexure – A and etc.

W.P.No.51034/2012

BETWEEN:

Mahatma Gandhi Vidyapeetha Trust (Regd), Shavige Malleswara Hills, Kanakapura Road, Bangalore – 560 078, Represented by its Secretary. ... Petitioner

(By:Sri H.M.Muralidhar, Advocate

for M/s.Sreeranga Associates)

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AND:

1. The Union of India, Department of Ministry of Law & Justice, Government of India, 4th floor, ‘A’ Wing

Shastri Bhavan, New Delhi – 110 011,

Represented by its Secretary.

2. The Union of India, Department of Labour & Employment,

Government of India, Rafi Marg, New Delhi – 110 011, Represented by its Secretary.


Bangalore Division – 2, Karmika Bhavan

Bannerghatta Road, Bangalore – 560 029.

4. Dr.T N Srinivasa, S/o T V Nagabhushana Sharma,

Aged about 47 years, No.1490, 18th Cross, Kumaraswamy Layout,



Sri T.L.Kiran Kumar, A.G.A. for R3; Sri G.S.Balagangadhar, Advocate for R4)

This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to declare Sub-Section (2) of

Section 1 of the Payment of Gratuity (Amendment) Act, 2009, as unconstitutional for giving retrospective effect to the payment of

Gratuity (Amendment) Act, 2009, vide Annexure – A and etc.

W.P.No.51035/2012

BETWEEN :

Mahatma Gandhi Vidyapeetha Trust (Regd), Shavige Malleswara hills, Kanakapura road,

Bangalore – 560 078,

Represented by its Secretary. ... Petitioner

(By:Sri H.M.Muralidhar, Advocate

for M/s.Sreeranga Associates)

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AND:

1. Union of India,

Department of Ministry of Law & Justice, Government of India,

4th floor, ‘A’ Wing, Shastri Bhavan,

New Delhi – 110 011, Represented by its Secretary.

2. Union of India,

Department of Labour & Employment, Government of India,

Rafi Marg, New Delhi – 110 011, Represented by its Secretary.


Bangalore Division – 2, Karmika Bhavan, Bannerghatta road,


4. Sri H N Sathyamurthy, S/o late H S Nanjundaiah,

Aged about 62 years, No.29, 3rd ‘A’ Main,

AGB layout, Ist Stage, Mahalakshmipuram,



Sri T.L.Kiran Kumar, A.G.A. for R3; Sri G.S.Balagangadhar, Advocate for R4)


Constitution of India praying to declare Sub-Section (2) of Section 1 of the Payment of Gratuity (Amendment) Act, 2009, as unconstitutional for giving retrospective effect to the payment of Gratuity (Amendment) Act, 2009, vide Annexure – A and etc.

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W.P.No.2145/2013

BETWEEN :

Sri Siddartha Education Society,

SSIT Campus, Maralur, Tumkur – 572 105.

Represented by its Secretary. ... Petitioner

(By: Sri Chandrakanth R.Goulay, Advocate)

AND:

1. Union of India, Department of Ministry of Law & Justice,

Government of India, 4th floor, ‘A’ Wing, Shastri Bhavan, New Delhi – 110 011,


2. Union of India, Department of Labour & Employment,

Government of India, Rafi Marg, New Delhi – 110 011,



Bangalore Division – 1, Rajanna Road, Peenya First Stage,

Tumkur Road, Bangalore – 560 058.

4. Sri E.Eswara Reddy, S/o Late E.R.Krishna Reddy, Kumataiah Layout (Near Bilwa Tree)

Banashankari II Stage, Tumkur – 572 105. …Respondents

(By: Sri Krishna S.Dixit, ASG for R1 to R3;

Sri G.S.Balagangadhar, Advocate for R4)

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Constitution of India praying to declare Sub-Section (2) of Section 1 of the Payment of Gratuity (Amendment) Act, 2009, as

unconstitutional for giving retrospective effect to the payment of Gratuity (Amendment) Act, 2009, vide Annexure – A and etc.

W.P. No.37434/2013

BETWEEN :

M/s CMR Institute of Technology, No.132, ITPL Road, ACES Layout, Kundalahalli, Bengaluru – 560 057.

By its Principal. ... Petitioner

(By: Sri G.Papi Reddy, Advocate) AND:

1. The Union of India, Department of Ministry of Law and Justice,

Government of India, 4th floor, ‘A’ Wing, Shastri Bhavan, New Delhi – 110 011, Represented by its Secretary.

2. Department of Labour and Employment, Government of India, Rafi Marg, New Delhi – 110 011,

Represented by its Secretary. 3. The Assistant Labour Commissioner/ Controlling Authority, Bangalore Division,Kaarmikara Bhavan

Bannerghatta Road,Bangalore – 560 076.

4. S.Honnasiddaiah,

S/o Late Siddagangappa, Aged about 48 years,

R/at No.574, 3rd floor,4th Cross, 8th Main, Bhuvaneshwarinagar, T.Dasarahalli Bangalore – 560 037. … Respondents

(By: Sri Krishna S.Dixit, ASG for R1 to R3; Sri M V Hiremath, Advocate for R4)

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Constitution of India praying to declare the Payment of Gratuity (Amendment) Act, 2009 vide Annexure – F as illegal and

unconstitutional and declare Section 1(2) of the Payment of Gratuity (Amendment) Act, 2009, giving retrospective effect to

the Amendment Act as ultra vires and unconstitutional and having no nexus to the object of the parent Act vide Annexure –

F and etc.

W.P.No.49523/2013

BETWEEN:

M/s Alva Education Foundation (Regd.) Moodabidri – 574 227, Dakshina Kannada,

Represented by its Chairman Dr.M.Mohan Alva. ... Petitioner

(By: Sri Aruna Shyam.M, Advocate) AND:

1. Union of India By its Secretary, Ministry of Labour & Employment, Sharam Shakti Bhavan, New Delhi – 110 001.

2. The Assistant Labour Commissioner Sharam Sadan, III Cross, III Main, II Phase, Yashavanthapur Industrial Suburb, Tumkur Road, Bangalore – 560 022.

3. The State of Karnataka,

By its Secretary, Department of Labour, Karmika Bhavan, Bannerghatta Road,

Bangalore – 560 029. … Respondents

(By: Sri Krishna S.Dixit, A.S.G. for R1 and R2; Sri T.L.Kiran Kumar, A.G.A. for R3)

This writ petition is filed under Articles 226 and 227 of the Constitution of India praying to declare that the retrospective operation of the payment of Gratuity (Amendment) Act, 2009, is unreasonable, arbitrary, invalid and unconstitutional and

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consequently, strike down the same from the statute book and

etc.

W.P.Nos.10429-10436/2014

BETWEEN:

K.S.Institute of Technology, #14, Raghuvanahalli,

Kanakapura Main Road, Bengaluru – 560 062,

Represented by its President ... Petitioner

(By: Sri B.C.Prabhakar, Advocate) AND:

1. Union of India

Represented by its Secretary,

Ministry of Labour and Employment, New Delhi – 110 001.

2. The Assistant Labour Commissioner

and Controlling Authority Payment of Gratuity Act, 1972,

Bangalore Division – 2, Karmika Bhavana, Bannerghatta Road, Bengaluru – 560 029.

3. Dr.T.G.S.Murthy,

Aged about 69 years, No.36, Swathi, 2nd Main road,

College Teacher’s Layout,

Banashankari 3rd Stage, Bangalore – 560 085. 4. Dr.K.Ramanarasimha,

Aged about 42 years, No.30, New Income Tax Layout, 3rd Stage, 1st Block, Jyothi Nagar, Nagarabhavi Road,


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5. Sri K.Chandrashekar,

Aged about 43 years, No.288, 8th Cross, TAT Nagar

Kodigehalli, Bangalore – 560 094.

6. Dr. C.B.Mohan, Aged about 45 years,

No.95, Behind Shakaramatta, Kirloskar Colony, Mahalakshmi Puram,


7. Dr.K.Venkatesh, Aged about 46 years,

No.30, New Income Tax Layout, 3rd Stage, 1st Block, Jyothi Nagar,

Nagarabhavi road, Bangalore – 560 072. 8. Dr.K.Goplalakrishna,

Aged about 51 years, No.42, Nandashree, 3rd Cross,

Eshwar Layout, 7th Cross, J.P.Nagar, Bangalore – 62. … Respondents

(By: Sri Krishna S.Dixit, ASG for R1 and R2;

Sri T.V.Narayana Murthy, Advocate for R5)

These writ petition are filed under Articles 226 and 227 of the Constitution of India praying to retrospective operation (Prior to 31.12.2009) of the payment of Gratuity (Amendment) Act,

2009, operates unreasonably, arbitrarily, and harshly in respect of the petitioner’s institute and is therefore, in violation of the

constitutional right (Annexure –A) and etc.

W.P.No.38497/2014

BETWEEN:

Dayananda Sagar Dental College,

Shavige Malleswara Hills, Kumara Swamy Layout, Bangalore – 560 078, Represented by its Secretary. …Petitioner

(By:Sri H.M.Muralidhar, Advocate)

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AND:

1. The Union of India, Department of Ministry of Law and Justice, Government of India, 4th Floor, ‘A’ Wing

Shastri Bhavan,New Delhi – 110 001. Represented by its Secretary. 2. The Union of India,

Department of Labour and Employment,

Government of India, Rafi Marg New Delhi – 110 001,Represented by its Secretary.

3. The Controlling Authority and

Assistant Labour Commissioner, Division – 2, Karmika Bhavan,

Bannerughatta Road, Bengaluru – 560 029.

4. Dr.(Mrs.) Suma Sridhar, W/o Sri L.Sridhar,

Aged about 36 years, No.257, 11th Cross, 20th Main,

J.P.Nagar II Phase, Mahalakshmipuram, Bangalore – 560 078. …Respondents

(By:Sri Krishna S.Dixit, ASG for R1 to R2; Sri T.L.Kiran Kumar, AGA for R3;

Sri D.Leelakrishnan, Advocate for R4)

This writ petition is filed under Articles 226 & 227 of the

Constitution of India praying to declare Sub-Section (2) of Section 1 of the payment of Gratuity (Amendment) Act, 2009, and Section 13-A

newly inserted by Section 3 of the payment of Gratuity Act, 1972 as per notification dated 31.12.2009 vide Annexure-A and etc.

W.P.No. 43321/2015

BETWEEN:

Sri Krishnadevaraya Educational Trust, Royal Cottage, Royal Palace,

Bengaluru – 560 052. Represented by its Secretary …Petitioner

(By:Sri V.Krishna Murthy, Advocate)

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AND:


Represented by its Secretary, Department of Ministry of Law and Justice, Government of India, 4th Floor, ‘A’ Wing

Shastri Bhavan, New Delhi – 110 001.

2. The Union of India, Represented by its Secretary, Department of Labour and Employment, Government of India,

Rafi Marg, New Delhi – 110 001.

3. The Assistant Labour Commissioner and

Gratuity Controlling Authority, Division – 2, Karmika Bhavan, Bannerughatta Road, Bengaluru – 560 029.

4. Sri K.Raghupathi,

S/o Sri R.Krishnaswamy Iyengar, Aged about 56 years,

R/at No.916, I-A Main, 4th Cross, BSK 3rd Stage, 3rd Phase, 3rd Block,

Bengaluru – 560 085. …Respondents

(By:Sri Krishna S. Dixit, ASG for R1 to R3;

Sri T.N.Narayana Murthy, Advocate for R4)

This writ petition is filed under Articles 226 & 227 of the Constitution of India praying to issue writ of mandamus, to declare

Section 2(1) of the payment of Gratuity (Amendment) Act, 2009, as unconstitutional in so far as it relates to giving retrospective effect to the payment of Gratuity (Amendment) Act, 2009 (Annexure – D)

issued by the R1 and etc.

W.P.No.43322/2015

BETWEEN:

Sri Krishnadevaraya Educational Trust, Royal Cottage, Royal Palace, Bengaluru – 560 052.

Represented by its Secretary K. Shyamaraju, Aged about 65 years. …Petitioner

(By:Sri V.Krishna Murthy, Advocate)

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AND:


Represented by its Secretary, Department of Ministry of Law and Justice,

Government of India,4th Floor, ‘A’ Wing Shastri Bhavan, New Delhi – 110 001.


Represented by its Secretary, Department of Labour and Employment,

Government of India, Rafi Marg New Delhi – 110 001.

3. The Assistant Labour Commissioner and

Gratuity Controlling Authority, Division – 2 Karmika Bhavan, Bannerughatta Road,

Bengaluru – 560 061.

4. Sri H.Narendra Kumar,

S/o Sri C.Hanumathaiah, Aged about 50 years,

R/at No.606, Vaishaka, 8th A Main, 3-A Cross, BHCS Layout

Uttarahalli, Bengaluru – 560 061. …Respondents

(By:Sri Krishna S.Dixit, ASG for R1 to R3; Sri T.N.Narayana Murthy, Advocate for R4)

This writ petition is filed under Articles 226 & 227 of the

Constitution of India praying to declare Section 2(1) of the

Payment of Gratuity (Amendment) Act, 2009 as unconstitutional in so far as it relates to giving retrospective effect to the

Payment of Gratuity (Amendment) Act, 2009 (Annexure – D) issued by the R1 and etc.

These writ petitions having been heard and reserved for

orders on 01.08.2017, coming on for pronouncement this day, the Court* made the following:

*Corrected vide chambers order dated:18.08.2017.

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O R D E R

The petitioners’ grievance is over the newly substituted

Section 2(e) and the newly inserted Section 13-A of the Payment

of Gratuity Act, 1972 (‘the said Act’ for short). The amendments

in question are brought about by Act 47 of 2009. The challenge

is mainly to the retrospective operation making it enforceable

with effect from 3.4.1997. Some of the petitioners have also

challenged the orders passed by the Controlling Authority under

the said Act directing the payment of gratuity to the teachers.

Some of them have approached this Court on receiving the

notice, issued by the Controlling Authority, pursuant to the

claims preferred by the employees.

2. Sri K.V.Dhananjay, the learned counsel for the

petitioner in W.P.No.14083/2011 submits that the Payment of

Gratuity (Amendment) Act, 2009 cannot traverse backward in

time for a period of 12 years. It cannot confer gratuity upon the

teachers, who have retired prior to the coming into force of the

said amendment, dated 31.12.2009.

3. He submits that the insertion of Section 13-A is only for

validating the payment of gratuity already paid by an employer

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under the mistaken impression of the legal requirement. But it

cannot be understood that a teacher, who has already retired as

on the date of the commencement of the Amendment Act should

be recalled and be rendered eligible and entitled to receive the

gratuity.

4. He submits that the Amendment Act in question over-

reaches the judicial powers of the Court. It defeats a series of

binding judgments of the Hon’ble Supreme Court on how the

definition of an employee does not cover the services of a

teacher. He submits that the teachers employed in a school are

not held to be employees under the Minimum Wages Act, 1948,

as per the decision of the Apex Court in the case of HARYANA

UNRECOGNISED SCHOOLS’ ASSOCIATION v. STATE OF

HARYANA reported in (1996) 4 SCC 225. He submits that

the Apex Court in the case of MISS A. SUNDARAMBAL v.

GOVERNMENT OF GOA, DAMAN AND DIU AND OTHERS

reported in (1988) 4 SCC 42, has expressed the view that the

teachers employed by educational institutions cannot be called

as ‘workmen’ within the meaning of Section 2(s) of the Industrial

Disputes Act, 1947.

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5. He submits that the members of the petitioner are

private unaided schools; they do not receive any aid or

assistance of any kind from the Government, State or Central.

Their fundamental right to establish and administer the

educational institutions of their choice is being affected adversely

on account of imposition of excessively harsh and unreasonable

liability upon them. The fundamental right guaranteed under

Article 19(1)(g) of the Constitution of India is required to be

protected by invalidating the impugned legislation. A

retrospective law is not immune from the judicial challenge. The

learned counsel clarifies that the challenge in this case is not to

the power of Parliament to legislate retrospectively; rather the

challenge is to the jurisdiction of Parliament to legislate

retrospectively in the special circumstances of this case.

6. Relying on the Hon’ble Supreme Court’s judgment in

the case of JAWAHARMAL v. STATE OF RAJASTHAN AND

OTHERS reported in AIR 1966 SC 764, he would contend that

when the liability is introduced retrospectively, its

reasonableness has to be examined by the higher judiciary.

Drawing support from the Apex Court’s judgment in the case of

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NATIONAL AGRICULTURAL COOPERATIVE MARKETING

FEDERATION OF INDIA LTD. AND ANOTHER v. UNION OF

INDIA AND OTHERS reported in (2003) 5 SCC 23, he would

contend that the excessive harshness or unreasonableness

would be a valid ground to strike down a retrospective

legislation. He submits that if the retrospectivity is harsh, it runs

the risk of being struck down as unconstitutional.

7. He submits that without ascertaining whether there are

atleast 10 employees in the establishment of educational

institutions and without ascertaining as to whether the teacher

has taught for five years, the applicant-teacher cannot be

granted the gratuity.

8. He submits that the Members of the petitioner

Association face harsh consequences of the Amendment Act.

The member institutions have not made any provision for future

payment of gratuity, as they never anticipated that some day

they would become liable to pay the gratuity to the retired

teachers. He submits that many statutes and the rules framed

thereunder, more particularly the Karnataka Educational

Institutions (Prohibition of Capitation Fee) Act, 1984 prohibits

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the making of profits by the educational institutions. The

revenue – limitations of private unaided schools are not at all

appreciated. He submits that the member-schools of the

petitioner Association did not pay the gratuity to their teachers

between 1997 and 2009, as they were legally not liable to do so.

At a later point of time they cannot be forced to pay the gratuity

from a retrospective date. He submits that the proceedings of

the Standing Committee of Labour do not show that the

introduction of the retrospective liability was ever intended.

9. He relies on the Apex Court’s judgment in the case

of SHYAM SUNDER AND OTHERS v. RAM KUMAR AND

ANOTHER reported in (2001) 8 SCC 24 in which it is held that

a statute, which not only changes the procedure but also creates

new rights and liabilities, shall be construed to be prospective in

operation, unless otherwise provided, either expressly or by

necessary implication.

10. He submits that the Amendment Act requires the

employer not only to pay the gratuity to teachers, who have

already retired between 03.04.1997 and 31.12.2009 but also

requires them to compulsorily pay interest in such cases.

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Therefore, the Amendment Act deserves to be struck down on

the said count.

11. Relying on the Apex Court’s judgment in the case of

AMALGAMATED COALFIELDS LTD. AND ANOTHER v.

JANAPADA SABHA CHHINDWARA AND OTHERS reported in

AIR 1964 SC 1013, he contends that the principle of

constructive res judicata is a special and artificial form of res

judicata and therefore should not generally be applied to the writ

petitions. He sought to draw support from the Apex Court’s

judgment in the case of NAND KISHORE v. STATE OF

PUNJAB reported in (1995) 6 SCC 614 to advance the

submission that questioning the constitutionality of a provision of

law stands on a different footing than raising a matter on a bare

question of law or mixed question of law and fact, or on fact.

12. He relies on the Calcutta High Court’s decision in the

case of SHEW BHAGWAN GOENKA v. COMMERCIAL TAX

OFFICER AND OTHERS reported in 1973 32 STC 368 Cal in

support of his submission that the test of reasonableness should

be applied to each individual statute impugned and no abstract

standard or general pattern of reasonableness can be laid down

24

as applicable to all cases. The nature of the rights alleged to

have been infringed, the underlying purpose of the restriction

imposed, the extent and urgency of the evils sought to be

remedied thereby, the disproportion of the imposition, the

prevailing conditions at the time, should all enter into the judicial

verdict.

13. Sri S.Basavaraj, the learned counsel for the petitioners

in W.P.Nos.44827-44830/2011 and 29691-29694/2011 submits

that the constitutionality of an enactment can be challenged on

the ground of the violation of the Articles in Part III of the

Constitution; the ascertainment of its true nature and character

becomes necessary. In support of his submissions, he relies on

the Apex Court’s judgment in the case of HAMDARD

DAWAKHANA AND ANOTHER v. THE UNION OF INDIA AND

OTHERS reported in AIR 1960 SC 554.

14. He read out paragraph No.21 from the Apex Court’s

judgment in the case of MITHILESH KUMARI AND ANOTHER

v. PREM BEHARI KHARE reported in (1989) 2 SCC 95. It

reads as follows:

25

“21. We read in Maxwell that it is a fundamental rule

of English Law that no statute shall be construed to have

retrospective operation unless such a construction

appears very clearly at the time of the Act, or arises by

necessary and distinct implication. A retrospective

operation is, therefore, not to be given to a statute so as

to impair existing right or obligation, otherwise than as

regards matter of procedure unless that effect cannot be

avoided without doing violence to the language of the

enactment. Before applying a statute retrospectively the

court has to be satisfied that the statute is in fact

retrospective. The presumption against retrospective

operation is strong in cases in which the statute, if

operated retrospectively, would prejudicially affect vested

rights or the illegality of the past transactions, or impair

contracts, or impose new duty or attach new disability in

respect of past transactions or consideration already

passed. However, a statute is not probably called a

retrospective statute because a part of the requisites for

its action is drawn from a time antecedent to its

passing….…”

15. Nextly, he relies on the Apex Court’s judgment in the

case of EX-CAPT. K.C. ARORA AND ANOTHER v. STATE OF

HARYANA AND OTHERS reported in (1984) 3 SCC 281,

wherein it is held that the legislature cannot legislate today with

reference to a situation that prevailed 20 years ago and ignore

the march of events and the rights accrued in the course of 20

26

years. He submits that the said view was reiterated by the Apex

Court in its decision in the case of CHAIRMAN, RAILWAY

BOARD AND OTHERS v. C.R. RANGADHAMAIAH AND

OTHERS reported in AIR 1997 SC 3828. He submits that if the

amendment suffers from the vice of arbitrariness or harshness, it

has to be struck down as unconstitutional. He brings to my

notice the Division Bench’s decision of Delhi High Court

pronounced in W.P.(C).No.6168/2010 in the case of

INDEPENDENT SCHOOLS’ FEDEREATION OF INDIA (REGD)

v. UNION OF INDIA AND OTHERS disposed of on 2.12.2011,

in the matter.

16. He submits that as held by the Apex Court in the

case of T.M.A. PAI FOUNDATION AND OTHERS v. STATE OF

KARNATAKA AND OTHERS reported in (2002) 8 SCC 481, an

educational institution is established for the purpose of imparting

education, which is regarded as charitable. An educational

institution cannot charge such fees as are not required for the

purpose of fulfilling that object. In view of the said decision, the

petitioners have charged only for paying the salary, etc. to the

teachers and not for paying the gratuity.

27

17. Relying on the Apex Court judgment in case of

COMMISISONER OF INCOME TAX (CENTRAL)-I, NEW

DELHI v. VATIKA TOWNSHIP PRIVATE LIMITED reported in

(2015) 1 SCC 1, he would contend that the legislations, which

modified the accrued rights or which impose obligations or

impose new duties or attach a new disability have to be treated

as prospective unless the legislative intent is clearly to give the

enactment a retrospective effect. Paragraph No.28 of the said

decision, read out by him, is extracted herein as follows:

“28. Of the various rules guiding how a legislation has

to be interpreted, one established rule is that unless a

contrary intention appears, a legislation is presumed not

to be intended to have a retrospective operation. The

idea behind the rule is that a current law should govern

current activities. Law passed today cannot apply to the

events of the past. If we do something today, we do it

keeping in view the law of today and in force and not

tomorrow’s backward adjustment of it. Our belief in the

nature of the law is founded on the bedrock that every

human being is entitled to arrange his affairs by relying

on the existing law and should not find that his plans

have been retrospectively upset. This principle of law is

known as lex prospicit non respicit: law looks forward not

backward. As was observed in Phillips v. Eyre, a

retrospective legislation is contrary to the general

principle that legislation by which the conduct of mankind

28

is to be regulated when introduced for the first time to

deal with future acts ought not to change the character of

past transactions carried on upon the faith of the then

existing law.”

18. Sri Aruna Shyam.M, the learned counsel for the

petitioner in W.P.No.49523/2013 submits that wherever the

amendment purports to restore the status quo ante for the past

period taking away the benefits already available, accrued and

acquired by the parties, the law may not be valid. For making

this submission, he relies on the Apex Court judgment in the

case of ANDHRA PRADESH DAIRY DEVELOPMENT

CORPORATION FEDERATION v. B.NARASIMHA REDDY AND

OTHERS reported in (2011) 9 SCC 286. He also relies upon

the Division Bench’s judgment of this Court reported in (2013)

1 KLJ 379 in the case of SHAMARAJA UDUPA v. THE

ASSISTANT LABOUR COMMISSIONER, MANGALORE AND

OTHERS in support of his submissions.

19. Sri V.Krishna Murthy, the learned counsel appearing

for the petitioners in W.P.Nos.43321/2015 and 43322/2015

submits that the fourth respondent – teachers in both the

petitions have accepted the appointment subject to the Service

29

and Conduct Rules of the petitioner Trust. As per the said Rules,

it is only the non-teaching staff members, who are entitled to

gratuity. As the said Rules do not provide for the payment of

gratuity to the teachers and as the said respondents have

accepted the appointment subject to the said Rules, they are

estopped from demanding anything that runs contrary to the

Rules. Without prejudice to this submission, he contends that

the Management is not liable to pay the gratuity. He submits

that if this Court is inclined to hold that the Management is liable

to pay the same, it cannot be with effect from 03.04.1997; the

teachers’ entitlement to gratuity would be only from the day on

the amendment has come into force.

20. Sri Krishna S. Dixit, the learned Assistant Solicitor

General of India submits that the Payment of Gratuity Act, 1972

is a welfare measure introduced in the interests of the general

public to secure the social and economic justice to the workmen

and the employees to assist them in their old age and to ensure

a decent standard of living on their retirement. He submits that

the said Act is a genre of the Minimum Wages Act, the Payment

of Bonus Act, the Provident Funds Act, the Employees’ State

30

Insurance Act, etc. which lay down the minimal service

conditions, which must be made available to the employees

notwithstanding the financial capacity of the employer. In

support of his submissions, he relies on the Hon’ble Supreme

Court’s decision in the case of BAKSHISH SINGH v.

M/S.DARSHAN ENGINEERING WORKS AND OTHERS

reported in AIR 1994 SC 251. He read out the following

portions from the said decision:

“The provisions of the Act were thus meant for laying

down gratuity as one of the minimal service conditions

available to all employees covered by the Act. There is no

provision in the Act for exempting any factory, shop etc.

from the purview of the Act covered by it except those

where, as pointed out above, the employees are in receipt

of gratuity or pensionary benefits which are no less

favourable than the benefit conferred under the Act. The

payment of gratuity under the Act is thus obligatory being

one of the minimum conditions of service. The non-

compliance of the provisions of the Act is made an offence

punishable with imprisonment or fine. It is settled law

that the establishments which have no capacity to give to

their workmen the minimum conditions of service

prescribed by the Statute have no right to exist.”

21. Relying on the Apex Court’s decision in the case of

RAICHURMATHAM PRABHAKAR AND ANOTHER v.

31

RAWATMAL DUGAR reported in (2004) 4 SCC 766, he

submits that in case of conflict between the plain language of the

provision and the meaning of the heading or title, the heading or

title would not control the meaning which is clearly and plainly

discernible from the language of the provision thereunder.

22. He read out the relevant portions from Sri

H.M.Seervai’s Constitution of India, a Critical Commentary,

Fourth Edition, Volume 3 to buttress his submission that there is

nothing in our Constitution which creates any fetter on the

legislature’s jurisdiction to amend the laws with retrospective

effect and validate the invalid laws or invalid executive acts and

notifications.

23. He relies on the Apex Court’s judgment in the case of

PATHUMMA AND OTHERS v. STATE OF KERALA AND

OTHERS reported in 1978 (2) SCC 1 and contends that the

Court has to strike a just balance between the fundamental

rights and the larger and broader interests of the society so that

when such a right clashes with the larger interest of the country,

it must yield to the latter. He relies on the said decision for yet

another proposition which he canvassed: there is always a

32

presumption in favour of the constitutionality of a statute and

the onus to prove its invalidity lies on the party, which assails

the same.

24. He submits that the Recommendations concerning the

Status of Teachers are adopted on 05.10.1966 by the Special

Intergovernmental Conference pursuant to the deliberation of

the U.N.E.S.C.O. (United Nations Educational, Scientific and

Cultural Organization) in co-operation with the I.L.O.

(International Labour Organization).

25. He sought to draw the support from the Apex Court’s

judgment in the case of UDAI RAM SHARMA AND OTHERS v.

THE UNION OF INDIA AND OTHERS reported in AIR 1968

SC 1138, wherein it is held that the Validating Acts cannot be

struck down merely because the courts of law have declared

actions taken earlier to be invalid for want of jurisdiction. Nor is

there any reason to hold that in order to validate the action

without legislative support, the Validating Act must enact

provisions to cure the defect for the future and also provide that

all actions taken or notifications issued must be deemed to have

33

been taken or issued under the new provisions so as to give

them full retrospective effect.

26. Taking support from the Apex Court’s judgment in the

case of AHMEDABAD PVT. PRIMARY TEACHERS’ ASSN. v.

ADMINISTRATIVE OFFICER AND OTHERS reported in

(2004) 1 SCC 755, he submits that the gratuity is a gratuitous

payment given to an employee on discharge, retirement or

death. It is a gift for the services rendered or return for the

favours received. Gratuity is an amount paid unconnected with

any consideration and not resting upon it, and has to be

considered as something given freely, voluntarily or without

recompense. It is a sort of financial assistance to tide over the

post-retiral hardships and inconveniences. On the ground that

the payment of gratuity would render their institutions unviable,

the legislative amendment cannot be challenged. Without

prejudice to this submission, he submits that the material

particulars of actual damage or hardship, if any, suffered by the

managements suffered on account of the amendment in

question, are not at all furnished to this Court.

34

27. He also read out some portions from a Treatise on the

Constitutional Limitations authored by Thomas M. Cooley and

published by Hindustan Law Book Company, Calcutta and

submits that the judiciary can arrest the execution of a statute

only when it conflicts with the Constitution. It cannot run a race

of opinions upon points of right, reason and expediency with the

law-making power.

28. He read out the relevant portion of the 26th Report of

the Standing Committee of 14th Lok Sabha, on Labour which

explains the antecedent facts warranting the giving of the

needed succor and justice to all those affected persons, who

were denied their rightful benefits due to some technical

flaw/legal lacuna in the definition of the term ‘employee’, as

contained in Section 2(e) of the Payment of Gratuity Act, 1972.

29. He relies on the Apex Court’s judgment in the case of

KUSUM INGOTS AND ALLOYS LTD. v. UNION OF INDIA

AND ANOTHER reported in (2004) 6 SCC 254, wherein it is

held that an order passed on a writ petition questioning the

constitutionality of a Parliamentary Act, whether interim or final,

will have effect throughout the territory of India subject of

35

course to the applicability of the Act. Following the said Apex

Court’s judgment, the Division Bench of this Court in the case of

SHIV KUMAR v. UNION OF INDIA reported in ILR 2014 KAR

2474 has held that the Kerala High Court’s pronouncement on

the constitutionality of a provision of a Central Act would be

applicable throughout India.

30. Smt.T.N.Asha, learned counsel for the respondent No.4

in W.P.Nos.43321/2015 and 43322/2015 submits that the

teachers in question were still in service as on the date of the

commencement of the Amendment Act in 2009. She submits

that the teachers in question have retired only in 2013.

31. Sri D.Leelakrishnan, the learned counsel for the

respondent No.4 in W.P.No.38497/2014 submits that the

Bombay High Court in its judgment in the case of

PRESIDENT/SECRETARY, VIDARBHA YOUTH WELFARE

INSTITUTION (SOCIETY), AMRAVATI v. PRADIPKUMAR

AND OTHERS reported in 2012 LLR 417 has held that in view

of amendment of 2009, a teacher is not only an employee under

the Payment of Gratuity Act but is also entitled to get gratuity

with retrospective effect from 3.4.1997. He further submits that

36

the Apex Court has dismissed the SLP filed against the said

judgment of the Bombay High Court.

32. Sri H. Jayakar Shetty, the learned Central

Government Standing Counsel appearing for the Union

Government in W.P.Nos.39434/2013, 44827-44830/2011,

51033/2012 and 2145/2013 submits that a competent

legislature can always validate a law which has been declared by

courts to be invalid, provided the infirmities and vitiating factors

noticed in the declaratory judgment are removed or cured. Such

a validating law can also be made retrospective. While advancing

this submission, he relies on the Apex Court’s judgment in the

case of M/S. UJAGAR PRINTS AND OTHERS (II) v. UNION

OF INDIA AND OTHERS reported in (1989) 3 SCC 488.


case of RAI RAMKRISHNA AND OTHERS v. STATE OF BIHAR

reported in AIR 1963 SC 1667, wherein it is held that the

legislative power conferred on the appropriate legislatures to

enact law in respect of topics covered by several entries in the

three Lists can be exercised both prospectively and

retrospectively. The legislative power conferred on the

37

legislature includes the subsidiary or the auxillary power to

validate laws which have been found to be invalid.

34. He submits that merely because the legislation has

retrospective effect, it cannot be challenged. If it has to be held

as unconstitutional, it has to be unduly oppressive and

confiscatory. For making these submissions, he relies on the

Apex Court’s judgment in the case of R.C. TOBACCO PVT. LTD.

v. UNION OF INDIA reported in 2005 (188) E.L.T. 129 (SC).


case of RAGHUNATH RAI BAREJA AND ANOTHER v. PUNJAB

NATIONAL BANK AND OTHERS reported in 2006 AIR SCW

6446, wherein it is held that if there is a conflict between law

and equity, it is the law which has to prevail, in keeping with the

Latin maxim ‘dura lex sed lex’ which means ‘the law is hard, but

it is the law’. Equity can only supplement the law, but it cannot

supplant or override it.

36. Sri G.S.Balagangadhar, the learned counsel for the

respondent No.4 in W.P.Nos.51033/2012, 51034/2012,

51035/2012 and 2145/2013 submits that the High Courts of

38

Delhi, Gujarat, Punjab and Haryana have already upheld the

validity of the amendment in question.

37. Sri T.L.Kiran Kumar, the learned Additional

Government Advocate appearing for the Controlling Authority

prays for the dismissal of these writ petitions.

38. In the course of rejoinder, Sri Dhananjay submits that

the decisions of the High Courts of Delhi, Punjab and Haryana do

not come to the rescue of the Central Government in any way.

The decisions of the other High Courts can at the most have only

persuasive value. He disagrees with submission of the Assistant

Solicitor General of India that the decision of one High Court

would bind the other High Courts, if it touches upon the

constitutionality of a central legislation. Sri Dhanajay asserts

that the Assistant Solicitor General’s reliance on Kusum

(supra) would not therefore come to the rescue of the Central

Government. Similarly, he would contend that the Delhi High

Court’s decision can also be of no assistance for deciding this

case, as the arguments being canvassed before this Court were

not raised before the Delhi High Court.

39

39. He submits that the Central Government’s argument

that the petitioner should have furnished the proof of actual

damage or hardship instead of arguing on the theoretical

damage or hardship is misplaced.

40. He brings to my notice the Apex Court’s judgment in

the case of AMBICA INDUSTRIES v. COMMISSIONER OF

CENTRAL EXCISE reported in (2007) 6 SCC 769, for

contending that the decision of one High Court is a binding

authority within its territorial jurisdiction; but it is not a binding

precedent for another High Court or Tribunal outside its

territorial jurisdiction.

41. The submissions of the learned counsel have

received my thoughtful consideration. The first question that

falls for my consideration is whether the amended statutory

provisions are liable to be invalidated on the ground of their

retrospective operation? There is always a presumption in

favour of the constitutionality of an enactment and the burden is

upon him, who attacks it, to show that there has been a clear

transgression of the constitutional principles, as held by the Apex

Court in the cases of SHRI RAM KRISHNA DALMIA v. SHRI

40

JUSTICE S.R.TENDOLKAR & OTHERS reported in AIR 1958

SC 538 and PEOPLE’S UNION FOR CIVIL LIBERTIES v.

UNION OF INDIA AND OTHERS reported in (2004) 2 SCC

476.

42. An Act of legislature can be struck down only on two

grounds – (i) lack of legislative competence and (ii) violation of

fundamental rights or any other provisions of the Constitution.

No third ground exists for invalidating the legislation. In saying

so, I am fortified by the Apex Court’s judgments in the cases of

STATE OF A.P. AND OTHERS v. MCDOWELL & CO. AND

OTHERS reported in (1996) 3 SCC 709 and PUBLIC

SERVICES TRIBUNAL BAR ASSOCIATION v. STATE OF U.P.

AND ANOTHER reported in (2003) 4 SCC 104.

43. The power of the Parliament and State Legislatures

to make laws is conferred by Articles 245, 246 and 248 of

Constitution of India. There is nothing in the said Articles to

suggest that the Indian Legislatures do not possess the power to

make retrospective legislations, which every sovereign

legislature possesses. In the case of STATE OF TAMIL NADU

v. AROORAN SUGARS LTD. reported in (1997) 1 SCC 326,

41

the Hon’ble Supreme Court has held that legislature has the

power to amend, delete or obliterate the statute or to enact a

statute prospectively or retrospectively.

44. In the case of UNION v. MADAN GOPAL KABRA

reported in 1954 SCR 541, the Hon’ble Supreme Court has held

that the Parliament has the power to impose retrospectively a

tax on income for any year prior to the commencement of the

Constitution. Unless limited by the Constitution, the legislatures

in India have the power to legislate retrospectively and also to

validate the invalid laws or invalid executive acts and

notifications.

45. As held by the Apex Court in the case of M/S.

Ujagar Prints (supra), validating and curative exercise made

by the legislature cannot be called an impermissible legislative

overruling of the judicial decision. The legislative expedience of

validation of laws is of great significance and utility. The courts,

except under extraordinary circumstances, would be reluctant to

override the legislative judgment as to the need for and wisdom

of the retrospective legislation.

42

46. As held by the Apex Court in the case of Rai

Ramkrishna (supra), if a law passed by a legislature is struck

down by the courts as being invalid for one or the other

infirmity, it would be competent for the appropriate legislature to

cure the said infirmity and pass a validating law so as to make

the provisions of the said earlier law effective from the date

when it was passed.

47. When the challenge to Amendment Act, 2009 to the

Payment of Gratuity Act, 1972 fell for consideration before the

Division Bench of Gujarat High Court in the case of JAIN

CITIZENS EDUCATION SOCIETY v. UNION OF INDIA

reported in 2012 LLR 292, it was held that what is substituted

in Section 2(e) and what is inserted by Section 13-A of the

Payment of Gratuity Act, 1972 by Amendment Act of 2009 are

neither violative of Article 14 nor violative of Article 19(1)(g) of

the Constitution, as no substantive right was earlier created in

favour of the schools nor any such substantive right has been

taken away. Further it has been held therein that the legislative

power conferred on the legislature includes the subsidiary or the

ancillary power to validate laws, which have been struck down

43

by the courts as invalid for one or the other infirmity, thereby to

cure the infirmity and pass the validating law so as to make the

provision of the earlier law effective from the date when it was

passed.

48. The High Court of Bombay in the case of

President/Secretary, Vidarbha Youth Welfare Institution

(Society), Amravati (supra) has held that there is no escape

but to hold that a ‘teacher’ is an ‘employee’ within the meaning

of Section 2(e) of the said Act and hence the provisions of the

said Act are applicable. The Division Bench of Punjab &

Haryana High Court in W.P.No.16884/2012, between

MAHARISHI DAYANAND EDUCATION SOCIETY AND

OTHERS v. UNION OF INDIA AND OTHERS, disposed of on

18.10.2012 has also upheld the amended statutory provisions

in question.

49. The Court may take into account the surrounding

circumstances, which existed at the time of bringing about an

amendment. The antecedent state of affairs which lead to the

initiation of the amendment bill cannot be glossed over. The

recommendations concerning the status of teachers, which

44

emanated from U.N.E.S.C.O. and I.L.O., are accepted by the

Special Intergovernmental Conference on 5.10.1966. The

recommendation is for taking the social security measures to

protect the interests of the teachers. Payment of gratuity is one

such measure recommended by International Organizations and

incorporated in our domestic/municipal law. On the grounds

that the educational institutions have not collected the amounts

from the students for the payment of gratuity to its teachers,

that the payment of the gratuity makes the working of the

educational institutions unviable, etc., this Court’s interference is

not warranted.

50. As held by the Apex Court in the case of BAKSHISH

SINGH (supra), the payment of gratuity is one of the minimal

conditions of service, which must be available to the employees,

notwithstanding the financial capability of the employer. In the

said case, the Hon’ble Supreme Court has observed that the

establishments, which have no capacity to give their workmen

minimal conditions of service prescribed by the Payment of

Gratuity Act, have no right to exist.

45

51. In this context, I may also usefully refer to the

Division Bench’s judgment of Delhi High Court in the case of

INDEPENDENT SCHOOLS’ FEDERATION OF INDIA (REGD)

v. UNION OF INDIA & ORS. passed in W.P.(C)

No.6168/2010, disposed of on 2.12.2011. In the said case,

the same statutory provisions were questioned. Para 33 of the

said decision reads as follows:-

“33. No doubt, this amendment may cause

financial burden on the schools who will have to pay

gratuity to all those teachers who retired after 3.4.1997.

However, that may not be a reason sufficient to set at

naught the retrospective operation of the amendment. We

thus do not find any merit in this writ petition which is

dismissed. There shall, however, be no order as to costs.”

52. The submission urged on behalf of the petitioners in

W.P.Nos.43321/2015 and 43322/2015 that the Service and

Conduct Rules of the petitioner’s Trust do not provide for the

payment of gratuity to teachers is too slender a ground for this

Court’s interference. It is trite that in case of conflict between

the byelaws of the Society and the law, ordinarily the latter shall

prevail over the former. That apart, the teachers have no

strength when it comes to the question of negotiating with the

46

managements. An unemployed person, who is appointed as a

teacher would have no strength and perhaps no occasion to

oppose any provision of the byelaws of the Society. If he

opposes, he would run the risk of his losing the employment or

the prospective employment.

53. For all the aforesaid reasons, I have no hesitation in

answering the first question to the effect that the newly

substituted Section 2(e) and the newly inserted Section 13-A of

the said Act cannot be struck down as unconstitutional on the

ground of their retrospective operation.

54. The second question that falls for my consideration is

whether the Controlling Authority is justified in levying the

interest on the gratuity? Sub-Section (3-A) of Section 7 of the

said Act has made the payment of interest a mandatory

requirement of law itself. Payment of interest is exempted by

the proviso to Section 7(3-A) only if the delay is on account of

fault of the employee and the employer has obtained the

permission in writing from the Controlling Authority for the

delayed payments. The Andhra Pradesh High Court in the case

of D.PRASADA RAO v. A.P. STATE CO-OPERATIVE BANK,

47

HYDERABAD reported in (2003) 3 LLN 980 has held that an

employee is not entitled to interest, if the delay in the payment

of gratuity is not attributable to the employer.

55. Rule 7 of the Payment of Gratuity (Central) Rules,

1972 (‘the said Rules’ for short) states that the employee shall

ordinarily make the application within 30 days to his employer

for the payment of gratuity. In respect of the legal heir of the

employee, the period prescribed is one year as per Rule 7(3) of

the said Rules. Further, Rule 7(5) of the said Rules states that

the claim for payment of gratuity shall be entertained even after

the expiry of the specified periods, provided sufficient cause is

shown for the delay in preferring his claim. If the employee is

not satisfied with the decision of the employer, the employee can

make an application to the Controlling Authority within 90 days

from the date of occurrence of the cause of action, invoking Rule

10 of the said Rules.

56. This being the scheme of the Statute and the Rules

framed thereunder, the interest cannot be awarded without holding

the enquiry as to who, the employee or employer, is responsible for

the delay in the payment of gratuity and whether the Controlling

48

Authority’s permission is obtained by the employer for not

paying the gratuity. If an employee has not made an

application/s for the payment of gratuity before the

employer/Controlling Authority, or if he has not produced the

documents in support of his claims, the proviso to Section 7(3-A)

is attracted. In the instant cases, for softening the rigors of

transition from one legal regime to another legal regime, the

period for making the applications for preferring the claims can

be reckoned from the date of the commencement of Act 47 of

2009.

57. There cannot be any straitjacket answer to the

second question. The answer cannot be a blanket ‘yes’ or ‘no’,

but it would be qualified ‘yes’ or ‘no’ depending on whether or

not the two ingredients of the proviso to Section 7 (3-A) of the

said Act are made out.

58. In the result, I pass the following order:

(i) The challenge to the newly substituted Section

2(e) and the newly inserted Section 13-A of the

Payment of Gratuity Act, 1972 is negatived.

49

(ii) Writ Petition Nos.14083/2011, 29691-

29694/2011, 44827-44830/2011 and

49523/2013, wherein only the validity of

amended provisions is challenged, are

dismissed.

(iii) In Writ Petition Nos.51033/2012, 51034/2012,

51035/2012, 38497/2014 and 2145/2013, the

amended provisions and the notices issued by

the Controlling Authority are challenged.

These writ petitions are dismissed but by

expressly reserving the liberty to the petitioners

to submit a reply to the impugned notices and

to take part in the enquiry proceedings before

the Controlling Authority.

(iv) Writ Petition Nos.39434/2013, 1163/2012,

37434/2013, 10429-10436/2013, 43321/2015

and 43322/2015, wherein both the amended

provisions and the orders of the Controlling

Authority are challenged, are dismissed but by

expressly reserving the liberty to the petitioners

50

to challenge the impugned orders passed by the

Controlling Authority by way of appeal invoking

Section 7(7) of the said Act. It shall be open to

the petitioners to seek the exclusion of time

bona fide spent on these writ proceedings

invoking Section 14 of the Limitation Act, 1963.

The proviso to Section 7(7) of the said Act also

provides for the condonation of delay, if

sufficient cause is shown for the same. If an

appeal is filed within three weeks from today,

the Appellate Authority shall consider the

petitioners’ applications for the condonation of

delay sympathetically.

(v) It shall also be open to the petitioners in Writ

Petition Nos.39434/2013, 1163/2012,

37434/2013, 10429-10436/2013, 43321/2015

and 43322/2015 to establish before the

Appellate Authority that they are not liable to

pay the interest for the delayed period, if they

are in a position to bring the interest-issue

within the ambit of the proviso to Section

51

7(3-A) of the Payment of Gratuity Act, 1972.

Needless to observe that it shall be equally

open to the employees to resist the anticipated

appeals of the petitioners by contending that

the proviso to Section 7(3-A) is not attracted.

It is for the Appellate Authority to take a call on

the interest-issue after hearing both the

parties.

59. Now that the Writ Petition Nos.43321/2015 and

43322/2015 are disposed of, nothing survives for consideration

of I.A.No.1/16 for vacating the interim order in the said

petitions. They are dismissed as having become unnecessary.

No order as to costs.

Sd/-

JUDGE

MD/CM/GH/VGR

writ petition no.39434 of 2013 (l-pg) c/w w.p.nos.14083...

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