Case Note & Summary
The dispute arose out of a claim for gratuity and leave compensation filed by a former special correspondent of Bennett Coleman & Co. (P) Ltd. under the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955. In October 1963, the respondent tendered his resignation, which was accepted. Shortly thereafter, he accepted employment with another newspaper and claimed compensation for leave due and gratuity. The appellant company wrote to him stating that its rules did not permit compensation upon resignation and that his acceptance of other employment contravened his service conditions. Later, the respondent went to the appellant's office and received the letter of acceptance of resignation along with a cheque stated to be in full and final settlement. The statement of account revealed that no leave compensation was paid and that the monetary value of car allowance, free telephone, and free newspapers was excluded from the calculation of gratuity. The respondent promptly wrote to the appellant protesting that the settlement did not include leave compensation and that the acceptance letter and cheque were given only after he accepted the cheque under protest. The main legal issues were: (1) whether an ex-employee could maintain an application under Section 17 of the Act; (2) whether car allowance, free telephone, and free newspapers constituted 'wages' under Section 2(rr); and (3) whether the respondent was estopped by his acceptance of the full and final settlement under Section 115 of the Evidence Act. The appellant contended that the respondent, having resigned, was not an 'employee' and could not file the application, that the perquisites were not wages, and that the full and final settlement barred the claim. The respondent argued that his claim was maintainable, that the benefits formed part of his wages, and that the settlement was obtained under duress and without full disclosure. The Supreme Court allowed the appeal, holding that an ex-employee is entitled to maintain the application for benefits accrued during employment, that car allowance, free telephone, and newspapers are not 'wages' within the meaning of the Act, and that estoppel did not apply because the respondent had protested the finality of the settlement. Consequently, the gratuity was to be recomputed excluding these perquisites.
Headnote
A) Labour Law - Maintainability of Application - Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955, s.17 - The respondent, having resigned, was held to be an ex-employee entitled to file a claim for gratuity under s.17, as the Act does not preclude former employees from seeking benefits accrued during service. B) Labour Law - Definition of Wages - Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955, s.2(rr) - Car allowance, free telephone and free newspapers provided to an employee are not includible in 'wages' for computing gratuity, as they are perquisites and do not form part of the remuneration payable in terms of the contract of employment. C) Evidence - Estoppel - Indian Evidence Act, 1872, s.115 - The respondent's acceptance of a cheque in full and final settlement did not estop him from claiming gratuity because the appellant had withheld the letter of acceptance and made acceptance of the cheque a condition for delivery, and the respondent promptly protested the settlement being full.
Issue of Consideration
Whether car allowance, free telephone and newspapers constitute 'wages' for calculation of gratuity; whether an ex-employee can maintain the application; whether the employee is estopped from claiming gratuity after acceptance of full and final settlement.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court judgment, and held that the car allowance, free telephone and newspapers are not wages under the Act; however, the respondent was entitled to maintain the application for gratuity, and estoppel did not bar his claim. The matter was remanded for computation of gratuity excluding these perquisites.
Law Points
- Car allowance
- free telephone and free newspapers are not 'wages' within meaning of s.2(rr) of Working Journalists (Conditions of Service) and Miscellaneous Provisions Act
- 1955
- Ex-employee can file application under s.17 for gratuity
- Estoppel under s.115 Evidence Act not applicable when there is no representation leading to reliance.
