Case Note & Summary
The appeal arose from a dispute between Birla Institute of Technology (BIT) and a retired Assistant Professor (respondent No.4) regarding payment of gratuity under the Payment of Gratuity Act, 1972. Respondent No.4 joined BIT on 16.09.1971 and superannuated on 30.11.2001. He claimed gratuity, which BIT denied. The controlling authority allowed his claim, directing payment of Rs.3,38,796 with 10% interest. BIT's appeal to the appellate authority was dismissed. BIT then filed a writ petition in the High Court of Jharkhand, which was dismissed by the Single Judge on 12.01.2007, and the Letters Patent Appeal was dismissed by the Division Bench on 02.04.2008. BIT appealed to the Supreme Court. Initially, on 07.01.2019, the Supreme Court allowed the appeal relying on Ahmadabad Pvt. Primary Teachers Association v. Administrative Officer (2004) 1 SCC 755, which held that teachers are not 'employees' under Section 2(e) of the Act. However, the Court later discovered that the Parliament had amended the definition of 'employee' by Act No. 47 of 2009 with retrospective effect from 03.04.1997, which was not brought to its notice. The Court suo motu recalled its order on 09.01.2019 and reheard the appeal. The legal issue was whether respondent No.4, a teacher, was an 'employee' under the unamended Section 2(e). The Court applied the rule of noscitur a sociis and held that teachers do not fall within the categories of 'skilled', 'semiskilled', 'unskilled', 'manual', 'supervisory', 'technical' or 'clerical' work. However, the 2009 amendment retrospectively included teachers. Since the amendment was not brought to the Court's notice earlier, the Court recalled its order dated 07.01.2019. On merits, the Court found that the amendment had direct bearing and dismissed the appeal, upholding the orders of the authorities below. The Court held that respondent No.4 was entitled to gratuity under the Act as amended retrospectively.
Headnote
A) Payment of Gratuity Act - Definition of Employee - Section 2(e) - Teachers - Prior to 2009 amendment, the definition of 'employee' under Section 2(e) of the Payment of Gratuity Act, 1972 did not include teachers, as they are not 'skilled', 'semiskilled', 'unskilled', 'manual', 'supervisory', 'technical' or 'clerical' employees - The Supreme Court, applying the rule of noscitur a sociis, held that teachers are not covered under the Act - However, the Parliament subsequently amended the definition with retrospective effect from 03.04.1997 by Act No. 47 of 2009 to include teachers - The Court recalled its earlier order due to error apparent on record as the amendment was not brought to its notice (Paras 23-26).
Issue of Consideration
Whether a teacher is an 'employee' under Section 2(e) of the Payment of Gratuity Act, 1972, as it stood prior to the 2009 amendment.
Final Decision
The Supreme Court recalled its earlier order dated 07.01.2019 and dismissed the appeal, upholding the orders of the controlling authority, appellate authority, and the High Court. The Court held that respondent No.4 is entitled to gratuity under the Payment of Gratuity Act, 1972 as amended retrospectively.
Law Points
- Definition of employee under Section 2(e) of Payment of Gratuity Act
- 1972
- Noscitur a sociis
- Retrospective amendment
- Error apparent on face of record
Case Details
Civil Appeal No. 2530 of 2012
Abhay Manohar Sapre, Indu Malhotra
Shambo Nandy (for appellant), Anil Kumar Jha (for respondent Nos.1-3), Sunil Roy (for respondent No.4)
Birla Institute of Technology
The State of Jharkhand & Ors.
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Nature of Litigation
Civil appeal against the judgment of the High Court of Jharkhand dismissing the Letters Patent Appeal and upholding the order of the controlling authority directing payment of gratuity to a retired teacher.
Remedy Sought
The appellant (Birla Institute of Technology) sought to set aside the orders of the controlling authority, appellate authority, and the High Court, and to deny gratuity to respondent No.4.
Filing Reason
The appellant disputed the applicability of the Payment of Gratuity Act, 1972 to teachers, contending that they are not 'employees' under Section 2(e) of the Act.
Previous Decisions
The controlling authority allowed the gratuity claim on 07.09.2002; the appellate authority dismissed the appeal on 15.04.2005; the Single Judge dismissed the writ petition on 12.01.2007; the Division Bench dismissed the LPA on 02.04.2008.
Issues
Whether a teacher is an 'employee' under Section 2(e) of the Payment of Gratuity Act, 1972 prior to the 2009 amendment?
Whether the retrospective amendment to Section 2(e) by Act No. 47 of 2009 applies to the present case?
Submissions/Arguments
Appellant argued that teachers are not covered under the definition of 'employee' in Section 2(e) as they are not skilled, semiskilled, unskilled, manual, supervisory, technical, or clerical workers, relying on Ahmadabad Pvt. Primary Teachers Association.
Respondent No.4 argued that the 2009 amendment retrospectively included teachers as employees, and thus he is entitled to gratuity.
Ratio Decidendi
The definition of 'employee' under Section 2(e) of the Payment of Gratuity Act, 1972, prior to the 2009 amendment, did not include teachers. However, the Parliament amended the definition with retrospective effect from 03.04.1997 by Act No. 47 of 2009, which now includes teachers. Since the amendment has retrospective effect, teachers are entitled to gratuity under the Act. The Court's earlier order was recalled due to error apparent on record as the amendment was not brought to its notice.
Judgment Excerpts
The apparent error is that it was not brought to our notice that the Parliament, consequent upon the decision of this Court in Ahmadabad Pvt. Primary Teachers Association (supra), had amended the definition of 'employee' as defined in Section 2(e) of the Payment of Gratuity Act by amending Act No. 47 of 2009 with retrospective effect from 03.04.1997.
In our view, the error mentioned above is an error apparent on the face of the record of the case because the material, subsequent event, which came into existence, had a direct bearing over the controversy involved in this appeal, was not brought to our notice at the time of hearing the appeal.
Procedural History
Respondent No.4 filed an application before the controlling authority under the Payment of Gratuity Act, which was allowed on 07.09.2002. The appellant's appeal to the appellate authority was dismissed on 15.04.2005. The appellant then filed a writ petition in the High Court of Jharkhand, which was dismissed by the Single Judge on 12.01.2007. The Letters Patent Appeal was dismissed by the Division Bench on 02.04.2008. The appellant filed a special leave petition in the Supreme Court, which was registered as Civil Appeal No. 2530 of 2012. The Supreme Court initially allowed the appeal on 07.01.2019, but later recalled that order on 09.01.2019 and reheard the appeal, ultimately dismissing it.
Acts & Sections
- Payment of Gratuity Act, 1972: Section 2(e)
