Case Note & Summary
The case involves three writ petitions filed by educational institutions (Seth Govindraoji Ayurved Mahavidyalaya and Seth Sakharam Premchand Jain Aushadhalaya & Rungnalaya) challenging orders of the Controlling Authority under the Payment of Gratuity Act, 1972, which held that teachers are entitled to gratuity. The respondent teachers (Vimal S. Nagare, Ganesh P. Kale, and Neelkanth Shankar Ranade) were professors who retired after long service. The respondent Nagare worked from 1.1.1967 to 31.10.1989 and filed an application for gratuity in 2001, 12 years after retirement, without seeking condonation of delay. The petitioner college initially appeared before the Controlling Authority but later remained absent, and the Authority passed an ex parte order directing payment of gratuity. The legal issue was whether teachers are 'employees' under Section 2(e) of the Payment of Gratuity Act, 1972. The petitioners argued that teachers are not employees under the Act, while the respondents contended that the definition is broad enough to include teachers. The Court analyzed the definition of 'employee' under Section 2(e), which includes any person employed on wages, and held that teachers are employees. The Court also addressed the delay issue, noting that the Controlling Authority has power to condone delay under Section 7(4) read with Section 10(1) of the Act. The Court dismissed the petitions, upholding the orders of the Controlling Authority and confirming that teachers are entitled to gratuity under the Act.
Headnote
A) Payment of Gratuity Act, 1972 - Definition of Employee - Section 2(e) - Teachers as Employees - The short question was whether teachers of an educational institution are 'employees' under Section 2(e) of the Payment of Gratuity Act, 1972. The Court held that teachers are employees within the meaning of the Act and are entitled to gratuity. The Court relied on the definition which includes any person employed on wages, and rejected the argument that teachers are not covered. (Paras 1, 7-8) B) Payment of Gratuity Act, 1972 - Limitation - Section 7(4) - Condonation of Delay - The respondent teacher filed an application for gratuity 12 years after retirement without seeking condonation of delay. The Court held that the Controlling Authority has power to condone delay under Section 7(4) read with Section 10(1) of the Act, and the delay was not fatal. (Paras 5, 9) C) Payment of Gratuity Act, 1972 - Applicability - Educational Institutions - The petitioner college, a private aided institution receiving 100% grant-in-aid, was held to be covered under the Act. The Court held that the Act applies to all establishments, including educational institutions, and teachers are entitled to gratuity. (Paras 3-4, 10)
Issue of Consideration
Whether teachers of an educational institution can be held to be employees under Section 2(e) of the Payment of Gratuity Act, 1972 to enable them to claim gratuity.
Final Decision
The Court dismissed the writ petitions, upholding the orders of the Controlling Authority that teachers are entitled to gratuity under the Payment of Gratuity Act, 1972.
Law Points
- Teachers are employees under Section 2(e) of the Payment of Gratuity Act
- 1972
- Educational institutions are liable to pay gratuity to teachers
- Delay in filing application for gratuity can be condoned under Section 7(4) of the Act
