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E. GOPAL & OTHERS V/S ARULMIGU DHANDAYUTHAPANISWAMY TEMPLE, PALANI, REP, BY ITS JOINT COMMISSIONER EXECUTIVE OFFICER & OTHERS, decided on Monday, September 17, 2012.
[ In the High Court of Madras, W.A. Nos. 3825 of 2003, 993, 994 & 2040 of 2004 & W.P. No. 15497 of 2002 & connected MPs. ] 17/09/2012
Judge(s) : ELIPE DHARMA RAO, D. MURUGESAN & M. VENUGOPAL
Advocate(s) : Silambanan Senior Counsel N. Umapathy, Ms. G. Thilakavathi, P. Gopalan. A. Navaneetha Krishnan, General Assisted by S. Kandasamy, Special Government Pleader (HR & CE), R1, Venkatachalapathy, Senior Counsel M. Sriram, R2, P. Gopalan.
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  "2013 (2) LW 97 (Full Bench)"  







    Constitution of India - Article 246 Article 254(2) - Payment of Gratuity Act 1972 – Section 1(3)(b) Section 2(e) Section 4(5) Section 5 Section 14 - Tamil Nadu Hindu Religious and Charitable Endowment Act 1959 -Section 116 - Tamil Nadu Payment of Subsistence Allowance Act 1981 - Section 2(c) - Tamil Nadu Hindu Religious Institutions (Officers and Servants) Service Rules 1964 - Rule 26 – “gratuity” - writ appeal - Judge rejecting the contention of applicability of payment of Gratuity to the religious institution - whether a “religious institution will come within the purview of the Payment of Gratuity ActPara 2 18 and 19)Held - Central Act is more advantageous than that of the State Rules - Welfare benefits such as pensions provident fund and gratuity are in fulfillment of the directive principles - Demands of social security and social justice made it necessary to provide for payment of gratuity - no steps to invoke the power of the Central Government to exempt any establishment from the operation of the provisions - employees would be entitled to the payment of gratuit.(Para 28 29 and 31)Cases Referred:1. Tiruchendur Arulmigu Subramaniasamy Kovil Oivupetra Paniyalargal Sangam v. Executive Officer Arulmigu Subramaniasamy Devasthanam Tiruchendur2. 1981 (1) LLJ 354 (State of Punjab v. Labour Court Jullundur)3. 1992 WLR 155 (Management of the SIET Women’s College v. Mohamed Ibrahim)4. 1981 (1) LLJ 354 (State of Punjab v. Labour Court Jullundur)5. 1989 Vol.73 S.T.C. 321 (State of Andhra Pradesh v. Sri Bhramaramba Mallikarjuna Swamy Devasthanam Srisailam)6. 1979 II L.L.J 446 (Narayanan Namboodiri and others v. Cochin Devaswom Board and another)7. 2003 L A B.I.C. 917 (Tiruchendur Arulmigu Subramaniasamy Kovil Oivupetra Paniyalargal Sangam v. The Executive Officer Arulmigu Subramaniaswamy Devasthanam).8. (1978) 2 SCC 213 (Bangalore Water Supply & Sewerage Board v. A. Rajappa)9. (1980) 1 SCC 4 (State of Punjab v. Labour Court Jullundur)10. 1992 II LLJ 863 (Administrator Shri Jagannath Temple Puri v. Jagannath Padhi and11. 1992 Writ L.R. 155 (The Management of the SIET Women’s College represented by the Secretary v. Mohamed Ibrahim & others)12. 2008-I-LLJ 122 (Management of Sri Venkataramana Temple and Sri Hale Mariyamma Temple Kapur Udupi District v. Deputy Labour Commissioner and the Appellate Authority under the Payment of Gratuity Act 1972 Hassan Region Hassan and Others.     (Prayer: W.A.No.3825 of 2003 is filed under Clause 15 of the Letter Patent against the order of the learned single Judge in W.P.No.17597 of 2000 dated 13.3.2003.)Elipe Dharma Rao J.1. Learned Division Bench has raised some doubt regarding the applicability of the ratio of a Division Bench decision of the Madras High Court in W.A.No. 2626 of 2002 dated 2.9.2008 (Tiruchendur Arulmigu Subramaniasamy Kovil Oivupetra Paniyalargal Sangam v. Executive Officer Arulmigu Subramaniasamy Devasthanam Tiruchendur) in the light of the law laid down by the Honourable Supreme Court in 1981 (1) LLJ 354 (State of Punjab v. Labour Court Jullundur) which was followed by the earlier Division Bench in 1992 WLR 155 (Management of the SIET Women’s College v. Mohamed Ibrahim) and referred the matter to a Larger Bench by observing as follows:-“20. The decision in W.A.No.2626 of 2002 (supra) may have to be reconsidered afresh with regard to the construction of Section 1(3)(b) of the Act in the light of the law laid down in 1981 (1) LLJ 354 (supra) which has been followed by the earlier Division Bench in 1992 W L R 155 (supra). We are of the opinion that the matter should be heard and decided by a Larger Bench.Thereafter the present Full Bench has been constituted by the Honourable the Chief Justice.2. The precise question to be answered is whether a “religious institution / temple” will come within the purview of Section 1(3)(b) of the Payment of Gratuity Act in the light of the law laid down by the Honourable Supreme Court in 1981 (1) LLJ 354 (State of Punjab v. Labour Court Jullundur). If this question is decided the other related questions relating to applicability of Article 254(2) of the Constitution and whether the provisions of the Tamil Nadu Hindu Religious Institutions (Officers and Servants) Service Rules 1964 in respect of payment of gratuity is repugnant to the provisions of the Payment of Gratuity Act 1972 can be answered.3. Before considering the aforesaid question it would be appropriate to notice the relevant statutory provisions contained in the Payment of Gratuity Act 1972 and the Tamil Nadu Hindu Religious Institutions (Officers and Servants) Service Rules 1964.3.1. The Payment of Gratuity Act 1972 (39 of 1972) came into force on 16th September 1972. In order to ensure uniform pattern of payment of gratuity to the employees throughout the country and to avoid different treatment to the employees of establishments the Legislature thought it fit to enact a Central law on the subject and that is how the Payment of Gratuity Act 1972 came into existence.3.2. The Statement of Objects and Reasons for enacting the Act was to provide for a scheme for the payment of gratuity to employees engaged in factories mines oilfields plantations ports railway companies shops or other establishments and for matters connected therewith or incidental thereto. The payment of gratuity is a kind of retiral benefit like pension provident fund etc. and it is a gift especially for services rendered or return for favours received. One should not forget that for the wage-earning population when the worker becomes old or infirm as security of income the payment of gratuity assumes great importance. It is a gratuitous payment given to an employee on discharge superannuation or death.3.3. As per Section 1(3) (a) the Act shall apply to every factory mine oilfield plantation port and railway company. According to Section 1(3) (b) the Act shall apply to every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State in which ten or more persons are employed or were employed on any day of the preceding twelve months.3.4. Section 2(e) defines “employee” means any person (other than an apprentice) who is employed for wages whether the terms of such employment are express or implied in any kind of work manual of otherwise in or in connection with the work of a factory mine oilfield plantation port railway company shop or other establishment to which this Act applies but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.3.5. In order to ascertain the meaning of shop or establishment as stated in 1(3) of the Act one has to go by the meaning of any law for the time being in force in relation to shops and establishments in a State. In the State of Tamil Nadu the Act for time being in force in relation to shops and establishments is “The Tamil Nadu Shops and Establishments Act 1947 (Act XXXVI of 1947). This Act has been enacted for regulation of conditions of work in shops commercial establishments restaurants theatres and other establishments. Section 2(3) of this Act defines “commercial establishment” means an establishment which is not a shop but which carries on the business of advertising commission forwarding or commercial agency or which is a clerical department of a factory or industrial undertaking or which is an insurance company joint stock company bank broker’s office or exchange and includes such other establishment as the State Government may by notification declare to be a commercial establishment for the purposes of this Act.3.6. Section 2(6) defines “establishment” means a shop commercial establishment restaurant eating-house residential hotel theatre or any place of public amusement or entertainment and includes such establishment as the State Government may by notification declare to be an establishment for the purposes of this Act. Under Section 4 the Act provides exemption to certain establishments and it shall not apply to the persons employed in any establishment in a position of management establishments in bazaars in places where fairs or festivals are held temporarily for a period not exceeding fifteen days at a time etc. The State Government is empowered under Section 7 to exempt either permanently or for any specified period any establishment or person form all or any of the provisions of this Act by notification.3.7. Section 2(c) of the Tamil Nadu Payment of Subsistence Allowance Act 1981 defines the “establishment” in the following manner.(c) “establishment” means any place where any industry trade business undertaking manufacture occupation or service is carried on and with respect to which the executive power of the State extends but does not include –…..”3.8. Rule 26 of the Tamil Nadu Hindu Religious Institutions (Officers and servants) Service Rules 1964 deals with Gratuity payable to the employees of the Religious Institutions. Rule 26 is as follows:-“26. Gratuity.-Even non-hereditary officer or servant who retires after completing ten years of service in a religious institution included in the list published under Sec.48 of the Act shall become eligible for a gratuity at the rate of half a month’s salary for every completed year of service subject to a maximum of 15 month’s salary.Provided that this rule shall not apply to any such institution where the Contributory Provident Fund Scheme is in force.Explanation.- (1) Fraction of a year equal to six months and above shall be treated as completed years.(2) ‘Retirement’ for this purpose shall mean retirement on superannuation or after completing twenty-five years of service and shall not include cessation of service on resignation or as a result of disciplinary action.(3) Salary for the purpose of this rule shall mean the average monthly salary excluding the Dearness and other Allowances drawn during the last twelve months of service.”4. By placing reliance on the aforesaid statutory provisions of law Mr. S. Silambanan the learned Senior Counsel appearing for the appellant in W.A.No.3825 of 2004 would mainly contend that “Religious Institution” or “Temple” will come under purview of “establishment” as contemplated under the Tamil Nadu Shops and Establishment Act 1947.5. In order to appreciate the aforesaid contention which was strongly refuted by the other side one has to primarily go by the decisions of the Court.6. In support of their contention on the side of the Appellants strong reliance was placed on the following decisions amongst various other decisions:-1. (1978) 2 SCC 213 (Bangalore Water Supply & Sewerage Board v. A. Rajappa)2. (1980) 1 SCC 4 (State of Punjab v. Labour Court Jullundur)3. 1992 II LLJ 863 (Administrator Shri Jagannath Temple Puri v. Jagannath Padhi and Others)4. 1992 Writ L.R. 155 (The Management of the SIET Women’s College represented by the Secretary v. Mohamed Ibrahim & others)5. 2008-I-LLJ 122 (Management of Sri Venkataramana Temple and Sri Hale Mariyamma Temple Kapur Udupi District v. Deputy Labour Commissioner and the Appellate Authority under the Payment of Gratuity Act 1972 Hassan Region Hassan and Others.7. On the other hand the learned Advocate General appearing for the State and the learned Senior Counsel appearing for the Respondents placed strong reliance on the following decisions :-1. 1989 Vol.73 S.T.C. 321 (State of Andhra Pradesh v. Sri Bhramaramba Mallikarjuna Swamy Devasthanam Srisailam)2. 1979 II L.L.J 446 (Narayanan Namboodiri and others v. Cochin Devaswom Board and another)3. 2003 L A B.I.C. 917 (Tiruchendur Arulmigu Subramaniasamy Kovil Oivupetra Paniyalargal Sangam v. The Executive Officer Arulmigu Subramaniaswamy Devasthanam).8. First we can go through the decisions relied on the side of the appellants. In Bangalore Water Supply & Sewerage Board (cited above) the Honourable Supreme Court while holding that the educational institution can be and is an industry went further to probe into the question as to whether the charitable institutions could also be considered as industries. While answering the aforesaid question the Honourable Supreme Court observed as follows:-“Are charitable institutions industries”?102. Can charity be ‘industry’? This paradox can be unlocked only by examining the nature of the activity of the charity for there are charities and charities. The grammar of labour law in a pluralist society tells us that the worker is concerned with wages and conditions service the employer with output and economies and the community with peace production and stream of supply. This complex of work wealth and happiness firmly grasped will dissolve the dilemma of the law bearing on charitable enterprises. Charity is free: industry is business. Then how? A lay look may scare; a legal look will see; a social look will see through a hiatus inevitable in a sophisticated society with organizational diversity and motivational dexterity.103. If we mull over the major decisions we get a hang of the basic structure of ‘industry’ in its legal anatomy. Bedrocked on the grundnorms we must analyse the elements of charitable economic enterprises established and maintained for satisfying human wants. Easily three broad categories emerge; more may exist. The charitable element enlivens the operations at different levels in these patterns and the legal consequences are different viewed from the angle of ‘industry’. For income tax purposes Trusts Act or company law or registration law or penal code requirements the examination will be different. We are concerned with a benignant disposition towards workmen and a trichotomy of charitable enterprises run for producing and/or supplying goods and services organized systematically and employing workmen is scientific.104. The first is one where the enterprise like any other yields profits but they are siphoned off for altruistic objects. The second is one where the institution makes no profit but hires the services of employees as in other like businesses but the goods and services which are the output are made available at low or no cost to the indigent needy who are priced out of the market. The third is where the establishment is oriented on a humane mission fulfilled by men who work not because they are paid wages but because they share the passion for the cause and derive job satisfaction from their contribution. The first two are industries the third not. What is the test of identity whereby these institutions with eleemosynary inspiration fall or do not fall under the definition of industry?”8.1 Pausing for a moment one has to see now whether the religious institution in the present case can be termed as industry as defined by the Honourable Supreme Court in the aforesaid decision. From the activities carried on by the temple in the present case admittedly it will not fall under the first category as it was not an enterprise like any other yields profits but siphoned off for altruistic objects. Certainly the Institution will also not fall under the third category because when the employees share the passion for the cause and derive job satisfaction from their contribution the question of approaching the Court would certainly not arise and this position is amply made clear by the Honourable Supreme Court in the coming paragraphs. Therefore we have to see whether the present institution will fall under the second category or not for which one has to go through the materials on record.8.2. The Honourable Supreme Court has further proceeded to delve in detail of the aforesaid three categories of industries in the following words:-“105. All industries are organized systematic activity Charitable adventures which do not possess this feature of course are not industries. Sporadic or fugitive strokes of charity do not become industries. All three philanthropic entities we have itemized fall for consideration only if they involve cooperation between employers and employees to produce and/or supply goods and/or services. We assume all three do. The crucial difference is over the presence of charity in the quasi-business nature of the activity. Shri Tarkunde based on Safdarjung submits that ex hypothesi charity frustrates commerciality and thereby deprives it of the character of industry.106. It is common ground that the first category of charities is disqualified for exemption. If a business is run for production and or supply of goods and services with an eye on profit it is plainly an industry. The fact that the whole or substantial part of the profits so earned is diverted for purely charitable purposes does not affect the nature of the economic activity which involves the cooperation of employer and employee and results in the production of goods and services. The workers are not concerned about the destination of the profits. They work and receive wages. They are treated like any other workmen in any like industry. All the features of an industry as spelt out from the definition by the decisions of this Court are fully present in these charitable businesses. In short they are industries. The application of the income for philanthropic purposes instead of filling private coffers makes no difference either to the employees or to the character of the activities. Good Samaritans can be clever industrialists.If a philanthropic devotion is the basis for the charitable foundation or establishment the institution is headed by one who whole-heartedly dedicates himself for the mission and pursues it with passion attracts others into the institution not for wages but for sharing in the cause and its fulfillment then the undertaking is not ‘industrial’. Not that the presence of charitable impulse extricates the institution from the definition in Section 2(j) but that there is no economic relationship such as is found in trade or business between the head who employs and the other who emotively flock to render service. In one sense there are no employers and employees but crusaders all. In another sense there is no wage basis for the employment but voluntary participation in the production inspired by lofty ideals and unmindful of remuneration service condition and the like. Supposing there is an Ashram or Order with a guru or other head. Let us further assume that there is a band of disciples devotees or priestly subordinates in the Order gathered together for prayers ascetic practices bhajans meditation and worship. Supposing further the outsiders are also invited daily or occasionally to share in the spiritual proceedings. And let us assume that all the inmates of the Ashram and members of the Order invitees guests and other outside participants are fed accommodated and looked after by the institution. In such a case as often happens the cooking and the cleaning the bed-making and service may often be done at least substantially by the Ashramites themselves. They may chant in spiritual ecstasy even as material goods and services are made and served. They may affectionately look after the guests and all this they may do not for wages but for the chance to propitiate the Master work selflessly and acquire spiritual grace. It may well be that they may have surrendered their lucrative employment to come into the holy institution. It may also be that they take some small pocket money from the donations or takings of the institution. Nay more; there may be a few scavengers and servants a part-time auditor or accountant employed on wages. If the substantial number of participants in making available goods and services if the substantive nature of the work as distinguished from trivial items is rendered by voluntary wage-less sishyas it is impossible to designate the institution as an industry notwithstanding a marginal few who are employed on regular basis for hire. The reason is that in the crucial substantial and substantive aspects of institutional life the nature of the relations between the participants is non-industrial.” (Emphasis added)9. In the second cited decision viz. State of Punjab v. Labour Court Jullundur (1981 (1) LLJ 354) the Honourable Supreme Court had an occasion to deal with the aspect of Section 1(3)(b) of the Payment of Gratuity Act and while determining the applicability of the “law” defined in the said section it proceeded to observe as follows:-“3……. Section 1(3) (b) speaks of ‘any law for the time being in force in relation to shops and establishments in a State’. There can be no dispute that the Payment of Wages Act is in force in the State of Punjab. Then it is submitted the Payment of Wages Act is not a law in relation to ‘shops and establishment’. As to that the Payment of Wages Act is a statute which while it may not relate to shops relates to a class of establishment that is to say industrial establishment. But it is contended the law referred to under Section 1(3) (b) must be a law which relates to both shops and establishments such as the Punjab Shops and Commercial Establishments Act 1958. It is difficult to accept that contention because there is no warrant for so limiting the meaning of the expression ‘law’ in Section 1(3) (b). The expression is comprehensive in its scope and can mean a law in relation to shops as well as separately a law in relation to establishments or a law in relation to shops and commercial establishments and a law in relation to non-commercial establishments. Had Section 1(3) (b) intended to refer to a single enactment surely the appellant would have been able to point to such a statute that is to say a statute relating to shops and establishments both commercial and non-commercial. The Punjab Shops and Commercial Establishments Act does not relate to all kinds of establishments. Besides shops it relates to commercial establishments alone. Had the intention of Parliament been when enacting Section 1(3)(b) to refer to a law relating to commercial establishments it would not have left the expression ‘establishments’ unqualified. We have carefully examined the various provisions of the Payment of Gratuity Act and we are unable to discern any reason for giving the limited meaning to Section 1(3)(b) urged before us on behalf of the appellant. Section 1(3 b) applies to every establishment within the meaning of any law for the time being in force in relation to establishments in a State. Such an establishment would include an industrial establishment within the meaning of Section 2(ii) (g) of the Payment of Wages Act”.10. In Shri Jagannath Temple’s case a Division Bench of Orissa High Court by going one step further what was stated in 1981 (1) LLJ 354 gave a well constructed definition for the term “establishment”. The short but interesting question which fall consideration in the said case was relating to applicability of the provisions of the Payment of Gratuity Act 1972 to the employees of Shri Jagannath Temple. In that context while answering the question whether the term “establishment” as defined in any law operating in the State includes within its ambit “Temple” the Division Bench proceeded to observe as follows :-“3…. The authorities under the Act have observed that the Industrial Disputes Act and the statute relating to shops and commercial establishments include “Temple Trust” and therefore the Temple is included therein. It would be relevant at the stage to refer to a decision of this Court reported in 1980(49) CLT 252 Gopichand Agarwala v. State of Orissa wherein the question whether deity is an establishment or an undertaking under the Orissa Prevention of Land Encroachment Act came up for consideration and it was held that deity is neither an establishment nor an undertaking within the meaning of that Act. It was observed that the word “establishment” was not defined in the concerned statute and therefore to be assigned the commonsense meaning; it is difficult to conceive that a religious institution like a Hindu temple can constitute an establishment in the sense the words have been used in Section 2(e) of the Orissa Prevention of Land Encroachment Act 1972.”Ultimately the Division Bench held that it would be unconscionable to keep temple out of the purview of the Act more particularly when the low paid employees have served the temple for a very long span of time.11. In The Management of SIET Women’s College case (supra) the question posed before the Division Bench of this Court was whether the provisions of the Payment of Gratuity Act 1972 are applicable to the minority educational institution in question. The Division Bench by considering all the earlier decisions of the Honourable Supreme Court holding the field and the decisions of various High Courts came to a conclusion that the minority educational institution is also an establishment. While refuting the contention raised by the Management to the effect that the law referred to in Section 1(3)(b) of the Act should be a law already in force in the concerned State and not any law which comes into force subsequently the Division Bench observed as follows :-“5……..We do not agree with this contention. The question has to be decided only when it arises before the Court. If at the time when the question arises before the Court for consideration there is a law in force in relation to shops or establishments in a state then the Act will apply all shops and establishments within the meaning of such law. There is no necessity for the relevant law to have been in force already when the Act was passed in 1972.”12. In Sri Venkataramana Temple and Sri Hale Mariyamma Temple’s case the contention of the temple was that the Payment of Gratuity Act was not applicable to the employees / Petitioners since they were not engaged in any business trade or profession and hence cannot be termed as an “establishment” under the Payment of Gratuity Act. It was their further contention that the temple being governed under the provisions of the Karnataka Hindu Religious Institutions and Charitable Endowments Act any claim for gratuity or service benefits could have been raised only under the provisions of that Act and the authorities under the Payment of Gratuity Act would have no jurisdiction. Learned single Judge of the Karnataka High Court by relying on the decisions of the Honourable Supreme Court in Delhi Cloth and General Mills Company Limited v. Its Workmen and Others (A I R 1970 SC 919) and Indian Hume Pipe Company Limited v. Workmen (AIR 1960 SC 251) observed as follows:-“12. On these rival contentions and on a further examination of the case-law it is clear that the word “establishment” in Section 1(3)(b) of the Payment of Gratuity Act 1972 is not to be restricted as referring to “commercial establishments” alone. The Act has been held to apply even to institutions which were exempted under the Shops and Establishments Act (See: Principal Bhartiya Mahavidyalaya Amravati and Another v. Ramakrishna Wasudeo Lahudkar 1994-II-LLJ-556 (Bom). There is no doubt that a liberal construction has to be given to the expression and any institution or organization where systematic activity is carried on by employing ten or more persons would fall within the ambit of the provision.13. In a temple the main activity of facilitating devotees to offer prayers requires the employment of personnel who render service just as they world in any other establishment. The circumstance that the profit motive is absent in the activity in which the institution is engaged is not material. The petitioner-temples would hence fall within the purview of Section 1(3)(b) of the Act. The impugned orders cannot be said to be without jurisdiction.” (Emphasis added)13. Before coming to a conclusion as to whether the temple would come under the term “establishment” as stated in the aforesaid decisions it is appropriate to examine the decisions relied on by the other side.14. Learned Senior Counsel has placed strong reliance on the decision of a Division Bench of the Andhra Pradesh in Sri Bhramaramba Mallikarjuna Swamy Devasthanam’s case (cited supra) to establish that a religious or charitable institution would not come under the purview of business / commercial activity. The said case arose under the Andhra Pradesh General Sales Tax Act 1957. The Sales Tax Department sought to levy tax on sales of food and drink in the canteens run by Devasthanam on the sales of motor parts as scrap and on sales of human hair by contending that though the Devasthanam may not be carrying on in the main any business activity running of canteen being a business activity where food is sold for consideration to those who visit the canteen sales tax is attracted. The counter contention of the Devasthanam was that the Devasthanam being a religious and charitable institution and the predominant activities are nothing but religious and charitable in nature and therefore merely because it is catering to the needs of pilgrims who come over to Devasthanam for the purpose of having darshan and for whose facility the canteen is run wherein eatables are supplied for reasonable prices the Devasthanam cannot be termed as a dealer and such activity cannot be termed as business activity within the meaning of the Andhra Pradesh General Sales Tax Act. The Division Bench by Placing reliance on various decisions held as follows:-“Now bearing in mind the above principles when we come to the incidental activity of the assessee - Devasthanam viz. running of the canteen wherein eatables are sold to the pilgrims it is clear that the main object of the assessee – Devasthanam is neither commercial nor trading in nature and secondly the running of a canteen for the supply of foodstuffs to the visiting pilgrims or devotees is to extend the facilities at reasonable prices which has in our judgment the bearing of functional integrality and therefore though such activity by itself constitutes business activity but it must escape sales tax because of the second principle as enumerated above.”15. The other foremost decision relied on by the Management is the decision of a Division Bench of this Court in W.A.No.2626 of 2002 dated 2.9.2008 Tiruchendur Arulmigu Subramaniasamy Kovil Oivupetra Paniyalargal Sangam v. Executive Officer Arulmigu Subramaniasamy Devasthanam Tiruchendur which decision made the Division Bench to refer the matter to the Full Bench.16. Before going through the aforesaid order of the Division Bench it would be profitable to note the order of the learned single Judge which gave rise to the aforesaid Division Bench decision.The matter related to payment of gratuity to the retired employees of the Arulmigu Subramaniaswamy Devasthanam Tiruchendur under the Payment of the Gratuity Act. The main contention of the employees before the learned single Judge was that at the time of retirement the employees are paid only the provident fund but not pension and the Devasthanam comes under the purview of the Payment of Gratuity Act and as per Section 2-J of the Industrial Disputes Act the Devasthanam has to be treated as an industry. The stand of the Management was that the employees are entitled to provident fund and not either pension or gratuity and that the management does not come under the category of “industry” nor fall under the ambit of Section 1(3) of the Payment of Gratuity Act.In the absence of furnishing of already decided cases toward their stand point by either of the counsel the Court proceeded to pass orders on the facts pleaded by parties and the circumstances encircling the case.17. While dealing with the applicability of Section 1(3) of the Payment of Gratuity Act the learned single Judge observed as follows:-“12. Coming to the applicability of Section 1(3) of the Payment of Gratuity Act 1972 to the employees of the respondent Devasthanam excepting to denote under Section 1(3)(b) to the effect of having ten or more persons employed in relation to the Shops and Establishment Act nothing else is found for being applicable to religious institutions like the respondent Devasthanam. The other establishments indicated therein are either commercial or industrial establishments and not a religious institution such as the respondent institution such as the respondent Devasthanam. Therefore it is safe to conclude that for the respondent Devasthanam Section 1(3) of the Payment of Gratuity does not apply at all needless to mention that the members of the petitioner Sangam are not entitled to claim gratuity as they have claimed in the above writ petition.”18. When the matter was taken in appeal the Division Bench by a short judgment dismissed the writ appeal by observing as follows:-“2. This writ appeal is directed against the order of the learned Single Judge rejecting the contention of applicability of Payment of Gratuity Act 1972 (in short ‘the Act’) to the religious institution / respondent herein. The fact that the respondent is a religious institution is not disputed. If that be so Section 1(3) of the Act read with Shops and Establishments Act makes it clear that Section 1(3) of the Act does not apply to the respondent. That apart even on 17.10.98 the appellant / sangam had made an application to the Joint Commissioner / Executive Officer of the respondent endowment for payment of gratuity and even though the plea was rejected on the ground of inapplicability of the provisions of the payment of gratuity the order had become final as it remains unchallenged. For the above reasons the writ appeal is dismissed.”19. A reading of the aforesaid decisions rendered by the learned single Judge and confirmed by the Division Bench would show that neither the decision of the Apex Court or the other High Courts or this Court had been relied on / referred to in order to arrive at a conclusion that a religious institution does not come under the purview of the Payment of Gratuity Act 1972. The learned single Judge merely on the basis of facts encircling the case proceeded to observe that Section 1(3) of the Act is not applicable to religious institutions. Neither the learned single Judge nor the Division Bench had the benefit of going through the decisions of the Honourable Supreme Court rendered in the context of applicability of the term “establishment”.20. The Honourable Supreme Court in 1981 (1) LLJ 354 (cited supra) had given a wider meaning to the expression “law” is Section 1(3) (b) of the Payment of Gratuity Act by stating that it can apply to every establishment within the meaning of any law for the time being in force in relation to an establishment in a State and it was not necessary that the law should be one relating to shops and establishment alone. In other words it was laid down that Section 1(3)(b) can even apply to non-commercial establishments.21. In Bangalore Water Supply & Sewerage Board case (cited supra) while analysing the question whether Charitable Institutions are Industries laid down three categories (already extracted above) and we are concerned with the second category where the institution makes no profit but hires the services of employees as in other like business. To fall under the second category as laid down by the Honourable Supreme Court one had to see whether the charitable employer is exactly like a commercial minded employer and there is relationship of employer and employee as like that of the industries. In the present case though the Management may state that they fall under the third category to the effect that the establishment is oriented in a humane mission fulfilled by ham who work not because they are paid wages but because they share the passion for the cause and derive job satisfaction from their contribution from the materials on record and the documents produced by either side we are not inclined to accept that the respondent Devasthanam fall under the third category. From the orders passed by the authorities below there is no dispute that there is employer and employee relationship between the Management and the appellants / employees and the employees are paid wages according to the work done and they are entitled to leave as per the Rules. From the part of the employees the Devasthanam is not a charity and it is only an establishment working for profit. It is also brought to our notice that the temples in question were paying salary in Crores of rupees to the employees which fact is not in dispute. The other decisions relied on and extracted by us viz. Administrator Shri Jagannath’s case The Management of SIET College Sri Venkataramana Temple Sri Hale Mariyamma Temple etc. (cited above) would only pave a way to the conclusion that the Religious Institutions would also be attracted by the term “establishment” under the Payment of Gratuity Act and it would not stop within the meaning prescribed to the “establishment” defined under the Tamil Nadu Shops and Establishments Act.22. The contention raised by the learned Advocate General to the effect that the word “establishment” has to be construed to mean what has been referred to in the Tamil Nadu Shops and Establishments Act and not in any other Act which deal with the establishment cannot be accepted in view of the wider meaning give by the Honourable Supreme Court in 1981 (1) LLJ 354. Moreover keeping in view the observations made by the Honourable Supreme Court with regard to charitable institutions in Bangalore Water Supply & Sewerage Board’s case which are extracted above we have no hesitation in arriving at a conclusion that the “religious institutions” will certainly fall within the meaning of “establishment” as defined under Section 1(3)(b) of the Payment Gratuity Act. The decisions relied on by the respondents / Management will be of no help to them.23. The decision in 1989 Vol.73 S.T.C. 321 (cited above) relied on by the respondents relate to payment of tax by Sri Bhramaramba Mallikarjuna Swamy Devasthanam arise under the Andhra Pradesh General Sales Tax Act. The question was whether the religious or charitable institution having any distinct incidental activity like running of canteen for the pilgrims is exempted from payment of tax or not. The Division Bench of Andhra Pradesh held that since the main activity of the Devasthanam was neither commercial nor trading in nature and the incidental activity of running a canteen for the pilgrims although of a business nature was for the supply of food stuffs to visiting pilgrims at reasonable prices which was functionally integral to the main activity the sale of food in the canteen was not liable to tax. In the said decision the scope of Section 1(3)(b) of the Act was not examined and moreover for Income-tax purposes or for any tax liability the Trusts Act or Company Law or Registration Law or penal code requirements the examination will be different but we are concerned with a benignant disposition towards workmen. Therefore the said decision cannot come to aid to the respondents.24. The next decision on which much reliance was placed by the respondents was the decision of a learned single Judge of Kerala High Court in Narayanan Namboodiri’s case (cited above). Though the second question which arose for consideration in the aforesaid case was whether Devaswom employees are covered by the Payment of Gratuity Act the decision of the Honourable Supreme Court in Bangalore Water Supply & Sewerage Board’s case or the decision of the Orissa High Court in 1992 (II) LLJ 863 (cited supra) were not brought to the notice of the learned single Judge. Further the principle laid down by the Honourable Supreme Court in 1981 (1) LLJ 354 to the effect that Section 1(3)(b) of the Payment of Gratuity Act will apply to non-commercial establishments has not been brought to the notice of the learned single Judge. Therefore the decision of the Kerala High Court cannot be followed.25. Coming to the decision referred to this Full Bench the Division Bench upheld the decision of the learned single Judge rejecting the contention of applicability of Payment of Gratuity Act 1972 to the religious institution. The learned counsel appearing for both sides have not brought any of the decision of the Honourable Supreme Court to the attention of either the learned single Judge or the Division Bench. The Division Bench without noticing the decisions holding the field came to a conclusion that section 1(3) of the Act read with Shops and Establishments Act will not apply to the Devasthanam. Moreover the decision rendered was on a factual finding that the application made by the appellant therein viz. Tiruchendur Arulmigu Subramaniasamy Kovil Oivupetra Paniyalargal Sangam for payment of gratuity was rejected by the Joint Commissioner / Executive Officer on the ground of inapplicability of the provisions of the payment of gratuity and the said order has become final as it remained unchallenged. Here the facts of the case are different. The authorities under the Act have concurrently held that Section 1(3)(b) of the Act is applicable to the respondents / Management and the appellants are entitled for gratuity. In view of the decisions of the Honourable Supreme Court referred to above and the conclusion arrived by us we are of the considered opinion that the ratio laid down in W.A.No.2626 of 2002 dated 02.09.2002 has to be overruled.26. The other question to be answered is whether Rule 26 of the Tamil Nadu Hindu Religious Institutions (Officers and Servants) Service Rules 1964 will apply or the provisions of the Payment of Gratuity Act 1972 will apply in respect of those employees employed in the temples governed by the Hindu Religious and Charitable Endowments Act 1959. According to the employees the Payment of Gratuity Act 1972 will apply as it was beneficial whereas according to the Management Rule 26 will apply which restricts payment of gratuity where the Contributory Provident Fund Scheme is in force. Admittedly the Contributory Provident Fund Scheme is in force in the respondent Devasthanams.27. In view of the power conferred under Section 116 of the Tamil Nadu Hindu Religious and Charitable Endowment Act 1959 the State Government has framed the Tamil Nadu Hindu Religious Institutions (Officers and Servants) Service Rules 1964. Rule 26 of 30 relates to payment of Gratuity. The aforesaid State Rules came into existence prior to the Central Act the Payment of Gratuity Act. The prior Act falls under Entry 28 Schedule VII whereas the latter comes under Entry 24 of List III of the Concurrent List Schedule VII. It is the contention of the learned Senior Counsel for the Management that the Rule framed in exercise of power granted under Section 116 of the HR & CE Act falls under the Concurrent List and therefore the State Legislature has full power to legislate on the subject and in so far as the latter Act is concerned as it also falls under the concurrent list the State is also competent to frame rules by virtue of Article 246(2) of the Constitution. However the learned Senior Counsel accepted that the State Act do not have conflict with those of any Central Act or the subject in terms of Article 254 and if there is any conflict over any such provision then the Central Act will prevail over the State Act to the extent of repugnancy. Therefore one has to see whether the Payment of Gratuity Act will prevail over the Rules framed in exercise of the power conferred under Section 116 of the HR & CE Act keeping in view the aforesaid provisions of law.28. The Payment of Gratuity Act 1972 is a self contained and complete code by itself and its provisions impliedly exclude recourse to any other statute. Section 14 of the Payment of Gratuity Act has overriding effect over the provisions of any other enactment. It is not in dispute that the Central Act is more advantageous than that of the State Rules. In other words the benefit availed by the employees of the Devasthanam under the State Rules is meager compared to the Gratuity payable under the Payment of Gratuity Act. Section 4(5) of the Act protects the right of the employee to receive better terms of gratuity under any award or agreement or contract with the employer. The proviso to Rule 26 of the Rules provides that the said Rule will not apply to any institution where the Contributory Provident Fund scheme is in force. By imposing a restriction the Rules prohibit the employees to enjoy the fruits of the beneficial Central Act and to that extent the Rules are inconsistent with the Central Act. Therefore we have no hesitation in holding that the Rules are repugnant to the Central Act to the extent indicated above.29. A doubt has been raised regarding entitlement of gratuity when the employees are paid pension as one could not be entitled for two. This doubt has to go in view of the following pronouncements of the Apex Court.In Som Prakash Rekhi v. Union of India (1981) 1 SCC 449 Justice Krishna Iyer while examining the overriding effect of Section 14 of the Act along with similar provisions contained in other Acts observed as follows:-“66. We live in a welfare State in a ‘socialis’-republic under a Constitution with profound concern for the weaker classes including workers (Part IV). Welfare benefits such as pensions payment of provident fund and gratuity are in fulfillment of the directive principles. The payment of gratuity or provident fund should not occasion any deduction from the pension as a ‘set-off’. Otherwise the solemn statutory provisions ensuring provident fund and gratuity become illusory. Pensions are paid out of regard for past meritorious services. The root of gratuity and the foundation of provident fund are different. Each one is a salutary benefaction statutorily guaranteed independently of the other. Even assuming that by private treaty parties hand otherwise agreed to deductions before the coming into force of these beneficial enactments they cannot now be deprivatory. It is precisely to guard against such mischief that the non obstante and overriding provisions are engrafted on these statutes.”(Emphasis added)30. In Sudhir Chandra Sarkar v. TISCO Limited (1984) 3 SCC 369 while holding that payment of gratuity is a statutory liability case on the employer the Honourable Supreme Court observed observed as follows:-“15. The fundamental principle underlying gratuity is that it is a retirement benefit for long service as a provision for old age. Demands of social security and social justice made it necessary to provide for payment of gratuity. On the enactment of Payment of Gratuity Act 1972 a statutory liability was case on the employer to pay gratuity.16. Pension and gratuity coupled with contributory provident fund are well-recognised retiral benefits. These retiral benefits are now governed by various statutes such as the Employees’ Provident Fund and Miscellaneous Provisions Act 1952 the Payment of Gratuity Act 1972. These statues were legislative responses to the developing notions of fair and humane conditions of work being the promise of Part IV of the Constitution.” (Emphasis added)31. In MCD v. Dharam Prakash Sharma (1998) 7 SCC 221 the Honourable Supreme Court has categorically held that though there is provision for payment of gratuity under the Pension Rules that will not disentitle the employees from the payment of gratuity under the Payment of Gratuity Act. While holding so the Honourable Supreme Court observed as follows:-“2…. The mere fact that the gratuity is provided for under the Pension Rules will not disentitle him to get the payment of gratuity under the Payment of Gratuity Act. In view of the overriding provisions contained in Section 14 of the Payment of Gratuity Act the provision for gratuity under the Pension Rules will have no effect. Possibly for this reason section 5 of the Payment of Gratuity Act has conferred authority on the appropriate Government to exempt any establishment from the operation of the provisions of the Act if in its opinion the employees of such establishment are in receipt of gratuity or pensionary benefits not less favourable then the benefits conferred under this Act. Admittedly MCD has not taken any steps to invoke the power of the Central Government under Section 5 of the Payment of Gratuity Act. In the aforesaid premises we are of the considered opinion that the employees of the MCD would be entitled to the payment of gratuity under the Payment of Gratuity Act notwithstanding the fact that the provisions of the Pension Rules have been made applicable to them for the purpose of determining the pension. Needless to mention that the employees cannot claim gratuity available under the Pension Rules.”32. In view of the principle laid down by the Honourable Supreme Court in the aforesaid decisions the Management could not have any more doubt with regard to payment of gratuity and the pension.33. It is brought to our notice that the State Government has introduced the Employees Provident Fund in the temples by issuing G.O.Ms.No.54 dated 13.2.2006 and the Central Provident Fund scheme has been withdrawn and in future there would no bar as provided under Rule 26 for payment of gratuity and the employee would be entitled to gratuity either under the HR & CE Rules or under the Act which ever is more beneficial to them. The issuance of the aforesaid G.O. will not be any way concerned with the present case as the persons affected are retired employees who have been agitating for years together.34. The doubts raised by the Division Bench regarding the applicability of the ratio of a Division Bench decision of the Madras High Court in W.A.No.2626 of 2002 dated 2.9.2008 (Tiruchendur Arulmigu Subramaniasamy Kovil Oivupetra Paniyalargal Sangam v. Executive Officer Arulmigu Subramaniasamy Devasthanam Tiruchendur) in the light of the law laid down by the Honourable Supreme Court in 1981 (1) LLJ 354 (State of Punjab v. Labour Court Jullundur) have been answered in the preceding paragraphs.Now the matter can be listed before the Division Bench for disposal in the light of the conclusions arrived at above.