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MANAGEMENT OF CHEVALIER T. THOMAS EDUCATIONAL TRUST, CHENNAI V/S THE SECRETARY, STATE OF TAMIL NADU & OTHERS, decided on Friday, November 29, 2013.
[ In the High Court of Madras, W.P. Nos. 29279 & 29280 of 2013. ] 29/11/2013
Judge(s) : S. MANIKUMAR
Advocate(s) : V. Shanmugham.
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    Constitution of India Article 226; Payment of Gratuity Act 1972 (“the Act”) Sections 1(3) 2(e) 4 5 14- Writ Petitions- Gratuity- Orders passed in two matters by the Controlling Authority under the Act directing payment of gratuity to two employees of the Petitioner the Management of an educational Trust challenged by the latter- Petitioner contending that as it is a public charitable trust running unaided educational institutions it is not an “establishment” coming within the purview of the Act and is hence exempted from the provisions of the Act- Both employees were admitted to the Employees Provident Fund Scheme applicable to all educational institutions notified by the Government as “establishment” under the Act – Held Petitioner/Trust falling within the definition of “establishment” under the Act comes within its ambit and all the provisions of the Act are applicable to it-  Application filed by Petitioner Trust seeking exemption from the provisions of the Act only after orders were passed by the Controlling Authority with the implied admission on its part that the provisions of the Act were applicable to it- No interference in Orders warranted- Petitions dismissed.                                                                  (Para 1 4 13 58 70 71 72)Payment of Gratuity Act 1972 -Gratuity is no longer in the realm of charity but a statutory right given to the employee. The mandate of the statute is that gratuity has to be paid to the employee on his retirement or to his dependents on his death.(Para 22 23 29)Straw Board Manufacture Company Limited v. Its Workmen reported in 1977 (2) SCC 329. Relied on.F.R. Jesuratnam v. Union of India reported in 1990 Supp SCC 640. Relied on.Balbir Kaur v. Steel Authority of India Limited reported in (2000) 6 SCC 493 : 2000 SCC (L&S) 767 : (2000 2 LLJ 1 : (AIR 2000 SC 1596) Relied on.Payment of Gratuity Act 1972 Section 1(3)-“Establishment”- A College run by a society registered under the Societies Registration Act is an establishment.(Para 50)Gurudco Ayurved Mahavidyalaya v. Madhav reported in 1994 (2) LLN 551 : (1994 Lab IC 1542) . Relied on.Payment of Gratuity Act 1972 Section 1(3)-“Establishment”- An educational institution employing ten or more persons on any day in the preceding 12 months is an establishment. An employee who has put in continuous service of 5 years or more in such educational institution is entitled to gratuity.(Paras 51 53 56)Ramgopal v. Mahesh Shikshan Sansthan Jodhpur reported in 1997 (1) LLJ 26: 1996 (2) LLN 678 (Raj) Relied on.Nitin A. Mehta v. Mehta Prafullaben Dalpatrai reported in 2001 (1) ILJ 1348: (2001 1 Lab IC 592). Relied on.General Secretary Vokkaligara v. R. Chandramouli reported in 2002 (2) Cur LR 1070 (Karn) : (2002 Lab IC 1894) Relied on.Payment of Gratuity Act 1972- Unaided schools- Employees of unaided educational institutions are entitled to gratuity by calculating on the basis of their initial appointment and not from the date on which the school became recognised and aided.(Para 60)Habibia Girls Primary School v. Noorinisha reported in 2004 (1) LLN 592 (Mad). Relied on.Payment of Gratuity Act 1972 (“the Act”) – The Act being a beneficial legislation its provisions have to be construed liberally to benefit as many persons as possible.(Para 61 62 65)Jeevanlal (1929) Ltd. v. Appellate Authority under Payment of Gratuity Act 1984 reported in 1984 (4) SCC 356: (AIR 1984 SC 1842) Relied on.Premlata Digambar Rao Deo v. Principal St. Philomine’s Convent High School Nashik Road reported in 1997 (II) LLJ 1050 Relied on.Payment of Gratuity Act 1972- Charitable Institutions-The Act applies if any Institution is covered by the provisions of the Act notwithstanding the nature of activities or the philanthropical services rendered by them.(Para 70)Judgment in W.P.Nos.3907 to 3909 of 2004 dated 10.02.2011 (CSI Mission Hospital v. Appellate Authority under the Payment of Gratuity Act). Relied on.Management of Good Samaritan Rural Development Project v. T.A. Ramaiah and others reported in (2003) 1 LLN 378 : (2003 Lab IC (NOC) 29). Relied on.Cases Referred:Indian Hume Pipe Company Ltd. v. Workmen reported in 1959 (2) LLJ 830French Motor Car Co. Ltd. v. Employees reported in 1961 (2) LLJ 180Gramophone Co. Ltd. v. Ahmedabad Misc. Industrial Workers’ Union reported in 1961 (2) LLJ 660 (SC)Burhanpur Tapti Mills Ltd. v. Burhanpur Tapti Mills Mazdoor Sangh reported in 1965 (1) LLJ 453 (SC) : (AIR 1965 SC 839)Straw Board Manufacture Company Limited v. Its Workmen reported in 1977 (2) SCC 329F.R. Jesuratnam v. Union of India reported in 1990 Supp SCC 640Administrator Shri Jagannath Temple Puri v. Jagannath Padhi reported in 1992 LLR 737 (Ori) (DB): (1992 Lab IC 1621)U.P. State Sugar Corpn. Unit Munderwa v. Ram Nain Singh reported in 1999 LLR 41 (All) (DB)Ahmedabad Pvt. Primary Teachers’ Assn. v. Administrative Officer reported in 2004 (1) SCC 755 : (AIR 2004 SC 1426)Ahmedabad Municipal Corporation v. Workmen (1954) 6 FJR 453.Dholpur Kraya Vikraya Sahkari Samiti Ltd. v. Controller under Gratuity Act reported in 2000 (1) LLN 787 (Raj)Jagdisb Narain Chopra v. Allahabad District Co-operative Bank Ltd. reported in 2000 ILR 88 (All) : (2000 Lab IC 1895)Balbir Kaur v. Steel Authority of India Limited reported in (2000) 6 SCC 493 : 2000 SCC (L&S) 767 : (2000 2 LLJ 1 : (AIR 2000 SC 1596)EID Parry Company Limited v. Omkar Maruthu and others reported in 2001 (4) SCC 68 : (AIR 2001 SC 1407)W.A.Nos.864 to 870 of 1988 dated 21.11.1988 (Workmen of E.I.D. Parry (India) Ltd. Rep. by its General Secretary Parry Employees Union Ranipet v. Industrial Tribunal Madras and others)McNeil and Magar Limited v. Jogendra Lal Malakar reported (1979) 55 FJR 149 : 1979 (39) FLR 349: 1981 (42 FLR 12 (Cal) DB)B.N. Sarda Pvt. Ltd. v. Kisan K. Borade 1981 1 LLJ 190: 1980 (41) FLR 168: 1980 II LLN 475 : 1981 LIC 911 (Born DB)Sudhir Chandra Sarkar v. Tara Iron and Steel Company Limited reported in (1984) II LLJ 223 : 1984 (65) FJR 61 : 1984 (49) FLR I: 1984 II LLN 229 : 1984 LIC 790 : 1984 SCC (LBS) 540 : AIR 1984 SC 1064 : 1984 (3) SCC 369 (SC.3J)Wimco Limited v. Appellate Authority under Payment of Gratuity Act reported in 1997 II LLJ 15: 1997 (76) FLR 958: 1997 1 LLN 959 : 1997 II CLR 142 : 1997 LLR 516 (Karnataka High Court)Shalimar Paints Head Office Employees Union v. Shalimar Paints Ltd. reported in 1981 1 LLJ 471: 1981 1 LLN 405: 1981 LIC 349Thiruvangadi Service Co-operative Bank Limited v. District Labour Officer reported in 1982 1 LLJ 430 : 1982 (44) FLR 377 : 1982 1 LLN 159 : 1982 LIC 717Mis. Charnparan Sugar Co. Ltd. v. Joint Labour Commissioner reported in 1987 (70) FJR 211 : 1987 (54) FLR 60 : 1987 1 LLN 270 : 1987 LIC 47 : AIR 1987 Pat 96Municipal Board Gangapur v. Salim Khan reported in 2000 II LLJ 696: 2000 (86) FLR 791 : 2001 III LLN 398 : 2000 LTC 1326 : 2000 II CLR 916Jeevanlal (1929) Limited v. Controlling Authority under the Payment of Gratuity Act 1982 1 LLJ 86: 198211 LLN 217Rajamony v. Deputy Labour Commissioner of Labour and Appellate Authority under P.G. Act Trichirappalli reported in 2001 II LLJ 1453 : 2001 IV LLN 972Municipal Board Gangapur v. Controlling Authority under Payment of Gratuity Act Bhilwara (1987 1 LLN 663 : 1987 Lab IC 575)Municipal Corporation of Dehli v. Dhararn Prakash Sharma reported in 1998 II LLJ 625 : 1998 (80) FLR 178 : 1999 (81) FLR 867: 1998 III LLN 898 : 1999 LIC 177 : 1998 II CLR 574 : 1998 LLR 881 : 1998 SCC (L&S) 1800: AIR 1999 SC 293 : 1998 (7) SCC 221Kalyan Mal Bhandari v. Rajasthan State Road Transport Corporation and others reported in 1986 (52) FLR 550C. Kuppuswami and others v. E.I.D. Parry (India) Ltd. (by General Manager) Ranipet reported in 1989 I LLN 85Municipal Board Gangapur v. Salim Khan reported in 2000 II LLJ 696: 2000 (86) FLR 793: 2001 III LLN 398: 2000 LIC 1326 : 2000 II CLR 916Municipal Corporation of Delhi v. V.T. Naresh reported in 1986 1 LLJ page 323 : 1986 (68) FJR 123: 1986 (52) FLR 335: 1986 I LLN 791 : 1986 1 CLR 176S.I.E.T. Women’s College v. Mohd. Ibrahim reported in 1992 (1) LLJ 91 (Mad)Gurudco Ayurved Mahavidyalaya v. Madhav reported in 1994 (2) LLN 551 : (1994 Lab IC 1542)Ramgopal v. Mahesh Shikshan Sansthan Jodhpur reported in 1997 (1) LLJ 26: 1996 (2) LLN 678 (Raj)Principal Bhartiya Mahavidyalaya v. Ramkrishna reported in 1994 (1) LLN 37 : 1994 (2) LLJ 556: (1994 Lab IC 404) (Bom)Nitin A. Mehta v. Mehta Prafullaben Dalpatrai reported in 2001 (1) ILJ 1348: (2001 1 Lab IC 592)Laxmi D. v. A.P. Agricultural University reported in 2002 (1) LLJ 69 : (2002 Lab IC 42 (NOC) (AP))Gujarat Agricultural University v. Laxmiben Chhibabhai Talaviya reported in 2001 (2) LLJ 448 (Guj)General Secretary Vokkaligara v. R. Chandramouli reported in 2002 (2) Cur LR 1070 (Karn) : (2002 Lab IC 1894)Habibia Girls Primary School v. Noorinisha reported in 2004 (1) LLN 592 (Mad)Jeevanlal (1929) Ltd. v. Appellate Authority under Payment of Gratuity Act 1984 reported in 1984 (4) SCC 356: (AIR 1984 SC 1842)McNeil & Magor Ltd. v. Jogendra Lal Malakar reported in 1979 (39) FLR 349 a Division Bench of the Calcutta High CourtB.N. Sarda Pvt. Ltd. v. Kisan K. Borade reported in 1981 (1) LLJ 190 : (1981 Lab IC 911) the Bombay High CourtPremlata Digambar Rao Deo v. Principal St. Philomine’s Convent High School Nashik Road reported in 1997 (II) LLJ 1050Eastern Coal Fields Ltd. v. Regional Labour Commissioner (Central) Calcutta reported in 1982 (II) LLJ 324 : (1982 Lab IC 75 (NOC))W.P.Nos.3907 to 3909 of 2004 dated 10.02.2011 (CSI Mission Hospital v. Appellate Authority under the Payment of Gratuity Act)State of Punjab v. Labour Court. Jullundur and others reported in 1980 (1) SCC 4 : (AIR 1979 SC 1981)Management of SIET Women’s College Madras v. Mohamed Ibrahim and others reported in 1992 (1) LLJ 91Christian Medical College Hospital Employees Union v. Christian Medical College Vellore reported in AIR 1988 SC 37Management of Good Samaritan Rural Development Project v. T.A. Ramaiah and others reported in (2003) 1 LLN 378 : (2003 Lab IC (NOC) 29)     1. In both the writ petitions the Management of Chevalier T. Thomas Educational Trust Chennai petitioner herein have challenged the orders passed by the Controlling Authority under the Payment of Gratuity Act Chennai 2nd respondent herein made in PG.Nos.53 and 54 of 2008 dated 08.11.2012 directing gratuity to Mr. D. Subramaniam (3rd respondent in W.P.No.29279 of 2013) and Mr. M. Mani (3rd respondent in W.P.No.29280 of 2013) employees of the petitioner.2. As both the writ petitions involve common questions of fact and law they are disposed of by a common order.3. Before the Controlling Authority under the Payment of Gratuity Act Chennai 2nd respondent herein both Mr. D. Subramaniam (3rd respondent in W.P.No.29279 of 2013) and Mr. M. Mani (3rd respondent in W.P.No.29280 of 2013) employees of the petitioner have filed separate claim petitions in P.G.Nos.53 and 54 of 2008 respectively for determination of gratuity contending inter alia that after completion of service for nearly 20 years in the Management of Chevalier T. Thomas Educational Trust Chennai petitioners herein superannuated on 30.11.2006 and 30.09.2006 respectively. Their last drawn wages were Rs. 5 758/- and Rs. 6 193/- respectively.4. Before the Controlling Authority the petitioner-Management has raised a preliminary objection regarding maintainability of the applications in terms of the provisions under Section 1(3) of the Payment of Gratuity Act 1972. According to them the Management is a public charitable trust and running un-aided educational institutions. Therefore it has been contended that it is not an establishment falling within the purview of Section 1(3) of the Payment of Gratuity Act.5. The petitioner-Management has further contended that the Trust is governed by a elected Board of Trustees and that the Trust is administered as per the Scheme approved by this Court in O.S.A.No.49 of 1995 dated 05.12.2002. It has also been contended that the pension scheme was allowed to the staff members who joined the schools under the Management of Chevalier T. Thomas Trust up to 1997-98 by Board’s resolution dated 08.03.2003. The Management has provided the best suitable payment benefits to the staff from the date of appointment 6. Insofar as Mr. D. Subramaniam (3rd respondent in W.P.No.29279 of 2013) the petitioner-Management has contended that the 3rd respondent was originally appointed as a Driver in St. Mary’s Group of Schools on 13.07.1987 on a monthly consolidated pay of Rs. 700/-. He was not appointed through employment exchange. However he was admitted to Provident Fund Scheme from 01.12.1987. His appointment was on contract basis and that he retired on 30.11.2006 on attaining the age of superannuation. At the time of retirement he was drawing wages at Rs. 3 650/- and Dearness Allowances at Rs. 1 643/-.7. Insofar as Mr. M. Mani (3rd respondent in W.P.No.29280 of 2013) the petitioner-Management has submitted that the 3rd respondent was originally appointed as a Painter. on contract basis on a consolidated pay of Rs. 1 200/- per month for a period of one year from September’ 1987 to May’ 1988 and thereafter renewed periodically. His services were regularised from 01.06.1990 in the scale of pay of Rs. 825-15-900-20-1200 in the last grade of service. Further the 3rd respondent was admitted to the Employment Provident fund Scheme from 01.11.1987 itself (A/c.No.16148/673) even before his regularisation as per the Rules of the Scheme which provides even casual employees as its members. He was drawing a basic pay of Rs. 3 950/- and Dearness Allowance of Rs. 1 778/- as on 30.09.2006 the date of his retirement.8. Before the Controlling Authority constituted under the Payment of Gratuity Act the petitioner-Management has relied on following documents:In PG.No.53 of 2008:1. Contract of Agreement dated 03.06.1989 for appointment on consolidated pay of Rs. 785/- from 03.06.1989 to 31.05.1990.3. Pay Acquaintance for the month of July 1987.4. Pay Acquaintance for the month of July 1992.4. Pay slip for the month of September 2006.5. Pay Acquaintance for the month of November 2006 on his retirement.6. Letter dated 11.01.2007 to Regional Provident Fund Commissioner forwarding PF Application with Form-9.In P.G.No.54 of 2008:1. Contract of Agreement dated 01.09.1987 for appointment on consolidated pay from September 1987 to May 1988.2. Renewal of Contract of Agreement dated 01.07.1988 for appointment on Consolidated pay from June 1988 to May 1989.3. Applicant’s Applications dated 30.05.1989.4. Renewal of Contract of Agreement dated 05.06.1989 for appointment on consolidated pay from 05.06.1989 to 31.05.1990.5. Pay Acquaintance of the applicant for the month of September 1987.6. Pay Acquaintance of the applicant for the month of June 1990.7. Pay slip for the month of September 2006.8. Pay Acquaintance of the applicant for the month of September 2006.9. Letter dated 19.10.2006 to the Regional Provident Fund Commissioner forwarding P.F. Application with Form 9.9. After considering the rival submissions the Controlling Authority under the Payment of Gratuity Act Chennai 2nd respondent herein bas rejected the contention of the petitioner therein that it is not an establishment. The 2nd respondent has further observed that having regard to the fact that when both the applicants have been admitted to the employment Provident Fund Scheme from 01.11.1987 (in respect of Mr. D. Subramaniam 3rd respondent in W.P.No.29279 of 2013) and 01-12-1987 (in respect of Mr. M. Mani 3rd respondent in W.P.No.29280 of 2013) the contention of the petitioner-Management that the Trust does not fall within the ambit of establishment under the Payment of Gratuity Act is untenable. After considering the documentary evidence produced by both the parties the Controlling Authority has computed the gratuity as follows:P.G.No.53 of 2008:Claimant’s total service from 13.07.87 to 30.11.2006 = 19 yearsClaimant’s salary = Rs. 5 293/-Entitlement of Gratuity = Rs. 5 293 x 19 x 15 / 26 = Rs. 58 019/-P.G.No.54 of 2008:Claimant’s total service from June 1975 to 30.09.2006 = 31 yearsClaimant’s salary = Rs. 5 728/-Entitlement of Gratuity = Rs. 5 728 x 31 x 15 / 26 = Rs. 1 02 443/-10. The Controlling Authority vide order dated 08.11.2012 has directed payment of gratuity with 10% interest to be paid within 30 days from the date of passing of the order. Being aggrieved by the orders made in P.G.Nos.53 and 54 of 2008 dated 08.11.2012 the present writ petitions have been filed by the Management of Chevalier T. Thomas Educational Trust Chennai petitioner herein.11. From the pleadings it could be deduced that the Trust is running the following institutions viz.(i) St. Mary’s Mat. Boys Hr. Sec. School Perambur Chennai-11.(ii) St. Mary’s Mat. Girls Hr. Sec. School Perambur Chennai-11.(iii) St. Mary’s Mat. Hr. Sec. School Redhills Chennai-52.(iv) St. Mary’s Nursery and Primary School Kodungaiyur Chennai-118.(v) Marian Senior Secondary School Kalathipadi Kottayam-10.(vi) C.T.T.E. College for Women Perambur Chennai-11.12. The main contentions of the petitioner are that (i) the petitioner-trust is a charitable trust established and created for educational purpose to serve the poor and needy children.(ii) It is not an establishment or a business organisation and hence Payment of Gratuity Act cannot be made applicable to them.(iii) The 3rd respondent in both the writ petitions were employed only on contractual basis and their services were periodically renewed by the then Management.(iv) The Management is running a trust pursuant to the scheme framed in O.S.A.No.49 of 1995.(v) The Trust has introduced several schemes for the benefit of its employees and also protect the interest of its employees.Apart from the abovesaid contentions the petitioner has inter alia contended that the Trust would not fall within the ambit of “establishment” and thus the provisions of Payment of Gratuity Act are not applicable to the third respondent in both the cases.13. From the materials on record it could be seen that the Trust has filed an application under Section 5 of the Payment of Gratuity Act 1972 seeking for exemption from the provisions of the Payment of Gratuity Act. In the said application filed before the Secretary to the Government Labour and Employment Department Secretariat Chennai-9 the Trust has contended that the abovesaid educational institutions do not fall under any category of business organisation or establishment or a factory mine oil field plantation port railway company or shop to which alone the Payment of Gratuity Act would apply. Before the Government the petitioner-Trust has also contended that even Section 5 of the Act does not contemplate that in the event of establishment or organisation providing any other beneficial or welfare schemes for the benefit of its employees they are exempted from the provisions of the Payment of Gratuity Act.14. Assailing the correctness of the impugned orders Mr. V. Shanmugham learned counsel for the petitioner-Trust reiterated the same grounds under challenge.Heard the learned counsel for the parties and perused the materials available on record.15. Before adverting to the main ground of challenge that the educational institutions run by the Trust would not fall within the ambit of the provisions of Payment of Gratuity Act 1972 this Court deems it fit to consider Section 4 of the Payment of Gratuity Act and few decisions as to the scope and nature of the Legislation.16. Section 4 of the Payment of Gratuity Act 1972 reads as follows:“Section 4(1): Gratuity shall be payable to an employee of the termination of his employment after he has rendered continuous service for not less than five years —(a) on his superannuation or(b) on his retirement or resignation or(c) on his death or disablement due to accident or disease:Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement:(2) For every completed year of service or part thereof in excess of six months the employer shall pay gratuity to an employee at the rate of fifteen days’ wages based on the rate of wages last drawn by the employee concerned:Provided that in the case or a piece-rated employee daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment and for this purpose the wages paid for any overtime work shall not be taken into account:Provided further that in the case of an employee who is employed in a season establishment and who is not so employed throughout the year the employer shall pay the gratuity at the rate of seven days’ wages for each season.Explanation:- In the case of a monthly-rated employee the fifteen days’ wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.(3) The amount of gratuity payable to an employee shall not exceed (three lakhs and fifty thousand)(4) For the purpose of computing the gratuity payable to an employee who is employed after his disablement on reduced wages his wages for the period preceding his disablement shall be taken to be the wages receivedby him during that period and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.(5) Nothing in this Section shall affect the right of an employee to receive better terms of gratuity under any award or agreement or contract with the employer.17. As per abovesaid provision of the Payment of Gratuity Act gratuity is payable to an employee at the rate of 15 days wages which the employee has last drawn for every completed year of service. In the case of employees of seasonal establishments the gratuity payable would be at the rate of seven days wages for each season. The wages would be wages last drawn by the employee concerned. Fifteen days wages will be calculated by dividing monthly wages by twenty six and multiplying the same by fifteen.18. In Indian Hume Pipe Company Ltd. v. Workmen reported in 1959 (2) LLJ 830 the Court held that “...... Gratuity is a kind of retirement benefit like the provident fund or pension ..... Gratuity paid to workmen is intended to help them after retirement whether the retirement is the result of the rules of superannuation or physical disability. The general principle underlying such gratuity schemes is that by their length of service workmen are entitled to claim a certain amount as a retiral benefit.”19. In French Motor Car Co. Ltd. v. Employees reported in 1961 (2) LLJ 180 the Court held that the object intended to he achieved by the Provident Funds Scheme is not the same as the object or the Gratuity Scheme and in any case where the financial position of the employer justifies the introduction of both benefits there is no reason why the employees should not get the benefit of both the Provident Fund Scheme and the Gratuity Scheme.20. In Gramophone Co. Ltd. v. Ahmedabad Misc. Industrial Workers’ Union reported in 1961 (2) LLJ 660 (SC) the Supreme Court held as follows:“The existence of a Provident Fund Scheme is not a bar to the grant of a second retiral benefit in the share of a gratuity scheme provided the employer is able to bear the burden of two retiral benefits. That naturally depends on the financial capacity of the employer. But the mere existence of a Provident Fund Scheme is not by itself a reason for refusing a gratuity scheme particularly when a good part of the services of the existing workmen was not covered by the provident fund scheme.”21. In Burhanpur Tapti Mills Ltd. v. Burhanpur Tapti Mills Mazdoor Sangh reported in 1965 (1) LLJ 453 (SC) : (AIR 1965 SC 839) the Supreme Court has made a distinction between a scheme of gratuity and a scheme of pension as follows:“……A scheme of gratuity and a scheme of pension have much in common. Gratuity is a lump sum payment while pension is a periodic payment of a stated sum. They are both ‘efficiency devices and are considered necessary for an orderly and humane elimination’ from industry of superannuated or disabled employees who but for such retiring benefits would continue in employment even though they function inefficiently.”22. Straw Board Manufacture Company Limited v. Its Workmen reported in 1977 (2) SCC 329 His Lordship V. R. Krishna Iyer and Jaswant Singh has held that the gratuity for workers is no longer a gift but a right. It is a vague humanitarian expression of distributive justice to partners in production for long meritorious service in conformity with Article 43A. Therefore as per the judgment of the Supreme Court the authorities ought to have adopted the Board proceedings instead of approaching the issue mechanically. In the said reported judgment the Supreme Court defines the word “Gratuity” as follows:“Gratuity” means something given voluntarily or beyond obligation. It connotes the idea of gift. In industrial law however it has come to mean some sort of retiral benefit which is available to an employee for a minimum period of continuous services. Gratuity for workers is no longer a gift but a tight.”23. In F.R. Jesuratnam v. Union of India reported in 1990 Supp SCC 640 the Supreme Court has observed that the employee has a right to be paid gratuity and the Government has no discretion in the matter and accordingly the Government have no tight to forfeit the gratuity.24. Insofar as object of the Act the Orissa Division Bench in Administrator Shri Jagannath Temple Puri v. Jagannath Padhi reported in 1992 LLR 737 (Ori) (DB): (1992 Lab IC 1621) held that.“Gratuity” as observed by the Supreme Court in etymological sense means gift especially for services rendered in return for favours received. It is well settled that long service carries with it an expectation of an appreciation from the employer and a gracious financial assistance to tide over post-retiral difficulties.”25. As regards nature of legislation a Hon’ble Division Bench of Allahabad High Court in U.P. State Sugar Corpn. Unit Munderwa v. Ram Nain Singh reported in 1999 LLR 41 (All) (DB) observed that the Payment of Gratuity Act is a social legislation to protect the weaker Sections of society. So also the Supreme Court in Ahmedabad Pvt. Primary Teachers’ Assn. v. Administrative Officer reported in 2004 (1) SCC 755 : (AIR 2004 SC 1426) held that the Act is a piece of social welfare legislation and its provisions are in the nature of social security measures like employment insurance provident fund and pension.26. The fundamental principle in allowing gratuity is that it is a retirement benefit for long service as a provision for old age. Provident Fund provides a certain measure of relief only and a portion of that consists of employee’s wages that he and his family would ultimately receive and that this provision in the present-day conditions is wholly insufficient relief and two retirement benefits gratuity and provident fund when the finances of the concern permit ought to be allowed. Useful reference can be made to a decision in Ahmedabad Municipal Corporation v. Workmen (1954) 6 FJR 453).27. Insofar as scope and applicability of the Act the Supreme Court in Dholpur Kraya Vikraya Sahkari Samiti Ltd. v. Controller under Gratuity Act reported in 2000 (1) LLN 787 (Raj) the Rajasthan High Court held as follows:“The Payment of Gratuity Act is a special Act for the benefit of employees wherein a machinery has been provided by the Legislature to adjudicate and decide the cases arising between employers and employees in regard to payment of gratuity. Even non-payment of gratuity had been made punishable under the Act. It was never the intention of Legislature to deprive the employee of the benefits falling within the ambit of Gratuity Act by referring the matter to any other forum when the forum under the Gratuity Act was available to him.”28. In Jagdisb Narain Chopra v. Allahabad District Co-operative Bank Ltd. reported in 2000 ILR 88 (All) : (2000 Lab IC 1895) the Court held that after a person has put in his youth and the prime of life in the service of the establishment he is entitled to receive gratuity which is not a charity to him but is a deferred payment which he earns by reason of his service rendered.29. In Balbir Kaur v. Steel Authority of India Limited reported in (2000) 6 SCC 493 : 2000 SCC (L&S) 767 : (2000 2 LLJ 1 : (AIR 2000 SC 1596) the Supreme Court held that Gratuity under the Payment of Gratuity Act 1972 is no longer in the realm of charity but a statutory right given to the employee. The mandate of the statute is that gratuity has to be paid to the employee on his retirement or to his dependants on his death. Introduction of Family Benefit Scheme by which the employee is compelled to deposit gratuity amount runs counter to the mandate of the Act. It was further held that the statutory obligations under the Act cannot be left high and dry as per the whims of the employer.30. In EID Parry Company Limited v. Omkar Maruthu and others reported in 2001 (4) SCC 68 : (AIR 2001 SC 1407) the respondents therein had voluntarily retired from the employment under the appellant therein and received terminal benefits as provided under the Payment of Gratuity Act 1972. Subsequently their claim under Section 44 of the A.P. Shops and Establishments Act 1966 for the differential amount of gratuity under Section 40(3) was allowed by the trial court and that the said decision was upheld by higher forums including the High Court. Before the Supreme Court the appellant has contended that by virtue of Article 254 the Central Act would prevail over the State Act and that therefore Section 14 of the Central Act will prevail over other enactments in relation to gratuity. Dismissing the appeals the Supreme Court held:“At the relevant time when the respondents voluntarily retired from service the definition of “employee” under Section 2(e) of the Central Act reads as not to include an employee whose wages exceeded Rs. 1 000/- per mensem while the respondent employees were all getting wages more than Rs. 1 600/- per mensem and therefore the Central Act could not be applied. Therefore it was certainly permissible for the respondents to have made an application for payment of gratuity under Section 40(3) of the State Act. Further the scheme of the Central Act indicates that it is not applicable in cases where the State Act is more beneficial than the Central Act. Therefore the contentions sought to be advanced on behalf of the appellant as to repugnancy or otherwise of the State Act would not arise at all. If both the enactments can coexist and can operate where one Actor the other is not available then there is no difficulty in making the State Act applicable on the fact situation available as has been done in the present case.”31. In W.A.Nos.864 to 870 of 1988 dated 21.11.1988 (Workmen of E.I.D. Parry (India) Ltd. Rep. by its General Secretary Parry Employees Union Ranipet v. Industrial Tribunal Madras and others) a Division Bench of this Court held that where the Pension Scheme was already in existence in the company it was held that the retiral benefits which stood conferred already on the employees did not militate against the benefit of gratuity.“Gratuity could not be totally curtailed for a particular category of employees and equally so that on the exercise of option for pension which is an independent benefit there could not be a losing of gratuity which stands protected under the Act. The Payment of Gratuity Act is a piece of legislation forming a milestone in the annals of labour welfare schemes in this country. Gratuity as the term itself suggests is a gratuitous payment given to an employee on discharge or retirement. The Act is not intended to do away with other retiral benefits already existing and available to the employees. In brief the Act the legislation clearly intended to confer extra benefits on the employees. The Court while construing the provisions of the Act which is a piece of social legislation must construe them so as to help achieving the object of the legislation. The retiral benefits which stood conferred already on the employees do not militate against the benefit of gratuity. The endeavour must be to see that the retiral benefit schemes already existing and the scheme of gratuity under the Act co-exist in a concern.”.32. In McNeil and Magar Limited v. Jogendra Lal Malakar reported (1979) 55 FJR 149 : 1979 (39) FLR 349: 1981 (42 FLR 12 (Cal) DB) the Court held that Payment of Gratuity Act 1972 being a beneficial legislation Sec. 2(3) and Section 4 should be construed liberally to benefit as many persons as possible.33. In B.N. Sarda Pvt. Ltd. v. Kisan K. Borade 1981 1 LLJ 190: 1980 (41) FLR 168: 1980 II LLN 475 : 1981 LIC 911 (Born DB) the Bombay High Court held that the Payment of Gratuity Act is a beneficial legislation and therefore liberal construction must be given to the provisions in such legislation.34. The Apex Court ill Sudhir Chandra Sarkar v. Tara Iron and Steel Company Limited reported in (1984) II LLJ 223 : 1984 (65) FJR 61 : 1984 (49) FLR I: 1984 II LLN 229 : 1984 LIC 790 : 1984 SCC (LBS) 540 : AIR 1984 SC 1064 : 1984 (3) SCC 369 (SC.3J) held that payment of gratuity is a retirement benefit for long and continuous service as a provision of old age.35. As regards the benefit of enhanced eligibility limit which can availed of by an employee who had retired prior to an amendment in Wimco Limited v. Appellate Authority under Payment of Gratuity Act reported in 1997 II LLJ 15: 1997 (76) FLR 958: 1997 1 LLN 959 : 1997 II CLR 142 : 1997 LLR 516 (Karnataka High Court) at paragraph No.3 held that:“On the date on which the substitution was effected the worker had ceased to be the employee but had become a quondam employee. The right of the worker arose on 2nd January 1984 and the statute as it stood on that day has to be applied. Unless the statute has declared that the amendment shall be deemed to have come into force anterior to the date of retirement the worker cannot avail the benefit of the amendment by the time the amendment came into force the worker has ceased to be an employee and has become the quondam employee and such employee cannot take the benefit of the amendment. Merely because he is invoking the provisions subsequent to the amendment he cannot avail the same. The exemption under Section 5 is granted only with retiral benefits are not less available than payment of gratuity under the Central Act.”36. In Shalimar Paints Head Office Employees Union v. Shalimar Paints Ltd. reported in 1981 1 LLJ 471: 1981 1 LLN 405: 1981 LIC 349 a Division Bench of the Calcutta High Court in paragraph 15 has held as follows:“We are afraid Section 5 does not admit of any such interpretation as to include within it the theory of substitution of the Pension Scheme by Payment of Gratuity in accordance with Section 4 of the Central Act. Section 5 confers a power on the appropriate Government to exempt an establishment factory etc. from the operation of the Central Act only if the retirement benefits of the employees of such establishment factory etc. are not less favourable than the payment of gratuity under the Central Act........”37. In Thiruvangadi Service Co-operative Bank Limited v. District Labour Officer reported in 1982 1 LLJ 430 : 1982 (44) FLR 377 : 1982 1 LLN 159 : 1982 LIC 717 the Kerala High Court held that an application of gratuity cannot be rejected solely for delay that is not deliberately or negligently caused by the employee and that can justifiably be condoned. At paragraph No.6 this Court has held that “the result would be that while an employer cannot be penalised for failure to pay gratuity to an employee who has not made an application the employer cannot refuse to comply with the demand for gratuity upon receipt of a proper application. An application presented by an employee cannot be treated as improper or rejected as invalid solely by reason of delay if the delay has not been deliberately or negligently caused by the employee and if there are justifiable grounds for condonation of the same. But an employee who negligently sleeps over his rights and chooses to file an application at any time of his choice cannot legitimately complain that he has been denied gratuity38. In Mis. Charnparan Sugar Co. Ltd. v. Joint Labour Commissioner reported in 1987 (70) FJR 211 : 1987 (54) FLR 60 : 1987 1 LLN 270 : 1987 LIC 47 : AIR 1987 Pat 96 a Full Bench judgment of the Patna High Court held that “These leave no manner of doubt that the statute places the basic duty of determining the amount of gratuity and tendering the same to the employee squarely on the employer dehors any claim or application by him. A combined reading of these provisions will indicate that herein the employer under a mandatory obligation to determine the statutory gratuity and it is not dependent or conditioned or any express claim or application by the employee for such gratuity and consequential interest.”39. In Municipal Board Gangapur v. Salim Khan reported in 2000 II LLJ 696: 2000 (86) FLR 791 : 2001 III LLN 398 : 2000 LTC 1326 : 2000 II CLR 916 the Rajasthan High Court held that the Controlling Authority under Gratuity Act has jurisdiction to decide disputes on gratuity claim by a municipal employee as the Gratuity Act overrides the relevant Municipal Rules by virtue of Section 14.40. In Jeevanlal (1929) Limited v. Controlling Authority under the Payment of Gratuity Act 1982 1 LLJ 86: 198211 LLN 217 a Division Bench of this Court held that at paragraph 20 held:“Merely because the employee had taken the initiative and asked for the payment of gratuity at a particular sum the employer will not stand absolved of his statutory obligation to pay the employee the proper amount of gratuity he is entitled to. Section 14 of the Act clearly lays down that the provisions of the Act or any rule made thereunder will have overriding effect over any other enactment other than the Act. Having regard to the wide ambit of Section 14 it follows that even if the employee had made a mistake in the calculation of the gratuity amount and received a lesser amount than what he is entitled to he will not estopped or barred in law from claiming the balance amount due to him or initiating proceedings envisaged under the Act and rules for recovering the balance amount due to him.41. Similar view has been expressed in yet another decision Rajamony v. Deputy Labour Commissioner of Labour and Appellate Authority under P.G. Act Trichirappalli reported in 2001 II LLJ 1453 : 2001 IV LLN 972 wherein it is held that Section 14 of the Payment of Gratuity Act has overriding the effect of all other Rules or Acts to the extent they are inconsistent with the Act.42. Reference can also be made to the decision of Municipal Board Gangapur v. Controlling Authority under Payment of Gratuity Act Bhilwara (1987 1 LLN 663 : 1987 Lab IC 575) Rajasthan High Court at paragraphs 7 and 8 held as follows: “Section 14 of the Act very clearly lays down that this Act will have overriding effect on all other laws. Section 14 reads as under:—“14. Act to override other enactments etc.—The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.”8. Section 14 overrides the other rules or Act made on the subject by virtue of these provision. Rules of 1969 will have no role to play so far as they are inconsistent with the Act. Thus the Payment of Gratuity Act will cover the municipalities for the payment of gratuity and not the Rules of 1969 “43. The Supreme Court in Municipal Corporation of Dehli v. Dhararn Prakash Sharma reported in 1998 II LLJ 625 : 1998 (80) FLR 178 : 1999 (81) FLR 867: 1998 III LLN 898 : 1999 LIC 177 : 1998 II CLR 574 : 1998 LLR 881 : 1998 SCC (L&S) 1800: AIR 1999 SC 293 : 1998 (7) SCC 221 has held that “……we have examined carefully the provisions of the Pension Rules as well as the provisions of the Payment of Gratuity Act. The Payment of Gratuity Act being the special provision for payment of gratuity unless there is any provision therein which excludes its applicability to an employee who is otherwise governed by the provision of the Pension Rules it is not possible for us to hold that the respondent is not entitled to the gratuity under the Payment of Gratuity Act. 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 overriding provisions contained in Section 14 of the Payment of Gratuity Act the provision for gratuity under Pension Rules will have no effect. In the aforesaid premises we are of considered opinion that the employees of the Municipal Corporation Delhi would be entitled to the payment of gratuity under the Payment of Gratuity Act notwithstanding the fact that the provisions of 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 Pension Rules.”44. In Kalyan Mal Bhandari v. Rajasthan State Road Transport Corporation and others reported in 1986 (52) FLR 550 the petitioner therein joined the services of the Government and thereafter gave his option to join the State Road Transport Corporation. He retired from the service of the Corporation with effect from 31st December 1981. He made a claim before authorities under the Payment of Gratuity Act 1972 against the corporation. It was disputed that the Act is not applicable to Corporation as the petitioner had given his option that he shall continue to be governed by the conditions regarding past terminal benefits of the Government of Rajasthan and that the Government of Rajasthan shall credit that amount from the Corporation. Since the petitioner was employee of the Corporation the Rajasthan High Court held that he shall be entitled to all the benefits of the Act of 1972. The Corporation preferred an appeal and the appellate authority dismissed both the appeals holding that since the petitioner had been paid gratuity under the Act of 1972 he is not entitled to claim the benefits advantageous to him. Dealing with the above issue the High Court held that the employee is entitled to claim the benefits advantageous to him.45. In C. Kuppuswami and others v. E.I.D. Parry (India) Ltd. (by General Manager) Ranipet reported in 1989 I LLN 85 a Hon’ble Division Bench of this Court held that“Until the Act came into force the curtailment of gratuity to a particular category of employees and giving options to another category of employees were perfectly workable. After the Act they come into conflict with the provisions of the Act. Gratuity could not be totally curtailed for a particular category of employees and equally so that on the exercise of option for pension which is an independent benefit there could not be a losing of gratuity which stands protected under the Act. The Payment of Gratuity Act is a piece of legislation forming a mile-stone in the annals of labour welfare schemes in this country. Gratuity as the term itself suggests is a gratuitous payment given to an employee on discharge or retirement. The Act is not intended to do away with other retiral benefits already existing and available to the employees. In bringing the Act the legislation clearly intended to confer extra benefits on the employees. The Court while construing the provisions of the Act which is a piece of social legislation must construe them so as to help achieving the object of the legislation. The retiral benefits which stood conferred already on the employees do not militate against the benefit of gratuity. The endeavour must be to see that the retiral benefit schemes already existing and the scheme of gratuity under the Act co-exist in a concern.”46. In Municipal Board Gangapur v. Salim Khan reported in 2000 II LLJ 696: 2000 (86) FLR 793: 2001 III LLN 398: 2000 LIC 1326 : 2000 II CLR 916 an employee of the Board was paid retirement gratuity. Being not satisfied he preferred a petition under the Act contending inter alia that as per the provisions of the Central Act he was entitled to terminal benefits then the one granted under the Rajasthan Municipalities (Contributory Provident Fund and Gratuity) Rules. The Municipal Board has contended that he had already opted a claim under the local rules and therefore the employee was entitled to only gratuity under the Payment of Gratuity Rules 1969 and not under the Central Act. Rejecting the said plea the Court has held “as per the scheme of the Act 1972 being Central Legislation in its preamble it is clearly laid down its provisions shall have override the provisions of such enactments which it makes it clear that notwithstanding any inconsistent to condone any enactment over this Act or in any instrument of contract having effect yet by virtue of any enactment provisions of this Act.”47. In Municipal Corporation of Delhi v. V.T. Naresh reported in 1986 1 LLJ page 323 : 1986 (68) FJR 123: 1986 (52) FLR 335: 1986 I LLN 791 : 1986 1 CLR 176 the Delhi High Court held that even if the Municipal Corporation of Delhi has certain schemes it is not a bar to the applicability of the Act to the employees of the petitioner-corporation.48. In ordinary usage ‘establishment’ means an organised body of men mentioned for a purpose. According to Black’s Law Dictionary the word ‘establishment’ connotes an institute a place where conducted to settle or fix firmly place of a permanent footing. According to Words and Phrases (Permanent Edn.) Vol. 15 the word ‘establishment’ means a place where one is permanent fixed for residence of business such as an office or place or business with its fixtures. Further it means an establishment in which employee is or was employed. ‘Establishment’ means merely something established. In Webster’s International Dictionary the word ‘establishment’ means an institute or place of business with its fixtures and organised staff. Oxford Dictionary define; the term ‘establishment’ as organised body of men maintained for a purpose. According to Bouvier Law Dictionary the word ‘establishment’ connotes that which is instituted or established for public or private use.49. In S.I.E.T. Women’s College v. Mohd. Ibrahim reported in 1992 (1) LLJ 91 (Mad) this Court held that an educational institution covered by EPF Act 1952 and the Tamil Nadu Payment of Subsistence Allowance Act is covered by the Payment of Gratuity Act 1972.50. In Gurudco Ayurved Mahavidyalaya v. Madhav reported in 1994 (2) LLN 551 : (1994 Lab IC 1542) the Bombay High Court held that a College run by a society registered under the Societies Registration Act is an establishment51. In Ramgopal v. Mahesh Shikshan Sansthan Jodhpur reported in 1997 (1) LLJ 26: 1996 (2) LLN 678 (Raj) the Court held that an educational institution is an establishment under Section 1(3)(b) of the Payment of Gratuity Act.52. In Principal Bhartiya Mahavidyalaya v. Ramkrishna reported in 1994 (1) LLN 37 : 1994 (2) LLJ 556: (1994 Lab IC 404) (Bom) the Bombay High Court held that Section 1(3)(b) of the Payment of Gratuity Act will apply to educational institution even if the same is exempted from the operation of the Bombay Shops and Establishments Act.53. In Nitin A. Mehta v. Mehta Prafullaben Dalpatrai reported in 2001 (1) ILJ 1348: (2001 1 Lab IC 592) the Supreme Court held that in view of the notification issued by the Central Government the educational institutions are covered within the purview of the Act.54. In Laxmi D. v. A.P. Agricultural University reported in 2002 (1) LLJ 69 : (2002 Lab IC 42 (NOC) (AP)) a Hon’ble Division Bench of the Andhra Pradesh High Court held that a University which carries on an organised and systematic activity by employing more than ten persons has to be held as an ‘establishment’ within the meaning of Section 1(3)(b) of the Act.55. In Gujarat Agricultural University v. Laxmiben Chhibabhai Talaviya reported in 2001 (2) LLJ 448 (Guj) the Gujarat High Court held that in view of the said notification issued by the Central Government under Section 1(3)(e) the Educational Institutions such as Agricultural University will be covered under the Act.56. In General Secretary Vokkaligara v. R. Chandramouli reported in 2002 (2) Cur LR 1070 (Karn) : (2002 Lab IC 1894) the Karnataka High Court held that in view of the notification issued by the Central Government the educational institutions in which ten or more persons are employed or were employed on any day preceding 12 months as a class of establishment to which the Act shall apply. Employee who has put in continuous service of 5 years or more in such educational institution is entitled to gratuity.57. Section 1(3) of the Payment of Gratuity Act makes it applicable to (a) every factory mine oilfield plantation port and railway company; (b) 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; and (c) such other establishments or class of establishments in which ten or more employees are employed or were employed on any day of the preceding twelve months as the Central Government may by notification specify in tills behalf.58. Now it is admitted by the petitioner-Trust themselves that both the contesting respondents were admitted to the Employees Provident Fund Scheme. Both Employment Provident Fund Act 1952 and the Tamil Nadu Payment of Subsistence Allowance Act are applicable to all educational institutions as the educational institution has been notified as an “establishment” within the meaning of the State as well as Central Act under Section 1(3)(b) of the Act vide Notification F.No.S-42013/1/95-SS.II dated 03.04.1997. Therefore the petitioner-Trust who is running many educational institutions falls within the definition “establishment”.59. The petitioner-Trust having admitted the 3rd respondent-employees to the Provident Fund Scheme cannot contend that it is not an establishment within the purview of the Payment of Gratuity Act. At this juncture this Court deems it fit to extract Notification F.No.S-42013/1/95-SS.II dated 03.04.1997 which are as follows:“In exercise of the powers conferred by clause (c) of sub-section (3) of Section I of the Payment of Gratuity Act 1972 (39 of 1972) the Central Government hereby specifies the educational institutions in which ten or more persons are employed or were employed on any day preceding 12 months as a class of establishments to which the said Act shall apply with effect from the date of publication of this notification:Provided that nothing contained in this notification shall affect the operation of the notification of the Ministry of Labour S.O.No.239 dated 8th January 1982.”60. In Habibia Girls Primary School v. Noorinisha reported in 2004 (1) LLN 592 (Mad) the Supreme Court held that the employees of unaided educational institution were entitled to gratuity by calculating on the basis of their initial appointment and not from the date on which the school became recognised and aided.61. As regards the interpretation of the legislation Courts have consistently held that the provisions have to be construed liberally to benefit as many persons as possible. Extract of few decisions would be useful before dealing with the facts of the case.62. In Jeevanlal (1929) Ltd. v. Appellate Authority under Payment of Gratuity Act 1984 reported in 1984 (4) SCC 356: (AIR 1984 SC 1842) at paragraph 10 the Supreme Court held that “In construing a social welfare legislation the Court should adopt a beneficent rule of construction and if a Section is capable of two constructions that construction should be preferred which fulfils the policy of the Act and is more beneficial to the persons in whose interest the Act has been passed. When however the language is plain and unambiguous the Court must give effect to it whatever may be the consequence for in that case the words of the statute speak the intention of the legislature……”63. In McNeil & Magor Ltd. v. Jogendra Lal Malakar reported in 1979 (39) FLR 349 a Division Bench of the Calcutta High Court held that “It should be noted in this connection that in the back-ground of Welfare State this particular legislation has been enacted to do social justice and in our view it should be construed liberally to extend the benefit granted by it to as many persons as possible.”64. In B.N. Sarda Pvt. Ltd. v. Kisan K. Borade reported in 1981 (1) LLJ 190 : (1981 Lab IC 911) the Bombay High Court held that “…The Gratuity Act is a beneficial legislation and therefore liberal construction must be given to the provisions in such legislation……”65. Again a Hon’ble Division Bench of Bombay High Court in Premlata Digambar Rao Deo v. Principal St. Philomine’s Convent High School Nashik Road reported in 1997 (II) LLJ 1050 held that “the Payment of Gratuity Act 1972 is a piece of social welfare legislation. It is intended to give benefit to employees working in establishments. Thus the provisions of the Act are required to be construed liberally. They should be so construed that the beneficial intention of the legislature is not frustrated by a strict or narrow interpretation and the benefit of the Act reaches the maximum possible persons……”66. It is also well settled in Eastern Coal Fields Ltd. v. Regional Labour Commissioner (Central) Calcutta reported in 1982 (II) LLJ 324 : (1982 Lab IC 75 (NOC)) that “It also appears to me that the Payment of Gratuity Act is a beneficial legislation intended to give benefits to the employees and the provisions of the Act should be construed liberally in a way so that the beneficial intention is not frustrated by any strict and narrow interpretation but the benefit under the Act reaches the maximum possible employees……”67. “Employee” as defined under Section 2(e) of the Payment of Gratuity Act means any person (other than an apprentice) employed on wages in any establishment factory mine oilfield plantation port railway company or shop to do any skilled semi-skilled or unskilled manual supervisory technical or clerical work whether the terms of such employment are express or implied (and whether or not such person is employed in a managerial or administrative capacity 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.68. Section 5 deals with the power of the appropriate Government from exempting any employee or class of employees employed in any establishment factory mine etc. and the said Section is extracted hereunder:“5. Power to exempt.-(1) The appropriate Government may by notification and subject to such conditions as may be specified in the notification exempt any establishment factory mine oilfield plantation port railway company or shop to which this Act applies from the operation of the provisions of this Act if in the opinion of the appropriate Government the employees in such establishment factory mine oilfield plantation port railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.(2) The appropriate Government may by notification and subject to such conditions as may be specified in the notification exempt any employee or class of employees employed in any establishment factory mine oilfield plantation port railway company or shop to which this Act applies from the operation of the provisions of this Act if in the opinion of the appropriate Government such employee or class of employees are in receipt of gratuity or pensionary benefits nor less favourable than the benefits conferred under this Act.(3) A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively from a date not earlier than the date of commencement of this Act but no such notification shall he issued so as to prejudicially affect the interest of any person.”69. As per Section 14 the provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.70. Only after passing of the orders by the Controlling Authority under the Payment of Gratuity Act in PG.Nos.53 and 54 of 2008 respectively the petitioner-Trust has filed an application under Section 5 of the Payment of Gratuity Act 1972 seeking for exemption from the provisions of the Payment of Gratuity Act. It is also to be noticed that the mere fact that the petitioner-Trust has applied for exemption is an implied admission on the part of the Trust that the provisions of Payment of Gratuity Act are applicable to its employees or class of employee employed in the educational institutions fun by the Trust and if only the Trust is able to establish that the benefits given by them are not less favourable under the benefits conferred under the Payment of Gratuity Act 1972 the appropriate Government may issue a notification and therefore till the Government forms an opinion in the matter the provisions of the Payment of Gratuity Act would be applicable to the petitioner-Trust. As the applicability of the provisions of the Payment of Gratuity Act to the institutions run by the Trust is the only argument advanced before this Court. the same is answered against the Trust in W.P.Nos.3907 to 3909 of 2004 dated 10.02.2011 (CSI Mission Hospital v. Appellate Authority under the Payment of Gratuity Act) wherein this Court held as follows:“8. Therefore the only question that arises for consideration is whether the petitioner establishment being a charitable trust is exempted under the provisions of Payment of Gratuity Act?9. Under Section 1(3)(a) of Payment of Gratuity Act 1972 the Act applies to every factory mine oil field plantation port and railway company. Under Section 1(3)(b) the Act applies to every shop or establishment within the meaning of any law for the time being in force in relation to shops. Under Section 1(3)(c) if any establishment wherein ten or more persons are employed if notified by the Central Government then to such establishments the Act applies.10. The Supreme Court while interpreting Section 1(3)(b) of Payment of Gratuity Act 1972 in State of Punjab v. Labour Court. Jullundur and others reported in 1980 (1) SCC 4 : (AIR 1979 SC 1981) has held that the term “law” found under the Section not only relate to shops and establishments but also applies to every establishment within the meaning of any law for the time being in force in relation to establishments in a State.11. A Division Bench of this Court in the case of the Management of SIET Women’s College Madras v. Mohamed Ibrahim and others reported in 1992 (1) LLJ 91 has held that in relation to a private College run by a minority institution since the Provident Fund Act applies to it it is also an establishment covered by Section 1(3 )(b) of the Payment of Gratuity act.12. Apart from the wider definition of an establishment provided under Section 1(3)(b) of the Act the Central Government has also power to notify other establishments under Section 1(3)(c) of the Act. The Central Government by a statutory order No. 2218 dated 22.8.1997 under Sec. 1(3)( c) of the Payment of Gratuity Act had issued the following notification:“S.O.2218. In exercise of the powers conferred by clause) of sub-section (3) of Section 1 of the Payment or Gratuity Act. 1972 (39 of 1972) the Central Government hereby specifies the trusts or societies registered under the Societies Registration Act 1860 (21 of 1860) or under any other law with respect of societies for the time being in force in any State in which ten or more persons are employed or were employed for wages on any day of the preceding 12 months as a class of establishments to which the said Act shall apply with effect from the date of publication of this notification in the Official Gazette.”13. The contention that a particular institution is a charitable institution is not relevant for the purpose of determining the coverage under the Act. The Act applies only if any Institution is covered by the provisions of the Act notwithstanding the nature of activities or the philanthropical services rendered by them.14. It must be noted that the Supreme Court vide its judgment in Christian Medical College Hospital Employees Union v. Christian Medical College Vellore reported in AIR 1988 SC 37 has held that “those rights which are enforced through the several pieces of labour legislation in India have got to be applied to every workman irrespective of the character of the management.”15. It was also held by a learned Judge of this Court in Management of Good Samaritan Rural Development Project v. T.A. Ramaiah and others reported in (2003) 1 LLN 378 : (2003 Lab IC (NOC) 29) that even charitable institutions are covered by the provisions of the Act.16. In view of the above no fault can be found with the order passed by the appellate authority. Hence all the three Writ Petitions will stand dismissed”71. In the light of the decisions and discussion this Court is of the view that there is no manifest illegality in the impugned orders in both the writ petitions warranting interference. The status of the 3rd respondent in both the writ petitions has not been seriously disputed.72. In the result the Writ Petitions are dismissed. No costs. Consequently connected Miscellaneous Petitions are also closed.Petitions dismissed.