GDS: Supreme Court Judgement

GDS: Supreme Court Judgement

REPORTABLE

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.3150 OF 2019
(Arising out of SLP (Civil) 7627 of 2019)

Diary No. 41829 of 2018

Sr. Superintendent of Post Offices …Appellant
Versus
Gursewak Singh & Ors. …Respondents

WITH
CIVIL APPEAL NO. 3151 OF 2019
(Arising out of SLP (Civil)No. 7628 of 2019)
Diary No. 41825 of 2018

Sr. Superintendent of Post Offices …Appellant
Versus
Smt. Swam Kanta …Respondents

J U D G M E N T
INDU MALHOTRA, J.

1. Leave granted in both the special leave petitions.

2. A common question of law arises in both the appeals which are being disposed of by a common judgment. The facts in Sr. Superintendent of Post Offices v. Gursewak Singh & Ors. are being considered as the lead case.

3. The present Civil Appeal has been filed against the Order dated 01.12.2017 passed by a Division Bench of the Punjab & Haryana High Court at Chandigarh in LPA No. 1612 of 2017.

4. The factual matrix of the case, briefly stated, is as under:

4.1. On 26.06.1991, Respondent No. 1 was engaged as a Gramin Dak Sewak i.e. an Extra-Departmental Agent, to work on a parttime basis in the Postal Department at Faridkot, Punjab.
4.2. In 2014, Respondent No. 1 voluntarily resigned from the said parttime job. On 28.08.2014, the Department accepted the resignation, and Respondent No. 1 was discharged with immediate effect.
4.3. Respondent No. 1 approached the Controlling AuthoritycumAssistant Labour Commissioner, Central Jalandhar, seeking gratuity under the Payment of Gratuity Act, 1972 (herein after referred to as “the 1972 Act”).
4.4. The Appellant – Department took the stand that Respondent No. 1 was not entitled to exgratia
gratuity under the Gramin Dak Sewak (Conduct & Engagement) Rules, 2011 as he had voluntarily resigned from the job. The Controlling AuthoritycumAssistant Labour Commissioner, Central Jalandhar, vide Order dated 21.09.2015, allowed the claim of Respondent No. 1 and directed the Department to pay an amount of Rs. 1,06,021/along with Interest @ 10% p.a. from 28.08.2014.
4.5. The Department filed an Appeal u/S. 7(7) of the 1972 Act, against the Order dated 21.09.2015 before the Deputy Chief Labour Commissioner (Central) Kendriya Sadan, Chandigarh.
The Appellate Authority vide Order dated 17.05.2016 dismissed the Appeal filed by the Appellant – Department, and upheld the Order dated 21.09.2015 passed by the Controlling AuthoritycumAssistant Labour Commissioner, Central Jalandhar.
4.6. The Department filed C.W.P. No. 11412 of 2017 before the Punjab & Haryana High Court at Chandigarh under Article 226/227 of the Constitution against the Order dated 17.05.2016.
The learned Single Judge vide Oder dated 23.05.2017 dismissed the Writ Petition filed by the Department relying upon earlier judgments passed by the same High Court in Senior Superintendent of Post Officers, Jalandhar Division, Jalandhar v. Darshan Ram (through LRs) & Ors.1 and Senior Superintendent of Post Officers v. Smt. Sham Duiari & Ors.2
4.7. The Department challenged the Order dated 23.05.2017 passed by the Single Judge by way of LPA No. 1612 of 2017 before the Punjab & Haryana High Court at Chandigarh. The division bench of the Punjab & Haryana High Court at Chandigarh on 01.12.2017, dismissed the LPA 1 2014 (9) SCT 120 (DB) 2 2006 (3) SCT 577 filed by the Department on the ground that SLPs filed against the earlier judgments had been dismissed by this Court. As a consequence, the judgment of the learned Single Judge did not warrant interference.
4.8. The Department has filed the present Appeal to challenge the Judgment and Order dated 01.12.2017 passed by a division bench of the High Court.

5. We have heard the learned ASG Mr. Vikramjit Banerjee for theAppellant – Department. Mr. Bharat Sangal, Advocate was appointed as Amicus Curiae vide Order dt. 10.12.2018 to represent the interest of the Respondents who did not appear, despite service being effected on them. We have perused the pleadings and written submissions filed by both parties.

6. The issues which arise for consideration are as follows:

6.1. Whether a Gramin Dak Sewak is an ‘employee’ as per Section 2(e) of the 1972 Act, and is entitled to payment of Gratuity under this Act?
6.2. Whether a Gramin Dak Sewak is eligible for payment of Gratuity under the 2011 Rules upon voluntary resignation?

7. The learned ASG appearing on behalf of the Department submitted that :

7.1. The Gramin Dak Sewaks constitute a unique department of posts. The persons working as Gramin Dak Sewaks are not regular departmental employees but “extradepartmental agents”, who work on a parttime basis for a few hours every day; and, have an independent source of livelihood. They are permitted to work upto the age of 65 years.
7.2. The Gramin Dak Sewaks are governed by the 2011 Rules, which form a complete and separate code providing for the recruitment, gratuity, conduct, and disciplinary proceedings of Gramin Dak Sewaks. The terms and conditions of their engagement are governed by Rule 3A of the 2011 Rules, which reads as under :

“3A Terms and Conditions of Engagement
(i) A Sevak shall not be required to perform
duty beyond a maximum Period of 5
hours in a day;
(ii) A Sevak shall not be retained beyond 65
years of age;
(iii)A Sevak shall have to give an
undertaking that he has other sources of
income besides the allowances paid or to
be paid by the Government for adequate
means of livelihood for himself and his
family;
(iv)A Sevak can be transferred from one
post/unit to another post/unit in public
interest;
(v) A Sevak shall be outside the Civil Service
of the Union;
(vi)A Sevak shall not claim to be at par with
the Central Government employees;
(vii) Residence in post village/delivery
jurisdiction of the Post Office within one
month after selection but before
engagement shall be mandatory for a
Sevak:;
Failure to reside in place of duty for GDS
BPM & within delivery jurisdiction of the
Post Office for other categories of Gramin
Dak Sevaks after engagement shall be
treated as violative of conditions of
engagement and liable for disciplinary
action under Rule 10 of the Conduct rules,
requiring removal/dismissal;
(viii) Post Office shall be located in the
accommodation to be provided by Gramin
Dak Sevak Branch Postmaster suitable
for use as Post Office premises;
(ix)Combination of duties of a Sevak shall be
permissible;”
(emphasis supplied)

A reading of Rule 3A( iii) of the 2011 Rules, makes it abundantly clear that a Gramin Dak Sewaks must have an independent means of livelihood. The Gramin Dak Sewaks are engaged on a parttime basis for a maximum of 3 to 5 hours a day. Rule 3A( v) and (vi) stipulate that a Gramin Dak Sewak shall be outside the Civil Service of the Union,  and shall not claim to be at par with the servants of the Government.

7.3. It was further submitted on behalf of the Appellant – Department that the parttime employment of Gramin Dak Sewaks is governed by a separate scheme, since they do not form part of the regular cadre, and cannot be treated to be in the main service or class of service. Gratuity is payable to them in accordance with the Gramin Dak Sewak (Conduct & Engagement) Rules, 2011. Rule 6(1) of the 2011 Rules provides for payment of exgratia gratuity to Gramin Dak Sewaks. Rule 6(13) of the 2011 Rules provides that no gratuity is payable to a Gramin Dak Sewak, if he resigns from the agency on his own, except on medical grounds.

Rule 6(1) and (13) of the 2011 Rules read as under : “(1) Payment of exgratia gratuity. – The question of grant of some kind of purely ex gratia monetary grant to ED Agents working in the Indian Posts and Telegraphs Department on termination of their services has been under consideration for a long time. It has been decided as follows :1. ED Agents as defined in P & T Extra Departmental Agents (Conduct and  service)

Rules, 1964, whose services are terminated otherwise than (i) for unsatisfactory word or (ii) as a measure of disciplinary action or (iii) in
consequence of their being appointed in a regular post under the P & T Department, may be sanctioned monetary grants termed as ‘Gratuity’, provided that they have put in not less than ten years of continuous satisfactory service as Ed Agents.”

“(13) No gratuity to ED Agent who quits the
agency on his own. – The question of extending
the benefit of grant of ex gratia gratuity to ED
Agents who have to resign on account of
circumstances beyond their control was taken up
with the Ministry of finance. It has been decided
that no ex gratia gratuity will be paid to ED
Agents in such cases. It is, therefore, clarified that
according to the present orders, gratuity is
payable only if the services of an ED Agent are
terminated in consequence of an action of the
department, subject to their fulfillment of the other
prescribed conditions and that no gratuity is
payable if an ED Agent quits the agency on his
own. The services of an ED Agent should not be
terminated when he himself quits the job. In such
cases, an order permitting the ED Agent to quit
the services on his own should be issued so that
the order may not be construed as an order of
termination of service. ”
(emphasis supplied)

8. Mr. Bharat Sangal, learned Amicus Curiae, represented the
interest of the Respondents before this Court. The learned
Counsel inter alia submitted that :

8.1. The Payment of Gratuity Act, 1972 applies to every
place defined as an ‘establishment’ within the meaning of
any law for the time being in force in a state.

To determine the applicability of the Payment of
Gratuity Act, 1972 it must be seen whether the place is
defined as an establishment under the law applicable to the
State. Reliance was placed on the judgment of State of
Punjab v. Labour Court Jalandhar3 wherein this Court held
that an establishment falling within the definition of
Section 2(ii)(g) of the Payment of Wages Act, 1936 would be
covered by the Payment of Gratuity Act, 1972.
It was contended that the Postal Department is an
establishment within the meaning of the term used in
Section 2(ii)(g) of the Payment of Wages Act, 1936 and the
1972 Act, would be applicable to its employees.

8.2. Section 1(3) of the 1972 Act, provides for payment of
gratuity to employees of every factory, mine, oilfield,
plantation, port, railway company, shop or establishment.
Section 1(3) of the 1972 Act reads as under :
“1.Short title, extent, application and
commencement.( 3) It shall apply 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,
3 (1980) 1 SCC 4
in which ten or more persons are employed, or
were employed, on any day of the preceding
twelve months;
(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 this
behalf.” (emphasis supplied)

8.3. It was further submitted that Section 14 of the 1972
Act, specifically provides that the Act would apply
“notwithstanding anything inconsistent therewith contained
in any other enactment”.
Section 14 of the 1972 Act 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.”
8.4. Section 4(1)(b) of the 1972 Act provides that gratuity
would be payable to an employee even on his resignation.
Thus, any rule barring payment of gratuity to an employee
who resigns, would be contrary to Section 14 read with
Section 4(1)(b) of the 1972 Act.
8.5. It was further submitted that the Department of Posts,
Gramin Dak Sewak (Conduct and Employment) Rules, 2001
were superseded and replaced by the Department of Posts,
Gramin Dak Sewak (Conduct and Engagement) Rules,
2011.
Under the amended 2011 Rules the term
“employment/appointment” has been replaced by
“engagement”. The amended Rule 6 pertains to payment of
ex gratia Gratuity to Gramin Dak Sewaks.
9. The first issue to be determined is whether a Gramin Dak
Sewak is an ‘employee’ as per Section 2(e) of the 1972 Act, and
is entitled to payment of Gratuity under this Act?
9.1. Section 1(3)(b) of the 1972 Act applies to every
‘establishment’ within the meaning of “any law” for the time
being in force.
This Court in State of Punjab v. Labour Court
Jalandhar4 has held that there is no reason for limiting the
meaning of the expression ‘law’ in Section 1(3)(b) of the
1972 Act. 4 (1980) 1 SCC 4
The Postal Department is as an establishment under
Section 2(k) of the Indian Post Office Act, 1898 which reads
as under : “2. Definitions.(
k) the expression “Post Office” means the
department, established for the purposes of
carrying the provisions of this Act into effect and
presided over by the Director General.”
(emphasis supplied)
The Indian Post Office Act, 1898 would fall under the
expression ‘law’ in Section 1(3)(b). Consequently, the Post &
Telegraphs Department would be an establishment under
the 1972Act.
9.2. Section 4(1) of the 1972 Act, provides for payment of
Gratuity to an employee on the termination of his
employment, subject to the condition that he must have
rendered a minimum of 5 years’ continuous service.
Section 4(1) of the 1972 Act reads as under :
“4. Payment of Gratuity.( 1) Gratuity shall be payable to an employee on
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,
(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:
Provided further that in case of death of the
employee, gratuity payable to him shall be paid to
his nominee or, if no nomination has been made,
to his heirs, and where any such nominees or
heirs is minor, the share of such minor, shall be
deposited with the Controlling Authority who
shall invest the same for the benefit of such minor
in such bank or other financial institution, as may
be prescribed, until such minor attains majority.
Explanation.For the purposes of this section,
disablement means such disablement as
incapacitates an employee for the work which he
was capable of performing before the accident or
disease resulting in such disablement.”
(emphasis supplied)
9.3. Section 4 of the 1972 Act, states that “Gratuity shall be
payable to an employee”.
The term ‘employee’ is defined by Section 2(e) of the
1972 Act, as under : “2. Definitions.In
this Act, unless the context otherwise requires,(
e) “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 or
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;”
(emphasis supplied) Section 2(e) of the 1972 Act, however specifically
excludes persons who are governed by any Act, or Rules
providing for payment of Gratuity.
9.4. Section 2(e) of the 1972 Act excludes persons who hold
a post with the Central or State Government and are
governed by any other Act or rules providing for payment of
gratuity.
Gramin Dak Sewaks are engaged as Extra
Departmental Agents, a post governed by the 2011 Rules.5
These Rules have a separate provision for payment of
Gratuity to the Extra Departmental Agents.
A Gramin Dak Sewak is not an “employee” under the
1972 Act. The first issue is answered accordingly.
10. The second issue is whether a Gramin Dak Sewak is eligible
for payment of Gratuity upon voluntary resignation under the
2011 Rules?
10.1. The 2011 Rules provide that Gramin Dak Sewaks are
ExtraDepartmental
Agents, who are outside the Civil
Service of the Union, and shall not claim to be at par with
5 Superintendent of Post Officers v. PK Rajamma; (1997) 3 SCC 94
See also Union of India v. Kameshwar Prasad; (1997) 11 SCC 650
the Central Government Employees. The ExtraDepartmental
Agents are engaged by the Department of
Posts & Telegraphs to cater to the postal requirements in
the rural and remote areas. The system avails the services
of schoolmasters, shopkeepers, landlords, and such other
persons in a village who have a reasonable standard of
literacy, and adequate means of livelihood, and can
therefore assist the Department on a parttime
basis by
way of gainful avocation, to provide service to the rural
communities for their postal requirements.
Rule 3A(
i) of the 2011 Rules provides that the Gramin
Dak Sewaks shall not be required to perform duties beyond
a maximum period of 5 hours a day. This shows the
avocational nature of the service.
Rule 6(1) of the 2011 Rules provides for payment of
gratuity to Gramin Dak Sewaks. However, Rule 6(13) states
that no Gratuity is payable if an ExtraDepartmental
Agent
quits the agency on his own.
10.2. In the present case, Respondent No. 1 tendered his
resignation in 2014. The Appellant – Department accepted
his resignation vide letter dated 28.08.2014. The Order
dated 28.08.2014 accepting the resignation of Respondent
No. 1 reads as under :
“ The unconditional resignation dated nil
submitted by Sh. Gursewak Singh from the post
of GDSBPM Assa Butter in a/c with Bariwala SO
is hereby accepted with immediate effect.
Usual charge Reports should be sent to all
concerned.
Sd/THE
SUPDT OF POST OFFICES
FARIDKOT DIVISION
FARIDKOT – 151203 ”
(emphasis supplied)
The Order was passed under Rule 6(13) permitting
Respondent No. 1 to quit the services of the Gramin Dak
Sewak as per his voluntary resignation.
As a consequence of his resignation, Respondent No. 1
became disentitled from the payment of Gratuity under the
statutory 2011 Rules applicable to Gramin Dak Sewaks.
The second issue is answered accordingly.
11. The Impugned Orders passed by the High Court in both the
Appeals are hereby setaside.
We acknowledge the valuable assistance provided by the
learned Amicus Curiae Mr. Bharat Sangal in representing the
interest of the Respondents.
Pending applications in both the Appeals, if any, are
dismissed.
The Appeals are allowed accordingly.

…………………………J.
(UDAY UMESH LALIT)
…..……………………J.
(INDU MALHOTRA)
New Delhi,
March 15, 2019.

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