BIRLA INSTITUTE OF TECHNOLOGYversusTHE STATE OF JHARKHAND & ORS.

                         [2019] 2 S.C.R. 963                               963


             BIRLA INSTITUTE OF TECHNOLOGY                                 A
                                   v.
              THE STATE OF JHARKHAND & ORS.
                   (Civil Appeal No. 2530 of 2012)
                          MARCH 07, 2019                                   B
[ABHAY MANOHAR SAPRE AND INDU MALHOTRA, JJ.]
      Payment of Gratuity Act, 1972:
       s.2(e) – Appellant is a premier technical educational Institute
of repute in the country – Respondent no.4 joined the appellant-           C
Institute as Assistant Professor – On superannuation, he made a
claim for payment of gratuity amount – Entitlement for gratuity –
Held: The definition of “employee” as defined under s.2(e) was
amended with effect from 03.04.1997 retrospectively by Payment of
the Gratuity (Amendment) Act, 2009 (No. 47 of 2009) published on
                                                                           D
31.12.2009 – In the light of the amendment made, the benefit of the
Payment of Gratuity Act was extended to the teachers also from
03.04.1997 – In other words, the teachers were brought within the
purview of “employee” as defined in s.2(e) of the Payment of
Gratuity Act by Amending Act No. 47 of 2009 with retrospective
effect from 03.04.1997 – Respondent no.4 is entitled to the payment        E
of gratuity – Payment of the Gratuity (Amendment) Act, 2009.
      Constitution of India:
       Constitutionality of a statute – Appellant is a premier technical
educational Institute – Claim made by a teacher of appellant-Institute
for payment of gratuity – Appellant challenged the applicability of        F
the Payment of the Gratuity (Amendment) Act, 2009 (No. 47 of 2009)
by which teachers were brought within the purview of “employee”
as defined in s.2(e) of the Payment of Gratuity Act – The challenge
was on the ground that the constitutional validity of Amending Act
No. 47 of 2009 was under challenge in a writ petition, which was           G
pending – Held: Pendency of any writ petition by itself does not
affect the constitutionality of the Amending Act, and nor does it
affect the right of teacher in any manner in claiming gratuity amount
from the appellant(employer) under the Act – It is only when the
Court declares a Statute as ultra vires the provisions of the
                                                                           H
                                  963
964                SUPREME COURT REPORTS                   [2019] 2 S.C.R.


A     Constitution that the question may arise to consider its effect on the
      rights of the parties and that would always depend upon the
      declaration rendered by the Court and the directions given in that
      case – Such was not the case in the instant matter – Plea rejected –
      Payment of Gratuity Act, 1972 – s.2(e).
B           Dismissing the appeal, the Court
            HELD: 1. In the light of the amendment made in the
      definition of the word “employee” as defined in Section 2(e) of
      the Act by Amending Act No. 47 of 2009 with retrospective effect
      from 03.04.1997, the benefit of the Payment of Gratuity Act was
C     also extended to the teachers from 03.04.1997. In other words,
      the teachers were brought within the purview of “employee” as
      defined in Section 2(e) of the Payment of Gratuity Act by Amending
      Act No. 47 of 2009 with retrospective effect from 03.04.1997.
      [Paras 28, 29][973-E, F]
D           Ahmadabad Pvt. Primary Teachers Association v.
            Administrative Officer and Others (2004) 1 SCC 755 :
            [2004] 1 SCR 470 – held inapplicable.
            2. The appellant urged that the constitutional validity of
      Amending Act No. 47 of 2009 is under challenge in this Court in
E     a writ petition, which is pending. It is only when the Court declares
      a Statute as being ultra vires the provisions of the Constitution
      then the question may arise to consider its effect on the rights of
      the parties and that would always depend upon the declaration
      rendered by the Court and the directions given in that case. Such
      is not the case here. [Paras 32, 34][974-B-D]
F
                             Case Law Reference
      [2004] 1 SCR 470        held inapplicable               Para 1
            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2530
      of 2012.
G           From the Judgment and Order dated 02.04.2008 of the High
      Court of Jharkhand at Ranchi in L.P.A. No. 53 of 2007.
            Shambo Nandy, Ms. N. Annapoorani, Advs. for the Appellant.
            Anil Kumar Jha, Sunil Roy, Advs. for the Respondents.
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   BIRLA INSTITUTE OF TECHNOLOGY v. THE STATE OF                           965
                 JHARKHAND & ORS.

      The Judgment of the Court was delivered by                           A
      ABHAY MANOHAR SAPRE, J.
      1. On 07.01.2019, this Court placing reliance on the decision of
this Court in Ahmadabad Pvt. Primary Teachers Association vs.
Administrative Officer and Others (2004) 1 SCC 755, which was
brought to the Court’s notice by the learned counsel appearing for the     B
appellant, allowed the appeal and set aside the order of the High Court.
       2. However, after the pronouncement of the order in this appeal,
it came to the notice of this Court that consequent upon the decision of
this Court rendered in Ahmadabad Pvt. Primary Teachers
Association (supra), the Parliament amended the definition of the word     C
“employee” as defined in Section 2(e) of the Payment of Gratuity Act,
1972 by Amending Act No. 47 of 2009 on 31.12.2009 with retrospective
effect from 03.04.1997. This amendment was not brought to our notice
while passing the order on 07.01.2019 in this appeal.
      3. This Court, therefore, suo motu took up the appeal to its file    D
and directed it to be listed on the Board. On 09.01.2019 the appeal was
accordingly listed for orders. This Court then stayed its order dated
07.01.2019 and passed the following order:
         “ On 07.01.2019 this Court delivered the judgment
      allowing the appeal and setting aside the order of the High          E
      Court impugned therein.
         Today, we have listed the matter suo motu. The reason
      being that during the course of hearing of the appeal it was
      not brought to the notice of the Bench that the judgment of
      this Court in Ahmedabad Pvt. Primary Teachers Association            F
      vs. Administrative Officer & Ors. (2004) 1 SCC 755 on
      which the reliance was placed for allowing the appeal
      necessitated the Parliament to amend the definition of
      “employee” under Section 2(e) of the Payment of Gratuity
      Act by Amending Act No.47 of 2009 with retrospective effect
                                                                           G
      from 03.04.1997.
         In other words, though the definition was amended in
      2009 by Act No.47 of 2009, yet the same was given
      retrospective effect from 03.04.1997 so as to bring the
      amended definition on Statute Book, from 03.04.1997.
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966                 SUPREME COURT REPORTS                      [2019] 2 S.C.R.


A              Keeping in view the amendment made in the definition
            of Section 2(e), which as stated above was not brought to
            the notice of the Bench, this issue was not considered
            though had relevance for deciding the question involved in
            the appeal. It is for this reason, we prima facie find error in
            the judgment and, therefore, are inclined to stay the
B
            operation of our judgment dated 07.01.2019 passed in this
            appeal
                The judgment dated 07.01.2019 shall not be given effect
            to till the matter is reheard finally by the appropriate Bench.
C              The Registry is directed to list this matter for rehearing
            before the appropriate Bench comprising of Hon’ble
            Mr.Justice Abhay Manohar Sapre and Hon’ble Ms.Justice
            Indu Malhotra as early as possible.”
             4. It is in the light of the aforementioned order, the matter was
D     listed before this Bench for passing the appropriate order in the disposed
      of appeal.
            5. We heard the learned counsel for the parties. Both the parties
      have also filed their written submissions.
              6. Having heard the learned counsel for the parties and on perusal
E     of the record of the case including the written submissions, we are inclined
      to recall our order dated 07.01.2019 because, in our view, it contains an
      error apparent on the face of the order.
             7. The apparent error is that it was not brought to our notice that
      the Parliament, consequent upon the decision of this Court in Ahmadabad
F     Pvt. Primary Teachers Association (supra), had amended the
      definition of “employee” as defined in Section 2(e) of the Payment of
      Gratuity Act by amending Act No. 47 of 2009 with retrospective effect
      from 03.04.1997. This amendment, in our opinion, had a direct bearing
      over the issue involved in this appeal.
G            8. What was brought to our notice was only the decision of this
      Court rendered in Ahmadabad Pvt. Primary Teachers Association
      (supra) by contending that the issue involved in this appeal remains no
      longer res integra and stands answered in appellant’s favour. We accepted
      this submission.
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    BIRLA INSTITUTE OF TECHNOLOGY v. THE STATE OF                              967
    JHARKHAND & ORS. [ABHAY MANOHAR SAPRE, J.]

       9. In our view, the error mentioned above is an error apparent on       A
the face of the record of the case because the material, subsequent
event, which came into existence, had a direct bearing over the
controversy involved in this appeal, was not brought to our notice at the
time of hearing the appeal. It is this apparent error, which led to passing
of the order dated 07.01.2019 in favour of the appellant.
                                                                               B
      10. In view of the aforesaid discussion, we recall our order dated
07.01.2019 passed in this appeal. As a consequence, the appeal (Civil
Appeal No. 2530 of 2012) is restored to its original number for its disposal
on merits in accordance with law.
      11. We now proceed to decide the appeal afresh on its merits.            C
      12. This appeal is directed against the final judgment and order
dated 02.04.2008 passed by the High Court of Jharkhand at Ranchi in
LPA No.53 of 2007 whereby the Division Bench of the High Court
dismissed the LPA filed by the appellant herein and confirmed the order
dated 12.01.2007 passed by the Single Judge of the High Court in W.P.          D
No.2572 of 2005.
      13. The controversy involved in this appeal is a short one as would
be clear from the facts stated infra.
       14. The appellant is a premier technical educational institute of
repute in the country. It is known as “Birla Institute of Technology”          E
(BIT).
      15. Respondent No.4 joined the appellant-Institute as Assistant
Professor on 16.09.1971 and superannuated on 30.11.2001 after attaining
the age of superannuation.
                                                                               F
       16. Respondent No.4 then made a representation to the appellant
and prayed therein for payment of gratuity amount which, according to
respondent, was payable to him by the appellant under the Payment of
Gratuity Act, 1972. The appellant, however, declined to pay the amount
of gratuity as demanded by respondent No.4.
      17. Respondent No.4, therefore, filed an application before the          G
controlling authority under the Act against the appellant and claimed the
amount of gratuity which, according to him, was payable to him under
the Act.

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968                 SUPREME COURT REPORTS                      [2019] 2 S.C.R.


A           18. By order dated 07.09.2002, the controlling authority (respondent
      No.3) allowed the application filed by respondent No.4 and directed the
      appellant to pay a sum of Rs.3,38,796/- along with interest at the rate of
      10% p.a. towards the gratuity to respondent No.4.
             19. The appellant felt aggrieved and filed appeal before the
B     appellate authority under the Act. By order dated 15.04.2005, the appellate
      authority dismissed the appeal. The appellant felt aggrieved and carried
      the matter to the High Court in a writ petition. The High Court (Single
      Judge) by order dated 12.01.2007 dismissed the writ petition and upheld
      the orders of the authorities passed under the Act. The appellant then
      filed Letters Patent Appeal before the Division Bench against the order
C     passed by the Single Judge. The LPA was also dismissed by the impugned
      order which has given rise to filing of the present appeal by way of
      special leave by the appellant-Institute in this Court.
            20. The short question, which arises for consideration in this appeal,
      is whether the Courts below were justified in holding that respondent
D     No.4 was entitled to claim gratuity amount from the appellant (employer)
      under the Act.
            21. Heard Mr. Shambo Nandy, learned counsel for the appellant
      and Mr. Anil Kumar Jha, learned counsel for respondent Nos.1-3 and
      Mr. Sunil Roy, learned counsel for respondent No.4.
E
             22. Having heard the learned counsel for the parties and on perusal
      of the record of the case, we find no merit in this appeal.
             23. As mentioned above, the issue in question was subject matter
      of the decision rendered in the case of Ahmadabad Pvt. Primary
F     Teachers Association (supra). This Court had examined the question
      in the light of the definition of the word “employee” defined in Section
      2(e) of the Act as it stood then. The definition reads as under:
             “2. (e) ‘employee’ means any person (other than an
            apprentice) employed on wages, in any establishment,
            factory, mine, oilfield, plantation, port, railway company or
G
            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
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BIRLA INSTITUTE OF TECHNOLOGY v. THE STATE OF                       969
JHARKHAND & ORS. [ABHAY MANOHAR SAPRE, J.]

 who holds a post under the Central Government or a State           A
 Government and is governed by any other Act or by any rules
 providing for payment of gratuity.”
 24. This is what was held in paras 22 to 26 of the decision:
 “22. In construing the abovementioned three words which
 are used in association with each other, the rule of               B
 construction noscitur a sociis may be applied. The meaning
 of each of these words is to be understood by the company
 it keeps. It is a legitimate rule of construction to construe
 words in an Act of Parliament with reference to words found
 in immediate connection with them. The actual order of             C
 these three words in juxtaposition indicates that meaning
 of one takes colour from the other. The rule is explained
 differently: “that meaning of doubtful words may be
 ascertained by reference to the meaning of words associated
 with it”. [See Principles of Statutory Interpretation by Justice
 G.P. Singh, 8th Edn., Syn. 8, at p. 379.]                          D

 23. The word “unskilled” is opposite of the word “skilled”
 and the word “semi-skilled” seems to describe a person
 who falls between the two categories i.e. he is not fully
 skilled and also is not completely unskilled but has some
 amount of skill for the work for which he is employed. The         E
 word “unskilled” cannot, therefore, be understood
 dissociated from the word “skilled” and “semi-skilled” to
 read and construe it to include in it all categories of
 employees irrespective of the nature of employment. If the
 legislature intended to cover all categories of employees          F
 for extending benefit of gratuity under the Act, specific
 mention of categories of employment in the definition clause
 was not necessary at all. Any construction of definition
 clause which renders it superfluous or otiose has to be
 avoided.
                                                                    G
 24. The contention advanced that teachers should be
 treated as included in the expression “unskilled” or
 “skilled” cannot, therefore, be accepted. The teachers
 might have been imparted training for teaching or there

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970         SUPREME COURT REPORTS                  [2019] 2 S.C.R.


A     may be cases where teachers who are employed in primary
      schools are untrained. A trained teacher is not described
      in the industrial field or service jurisprudence as a “skilled
      employee”. Such adjective generally is used for an employee
      doing manual or technical work. Similarly, the words “semi-
      skilled” and “unskilled” are not understood in educational
B
      establishments as describing nature of job of untrained
      teachers. We do not attach much importance to the
      arguments advanced on the question as to whether
      “skilled”, “semi-skilled” and “unskilled” qualify the words
      “manual”, “supervisory”, “technical” or “clerical” or the
C     above words qualify the word “work”. Even if all the words
      are read disjunctively or in any other manner, trained or
      untrained teachers do not plainly answer any of the
      descriptions of the nature of various employments given in
      the definition clause. Trained or untrained teachers are not
      “skilled”, “semi-skilled”, “unskilled”, “manual”,
D
      “supervisory”, “technical” or “clerical” employees. They
      are also not employed in “managerial” or “administrative”
      capacity. Occasionally, even if they do some administrative
      work as part of their duty with teaching, since their main
      job is imparting education, they cannot be held employed
E     in “managerial” or “administrative” capacity. The teachers
      are clearly not intended to be covered by the definition of
      “employee”.
      25. The legislature was alive to various kinds of definitions
      of the word “employee” contained in various previous
F     labour enactments when the Act was passed in 1972. If it
      intended to cover in the definition of “employee” all kinds
      of employees, it could have as well used such wide language
      as is contained in Section 2(f) of the Employees’ Provident
      Funds Act, 1952 which defines “employee” to mean “any
      person who is employed for wages in any kind of work,
G     manual or otherwise, in or in connection with the work of
      an establishment …”. Non-use of such wide language in
      the definition of “employee” in Section 2(e) of the Act of
      1972 reinforces our conclusion that teachers are clearly
      not covered in the definition.
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   BIRLA INSTITUTE OF TECHNOLOGY v. THE STATE OF                             971
   JHARKHAND & ORS. [ABHAY MANOHAR SAPRE, J.]

      26. Our conclusion should not be misunderstood that                    A
      teachers although engaged in a very noble profession of
      educating our young generation should not be given any
      gratuity benefit. There are already in several States separate
      statutes, rules and regulations granting gratuity benefits
      to teachers in educational institutions which are more or
                                                                             B
      less beneficial than the gratuity benefits provided under
      the Act. It is for the legislature to take cognizance of
      situation of such teachers in various establishments where
      gratuity benefits are not available and think of a separate
      legislation for them in this regard. That is the subject-matter
      solely of the legislature to consider and decide.”                     C
       25. The decision rendered in Ahmadabad Pvt. Primary Teachers
Association (supra), therefore, led the Parliament to amend the definition
of “employee” as defined in Section 2 (e) of the Payment of Gratuity
Act by amending Act No. 47 of 2009 on 31.12.2009 with retrospective
effect from 03.04.1997.                                                      D
      26. It is clear from the statement of Objects and Reasons of the
Payment of Gratuity (Amendment) Bill, 2009 introduced in the Lok Sabha
on 24.02.2009, which reads as under:
            “STATEMENT OF OBJECTS AND REASONS
                                                                             E
               The Payment of Gratuity Act, 1972 provides for
      payment of gratuity to employees engaged in factories,
      mines, oilfields, plantations, ports, railway companies,
      shops or other establishment and for matters connected
      therewith or incidental thereto. Clause (c) of subsection
      (3) of section 1 of the said Act empowers the Central                  F
      Government to apply the provisions of the said Act by
      notification in the Official Gazette to such other
      establishments or class of establishments in which ten or
      more employees are employed, or were employed, on any
      day preceding twelve months. Accordingly, the Central                  G
      Government had extended the provisions of the said Act
      to the educational institutions employing ten or more
      persons by notification of the Government of India in the
      Ministry of Labour and Employment vide number S.O. 1080,
      dated the 3rd April, 1997.
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972         SUPREME COURT REPORTS                  [2019] 2 S.C.R.


A     2. The Hon’ble Supreme Court in its judgment in Civil
      Appeal No. 6369 of 2001, dated the 13th January, 2004, in
      Ahmedabad Private Primary Teachers’ Association vs.
      Administrative Officer and others [AIR 2004 Supreme
      Court 1426] had held that if it was extended to cover in the
B     definition of ‘employee’, all kind of employees, it could have
      as well used such wide language as is contained in clause
      (f) of section 2 of the Employees’ Provident Funds and
      Miscellaneous Provisions Act, 1952 which defines
      ‘employee’ to mean any person who is employed for wages
      in any kind of work, manual or otherwise, in or in connection
C
      with the work of an establishment. It had been held that
      non-use of such wide language in the definition of
      ‘employee’ under clause (e) of section 2 of the Payment of
      Gratuity Act, 1972 reinforces the conclusion that teachers
      are clearly not covered in the said definition.
D
       3. Keeping in view the observations of the Hon’ble
      Supreme Court, it is proposed to widen the definition of
      ‘employee’ under the said Act in order to extend the benefit
      of gratuity to the teachers. Accordingly, the Payment of
      Gratuity (Amendment) Bill, 2007 was introduced in Lok
E
      Sabha on the 26th November, 2007 and same was referred
      to the Standing Committee on Labour which made certain
      recommendations.         Af ter      examining        those
      recommendations, it was decided to give effect to the
      amendment retrospectively with effect from the 3rd April,
F     1997, the date on which the provisions of the said Act were
      made applicable to educational institutions.
      4. Accordingly, the Payment of Gratuity (Amendment) Bill,
      2007 was withdrawn and a new Bill, namely, this Payment
      of Gratuity (Amendment) Bill, 2009 having retrospective
G
      effect was introduced in the Lok Sabha on 24th February,
      2009. However, due to dissolution of the Fourteenth Lok
      Sabha, the said Bill lapsed. In view of the above, it is
      considered necessary to bring the present Bill.

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    BIRLA INSTITUTE OF TECHNOLOGY v. THE STATE OF                             973
    JHARKHAND & ORS. [ABHAY MANOHAR SAPRE, J.]

      5. The Bill seeks to achieve the above objectives.                      A
      NEW DELHI;
      The 12th November, 2009"
                                   MALLIKARJUN KHARGE.”
      27. The definition of “employee” as defined under Section 2(e)
was accordingly amended with effect from 03.04.1997 retrospectively           B
vide Payment of the Gratuity (Amendment) Act, 2009 (No. 47 of 2009)
published on 31.12.2009. The amended definition reads as under:
      “(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               C
      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              D
      for payment of gratuity.”
       28. In the light of the amendment made in the definition of the
word “employee” as defined in Section 2(e) of the Act by Amending
Act No. 47 of 2009 with retrospective effect from 03.04.1997, the benefit
of the Payment of Gratuity Act was also extended to the teachers from         E
03.04.1997.
      29. In other words, the teachers were brought within the purview
of “employee” as defined in Section 2(e) of the Payment of Gratuity Act
by Amending Act No. 47 of 2009 with retrospective effect from
03.04.1997.                                                                   F
        30. The effect of the amendment made in the Payment of Gratuity
Act vide Amending Act No. 47 of 2009 on 31.12.2009 was two-fold.
First, the law laid down by this Court in the case of Ahmadabad Pvt.
Primary Teachers Association (supra) was no longer applicable
against the teachers, as if not rendered, and Second, the teachers were       G
held entitled to claim the amount of gratuity under the Payment of Gratuity
Act from their employer with effect from 03.04.1997.
       31. In our considered opinion, in the light of the amendment made
in the Payment of Gratuity Act as detailed above, reliance placed by the
learned counsel appearing for the appellant (employer) on the decision        H
974                   SUPREME COURT REPORTS                    [2019] 2 S.C.R.


A     of Ahmedabad Pvt. Primary Teachers Association(supra) is wholly
      misplaced and does not help the appellant in any manner. It has lost its
      binding effect.
              32. Learned counsel for the appellant then urged that the
      constitutional validity of Amending Act No. 47 of 2009 is under challenge
B     in this Court in a writ petition, which is pending.
              33. Be that as it may, in our view, pendency of any writ petition by
      itself does not affect the constitutionality of the Amending Act, and nor
      does it affect the right of respondent No.4 (teacher) in any manner in
      claiming gratuity amount from the appellant(employer) under the Act.
C            34. It is only when the Court declares a Statute as being ultra
      vires the provisions of the Constitution then the question may arise to
      consider its effect on the rights of the parties and that would always
      depend upon the declaration rendered by the Court and the directions
      given in that case. Such is not the case here as of now.
D           35. In the light of the foregoing discussion, we find no merit in this
      appeal, which fails and is hereby dismissed with costs quantified at
      Rs.25,000/- payable by the appellant to respondent No.4(teacher).
      Devika Gujral                                                Appeal dismissed.

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