REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.2530 OF 2012

Birla Institute of Technology       ….Appellant(s)

VERSUS

The State of Jharkhand & Ors.       …Respondent(s)

J U D G M E N T

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

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Court’s notice by the learned counsel appearing for the

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   “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 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:

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“ On 07.01.2019 this Court delivered the

judgment   allowing   the   appeal   and   setting

aside the order of the High 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   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 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.

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   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. 

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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 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 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 Pvt. Primary

Teachers   Association  (supra),   had   amended   the

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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. 

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. 

9.In our view, the error mentioned above is an error

apparent on 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.

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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.

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. 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” (BIT).

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15.Respondent No.4 joined the appellant­Institute as

Assistant Professor on 16.09.1971 and superannuated

on   30.11.2001   after   attaining   the   age   of

superannuation.

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 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. 

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

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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 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 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 appellant­Institute in this

Court.

20.The   short   question,   which   arises   for

consideration in this appeal, is whether the Courts

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below were justified in holding that respondent 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.1­3 and Mr. Sunil Roy,

learned counsel for respondent No.4. 

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   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,

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plantation, port, railway company or shop, to

do   any   skilled,   semi­skilled,   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.”

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 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 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.]

23. The word “unskilled” is opposite of the

word   “skilled”   and   the   word   “semi­skilled”

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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 word “unskilled” cannot,

therefore, be understood dissociated from the

word “skilled” and “semi­skilled” 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   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.

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 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   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”,   “semi­skilled”   and

“unskilled”   qualify   the   words   “manual”,

“supervisory”, “technical” or “clerical” or the

above words qualify the word “work”. Even if

all the words are read disjunctively or in any

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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”,   “semi­skilled”,

“unskilled”,   “manual”,   “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   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   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,

manual or otherwise, in or in connection with

the work of an establishment …”. Non­use 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.

26.   Our   conclusion   should   not   be

misunderstood   that   teachers   although

engaged   in   a   very   noble   profession   of

educating  our  young   generation   should   not

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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 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   subject­matter   solely   of   the

legislature to consider and decide.”

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. 

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

The   Payment   of   Gratuity   Act,   1972

provides   for   payment   of   gratuity   to

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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

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   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. 

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   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 with

the   work   of   an   establishment.   It   had   been

held that non­use of such wide language in

the definition of 'employee' under clause (e)

of section 2 of the Payment of Gratuity Act,

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1972 reinforces the conclusion that teachers

are clearly not covered in the said definition.

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   Sabha   on   the   26th

November, 2007 and same was referred to the

Standing Committee on Labour which made

certain   recommendations.   After   examining

those   recommendations,   it   was   decided   to

give effect to the amendment retrospectively

with effect from the 3rd April, 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

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. 

5.   The   Bill   seeks   to   achieve   the   above

objectives. 

NEW DELHI; 

The 12th November, 2009”

                     MALLIKARJUN KHARGE.”

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27.The   definition   of   “employee”   as   defined   under

Section 2(e) was accordingly amended with effect from

03.04.1997   retrospectively   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 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.” 

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 03.04.1997.

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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.

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 two­fold. 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 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

of  Ahmedabad   Pvt.   Primary   Teachers

Association(supra) is wholly misplaced and does not

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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   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. 

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.

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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). 

                     ………...................................J.

        [ABHAY MANOHAR SAPRE]

    …...……..................................J.

                          [INDU MALHOTRA]

New Delhi;

March 07, 2019 

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