ASPINWAL AND CO., KULSHEKAR, MANGALORE versus LAITHA PADUGADY AND ORS. ETC. ETC.

Citation: [1995] SUPP. 2 S.C.R. 369 · Decided: 26-07-1995 · Supreme Court of India · Bench: M.M. PUNCHHI, SUJATA V. MANOHAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

.. 
ASPINW AL AND CO., KULSHEKAR, MAN GALORE 
A 
v. 
LAITHA PADUGADY AND ORS. ETC. ETC. 
JULY 26, 1995 
(M.M. PUNCHHI AND MRS. SUJATA V. MANOHAR, JJ.J 
B 
Gratuity Act, 1972: 
Sections 2(b)(c)-Explanation-Section 4(As it stood prior to 
1984)-lnterpretation of. 
C 
Gratuity-Computation or-seasonal industry-Closure from June to 
September and operational from September onwards till June in following 
year-Maintainint accounting year on the basis of calender year-Workers 
held entitled to gratuity for a single season and not for two seasons in each 
calender year. 
D 
General Clauses Act, 1897: 
Concept of 'year' under Section 3(66)-Held inapplicable to the concept 
of 'completed year of service' under Gratuity Act, 1972. 
Words and Phrases: 
Expression 'completed year of service'-Occurring in Section 4 of 
Gratuity Act, 1972-Meaning of. 
E 
The appellant, a coffee curing establishment, was declared a F 
seasonal industry under Section 25·A(2) of the Industrial Disputes Act, 
1947. In each calender year it remains closed from June to September aQ.(f. 
operated from September onwards till June in the following year. The 
respondent-workmen, employed in the appellant-establishment, claimed 
' 
gratuity at the rate of 7 days' wages for two seasons in each calender year 
on the basis that calender year was a unit and the period of work stood G 
split into two seasons because the accounting year of the appellant was 
calender year. The appellant contested the respondents' claim on the 
ground that there was only one continuous season starting from Septem-
ber to June of the following year and therefore the workmen were entitled. 
to 7 days' wages for only one season. The Controlling authority accepted H 
369 
370 
SUPREME COURT REPORTS (1995) SUPP. 2 S.C.R. 
A 
the workers' claim and granted them gratuity for two seasons at the rate 
of 7 days' wages per season in each calender year. The appellant unsuc-
cessfully challenged the order of the Controlling Authority before a single 
judge as well as a Division Bench of the High Court. Hence these appeals. 
B 
c 
D 
E 
F 
Allowing the appeals and setting aside the order of the High Court, 
this Court 
HELD : 1. The Controlling Authority as also both the Benches of 
the High Court in ignoring the concept of continuous service for one year, 
which has reference to an individual workman and not universally 
relatable to the calender year, had wrongly conferred the benefit of two 
seasons to the workmen holding them entitled to fourteen days' wages as 
gratuity. (375-D-E] 
2. Section 4 of the Payment of Gratuity AEt, 1972 postulates deter-
mination of the 'completed year of service', meaning thereby one year's 
period of continuous service, rendered by an employee for the purposes of 
computation of gratuity and therein is a method provided for determining 
a completed year of service. The starting point of the said period is from 
the date an employee gets employment, which in the nature of things would 
vary from employee to employee .. It is no where envisaged in the scheme of 
the provisions contained in Sections 4, and 2(b) and (c) that the con-
tinuous service of the employee would be computed in a chain from 
calender year to calender year. Completed year of service would plainly 
mean continuous service for one year reckonable from the date of joining 
employment. It cannot be confused with that of a calender year. The 
understanding of the year as a calender year, as available in the General 
Clauses Act is not importable to shadow the concept of 'completed year of 
service'. (373-G-H; 374-A-B] 
3. The year ref~rred to in Explanation II to Section 2(c) of the Act 
obviously is the completed year of service of an employee, meaning thereby 
continuous service for one year. When under Second Proviso to· section 4(2) 
G the gratuity at the rate of seven days' wages for each season requires to be 
worked out, then one bas to see the number of seasons in each completed 
year of service of the workman; i.e. his continuous year of service, not 
regulated by the calender year. The second proviso would have to be read in 
a purposive way, i.e. in the nature of an explanation tied and woven in 
H Section 4. In working for each season thus the employee becomes entitled to 
ASPINWALAND CO. v. LAITHAPADUGADY 
371 
gratuity at the rate of seven days' wages per season. [375-A; B; C] 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4086-90 
of 1986. 
From the Judgment and Order dated 19.2.

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