GENERAL MANAGER, E.L.D. PARRY (INDIA} LTD versus PRESIDING OFFICER, 2ND ADDL. LABOUR COURT, MADRAS AND ORS.

Citation: [1991] 2 S.C.R. 637 · Decided: 02-05-1991 · Supreme Court of India · Bench: RANGANATH MISRA · Disposal: Dismissed

Judgment (excerpt)

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GENERAL MANAGER, E.l.D. PARRY (INDIA} LTD. 
v. 
PRESIDING OFFICER, 2ND ADDL. LABOUR COURT, 
MADRAS AND ORS. 
MAY 2, 1991 
[RANGANATH MISRA, CJ, A.M. AHMADI AND 
R.M. SAHAI, JJ.] 
Industrial Disputes Act, 1947: Sections 9-A, 33-C(2) Payment of 
Gratuity Act, 1972. 
Labour Law-Company-General Office Order No. 26 dated 
I. 12. 1943-Provision for 'Retiring Allowance' (Pension) and gratuity 
-Memorandum of settlement between Company and workmen-
Employees given option under the settlement either for Gratuity or 
Retiring allowance-Enforcement of Gratuity Act, 1972-Workers' 
claim for retiring allowance (Pension) in addition to gratuity-Held 
settlement had not substituted gratuity for pension-'-Employees held 
entitled to pension notwithstanding the settlement. 
A 
B 
c 
D 
The General Office Order No. 26 dated 1.12.1943 of the Appel-
lant-Company provided that employees with 30 years' service or more 
would he eligible to receive "Retiring Allowance" (pension). The said 
E 
office order also provided that all permanent employees who were in the 
Company's service prior to 1.1.1947 and who do not qualify for retiring 
allowance on retirement, will he eligible for gratuity on f'mally leaving 
the Company's service subject to the prescribed conditions being fulf'd-
Ied. 1n 1956 a Memorandum of settlement was signed by the appellant-
company and the Employees' Union under which the employees in 
F 
service prior to 1.1.47 were required to opt at the time of leaving service 
either for gratuity or in lieu of the gratuity the ratiring allowance. Later 
the Payment of Gratuity Act 1972 came into force md the payment of 
gratuity became statutory. The employer and the Employees' Uuion 
jointly applied to the Government for exemption from the provisions of 
the statute which was refused. 
G 
Some of the retiring employees of company f'ded applications 
under Section 33-C(2) of the Industrial Disputes Act, 1947 before the 
Labour Court claiming pension by alleging that payability of pension 
was a condition of service and the employer had stopped it without any 
justification. The Labour Court allowed the applications. Against the 
H 
637 
638 
SUPREME COURT REPORTS 
[ 1991] 2 S.C.R. 
A 
order of the Labour Court the employer preferred six writ petitions. In 
the meantime the same dispute was referred to the Industrial Tribunal 
and by an award the Tribunal answered the reference against the emp-
~ 
loyees. The Employees' Union challenged the award by filing a writ 
petition in the High Court. All the writ petitions were heard by a 
learned single judge of the High Court who allowed the writ petitions of 
B 
the management against th<! order of the Labour Court and dismissed 
c 
the writ petition preferred by the Labour Union challenging the award 
of the Tribunal. Writ appeals were carried against the single Judges' 
decision. The Appellate Bench of the High Court held that gratuity 
provided under the settlement was not a substitute of pension and the "' 
claim of pension was available to employees notwithstanding the settle-
ment. Hence this appeal by the employer-company. 
Dismissing the appeals, this Court, 
HELD: The 1956 settlement between. the parties does not provide 
for payment of pension except to pre-1947 employees and making the 
D benefit liable to exercise of option under clause 6( d) of the settlement. 
The retiral benefit (pension) was payable to all qualified employees as a ' -
matter of practice. If under the settlement that was not done away with, 
the benefit arising out of General Office Order No. 26 would still be 
available and gratuity contemplated under the settlement would not be 
a substitute of the retiral benefit of pension. The Appellate Bench of the 
E 
High Court was right in holding that the entitlement to pension had not 
been substituted by the settlement of 1956 and, therefore, the claim to 
pension subject to qualification being satisfied was available to be 
maintained notwithstanding the settlement of 1956. The High Court 
rightly came to the conclusion that the Labour Court bad justif'mbly 
worked out the dues and the claim petitions under section 33-C(2) of the 
F 
1947 Act. [641C-D, 642C-D] 
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 
1450-1458 of 1990. 
From the Judgment and Order dated 21.11.1988 of the Madras i. 
G 
High Court in W.A. Nos. 864 to 870 of 1988 and W.P. Nos. 1600 and 
1601of1986. 
Narayanswamy, N. Balasubramaniam and A.T.M. Sampath for 
the Appellant. 
H 
M. 

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