LexSHRI DIGVIJAY WOOLLEN MILLS LTD. ETC. versus MAHENDRA PRATAPRAI BUCH ETC.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B C, D E F G H 64 SHRI DIGVIJAY WOOLLEN MILLS LTD. ETC. v. MAHENDRA PRATAPRAI BUCH ETC. July 23, 1980 [A. C. GUPTA, AND N. L. UNTWALIA, JJ.J Payment of Gratuity Act, 1972-Section 4(2}-Scope of-Gratuity how calculated. Section 4(2) of the Payment oli Gratuity Act, 1972 provides that for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of 15 days' wages based on the rate of wages las.t drawn by the employee concerned. The employers sought to pay gratuity by dividing the workman's monthly wages by 30 and computing the 15 days' wages on that basis but the workman demanded that his monthly wages should be takrn as what he got for 26 working days and. not by taking half of his wages in a month of 30 days. The Controlling Authority upheld the workman's contention. In dismissing the employer's petition under Art. 227 of the Constitution the High Court observed that a worker received a full month's wages not. by remaining on duty' for all the 30 da,ys within a month but by remaining on work and doing duty for only 26 days and, therefore, gratuity payable to him should be calculated on this basis. Dismissing the employers' appeals, HELD : The view taken by the authorities, and upheld by the High Court, is not in any way unreasonable. Although a month is understood tD mean 30 days, the manner of calculating gratuity payable under the Act to employees 'who worked for 26 days a month followed by the High Court cannot be called perverse. [67C] Treating monthly wages as wages for 26 working days i.s not new or un· known. The expression "average of the basic wage" occurring in an award has been interpreted by ibis Court to mean the wage earned by a workman during a month divided by the number of days for which he has worked and multiplied by 26 in order to arrive at the monthly wage for the compu- tation of .gratuity payable to the workman. [67D & HJ Delhi Cloth and General Mills Company Ltd. v. Workmen and others etc., (1969] 2 SCR 107, referred to. CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1083 of 1976 and 480 of 1977. Appeals from the Judgments and Orders dated 19-4-1976 and 12-10-1976 of the Gujarat High Court in S.C.A. No. 495/76 and S.C.A. No. 1641 /76 respectively. P. R. Mridul, P. H. Parekh and C. B. Singh and Miss Vineeta Caprihan for the. Appellant in CA No. 480/77. SHRI DIGVIJAY WOOLLEN MILLS v. MAHENDRA PRATAPRAI (Gupta. ].) 6 i Gobind Das, A. N. Karkhanis and T. Sridharan ·and Mrs. Sunanda A Bhandare for the Respondent in CA No. 480/77. Y. S. Chitale, P. H. Parekh, R. Karan Jawala and Miss Vineeta .! Caprihan for the Appellant in CA No. 1088/76. Y. M. Tarkunde, K. L. HaJhi and P. C. Kapur for the Respondent in CA No. 1088/76. Shanker Ghosh, G. B. Pai, and D. N. Gupta for the,Intervener. (Superintendent, Mines and Quarries, Bisra Stone Lime Co. Ltd. & Anr.) Anil Kumar Gupta for the Intervener (Baba Jija Bhai Talekar). The Judgment of the Court was delivered by . GUPTA, J. A common question arises for consideration in these )· two appeals relating to the mode of calculating fifteen days' wages of· a monthly rated employee under section 4(2) of the Payment of Gratuity Act, 1972 (hereinafter referred to as the Act). Section 4(2) provides : "For every completed year of ~ervice or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned : Provided that in the case of a piece-rated employee, daily wages shall be computed on the average of the total wages received by him for a period of three months immediately preceding the termination of his employment, and, for this purpose, the wages paid for any overtime work shall not be 1aken into account : Provided further that in the case of an employee employed in a seasonal establishment, the employer shall pay the gratuity at the rate of seven days' wages for each season." "Wages" has been defined in section 2(s) of the Act as follows : " "wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus. commission, house rent allowance, over- time wages and any other allowance." It is
Excerpt shown. Read the full judgment & AI analysis in Lexace.