SUDHIR CHANDRA SARKAR versus TATA IRON & STEEL CO. LTD. AND OTHERS.

Citation: [1984] 3 S.C.R. 325 · Decided: 27-03-1984 · Supreme Court of India · Bench: D.A. DESAI · Disposal: Appeal(s) allowed

Cited by 4 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

f. 
325 
• 
SUDHIR CHANDR,A SARKAR 
v. 
--:rATA IRON & STEE_L CO. LTP .. AND OTHERS. 
March 27, 1984 
(D.A· DESAI, A .. P. SEN ANQ V. 'BALAKRTS ~r.-;A ERADI, JJ.] 
Rttirlng Gratuity Rults,I9J7-Rule /(g)-Definition of 'Retirtmtllt' scop~ of 
-Empluytt after y;orklttg fur 29 years left service by reslgl!ation which .;01 arce,_ 
udbyemplo)'U-Whtthn employee cotJid be said to hav~ rttittdfrom :ervice. · 
· 1/ttlring Gratuity Rules, 1937-Ru/e 10 validity of. Part af Rule 10 which 
fNiftrs abso/JJre diScretion 011 tmplvyer to pay gratuity, even of it is earned, at il.r 
dJJOiute discretion, u inefftcrive am/ enfurceab/e, 
InJ.strial Employment (Standing Orders) Act, 1946-Sation 3--Certi/ieJ 
!ilrl!llling Ordtrs-:Nawr' of-Wh~ther form parr of contract of suvice-IVherflu 
flotlr brtarlo can be rtpaired b) civil suit. 
· Words and Plorases-''Gmtuity"-Concept of. Gratuity is a retirul benefit a1 
""as11re of social seatrity ; it Is not lfrttlrlitous but has to be eumed by lo>nz N 
.Lontinuout sen•il't; il can be r~c.,vt!red Jlrrough ciril Juit. 
lbe app:llant .,..·ho ro,igned from service of the: respondent company after 
'<'tvinc for o•·er 29 years wu• not paid retiring grntl,lity by the respond~nt, even 
.,hen the appclbnt had become elil!ible. for it unJer the relevant gmmity ruloos 
111tltd as tbe RetiriOII: Gratuity· Rules. J9J7 \Gr~tuity Rules for short). Tbo 
. •PP<llantlilcd a 'uit in the Court of Subordinate Jutlge for recovering tbe 
«mount of Voltuity. The Subordinate JuJgc decreed the suit. The High Court . 
allowed tilt app:al f1led by the rc,pondent. Hence this appeal. The respoo. • 
. dent• submitted; (I) that since the appo:llant did not retire from the service but 
~It the ICn·u by resi~ning the po!l, he was not eligible for gratuity untler 
ult 6 or the Retiring Gr11tuity Rules, t 937 ; l2) that uoJer Rule 10 the ..:tiring · 
. :atu!!y wu payable Mt the absolute discretion or tho respon~ent and rol\ld not 
t claoa~cd •• a matter or right by the appellant even if he had become clisiblo 
or~ ; and (JJ thut claim to aratuity could not be enforced in the dvil rourt. 
. Allu.,inathc appca I, 
. H£Lo : Rule 6(a) which pre~ribcd the eligibility criterion f<>r p:~.yment gf 
·lfllrlllJ 
. 
· 
cratUJ·y pmvidcs, f/11ter ulla, that every permanent uncovenanted em· 
~ 
of tbe Comt~any, will be elivible tor rdirinll Qratulty • . The expression 
ttlremcnt• h 
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I 
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r 
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by . 
as uocn defined in Rule l(a) to mean 'I ld ternunat1oo o serviCe 
ll ~<:owq. or any cau~ other then rcmovul by dhdlDrge due to misconduct'. 
ii!Jnott<4 thQt the appellant wu ~ permanent uncovenan;ed :mployee or 
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B 
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j 26 
SUPREME COURT REPORTS 
[l9S4j 3 S C 
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ihe Company paid on monthly basis and he re~dercd sc,rvicc for over~ Y•• 
and his s~rvice came to an end by rea<on of hts tcndcnng resignation V.hit~ 
was unconditionally aa:cpted. II Is. not suggested that he was romovcd I> 
discharge due to misconduct. un.questJonabl~. therefore, the appellant ·h: 
within the meaning of the cxprcsston, thus .r•t•_red r"'IJ'l service of the '"llOo: . 
dent and he is qualified .for payment of gr.ttutty to terms of Ru!c 6. [Jl2D.f] 
. 
According to the High Court, ihc ,service conditions of the apP<ilant,,;,;~ 
gavemed by !he Works Standing Orders or the rc~~ondcnt. No C<Ctption h" 
. be•n taken to this finding. These Wqrks Standtn~; Orders were framed •n~ 
certified under the Industrial Employment (Standing Order:;) Act, 1946. n .. 
Act wu 8 kgi.slatlvc response to the /abJ~Z [airt rule or hire and fire ot· sweet 
. will. It w3s an auempt at intposing statu(Ory comrac:t of'service b¢tw~cn tv."O-
parties unequal io negotiate, on the footing of equ3
1
ity. The intendment · .. j ·.·.·  
underlyini the Act and the provi•ions of the Act enacted to give rffect to the 
intendment and the scheme of the A~t l=lve no roorn for doubt that Stand· 
· · ing Orders cerjificd under the Act become part or· the staiU10ry t<rms an~ 
· conditions of .. rvice between the employer and hi• cmp!o)<< nnd they eo .em 
the relatiouship bet wren the parti<s.I333E-3J4G] 
... 
Wr~ttrn India March Company !.rd. v. Workmn.,: [1974] I SCR 4H. WJtk· 
. man of Mtssrs FirtJiont T)" & Rul>ber Ca. of frtdia (Pl Lrtl. v, Manoxrin~nr 
and Or1; [1973] 3 SCR '87 ot 612. Workm~n: ill fJurki!oglwm uurl Cumurfc 
Mill• Mudros v. Buckingham ond Cantalic A[; /Is: ]1970]1 labour Law Journ•l 
·

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